The Cement Corporation of India (CCI) was set up in 1965 as a wholly-owned government company with the principal objective of achieving self-sufficiency in cement production. The authorised and paid-up capital of the company, as on March 31, 2010, was Rs900 crore and Rs811.41 crore, respectively. Its chairman and managing director RP Tak spoke to Hindustan Times on a range of issues. Excerpts:
CCI was making losses and had turned sick. What were the reasons behind it?
The company had become sick due to a variety of reasons. Plants were located in remote areas and run on obsolete technology. Non-modernisation of plants, inadequate captive power, shortage of working capital and recessionary conditions in the cement industry, till 2004-05, were among the other primary reasons that had turned the company sick. As per the provisions of the Sick Industrial Companies Act (SICA), the activities of the company are being monitored for implementation of the rehabilitation scheme by the Board of Industrial and Financial Reconstruction (BIFR). On its implementation, the company will come out of BIFR.
Please elaborate on the measures that brought about a turnaround in the company?
The company suffered losses upto 2005-2006, due to the reasons explained earlier. On the sanction of the scheme by BIFR in March 2006, infusion of government funds and by waiving of interest in certain cases, the company could clear the debts. The scheme also envisaged closure of seven non-operating units. Also, meticulous financial planning was introduced in all the areas of company operations, marketing operations were streamlined, high interest loans were repaid and operational efficiencies were introduced, among other measures. The company has been earning profits thereafter and these profits have been increasing every year. From R32.58crore in 2006-2007, it has reached Rs52.75 crore in 2009-10.
Do you have any plans for diversification of your product line?
Yes. We presently have five brands of cement. Our plan is to further diversify our product mix to manufacturing of railway sleepers, electric poles and ready mix concrete. We are also exploring the setting up of a joint venture for this purpose, besides technology upgradation of our plant in the south and the expansion of our plant in Assam. The company also has plans to set up new capacities of more than one million tonnes per annum at its operating units.
Despite rising demand for cement, there is also a lot of competition from the private sector for setting up large plants. Your views.
I agree that the demand of cement has increased. Yet, there is no denying the fact that there is a lot of competition due to the setting-up of giant cement plants in the private sector. We have been able to give tough competition to private manufacturers and turn around this company from a loss-making company to a profit-making one.