Adani Group ends standoff as truckers agree to 10-12% freight tariff cut

Shree Cement: P N Chhangani resigns as whole-time director of Shree Cement. Prakash Narayan Chhangani has resigned as Whole Time Director of the company effective from close of business hours on February 13, 2023 to pursue his career outside the organization.

Adani Group is set to resume operations at two of its cement plants in Himachal Pradesh from February 21, as truck operators agree to a 10-12 percent cut in tariffs, according to a statement released by the company. The agreed tariff reduction is lower than the initial demand by the conglomerate of a cut of more than 40 percent in tariffs charged by the truckers to ply cement and raw materials from the two units.

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Adani Group's cement units - the ACC Limited plant in Barmana (Bilaspur district) and the Ambuja Cement plant in Darlaghat (Solan district) - had temporarily shut operations starting December 15 after reaching an impasse where Adani Group demanded truck operators to lower freight rates. The company had earlier said that the plants are under severe pressure to reduce the cost of operations to sustain in the market.

As per the new agreement on freight rates, single axle trucks of 12 tons would operate at Rs. 10.30 Per Ton Per Km at both units. This is lower than the Rs 11.41 charged earlier at ACC’s Barmana unit and the Rs 10.58 charged at Ambuja’s Darlaghat unit in the state, the company said. Adani Group's statement also said that the freight rates are as per the guidance provided by the relevant government authorities.

Adani Group said the new rates will result in an overall reduction of 10-12 percent in the freight rates benefiting the customers of Himachal Pradesh. This is lower than Adani Group's original demand from the truck unions in December. In December before shutting down the unit, the company had quoted a 44percent lower tariff, Naresh Gupta, President of All Himachal Truck Operators Federation who also represents the union of truck drivers from Darlaghat, Himachal Pradesh, told Moneycontrol in January.

Adani Group acquired ACC and Ambuja Cement from LafargeHolcim in September last year. Following the takeover, the company shifted its focus to ironing out operating inefficiencies in these units. In its investor call, the company stated that it targets to achieve the lowest cost of production for cement at the industry level.