Saturday, September 01, 2012

“LOW INPUT COST WORKS FOR US”

Sunny Gaur, Managing Director, Jaiprakash Associates Limited

IN AN EXCLUSIVE INTERACTION WITH SUNNY GAUR, MD, JAL, REVEALS TO B&E WHAT MAKES JAYPEE CEMENT SO SUCCESSFUL.



While the whole industry was struggling, Jaypee Cement managed 47% growth in the first quarter. What’s the reason behind this success?
In 2002-03, our leader could foresee that with GoI’s projections of over 7% GDP growth, India’s cement consumption would grow at around 8–9%. Keeping that in mind, we initiated several measures of capacity augmentation and capacity creation. With commissioning of almost 12 MTPA in last 12 months and India’s cement consumption holding at 9% growth, our assessment of requirement of cement in India has been proved right and that is reflected in the satisfactory and healthy growth of 47% in the last quarter.

Analysts are of the view that rising cost of raw materials and expected moderation in realisation rates will affect the cement business. What are your views on the same? How do you plan to face such a situation?
Very early in our consolidation phase, we learnt that our cost control measures should effectively nullify cost of inflation. In cement there are three costs, which have to be kept in check – logistics cost, cost of power and Coal Consumption. We have the most efficient pyro process and milling department in the country ensuring least consumption of power and coal. Out of 22 MTPA cement capacity in operation, 17 MTPA of cement is being ground by most energy efficient VRMs/RPs. In order to address the cost of logistic our grinding units are located near consumption centres to keep distribution costs under check. Cost control in our company is the reason for which we have the largest base of captive thermal power.


Posted by at
Labels: , , , , , , , , , , ,