Udaipur Cement Works Ltd
Chairman Speech
Dear Shareholders,
Associates and Team UCWL,
The global economic scenario has witnessed a series of disruptions and challenges over
the past two years marked by trade wars, the COVID-19 pandemic, geopolitical conflicts,
and subsequent lockdowns creating complexities. Despite efforts to alleviate the
consequences of these challenges, the continuous uncertainties have had a notable effect
on consumer and business confidence, ultimately impacting global economic growth.
After a strong recovery in 2021 - driven by robust consumer spending and some uptake in
investment, with trade in goods surpassing pre-pandemic levels - there were increasingly
gloomy developments in 2022, and a further growth dip in 2023 but projections for
improvement in 2024.
However, amid this challenging environment, India has rebounded strongly. India's GDP
growth during FY 2021-22 has been favourably revised upward from 8.7% to 9.1%, led by the
manufacturing and construction sectors, indicating a more robust rebound. Similarly, in FY
2022-23, India's GDP growth has been among the highest in the world at an estimated 7.2%.
Industry Trends and Outlook
Substantial capacity is being added to the cement industry, but a more than
proportionate consumption growth is likely to improve the capacity utilisation levels in
the near future. The industry is likely to witness ~9% y-o-y volume growth in FY 2023-24,
supported by sustained demand from infrastructure projects and recovery in individual
housing demand. The upcoming general election of 2024 will generate pent-up demand in the
ongoing year. The government is expected to prioritise the completion of ongoing projects,
leading to increased economic activity and investment. Pre-long-term growth expectations
are to be in the range of ~7% to 8% mainly driven by higher projected growth in these two
sectors. Cooling off energy costs is a positive indicator for the industry but there are
concerns regarding negligible forward movement on cement prices.
Performance
Throughout the year, we have maintained an unwavering focus on achieving growth with
sustainability. Despite facing limited opportunities, we have remained committed to our
agenda. We have diligently worked to control costs, make incremental operational
improvements, and enhance our sales and market share. Our efforts have been directed
towards balancing growth with long-term viability, ensuring that our progress is
sustainable and aligned with our strategic objectives.
Our focused efforts have indeed yielded positive outcomes. The Company has achieved
commendable growth in both production and sales in the past year. Notably, the net sales
of the Company have witnessed a substantial 18% increase in FY 2022-23 compared to the
previous year. Additionally, the sales volume has reached 20.35 lakh tons in FY 2022-23
from 19.49 lakh tons in FY 2021-22.
Despite facing significant challenges such as the notable increase in fuel costs during
FY 2022-23, which put pressure on margins, the Company has managed to deliver a
satisfactory performance. This has been made possible through the implementation of
various efficiency improvement measures, optimisation of the product mix, and geographical
mix. These strategic initiatives have enabled the company to navigate challenging market
conditions and achieve positive results.
By continuously improving efficiency parameters and adapting to changing market
dynamics, we have effectively mitigated the impact of cost pressures and enhanced our
overall performance. Our focus on optimising the product mix and expanding into new
geographical markets has further contributed to our success. These accomplishments
underscore our commitment to sustainable growth and resilience in the face of challenges.
During the year, your Company successfully commissioned a floating solar power plant of
1 MW, the first of its kind in the state of Rajasthan and in the indian cement industry.
This has resulted in an increase in the share of renewable energy of the Company to more
than 48% of its total power requirement.
The Company is currently executing an expansion project that involves the addition of
new clinker line with a capacity of 1.50 million tonnes per annum and a cement grinding
unit of 2.50 million tonnes per annum. The clinkerisation line is projected to be
commissioned during the third quarter of FY 2024 and the cement grinding in the second
quarter of FY 2025, as originally scheduled. Upon completion of the project, the clinker
capacity will be enhanced to 3 million tonnes per annum, and the cement grinding capacity
will increase to 4.70 million tonnes per annum.
Awards & Accolades
Collective efforts by all our stakeholders have been well recognised in the industry
and your Company has been awarded as India's fastest growing cement company in the small
category 2022 by the Indian Cement Review (ICR).
I would like to take this opportunity to express my heartfelt gratitude to all our
valued customers, esteemed business partners, dedicated associates, reliable suppliers,
and esteemed members of our organisation. Your unwavering loyalty and confidence in us
have been instrumental in our success, and we deeply appreciate your continued support. I
would also like to extend my gratitude to our employees, who are truly the cornerstone of
our organisation.
As we embark on an exciting journey towards a promising future, I am grateful for the
partnership we have established and nurtured with all our stakeholders. Your support has
been invaluable, and it is our hope that we can continue to count on your support and
collaboration in the days to come. The future holds immense potential and abundant
opportunities, and we are confident that together, we can achieve even greater heights.
Namaskar,
Vinita Singhania,
Chairperson.
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