ACC, one of the leading cement makers in the country, has incurred losses in operations of a majority of its subsidiaries in 2009.
Out of the five subsidiaries, as on December 31, 2009 (ACC follows the calendar year for accounting), four reported losses amounting to close to Rs 50 crore.
The subsidiaries are: ACC Concrete, Bulk Cement Corporation (India) Ltd (BCCL), Lucky Minmat, National Limestone Company Private Ltd (NLCPL) and ACC Mineral Resources (AMRL).
ACC Concrete, though it increased its sales volumes by 6.5 per cent, posted a marginal decline of Rs 2 crore in its sales. Its loss after tax stood at Rs 46.9 crore for the year.
| CRACKS IN BIZ Companies and their losses after tax in 2009* | |
| Company | Losses |
Company
“Raw material unit prices also increased in 2009, but these were more than compensated by better mixed design optimisation, resulting in an overall reduction in raw material costs,” said ACC in its report.
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Further, BCCL, in which ACC holds 94.65 per cent stake, reported more than double losses at Rs 1.08 crore in 2009 against Rs 0.53 crore in the previous year. “This was mainly due to a reduction in railway freight rebate,” said ACC.
Likwise, losses of Lucky Minmat stood at Rs 0.15 crore against Rs 0.22 crore last year. NLCPL, in which ACC bought 100 per cent stake in April 2009, too witnessed a loss of Rs 0.06 crore. The company has limestone leases and reserves in Sikar district of Rajasthan.
AMRL was ACC’s only subsidiary which could manage to close the year with profit at Rs 0.016 crore against Rs 0.028 crore. Formerly known as Cement Marketing Company of India, AMRL is currently serving ACC as a special purpose vehicle for coal ventures.
It has inked four agreements with the Madhya Pradesh State Mining Corporation for development of coal blocks in the state.
Meanwhile, ACC has added one more subsidiary after acquiring 100 per cent stake in Andhra-based Encore Cements & Additives early this year.
Encore has a slag grinding unit in Visakhapatnam. At the same time, the cement maker has acquired a 45 per cent stake in Himachal Pradesh-based Asian Concrete, which is in the process of expanding its grinding capacity from 0.3 million tonnes to 1.3 million tonnes.
Swiss major Holcim-owned ACC currently has a cement production capacity of 26 million tonnes, which will be taken up to 30.4 million tonnes by the end of 2010.
In 2009, ACC’s consolidated net profit was 42.2 per cent higher at Rs 1,563.91 crore compared with Rs 1,099.65 crore in the previous year.