A similar projection is drawn for 2016 with Nu 432M pre-tax profit.
Cement: The year 2016 could prove lucrative for the country’s largest Cement plant in Nganglam, should the current trend linger for a while.
With some positive developments in both operation and maintenance, the company almost doubled its revenue from Nu 1.59B in 2014 to Nu 2.63B last year.
Should things follow suit, bottlenecks and losses would soon become a history for Dungsam Cement Corporation Limited (DCCL) because the projection for 2016 is targeting a similar trend, which would take the revenue to 5.63B this year.
Consequently, DCCL is anticipated to register profit before tax (PBT) of Nu 432M.
For now, the company is still recovering from the huge loss it suffered in 2014 because of the high interest bearing loans. Through issue of bonds, inter-corporate borrowing and private placement of share, the cost of financing in 2015 came down to Nu 661M from Nu 671M in 2014.
Cement production between 2014 and 2015, jagged up from 198,621 metric tones (MT) to 467,742 MT. However, clinker production in the same period slighted dropped from 379,763MT to 373,836MT.
While the contractors of the hydropower projects had placed an order of 393,435MT of cement, only 214,721.90 MT were lifted from the plant.
Sources said most of the supplies made to the projects were given on credit and that it is time for the company to collect the money. Even after the account closing, more than Nu 400M is booked as uncollected dues from the contractors.
However, the contractors too depend on the funds project authorities releases.
DCCL’s deputy chief executive officer, Karma Gayleg said the overall plant capacity has seen a steady increase over the last five months. “In the coming months, we are expecting that the capacity will further improve.”
After DCCL hired Humboldt Wedag India, last year, the average production capacity upped from 37 percent to 67 percent. But on daily basis, a DHI official said the production capacity is more than that.
He further clarified that the total production capacity was based on three types of cement, the company intended to produce. But DCCL currently produces only two types of cement and this will have implication on current production capacity.
“Within 2016, we are hoping to achieve anywhere between 75 percent to 80 percent production capacity,” he said.
Humboldt is required by contract to enhance capacity utilisation to 60 percent within three months, 65 percent in six months and 90 percent in a year.
So far, the deputy CEO said DCCL had been able to sell the cements to entire North Eastern Indian states such as Assam, Arunachal Pradesh, Manipur, Mizoram, Meghalaya, Tripura, and North Bengal region including Sikkim and East Bihar.
In the domestic market, DCCL has 88 numbers of authorized dealers spread across the country as a direct outlet for our cements.
“As we pick up our business, we intend to aggressively market further expansion into both the export and domestic markets. Our objective is to focus on selling 80 percent of our cements to India, to earn INR,” Karma Gayleg said.
DCCL, he said is also trying to cut costs by maintaining optimum employees, withholding the pay increment and allowances till the company’s financial situation improves, limiting expenditure on travels and trainings, reducing the administrative costs, saving power and fuels consumption and optimization of raw materials purchase.