ACC may shut more plants if demand fails to pick up

ACC, the country’s largest cement maker that had temporarily idled a plant in Himachal Pradesh this month, said it has kept all options open on similar shutdowns at its other locations in case there is no satisfactory demand for its products. The company, with a capacity to make 23 million tonnes of cement annually, has 15 plants across the country.

On December 16, ACC shut its 2.4-million tonne Gagal-II plant in Himachal Pradesh for a fortnight due to inventory pile-up at the unit. Last month, the company had laid off 25 per cent of employees at its wholly-owned subsidiary ACC Concrete.

Sumit Banerjee, managing director, ACC, told Business Standard, “The decision to shut our Himachal unit was the right one. If required, we will take such decision in our other plants also in the future if the demand is not satisfactory and our stocks pile up.”
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Cement traders to give credit to real estate and infrastructure developers only in lieu of security

Cement traders to give credit to real estate and infrastructure developers only in lieu of security

Cement traders are looking at taking matters in their own hands. They want to put an end to cash-strapped developers failing to pay them on time.

Starting January 1, they will give credit to real estate and infrastructure developers only in lieu of security, which could be bank guarantees, letters of credit, or even asset-backed loans.

As the liquidity crunch deepens and these cash-strapped real estate developers are taking a long time to make those payments which are due, this is putting the cement companies in a fix because they don’t get credit as much as they provide.

What happens is the cement companies give them for cash and they have to wait for the payment to come up, which puts a lot of pressure on these traders. Now, the cement companies have eventually decided to set up certain norms and follow them rigidly.

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