ACC full-year volumes impacted by mine closure, slow economic start to year

ACC full-year volumes impacted by mine closure, slow economic start to year
15 February 2016

ACC Ltd, part of the LafargeHolcim group, reported a 2.4 per cent decline in 2015 sales volumes to 23.62Mt due to the temporary closure of mines serving its Chaibasa and Bargarh plants in eastern India, and the generally slow pace of the economy earlier in the year.

Cement volumes during the final quarter of the year witnessed a turnaround, improving by four per cent YoY to 6Mt.

The company’s focus on cost management helped contain overall production costs, despite a contribution to the the District Mineral Foundation in terms of the provisions of the Mines and Minerals (Development) Amendment Act 2015, higher royalty rates on limestone and one-time costs. The cost of energy, raw materials and packing materials was lower during 2015. A reduction in road freight rates could only partially offset an increase in rail tariffs.

During the year, consolidated sales turnover was down marginally to INR114.33bn (US$1.68bn) from INR114.8bn a year earlier. EBITDA on a full-year basis improved by 1.6 per cent.

Jamul expansion update
The company added that the ongoing expansion project at Jamul in Chhattisgarh state, which comprises a new clinker line and grinding facility at Jamul, together with a new grinding unit at Sindri in Jharkhand, is nearing completion and expected to be commissioned in the 2Q16.

Optimistic on outlook
ACC said that although demand in 2015 was weak, it foresees India’s economy moving ahead supported by growth in all major sectors. The company is optimistic on the outlook for the domestic construction and building materials sector – particularly in terms of the cement and concrete sectors – given the government’s continued focus on infrastructure development and initiatives such as ‘Housing for All, ‘Smart Cities’ and concrete roads.

Published under Cement News