‘Future of India Cements employees is in safe hands’

Company taking steps to contain variable, fixed costs, says Whole-time Director Rupa Gurunath

The future of India Cements employees is in safe hands and will be taken care of by UltraTech Cement, the new owners, said India Cements’ whole-time Director Rupa Gurunath.

Addressing the 78^th AGM of India Cements via video-conferencing, Ms. Gurunath said that the cement major was taking steps to contain variable and fixed costs.

When shareholders asked her about the proposed takeover of ICL by UltraTech, she said, “We won’t be able to comment whether UltraTech will merge ICL with UltraTech.”

“ICL employees will be taken care of and they will be in safe hands. Shareholders’ value will increase in the coming days,” she said.

Ms. Gurunath also said that ICL had engaged the services of Boston Consulting Group (BCG) for improving operational efficiency adding that ICL had been continuously working for a reduction of fuel costs and she hoped that UltraTech will continue the efforts.

“Implementation of BCG recommendations has contributed to increasing the usage of alternate fuel for which further investments are also being envisaged at the plants,” said Vice Chairman and Managing Director N. Srinivasan.

ICL had taken pro-active steps for improving liquidity by selling the Parli grinding unit among others. However, capacity utilisation was severely impacted by the continuous liquidity crunch on account of losses sustained in the earlier quarters.

ICL could not take advantage of the reduced fuel cost as operating margins shrank further on account of low volumes.

According to Mr. Srinivasan, the higher cost of production, as compared with peers, due to varying vintage of the plants together with a free fall in cement prices affected dispatch and margins.

The increasing preference for home ownership and the growing trend of rebuilding of homes in urban and semi-urban centres augured well for the robust growth in the construction sector, he added.

Published - September 23, 2024 07:32 pm IST