GOING SOLO

SHREE CEMENT'S DECISION TO GROW ORGANICALLY MAKES IT AN ODBALL DURING UNPRECEDENTED CONSOLIDATION IN THE CEMENT SECTOR. CAN IT FIGHT BACK AGAINST ITS DEEP-POCKETED RIVALS?

- BY KRISHNA GOPALAN

IT'S BARELY 7 AM and the sun is already making its presence felt at Ras. The village, in Rajasthan’s Pali district, is home to a Shree Cement plant. There are eight imposing kilns that are op-erating, as we make our way around the large tract of land. It is hard to miss the limestone mines or the water bodies or the multiple heavy vehicles at the site. For the workers here, this—with all the din and dust—is just another day at work.

That we chose to visit a Shree Cement plant in northern India is for a reason. This region is the company’s biggest market and accounts for 40-41% of its sales. Another 28-29% comes from the east, 16-17% from central India, while the west and south contribute 9-10% and 5%, respectively. In India’s in-tensively competitive cement business, Shree is the third-largest company after the A.V. Birla Group’s UltraTech Cement and the AdaniGroup-owned Ambuja Cements (ACC is a subsidiary).

However, Shree Cement’s growth sto-ry is remarkably different from that of its peers. About 25 years ago, the company was not only on the verge of bankruptcy, but also had limited understanding of howto keep costs under control. According to data from Ace Equity, in the financial year ended March 2002, its profit after tax (PAT) was ₹1.5 crore as against a total debt of ₹307 crore, indicating that its earnings were not sufficient to cover liabilities. In FY24, it posted a PAT of ₹2,396 crore against a total debt of ₹1,475 crore, reflecting a significant improvement in financial strength.