Dalmia Cement increases its share of green fuel to 12%

Dalmia Cement Limited has turned to using biomass and industrial waste to protect itself from the fuel price hike.

The company is planning to raise Rs 10,000 crore for capital expenditure between FY22 and FY24 after achieving a negligible debt stage.

Managing Director and Chief Executive of Dalmia Cement, Mahendra Singhi, said that the company had increased its share of green fuel, which includes biomass and industrial wastes in total fuel consumption by 12%, and plans to increase it to 20% within one year. The plan is to gradually eliminate the use of fossil fuels.

The green fuel comes from industrial wastes such as chemical, pharma and automobile units through pyro-processing to reduce dependence on coal. Singhi said that the overall cost of green fuel is about 60% lower than fossil fuels.

Despite the coal price hike, the company managed the September quarter better than the previous quarter. Shifting to green fuel will keep high input costs under control. The earnings before interest, taxes, depreciation and amortisation (EBITDA) of Dalmia Cement dropped to 11% to Rs 621 crore during the September quarter, compared to the same period last year.

He said that the existing clinker facility and adoption of new technology in the plant resulted in a drop in power consumption. The cement power consumption was 67 kWh per tonne of cement, which has been reduced to 62 kWh.

He said that the company expects increased rural housing demand post-Covid-19. The upcoming elections may result in infrastructure demand beyond the Covid-19 levels. The company plans to increase its CAPEX to 48.5 million tonnes from 36 million tonnes.

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