DECISIVE STEPS IN TURBULENT TIMES
Dear shareholders,
I am happy to present to you our 64th Annual Report for the year 2021-22. On
this occasion, I would like to inform all our stakeholders that we continue to grow strong
on the back of our deep understanding of ever-changing customer demands, innovation
excellence and ability to respond to challenges with agility.
What makes me happy is the proactive and focussed efforts taken by our teams to stay
ahead of the challenges. They engaged at a deep level with customers to better understand
their requirements, and accordingly tweaked product portfolio to cater to these needs.
Macro and micro scenario
The fiscal 2021-22 was marked by several challenges. The most apparent ones being the
second and third wave of the pandemic. The second wave especially exacted a heavy toll on
the people of the country and the economy. Though this impacted the GDP growth in the
second quarter of the fiscal, the economy has since rebounded strongly driven by positive
business sentiments. The country is estimated to have grown at 8.7% in FY 2021-22 compared
to a contraction of 6.6% in FY 2020-21, thereby, posting a recovery.
However, rising oil prices and broad-based inflation remained a major challenge which
further aggravated in the fourth quarter of the fiscal with the onset of the Ukraine and
Russia war. Impacted by sectoral headwinds, the prices of pet coke, coal and fuel saw a
sharp rise. Primarily due to increasing input costs, the raw material, power and fuel and
freight expenses increased by 12%, 31% and 5% YoY, respectively, for the cement industry.
However, the rebound of cement production and demand in India in FY 2021-22 has
validated our optimism, after taking a hit in FY _2020-21 due to pandemic-induced
slowdown. India’s cement production was estimated at 332 million tonnes in FY
2021-22, growing at 12% y-o-y. Going forward, the cement industry is expected to head for
a speedy recovery to reach 358 million tonnes in FY 2022-23, growing at 8%_y-o-y, driven
by increasing Government spend on infrastructure and sharp focus on housing.
Firm and focussed
Faced by significant challenges, we stood our ground and remained resilient with an
unwavering focus on our key thrust areas, which enabled us to emerge stronger. We achieved
a sales quantum of 11.05 million tonnes during the fiscal compared to 9.98 million tonnes
in FY 2020-21, a growth of 10.72%. This number could have been much better if not for the
various challenges we were faced with during the year, ranging from excessive rain in the
southern and eastern markets to the second and third waves of COVID-19, affecting the
Southern states severely, when compared to other regions. The excessive rains during the
year delayed infrastructure work in these markets, thereby, impacting cement offtake.
South is our core market, which once disrupted by heavy monsoon and cyclones, capped our
sales growth.
What makes me happy is the proactive and focussed efforts taken by our teams to stay
ahead of the challenges. They engaged at a deep level with customers to better understand
their requirements, and accordingly tweaked product portfolio to cater to these needs. It
helped us in rapidly scaling sales as the markets revived, and at the same time
strengthened our reputation as a customer-centric brand. At our new Kurnool plant, trial
run upto clinkerisation has been completed during the fiscal. With this, our clinker
capacity scaled to 13.65 million tonnes per annum. We further undertook measures to
optimise operational cost which helped to some extent in offsetting the increase in
logistics and raw material costs.
ESG embedded deep in our ethos
Driven by our focus on creating shared value for all our stakeholders through
responsible steps, we have sharpened our focus on Environment, Social and Governance
(ESG). ESG is a part of our ethos, and is inculcated among all our employees and supply
chain partners. We believe in creating inclusive development by balancing growth with the
well-being of our employees, supply chain partners and communities.
Under the purview of environment, we undertake specific measures to reduce net carbon
emissions ensuring prudent water management, responsible waste management and zero waste
to landfill. There is a strong intent to lower dependence on conventional power and
attaining a mix of captive and green power in the total power consumption. Under the
purview of social, we focus on our employees and communities. To ensure creation of
greater employee value, we focus on active employee engagement, diversity and inclusion,
progressive employee learning and development and employee health and wellness. As a
culmination of these efforts, we have recorded zero fatalities during the year. For the
community, we undertake specific measures under the spheres of education, health and
sanitation, upskilling and biodiversity enrichment, to ensure holistic community
upliftment. Under the purview of governance, we focus on building a framework centred on
ethics, which is transparent, accountable, and promotes equity in all aspects. Our
management team works in conjunction with this robust framework, and leverages their rich
experience to take informed decisions and decisive measures, spearheading our growth
trajectory.
Acknowledgement
I am grateful to the various departments and agencies of the Central and State
Governments for their help and co-operation. I thank our investors for their unstinted
faith in the Company, and our customers for their loyalty towards the Ramco brand. I
extend my appreciation towards our supply chain partners, banks and financial institutions
for the strong cemented relationship we had shared throughout the year. Lastly, I extend
my appreciation to all our employees and my colleagues on the Board who helped us stand
strong in the face of challenges.
The opportunities in the industry are immense and as one of the leading cement players
with large capacities and a robust business model, we are set to see strong offtake in the
coming years. I seek the continued support and trust of all stakeholders in the journey
forward.