Cement makers rule out lay offs

Amid lay offs across sectors, the domestic cement industry has something to cheer about. Though ACC Concrete, which is into the ready-mix-concrete (RMC) business, recently cut around 25 per cent of its workforce, cement makers said the option of lay offs does not exist when the industry is not facing any slowdown.

For a cement plant of about one million tonne, around 400 skilled workers are required on an average. Presently, the industry employs around 70,000 people and with rising capacities the sector would require 43,000 more to attain the targeted capacity additions in the next two years.

Ambuja Cements Managing Director A L Kapur said, “The intensity of manpower is not high in the industry. It has not cut jobs ever. The total labour cost makes out around 3.5-6 per cent of the saleable volumes. So, job cuts will not make any difference.”

The industry is in the process of adding around 100 million tonnes of capacity in the current Five Year Plan (2007-12). Majority of the upcoming plants are greenfield projects.

At a time when the industry is undergoing massive expansion, how can one go for lay offs, wondered H M Bangur, president of the Cement Manufacturers’ Association. “Unlike other sectors, there is no slowdown in demand for cement and the sales are rising. I agree that the situation is bad, but it is not that bad for the sector that we will have to resort to job cuts,” added Bangur, who is also the chairman and managing director of Shree Cement, a dominant north cement player.

T Venkatesan, chief executive officer of Dalmia Cement, too ruled out layoffs. Analysts said that only when plants will be shut down, only then the possibility of lay offs arise. “However, no plants face closure nor is there such a possibility in the near future though capacity utilisation has come down,” they added.