Dear Stakeholders,
At the onset, I would like to express my heartfelt gratitude to our frontline workers, whose untiring efforts at ensuring the safety and well-being of our employees and communities have allowed us to hold our heads high, and continue our operations without disruptions. Despite the challenges, we have been able to create sustained value for our stakeholders, and, as an industry frontrunner, retain our leadership position through improved production, cost and distribution efficiency, and sustainability initiatives.
For the cement industry in general, 2021 started on a robust note, with strong signs of demand recovery. However, the second wave of the pandemic disrupted the market, led by localised lockdowns and a dampened consumer sentiment. Further, the unprecedented hike in fuel prices created cost pressures. Demand was particularly impacted during the fourth quarter of 2021 by unexpected rains in different parts of the country, a ban on construction activities in the National Capital Region (NCR), and shortage of labour and sand.
Notwithstanding these challenges, your Company reported one of the best performances in the recent past, registering substantial growth across both financial and non-financial metrics. I join the Board in thanking the team for demonstrating resilience and agility and delivering on our set objectives. We registered a volume growth of 17% year-on-year. We strengthened our revenues by 23% while EBITDA and profit after tax reported a growth of 21% and 16%, respectively, over the previous year.
OUR MOMENT OF PRIDE
Equally noteworthy are the significant interventions made by the Ambuja Cement Foundation (ACF), our CSR arm, in tackling the fallout of the second wave on the health infrastructure and community well-being. Having meticulously mapped locations that saw a surge in cases, and thereby areas which were in critical need of oxygen, ACF went about methodically to distribute oxygen concentrators and cylinders. Not stopping at that, we set up oxygen plants at Dadri and Ambujanagar. ACF also trained community volunteers as CoviSainiks to provide help at hospitals and community clinics. We actively participated in furthering the government’s immunisation mission, with ACF pitching in to help vaccinate more than 2.7 million community members.
This was also a remarkable year in terms of our commitment towards creating a sustainable future for all. Following the lead of the Holcim Group, we developed and had our 2030 carbon emission reduction targets validated by the Science Based Targets initiative (SBTi).
At Ambuja, we have consistently aimed at including sustainability in all our operational and project planning. This year as well, we continued to reduce our carbon footprint by lowering the clinker factor, reducing thermal and electrical energy intensity, while implementing Waste Heat Recovery Systems at our plants and increasing our use of and capacity of generating renewable energy.
At the same time, we remain committed to catering to the evolving requirements of our customers, enabling them to build more durable and sustainable structures with materials that are made sustainably.
OPPORTUNITIES AT HAND
We look at the future with unflagging enthusiasm. India continues to remain the second-largest cement producer in the world. The industry offers significant headroom for growth aided by low per capita consumption and a massive government push for infrastructure and affordable housing. The Union Budget 2022-23 saw a significant increase in proposed capital expenditure, vindicating the government’s sustained focus on infrastructure. The Pradhan Mantri Awas Yojana’s target of 8 million houses by 2023, will further push cement demand. The recovery in the real estate sector, backed by historically low interest rates, also augurs well for the industry. Furthermore, the e-commerce boom, which is spurring demand for warehouse space, data centres and energy storage systems, will attract more investment as they have been granted infrastructure status.
We are well-braced to meet the expanding demand. As part of our growth strategy, we are investing in the cement grinding expansion plan of 7 MTPA across locations, including in a greenfield project at Barh, Bihar. This will help us move closer to our target of achieving 50 MTPA capacity (presently at 31.45 MTPA) in the near future. Further, we are increasing our presence in existing and new markets through our strong distribution network and dealer partnerships.
OUR FOCUS AREAS
We aim to grow sustainably and meaningfully. This year saw us launch our new strategy aligned with the Holcim Group’s strategy of ‘Accelerating Green Growth’. Our own strategy to expand market presence while being one of the most efficient cement manufacturers with sustainability at the core of everything we do, mirrors the Group strategy. Our belief that green growth is the only way to grow sustainably is not new. Environmental consciousness is good for both the planet and for business. Our own experience over the years has established this beyond doubt. Our sustainability vision has had a direct beneficial impact on the bottom line, helping the premiumisation of our offering and enhancement of our product mix with sustainably manufactured products.
We are consolidating our sustainability leadership by investing in our Plants of Tomorrow program that will accelerate our transition to digital plants. This path-breaking project will lead to transformative outcomes not just in terms of operational and financial gains but also in making cement manufacturing in the country environmentally sustainable while creating a safe work environment for our colleagues across our plants.
OUR LARGER COMMITMENT
Since inception, we have built trust in Brand Ambuja by ensuring consistency in quality and reliability of service. This is perhaps the most valuable asset we have created over the years, and this is what we hold most dear to us. We pledge to strengthen this trust by not only delivering on our promise of providing our customers innovative and sustainable building solutions, but also ensuring that the construction sector takes the lead in building a stronger and greener India. Notwithstanding the temporary headwinds the industry may face, we are strongly committed to this goal. Together with ACC Limited, we have begun cleaning India’s river waters of plastic. The coming days will see us explore such initiatives more through partnerships with like-minded institutions and individuals while continuing to drive our CSR efforts towards promoting inclusive development.
On behalf of the Board of Directors, I would like to thank our stakeholders for their continued trust in us. We will continue to draw inspiration from your support to take on new challenges.
Warm regards,
N.S. Sekhsaria
Chairman and Principal Founder