A. V. Birla Group and Holcim are Expanding capacities to become the largest players

IIPM MANAGEMENT INSTITUTE

Holcim’s takeovers have not dented the confidence of A.V. Birla Group expansions plans even a bit, as Rajan Kumar, cement analyst at Networth Stock avers, “The expansion is in response to recent aggressive moves by Lafarge and Holcim. Capacity expansion is in order to consolidate Birla Group’s position in the cement industry. Along with the planned 8 MMT expansion of Grasim in North India, the 4 MMT Ultratech expansion would take A. V. Birla’s capacity to 45 MMT by the year 2009.”

Of late, there has been some pressure on the pricing front by cement companies because of inflation. The government came down heavily on the so-called ‘profiteering’ companies and forced cement companies to lower prices. However, lowering of prices worked in the favour of companies as demand generated at lower level was much enough to off set the loss suffered by companies due to lowering of prices. That’s the critical reason why companies in this sector thunder into the B&E list of 100 most profitable companies with some of the most impressive financial results!



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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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