BSE:500425 | NSE:AMBUJACEMEQ | 58888:gacl | IND:Cement - Pan India | ISIN code:INE079A01024 | SECT:Cement
The Indian economy continued to strengthen in 2018, reclaiming its position as the world''s fastest growing economy. This economic growth was led by a number of factors, including macro-economic policies, improved consumer sentiment and structural reforms introduced by the Government. The impact of these structural reforms are reflected in the World Bank''s ''Ease of Doing Business'' report for 2019, where India climbed 23 places to rank 77th among the 190 countries surveyed, making it the only country to place among the top 10 most improved countries for the second consecutive year.
This clear improvement in India''s ranking will strengthen the Government''s reformist credentials.
The nation''s economic growth had a positive impact on the Cement industry, which posted a higher growth rate than the previous year at 9%. Increased demand continued to be led by key infrastructure projects like roads and metros, and the Government-led ''Housing for All'' programme. This allowed the industry''s capacity utilisation to improve by approximately 3%, over 2017.
The Company took many significant steps forward this year and had several remarkable achievements. I would like to highlight a few of them.
Our Greenfield Marwar-Mundwa project is now approved with a revised clinker production capacity from 1.71 MTPA to 3.1 MTPA, a 1.8 MTPA cement grinding capacity and related infrastructure like a Waste Heat Recovery System and a Captive Power Plant. The total investment in the project is Rs,2350 crores.
Following the mandatory Board and shareholders'' approvals, Ambuja and ACC entered into a Master Supply Agreement in May last year to unlock various areas of synergy that will accrue incremental benefit to both companies.
The Company won two limestone blocks for our MCW and Marwa-Mundwa plants last year, ensuring a secure future supply of limestone.
In 2018, Mangu mines at Darlaghat kick-started operations, while two other mines at Lodhva and Maldi-Mopar are slated to begin operations soon.
Our captive coal block at Gare Palma started production ahead of schedule in November
2018. While this is yet another step to reduce our dependency on the market, it will also provide long term energy security for our Bhatapara unit, at a competitive cost.
This year our people''s determination and resilience - their quintessential / Can spirit -ensured our continued progress on many fronts.
To counteract elevated fuel and energy prices, coupled with the weakening of the Rupee, we continued to focus on ''least-cost fuel mixes'', increased our usage of alternative fuels to 5.5%, significantly improved our efficiency parameters and achieved a lower clinker factor.
On the Marketing front, our consumer''s needs were identified and innovative solutions were rolled out to complement the entire construction journey. Premium cement products like Compocem and Roof Special saw impressive sales growth. Cool Walls was launched last year to capture a greater share of the construction market, and is now witnessing good traction due to increased customer acceptance and our continuous efforts for market expansion.
On the sustainability front, our performance has been exemplary. Ambuja has been accredited with a 6x Water Positive status for 2017.
We bettered our own previous rank in the Dow Jones Sustainability Index to rank among the top 5 companies in the Construction Material Category for 2018. We also secured the number 2 position in the global Carbon Disclosure Project index. Closer to home, Ambuja shone bright with the highest number of wins at the CII-ITC Sustainability Awards, 2018.
Ambuja''s shipping operation, one of our greatest sustainability initiatives, celebrated its silver jubilee in 2018. We were among the first companies to transport cement by sea -a unique initiative that continues to record not just the lowest operational cost, but also provides uninterrupted services during the monsoons and even under cyclonic conditions.
I am proud to say that our work on the health and safety front continues to deliver results. Our concerted focus on reinforcing our systems and processes, learning from incidents, and better frontline leadership, have led to an overall reduction in injuries by 34%, with two of our plants in Surat and Farakka achieving ''Zero Harm''in 2018.
Our people''s continued efforts have had an impact on the Company''s performance.
I would like to share with you a snapshot
for the year ended 31st December 2018, as compared to the previous year:
- Sales by volume increased by 5.4% from 22.95 million tonnes to 24.18 million tonnes.
- Absolute EBITDA was lower by 2.5% to Rs, 1891 crores.
- Net Profit after tax was higher by 19% to Rs,1487 crores.
The government''s plan to increase both spending and budget allocation towards infrastructure bodes well for the cement sector and could translate into a boom in demand. With the strength of our people''s I Can spirit, and our premium quality products,
I am confident that Ambuja is poised to write a new chapter in our great story.
With warm regards,
Chairman & Principal Founder 18th February, 2019
It is our pleasure to present the Annual Report of the company for the year 2018.
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