Shree Cement commissioned a new kiln with a capacity of 11,500 Tons per day at Nawalgarh, Rajasthan. With the commissioning of a new Rajasthan kiln, the company’s total cement capacity reached 53.4 million tons. Speaking on Nawalgarh kiln, Neeraj Akhoury, Managing Director at Shree Cement, said, “In our pursuit to become a 80 million tonnes company by year 2028, we are excited to announce commissioning the kiln in our new integrated facility at Nawalgarh, Rajasthan. This state-of-the-art facility is the most modern plant of the Company and shall significantly boost the operational performance of the Company.” The company expects to attain a capacity of 80 million tons by March 2028, achieving a CAGR of 12% in the next 5 years. With this Nawalgarh expansion, Shree Cement boasts a network of five integrated facilities spanning Rajasthan, Chhattisgarh, and Karnataka. Cement sector is expected to do well with the central government’s strong focus on housing and infrastructure. Thus, both greenfield and brownfield expansion sprees are going on in the cement sector.
Shree Cement is one of India’s top three cement producers and among the fastest growing, with an installed capacity of 46.9 million tonnes per annum in India and 50.9 including overseas. The company has a diversified brand portfolio consisting of Roofon, Bangur Power, Shree Jung Rodhak, Bangur Cement and Rockstrong. The company reported stable September Quarter 2023 numbers supported by strong volumes and lower raw material cost. Revenue from operations came in at Rs 4,585 crore in Q2FY24 compared to Rs 3,781 crore, same period previous year, driven by higher volumes and better realizations.
Operating margins stood at 18.98% in September Quarter 2023 compared to 13.83% corresponding quarter previous year aided by better product mix and higher realization. Net Profit more than doubled YoY to Rs 491 crore in September Quarter 2023 compared to Rs 190 crore corresponding Quarter 2023.
Ongoing expansion and focus on premiumization
Shree Cement has manufacturing plants at 20 locations in India and one in UAE, four of them are integrated, 11 are cement grinding units, three are solar power plants and three are upcoming plants. New upcoming plants are at Guntur (Andhra Pradesh), Nawalgarh (Rajasthan) and Etah (UP). Delayed by three months, Nawalgarh plant is expected to be commissioned by March Quarter 2024. Speaking on Gutur plant (Andhra Pradesh), HM Bangur, Chairman at Shree Cements, said, “So this year, Andhra plant will be completed in quarter 4 of financial ’24, something like March or maybe April, May, Guntur plant will be completed.” According to the management, Etah cement grinding unit, requisite permissions have been received and work has started. Expansion is being done is cement grinding Baloda Bazar unit which will take 18 months to complete. And last but not the least, Shree Cement is putting up an integrated unit in Pali (Rajasthan). “So all these things put together by this year-end, we will be 56 million tons plus”, said Bangur. With all capacity expansion, the company does not want to solely focus on volumes. Regarding premiumization, Bangur said that the company’s focus is on the right pricing. He further added that, “The volumes will come later. But if the prices are diluted to get the volume much faster, then you win the sprint race but you lose the marathon race.” The company’s premium products currently contribute 9.5-10% and in the next six months, Shree Cement expects it to rise up to 12%.
