Since inception in the year 1936, ACC Limited (ACC) is a leading player in the Indian building materials space, with a pan-India manufacturing and marketing presence. With 17 cement manufacturing units, over 90 ready mix concrete plants, and a countrywide spread of sales offices, it contributes tremendously to the landscape of the country. ACC has been synonymous with cement, establishing its reputation as a pioneer organisation that consistently sets new benchmarks in research and innovative product development.
From the Bhakra Nangal Dam in 1960 to the Mumbai-Pune Expressway, ACC cement is at the heart of iconic landmarks across the country.
ACC’s brand architecture comprises the Gold range and Silver range of products assuring superior quality for general construction as well as for specialised applications and environments. The ready mix concrete product range provides one-stop solutions from basic requirements to high grades of concrete to build the country’s tallest structures.
ACC was among the first Indian companies to include commitment to environmental protection as one of its corporate objectives.
In 2005, ACC became part of the Holcim Group of Switzerland. Subsequently, in 2015, Holcim and Lafarge came together in a merger to form LafargeHolcim – the global leader in building materials and solutions.
COMPANY PERSPECTIVE AND REVIEW
• During the year, ACC reported net sales of 13,487 Crore and consolidated net profit of 1,430 Crore.
• The company is scaling up and is adding significant capacity in the coming post Covid19 period.
• Among its peer group, ACC is one of the few companies, which has historically not relied on external borrowings to finance its operations for the last many years.
• ACC, with its consistent financial performance, quality management and strong technical momentum in a growing sector, indicates a good stock for buying investment.
CEMENT INDUSTRY IN INDIA
• India is the second largest producer of cement in the world. The growing Indian infrastructure and construction sectors will continue to fuel the growth in the cement industry rapidly. Some of the recent initiatives, such as development of 98 smart cities, are expected to provide a major boost to the sector.
• Cement production reached 329 million tonnes (MT) in FY20 and is projected to reach 381 MT by FY22. However, the consumption stood at 327 MT in FY20 and will reach 379 MT by FY22 (approximately).
• With the rural markets normalising, the demand outlook remained strong. For FY21, CLSA expects a 14% YoY increase in EBITDA in the cement marketplace for its coverage stocks.
• According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), cement and gypsum products attracted Foreign Direct Investment (FDI) worth US$ 5.28 billion (approximately) between April 2000 and March 2020.
• The Union Budget has allocated Rs. 139 billion (US$ 1.93 billion) for Urban Rejuvenation Mission: AMRUT and Smart Cities Mission. Government’s infrastructure push combined with housing for all, Smart Cities Mission and Swachh Bharat Abhiyan is going to enhance cement demand in the country. The move is expected to boost the demand of cement from the housing fragment.
• An outlay of Rs. 27,500 crore (US$ 3.93 billion) has been allotted under Pradhan Mantri Awas Yojana in the Union Budget 2020-21, which will contribute to the demand for cement..