The Telegraph
Monday , January 28 , 2013
Since 1st March, 1999
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Dalmia Cement enters region

Guwahati, Jan. 27: Dalmia Cement (Bharat) Ltd of the Dalmia Group, the largest cement manufacturer now in the Northeast, is open to setting up a green field project here.

It is, however, at present looking to stabilise its investments and build higher throughput in the short term.

The company acquired two units in the region — a 76 per cent stake in Calcom Cement Limited for equity value of Rs 315 crore and secured full ownership of Adhunik Cement, including a 25MW captive power plant for Rs 1,085 crore.

“We are open to setting up a green field project in the Northeast but the priority at this stage in the region is to stabilise our investments and build higher throughput in the short term,” Chandrashekar Kini, senior executive director and CEO, Dalmia Cement, East told The Telegraph.

The company has installed capacity of 3.2 million metric tonnes of finished cement in the region.

The official said the company was currently executing a green field project in Belgaum, which, along with the entry into the Northeast, was a significant step towards establishing a serious national position in the medium term.

He said brown field acquisitions and green field creations formed an integral part of their growth trajectory. “We are already executing a green field project in Belgaum, Karnataka. Over the last five years, we have set up two green field units, one each in Tamil Nadu and Andhra Pradesh,” he said.

The company has made Mary Kom its national brand ambassador. “The company is advertising widely in various media and at different points of purchase and engaging deeply with influencers and dealers to communicate and demonstrate the brand promise. It is also strengthening its existing channel partners while acquiring new ones to create a robust response and best-in-class distribution system,” Kini said.

“Underlining all this will be the product experience, which will set in new benchmarks and will ultimately be our key differentiator,” he said, adding that Dalmia Cement was a top quartile industry player.

According to India Brand Equity Foundation, the North East has consistently been a cement deficit region over several years and at present, cement demand is about 5.2 million tonnes per annum whereas the supply is 3 million tonne per annum.

The projected compound annual cement demand growth rate for the region is around 20 per cent for the next few years.

On the brand’s entry into the Northeast, Kini said Dalmia Cements’ advent was part of national growth trajectory. “The Northeast is a market with attractive long-term growth rates. Considerable investment in the region by central and state governments bo-th directly and indirectly have generated good cement dema-nd and hence, we have a positive view of the long term growth trends,” he said, adding that they had also identified a gap between consumer need for superior quality cement and its availability.

On taking on local companies, he said for many years, the company had relied on quality, transparency and sustainability. “Central to these is consumers and communities in which we operate. We approach the Northeast markets with these fundamentals and the ability to improvise products and processes for market differentiation. We will create further competitive advantage by bringing in word class technology and management practices.”

While Topcem cement does not expect a major shift after the entry of Dalmia, Surya Gold Cement is happy to see the consolidation of cement companies in this region.

“We do not expect any major shift as national brands have been existing in this market for a long time and even Dalmia’s entry is through acquisition of existing facilities. Topcem has been a leading brand in this market for a long time because of our commitment to quality and environment friendly initiatives and we are confident of not only securing our market share but also building on it through our strong distribution network and financial health,” said Bajrang Lohia, group director of Topcem Cement.

“We are elated to see consolidation of cement companies in this region and the opening of doors for matured players. This will only increase the profitability of the industry, driving benefits for the entire value chain. Cement companies focussing on consistent quality and driving customer services through sound business policies would lead the race in the long term,” said Madhur Agarwalla, director, Surya Gold Cement.