ADDING UP THE PENNIES

Puneet Dalmia, who is steering growth for Dalmia Bharat primarily through buyouts, says cement is a pennies business that has to be earned every day

- Krishna Gopalan

"IT WAS A mess,” says Puneet Dalmia in a calm voice. Dressed casually in a T-shirt, the Managing Director of Dalmia Bharat Group is all keyed up when he talks about the cement business. The “mess” he is referring to is in connection with the buyout of Murli Industries, a Nagpur-based company, announced in late 2017 through the IBC process. The ₹402-crore acquisition brought to the table capacity of 3 million tonnes per annum (mtpa) in Maharashtra’s Chandrapur region. From a strategic point of view, it was a necessity. The cement major needed a presence in western India, which was a weak link in Dalmia Bharat’s portfolio.

But, as Dalmia says, the plant was a mess. While he and his team knew that it had been shut for four years, what they saw was shocking. “Gearboxes and transmission lines had been stolen. It was clear that the capex needed would be more than what we had in mind.” Banking on their expertise as turnaround specialists, the team worked hard for the next 12 months. Money was put in to correct a host of issues, including those related to mining leases and sourcing raw material.

“We managed to increase the life of the mine. Today, we are at 50 per cent utilisation and it has taken 18 months to get there,” says Dalmia, an alumnus of IIT Delhi and IIM Bangalore, who is also the winner in the Cement category of the Business Today-PwC India’s Best CEOs ranking.