Cement Division
JAL produces various grades of Ordinary Portland Cement (OPC) and Pozzulana Portland Cement (PPC) or blended cement. Currently, its product mix consists of 35% OPC and 65% PPC. JAL markets PPC cement under its well-established brands of “Buniyad” and “Buland”. It supplies mainly to the markets of eastern and central UP, northern MP and Bihar . Currently, the cement division is working at over 100% capacity utilisation. All its plants are ISO- 9002 certified.
Limestone, the raw material for manufacturing cement, is abundantly available in Rewa district of Chattisgarh. JAL also owns captive limestone mines. Cement manufacturing is highly energy-intensive with power and fuel constituting around 45% of the variable cost. At present, the average cost of power for the company is Rs.5.5/unit. However, with the commissioning of two captive power projects, the average cost of power is expected to reduce to Rs.3.07/unit. The cement industry is highly sensitive to demand and supply and performance is dependent on various macro-economic indicators. Till recently, JAL’s cement business was in the red with the company incurring operational losses as late as FY00. However, starting FY02 there has been a revival in the cement business which has translated into improved realisations.
The company’s total volume of cement sales declined marginally from 4.5 MTPA in FY03 to 4.4 MTPA in FY04 due to lower dispatches as the UP state government imposed strict restrictions on the load-carrying capacity of trucks plying in the state. About 90% of JAL’s cement sales are to retail and corporate customers. Sales to government agencies account for 4%, and the remaining 6% is captively consumed. The company is building a 3 million tonnes green-field plant in Himachal Pradesh to boost capacity. The plant is expected to be operational in March 2007.
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