FUTURE AMBUJA CEMENTS Chairmans Speech

Dear Shareholders,


It gives me great pleasure to share some momentous news - in August 2016, the company received the approval of the Foreign Investment Promotion Board (FIPB) for the acquisition of 24% equity shares of Holcim India Pvt. Ltd. and its subsequent amalgamation with the company. With the implementation of the aforesaid transaction, ACC Ltd., along with all its subsidiaries became the subsidiary of your company. As a result of this, the combined annual cement capacity of both the companies today stand at 63 million tonnes. This has also significantly increased our pan-India presence. And we are confident that this arrangement will deliver value for both the organisation and their stakeholders.


The Indian economy moved steadily along in 2016. The GDP as per advance estimates of National Income is expected to accelerate to 7.1%, aided by the Government''''s continuous efforts to push reforms, RBI’s inflation focus, benign global commodity prices and a good monsoon after two consecutive droughts.


The cement demand exhibited robust growth of 8.5% on a yearly basis up to the first half of 2016. However, demand growth remained muted during the latter part of 2016 due to a heavy monsoon across the country. Further, the demonetisation drive of the Government pulled back the construction cycle in the short run. Overall, cement demand growth in 2016 stood at 5% over 2015. To overcome this temporary demand slowdown, the Government announced various measures for Affordable Housing and Infrastructure, which augurs well for cement demand growth in the next few years.


The company delivered a solid performance despite the cement demand slowdown largely during the second half of 2016. To overcome demand impediments post demonetisation, our team immediately swung into action to minimise business risk for the company as well as for our channel partners. A ‘Go Cashless’ drive was launched successfully in all markets to facilitate business for our channel partners.


A key factor in this enhanced performance was our people’s renewed commitment to the customer, with a structured approach that emphasised the value of customer discovery. Our marketing team repositioned our premium ‘roof special’ brand and reinforced it further by offering a bundle of technical services and solutions, which propagated superior construction practices. As a result, the premium product volume saw a healthy growth of 70% in 2016. The product portfolio offer to the B2B segment was also repositioned to deliver a superior value proposition.


One of the most variable and crucial parts of our business are costs, and we make every effort to control them in our favour. Energy prices have been continuously firming up and have impacted us in the second half of the year. It was at this point that our people displayed the ‘I Can’ spirit by countering the problem head on. They focused on least-cost fuel mixes (including alternative fuels), and also improved efficiency parameters to offset the cost increases. Additionally, significant improvements were made by optimising the fly ash and gypsum mix to lower production costs. In the end, despite a continuous increase in diesel prices, our logistics cost remained at par with last year.


To encapsulate our company’s performance, here are the highlights for the year ended 31st December, 2016, as compared to 2015:


- Sales by cement volume decreased to 21.1 million tonnes


- Absolute EBITDA was higher by 10% to Rs,1683 crore


- Net Profit after tax was higher by 20% to Rs,970 crore


Numbers take a backseat though, when it comes to our people’s Health and Safety, which remains our top priority. We have made significant progress by staying focused on creating a healthy and safe environment for our people. The strategy covers 3 broad areas: mass sensitisation, capability building, and finally recognition and reward for exceptional efforts.


Sustainability has been a part of our core business strategy and guides us in all our endeavours. Our journey with sustainability has continued seamlessly through the resolute enthusiasm of our team, which increased performance in several areas of governance, environmental protection and social responsiveness. The company’s endeavour to give back to society at large continued with great enthusiasm. We are now aiming to become a 5 times water positive company by the end of 2017. We are also consciously synchronising our sustainable development (SD) efforts with the strategies of LafargeHolcim Group, and have aligned ourselves with their ’SD 2030 Plan’.


We are on the threshold of another challenging year. However, with our enduring focus on safety, sustainability, efficiency, quality, along with the support of several Government initiatives like Make in India, Housing for All, and Digital India, coupled with our people''''s ‘I Can'''' spirit,


I am confident our company will scale new heights and set global benchmarks for the industry.


With warm regards,


N. S. Sekhsaria


Chairman & Principal Founder 20th February, 2017

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
“2019 © COPYRIGHT DYNAMIC EQUITIES PVT. LTD.”

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

  • Download our Mobile App
  • Available on Google Play
  • Available on App Store
  • RSS