The Indian Economy began the fiscal year 2018-19 posting a 8.2 per cent growth which however tapered to 6.8 per cent due to headwinds from global volatility, rising crude oil prices and a stressed monetary environment. Growth is however projected to remain upward of 7 per cent for the coming fiscal, bolstered by the Government’s ‘Make in India’ drive, measures on bank restructuring and thrust on infrastructure building.
The Cement industry posted robust growth of 14.4% during H1FY19 with a capacity utilisation of nearly 70 per cent backed by stable residential construction, particularly across Western, Eastern and Southern Region. The Central Government’s affordable housing scheme for rural and urban areas continued to drive the demand for cement in the housing segment. This is further expected to rise with the exploring of the untapped sectoral potential for growth Construction activity was greatly impacted due to the heavy floods in Tamil Nadu and Kerala during the end of 2018. However reconstruction and rehabilitation is expected to revive the industry. Scarcity of sand and rising input and fuel costs, added to the challenges. In the Infrastructure space, the Northern and Central regions witnessed the implementation and completion of government backed mega-infrastructure projects such as ‘Bharatmala’ for roads, ‘Sagarmala’ for ports and development of dedicated freight corridors and smart city projects.
Southern states of Andhra Pradesh and Telangana have been drivers of demand in their region with new infrastructure development projects in the pipeline.
Overall the cement industry is upbeat about the future, with the country’s young demographic profile pushing the need for construction in housing, infrastructure and facility building.
Your Company has delivered a steady performance during the year despite sluggish demand in the latter part of the fiscal and continuing pressure on input costs. At Ramco Cements, 2018-19, was marked by an aggressive drive for Building the Future. We embarked on ambitious projects - a Greenfield Cement Plant at Kalavatala, Andhra Pradesh, Establishment of Line III at Jayanthipuram Cement Plant, Greenfield Grinding Unit at Haridaspur, Odisha and doubling of capacity at Vizag and Kolaghat grinding Units.
Capacity augmentation projects will, no doubt, throw challenges, such as finding new markets for capacity utilisation and additional output. I am however confident, that we will be able to overcome these challenges and fully exploit the opportunities presented by the new economy.
At Ramco we continued to focus on consolidating our primacy position with new product development, value-led innovation and customer co-partnering. The year was defined by expanding our presence in the Eastern markets, where the potential for growth is very promising.
Sustainability has always been of great importance in our business operations. This has been validated with the Company winning several awards from the Government and Industry for its benchmark standards in sustainable processes and operational efficiencies in mining and manufacturing.
At Ramco, our people are our greatest asset and we believe that in our roadmap for building the future, employee involvement is crucial to be continually creative and drive organisational excellence. Teams across the Company worked in tandem to reduce cost, improve efficiencies and innovate new methods of building competencies, to align with the changing dynamics of the future.
I congratulate Mr A V Dharmakrishnan, our CEO, the Senior Leadership and the entire team at Ramco Cements for the good performance.
The Members of the Board have always been a great support with their valued guidance and encouragement. I thank them for their time and active participation.
I also take this opportunity to express my gratitude to all of you, our valued shareholders, for your continued support and trust in taking this Company forward.
With warm regards,
P R Venketrama Raja