| Shree Cement supplemented its attractively low capital investment per tonne with one of the lowest manufacturing costs in the Indian cement industry. Timely execution of Unit-III along with better price realization and cost optimization measures made the year a hallmark for the Company:- - The turnover of the Company has more than doubled during the year.
- The operating profit margin of the Company at 44.84% is highest in the Indian cement industry.
- The proportion of blended cement in the total production has increased to 76% in the current year against 54% in the previous year. Company started use of wet fly ash for producing blended cement which is economical and environment friendly.
- The capacity utilization level of the Company further improved during the year from 114% to 116% with Unit-III recording 99% in its very first full year of operation. This compares well with the all India average of 94%.
- Continued thrust on improving energy consumption levels has brought down power and fuel consumption as under:
Although Power consumption for the year indicates marginal increase during the year, the unit-wise consumption has gone down from last year. The reduction in energy consumption with increasing production base has significantly contributed to cost efficiency of the Company.
- Dynamic and efficient logistic management practices have enabled Company to contain increase in freight cost in spite of rising diesel prices and loading restrictions on trucks. Company has made optimal use of its in-house railway sidings facility with appropriate route plan to limit freight cost.
- The Company's marketing strategy of maintaining multiple brands competing with each other with a view to garner increased market share has yield good returns. As a result,
- Company has retained market leadership status in Rajasthan and Delhi.
- “Jung Rodhak” brand has further strengthened its presence in its segment in the North India market.
- “Bangur Cement” launched last year in the premium quality segment, has been well received in the market and has been improving its market share. Its marketing strategy of appointment of Business associates and Business partners has enabled the Company to keep its debtors levels at zero and minimizing the Working Capital requirement.
- Company has introduced another premium quality brand “Tuff Cemento 3556”. The new brand has started attracting customers attention and is getting good response.
- The proportion of trade sale to total sale increased during the year from 66% to 74% showing higher customer recall and satisfaction.
- The Company continued with its highest credit rating of PR1+ for its short-term debt and AA for its long-term debt enabling containment of its cost of funds despite large borrowing requirements for its capital expenditure programme.
- The interest cost has been kept at a low level in the rising interest rate environment through optimal utilization of funds and judicious mix of rupee and fully hedged foreign currency borrowings.
- Timely execution of projects is a hallmark of the Company. The 1.5 MTPA capacity expansion with captive power plant of 18 x 3 MW completed in Feb 08 has been achieved well within the targets both time and budget.
- During the year Company has undertaken implementation of an “Enterprise Resource Planning” (ERP) Project with Oracle E-Business Suite to manage its expanding business operations. ERP Project shall help it in improving its business matrices by process optimization, improving logistics and integration across disciplines. The project is expected to be operational in FY 2008-09.
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