PPISM Cement was conceived towards the end of the last industrial boom. It began its commercial production by the end of 1997, when the entire industry was reeling under severe recession. Not only that, its target market enjoyed a cement surplus at the time, with little hint of any rise in demand.

Prism's project costs also escalated, as it had to accommodate a power plant in its venture. This, because Madhya Pradesh, where it had set up its cement plant, was going through a power crisis. All this affected its bottomline in the last couple of years. And the company's accumulated losses touched Rs 79.8 crore by March 31, 1999.

Neither the industry nor the company showed any sign of recovery. But then bad times do not last forever. With the economy showing signs of improvement, industrial activity increased and with it soared cement consumption. Aided by the improved macro economic scenario, Uttar Pradesh, Prism's prime market, consumed 25 per cent more cement this year. Cement prices have risen from Rs 110 a bag during 1997 to the existing Rs 130 a bag. This has resulted in an improvement in the company's operating margins. Prism has registered a marginal net profit for the first quarter of 1999-2000. The management is confident of going black in the current financial year.

Operating efficiency
Such high level of confidence stems from the fact that the company has a state-of-the-art plant. It has a most modern roller mill that helps it to reduce power consumption. A new 36 MW captive power generation plant has also reduced its dependence on the Madhya Pradesh State Electricity Board.

Apart from erratic power supply from the board, cost of power is Rs 4.50 per unit against the cost of Rs 2.01 for captive power. Prism has also benefited on the freight front. Its freight cost is the lowest in the industry because railway sidings have been installed right inside the plant. Since most of the market for the company is within a radius of 250 kms of its plant, about 20 per cent is saved on rail transportation costs.

To top it all, the plant operated at 90 per cent capacity last year, which helped the company to spread its fixed costs on a larger base.

Future
Prism plans to enter the lucrative southern market at a later stage. It also plans to develop its brand to attain better realisation in the market. Industry sources claim that Prism is able to earn additional Rs 2-3 per bag due to its established brand image in the market.