BCG Advises India Cements To Slash Production Cost By Rs 200/Tonne

Legacy issues seem to bother this one very much. Ageing plants are a constraint for it. In a cost-push kind of situation, this is not a happy position to be in. A combination of escalating input costs and age-induced restrictions in the efficiency of plants has hit India Cements hard. This has proved a huge disadvantage for this cement maker to boost production. Caught in a pincer-like situation, this Chennai-based cement major headed by N Srinivasan is trying hard to return to normal.  Making a detailed presentation, Boston Consulting Group has indicated that it is possible for India Cements to pare cost by Rs 200 a tonne. India Cements has already engaged FLSmidth and Krupp Polysius to suggest ways and means to refurbish its old plants. All these of course need funds. At the end of June 2023, it had a debt of Rs 2940 crore. At least Rs 400 crore is required for working capital needs and CapEx programme. Well, India Cements is looking to raise at least Rs 100 crore in the next couple of weeks. No doubt, it has a huge land bank. That is like a back-up cheque. The road ahead is long. Yet, there is a sense of optimism.