DECISIVE STEPS IN TURBULENT TIMES
I am happy to present to you our 64th Annual Report for the year 2021-22. Onthis occasion I would like to inform all our stakeholders that we continue to grow strongon the back of our deep understanding of ever-changing customer demands innovationexcellence and ability to respond to challenges with agility.
What makes me happy is the proactive and focussed efforts taken by our teams to stayahead of the challenges. They engaged at a deep level with customers to better understandtheir requirements and accordingly tweaked product portfolio to cater to these needs.
Macro and micro scenario
The fiscal 2021-22 was marked by several challenges. The most apparent ones being thesecond and third wave of the pandemic. The second wave especially exacted a heavy toll onthe people of the country and the economy. Though this impacted the GDP growth in thesecond quarter of the fiscal the economy has since rebounded strongly driven by positivebusiness sentiments. The country is estimated to have grown at 8.7% in FY 2021-22 comparedto a contraction of 6.6% in FY 2020-21 thereby posting a recovery.
However rising oil prices and broad-based inflation remained a major challenge whichfurther aggravated in the fourth quarter of the fiscal with the onset of the Ukraine andRussia war. Impacted by sectoral headwinds the prices of pet coke coal and fuel saw asharp rise. Primarily due to increasing input costs the raw material power and fuel andfreight expenses increased by 12% 31% and 5% YoY respectively for the cement industry.
However the rebound of cement production and demand in India in FY 2021-22 hasvalidated our optimism after taking a hit in FY _2020-21 due to pandemic-inducedslowdown. Indias cement production was estimated at 332 million tonnes in FY2021-22 growing at 12% y-o-y. Going forward the cement industry is expected to head fora speedy recovery to reach 358 million tonnes in FY 2022-23 growing at 8%_y-o-y drivenby increasing Government spend on infrastructure and sharp focus on housing.
Firm and focussed
Faced by significant challenges we stood our ground and remained resilient with anunwavering focus on our key thrust areas which enabled us to emerge stronger. We achieveda sales quantum of 11.05 million tonnes during the fiscal compared to 9.98 million tonnesin FY 2020-21 a growth of 10.72%. This number could have been much better if not for thevarious challenges we were faced with during the year ranging from excessive rain in thesouthern and eastern markets to the second and third waves of COVID-19 affecting theSouthern states severely when compared to other regions. The excessive rains during theyear delayed infrastructure work in these markets thereby impacting cement offtake.South is our core market which once disrupted by heavy monsoon and cyclones capped oursales growth.
What makes me happy is the proactive and focussed efforts taken by our teams to stayahead of the challenges. They engaged at a deep level with customers to better understandtheir requirements and accordingly tweaked product portfolio to cater to these needs. Ithelped us in rapidly scaling sales as the markets revived and at the same timestrengthened our reputation as a customer-centric brand. At our new Kurnool plant trialrun upto clinkerisation has been completed during the fiscal. With this our clinkercapacity scaled to 13.65 million tonnes per annum. We further undertook measures tooptimise operational cost which helped to some extent in offsetting the increase inlogistics and raw material costs.
ESG embedded deep in our ethos
Driven by our focus on creating shared value for all our stakeholders throughresponsible steps we have sharpened our focus on Environment Social and Governance(ESG). ESG is a part of our ethos and is inculcated among all our employees and supplychain partners. We believe in creating inclusive development by balancing growth with thewell-being of our employees supply chain partners and communities.
Under the purview of environment we undertake specific measures to reduce net carbonemissions ensuring prudent water management responsible waste management and zero wasteto landfill. There is a strong intent to lower dependence on conventional power andattaining a mix of captive and green power in the total power consumption. Under thepurview of social we focus on our employees and communities. To ensure creation ofgreater employee value we focus on active employee engagement diversity and inclusionprogressive employee learning and development and employee health and wellness. As aculmination of these efforts we have recorded zero fatalities during the year. For thecommunity we undertake specific measures under the spheres of education health andsanitation upskilling and biodiversity enrichment to ensure holistic communityupliftment. Under the purview of governance we focus on building a framework centred onethics which is transparent accountable and promotes equity in all aspects. Ourmanagement team works in conjunction with this robust framework and leverages their richexperience to take informed decisions and decisive measures spearheading our growthtrajectory.
I am grateful to the various departments and agencies of the Central and StateGovernments for their help and co-operation. I thank our investors for their unstintedfaith in the Company and our customers for their loyalty towards the Ramco brand. Iextend my appreciation towards our supply chain partners banks and financial institutionsfor the strong cemented relationship we had shared throughout the year. Lastly I extendmy appreciation to all our employees and my colleagues on the Board who helped us standstrong in the face of challenges.
The opportunities in the industry are immense and as one of the leading cement playerswith large capacities and a robust business model we are set to see strong offtake in thecoming years. I seek the continued support and trust of all stakeholders in the journeyforward.