Binani Cements Ltd, the Rs 1,700-crore cement major and the flagship of the Rs 2,500-crore Braj Binani Group, plans to strengthen its two-month old presence in eastern India by utilising the railway wagons returning empty after transporting coal to power plants in the northern and western regions. As most of Binani's operations are in Rajasthan, it hopes to transport its cement through these empty wagons to the eastern region.
Vinod Juneja, Managing Director, Binani Cements Ltd, told Projectmonitor, "These wagons transport coal to northern India and return empty on the return leg. The wagons are open type, thus not suitable for many other items." On being questioned further, Juneja stated that his company had already spoken to the Railways and would be implementing the proposal. He reiterated that it had always been railway policy to ensure more capacity on under-performing routes.
Juneja admitted that the transportation of cement over 500 km would make the commodity unviable due to rising competition, but he hoped that this arrangement would help the Rajasthan-based company to strengthen its presence in the east.
The company recently announced net sales of Rs 1,489 crore for 2008-09, an increase of 52 per cent over the previous year. "Binani Cement performed well in FY08-09 despite a weakening rupee and forex fluctuation loss on account of increase in imported coal prices. Despite cost pressure, Binani Cement managed higher realisation due to 50 per cent growth in sales volume," Vinod Juneja noted. "The company has executed a long-term contract for supply of coal from Indonesia for its coal requirements for its captive power plants which will show a saving in input cost in coming fiscal year. The company's policy to hedge supply and avoid speculating gains or losses has given a firm stand to Binani Cement and post a profit in the global downturn. "