Bridging the gap with quality cement

TANCEM rises from the pandemic fall, set to double target of profit

Published - March 04, 2022 11:18 am IST - CHENNAI

The brand has a plant in Alangulam in Tirunelveli district and two plants in Ariyalur. 

The brand has a plant in Alangulam in Tirunelveli district and two plants in Ariyalur.  | Photo Credit: Special Arrangement

Some of the best landmarks in Chennai have a tag that’s lesser known. The Gemini Flyover (now Anna Flyover), Napier Bridge and Thalamuthu Natarajan Maligai were either built or entirely renovated with cement churned out by the factories of the Tamil Nadu Cements Corporation Limited (TANCEM).

The brand, a fully owned Government of Tamil Nadu undertaking established almost half-a-century ago, has three plants — one in Alangulam (Tirunelveli district) and two in Ariyalur — with a total capacity of 17 lakh tonnes. The brand was not seen or heard much earlier in the highly competitive industry, due to its low-profile marketing and conservative strategies.

But, it is emerging as a competitor to big players. Widening its modest customer base, TANCEM has opened its doors to major consumers such as the Confederation of Real Estate Developers’ Association of India (CREDAI), Builders Association of India, Tamil Nadu Housing Board and Chennai Metro Rail Limited.

TANCEM showcases two brands — Arasu and the recently launched Valimai — which it claims is the best in the class in terms of quality parameters. Company’s marketing official R. Karthikeyan contends the cost of cement in the industry fell by about ₹60 a bag soon after Valimai was launched by Chief Minister M.K. Stalin last November.

“Our products surpass the best quality specifications in the industry. The National Council for Cement and Building Materials has certified that TANCEM brand products meet Bureau of Indian Standards (BIS) norms. There is a huge demand for our cement but we are not able to meet it due to limited capacity,” says Mr. Karthikeyan.

While the capacity would be enhanced on priority once a loan of ₹626 crore from the State Bank of India is closed. The company is paying a monthly interest of ₹3.5 crore and a quarterly principal repayment of ₹17.78 crore. The COVID-19 pandemic that affected the construction industry added to its problems.

TANCEM suffered huge losses in the last two years owing to the adverse impact on sales. However, as the industry opened up in phases, the company reached out to consumers with an aggressive marketing strategy. It is planning to offer a credit facility against bank guarantee on bulk purchases.

“In terms of pricing, we are cheaper by ₹75-₹100 per bag. Despite loan repayment and procurement slowdown, we were able to make profits. The company suffered a loss of ₹53 crore and ₹31.26 crore in 2020-21 and 2019-20 respectively. But we managed a turnaround in 2021-22. The company recorded a profit of ₹104.2 crore in April-January- end this financial year. By the end of this fiscal, we hope to touch ₹120 crore, which would be more than doubling the profit target of ₹53 crore for this fiscal,” says TANCEM Managing Director Anil Meshram.

Some of the challenges the company is battling is the recovery of dues from major buyers like the District Rural Development Agency and the cost of ₹9 crore per year incurred towards the purchase of fly ash which was till recently provided free by TANGEDCO.

Mr. Meshram is confident Valimai will soon emerge as the flagship of TANCEM as it is one of the most cost-effective products in the market. “Valimai provides improved workability, durability and enhanced compressive strength. It has a consistent and quick hardening character with a smooth surface that reduces the cost of colour wash.”

While offering the best quality cement at the lowest cost, and taking care of its employees, the company is running its social obligation scheme of Amma Cement (launched by the previous AIADMK government) by providing subsidised cement to people whose annual income was less than ₹3 lakh.

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