Associated Cement Companies Ltd (ACC) India’s second largest cement maker, expects revenue to grow 11 per cent in the current financial year, due to strong demand. "Our revenue growth would be in line with the growth we’ve seen in the past nine months, which is at 11 per cent," President (Finance) Nash Italia told Dow Jones Newswires in an interview Wednesday. ACC’s revenue in the previous financial year ended March 2003, was 28.77 billion rupees ($1=INR45.22).
"Our sales in the cumulative period between April last year until February have also been very good and much ahead of the industry. Our sales grew 10 per cent compared to just five per cent for the industry," Italia said. He attributed the company’s performance to a stronger demand in the eastern part of the country and to ACC’s ability to manage logistics in the 12 states in which it operates.
Italia also said ACC plans to wrap up its acquisition of Idcol Cement Ltd. by the end of the current fiscal year. "We now have 86.7 per cent in Idcol. We plan to buy the remaining stake by March 31." Last December, ACC bought the equity stake in Idcol Cement for INR1.76 billion. Idcol Cement, which produces 1 million tons of cement a year, is located in the eastern state of Orissa.
The Idcol acquisition has helped ACC boost its presence in the eastern part of India where prices have remained firm due to better supply demand equilibrium, Italia said. "We now have 23 per cent of the market share in the east compared to 18 per cent earlier," he said.
The Idcol acquisition has however pitted ACC directly with Lafarge India, the Indian unit of French cement major Lafarge, which has an annual capacity of 5Mt. ACC plans to further boost its presence in east India by expanding Idcol’s capacity. "The plant capacity could be expanded by about 300,000t to 400,000t. But we haven’t finalized that as yet," Italia said.