Connect with us

Environment

The accusations of cartelisation, if any, are totally incorrect and ill-founded

Published

on

Shares

Vinita Singhania, Managing Director, JK Lakshmi Cement Ltd, and President, Cement Manufacturers’ Association (CMA) in an e-interview with Indian Cement Review, explains her priorities, defends accusations and puts forth her suggestions for the growth of Indian cement industry.

Now that the Budget 2011-12 has been announced, what are your priorities for the Indian cement industry?
My main priority for the cement industry is to arrange/mobilise adequate raw materials and infrastructure so that the industry can grow at the required rate to meet the emerging demand of the nation in the next one decade. Indian cement industry today faces acute shortage of fuel for production as well as for its power requirement, wagon for its movement of cement and more importantly, bulk handling infrastructure at the cement unloading/consumption points. Further, since the Budget has not addressed the long pending concern of the industry with respect to the high taxation burden, the priority to sensitise and convince the authorities about the same remains an important item on the Industry’s agenda.

What has the Budget badly missed out, which would have propelled the industry to greater heights?
As mentioned earlier, the issue of high taxation on cement industry which results in high cost of cement to the end-consumers needs to be looked at by the government afresh, recognising that cement is an essential input for the country’s infrastructure development as also for common man’s housing requirement.

The Budget does not incentivise efficient working in the cement industry atleast. Neither it has encouraged the modern method of construction/products like RMC, AAC blocks etc, which are not only environment-friendly but if which encouraged can reduce the load on the country’s resources and infrastructure. Instead of any incentive products like fly ash, slag, RMC are now being subjected to excise rate of one per cent. With imaginative use of taxation on these products their consumption could have been encouraged.

What is your opinion on the reduction in import duty on pet coke and gypsum? What would be its impact on production cost?
Reduction in import duty on pet coke and gypsum is a positive move though the reduction is still only half way meeting the industry’s requirement which faces an anomaly of cement being imported at zero per cent import duty while the import of its raw material was being subject to 5 per cent import duty which has been reduced to 2.5 per cent in the Budget. It can possibly impact the production cost by about one per cent to those units who are dependent on imported coal or pet coke and who are situated closer to the ports. The rest of the cement plants which form a major chunk remain unaffected.

The government has restructured the excise duty by bringing in composite rates having an ad valorem and specific component. What would be its impact on the cement price?
The dual system of excise on cement is now prevalent for the fifth year. The bigger question is not that one of ad valorem vs specific rate. The issue is that since in a commodity like cement post manufacturing expenses are very high, notably that of freight, the excise duty if charged on ad valorem rate, should also have a provision for abatement on such post manufacturing expenses. In fact, the government has been providing abatement to many industries, including white cement. The cement (grey) industry, however, continues to remain deprived of this abatement causing hardship to the industry.

The surcharge limit on corporate tax has been brought down to 5 per cent from 7.5 per cent and the minimum alternate tax (MAT) has been increased to 18.5 per cent from the existing 18 per cent. What would be its impact on the industry?
The reduction of surcharge on corporate tax by 2.5 per cent and increase in MAT rate from 18 to 18.5 per cent has resulted in increase in overall MAT rate by 0.08 per cent and decrease in corporate tax by 0.77 per cent. This has widened the gap by 0.85 per cent in normal corporate tax and MAT rate.

The resultant gap between the normal tax and MAT will negatively impact the capital investments as also the cash flows of companies on MAT.

There is always an accusation of cartelisation in the cement industry, which leads to artificial hike in price. Your comments on this allegation.
The accusations of cartelisation, if any, are totally incorrect and ill-founded.

On one hand, a price hike is announced every alternate week while on the other, the industry faces a serious under-utilisation of capacity. Can you explain this anomaly?
It would be incorrect to say that price hikes are announced every alternate week. For instance, in the area where our company JK Lakshmi Cement operates, we have not seen any price increase from March 2010 to January 2011 though, yes, we did see price declining a number of times. The industry normally faces this dilemma that whenever the prices decline the capacity utilisation also declines. This is understandable as cement prices are a direct off-shoot of demand and supply and whenever the supply increases on account of new capacity creations the overall capacity utilisation falls if the demand is not able to keep pace with the addition in the capacities.

Since the capacity is under-utilised, are there any plans to bolster the export?
The exports this year are at about the same level as last year. Indian cement industry is a marginal player in the international cement trade on account of its high inland cost of transportation. Also in the recent times consequent to the recession of 2008-09 the international demand for cement continues to be at low ebb. The Indian cement industry, therefore, has been finding it difficult to even maintain its previous level of exports.

Coal being the main fuel for the industry, its availability is depleting at a faster rate. How the use of alternate fuel can be encouraged?
Cement industry has been experimenting with alternate fuel for last many years now. Many cement plants in the country, including ours, have taken lead in working with alternate fuel like pet coke, lignite, agricultural waste, biomass, etc. One obvious way to encourage the use of alternate fuel would be to offer excise duty concession to the extent cement produced from the alternate fuel and if that alternate fuel is an industrial waste then the waste generating industry must compensate by some levy mechanism to promote utilisation of such industrial wastes.

With conventional source of energy getting dearer and environmentally risky, how is the industry embracing renewable source of energy?
One of the methods increasingly being resorted to by the cement industry is by greater usage of waste heat from the kilns and convert it into power.

How do you see the acceptance and evolution of blended cement in India?
By and large, the blended cement is now well accepted in many segments of the users. Surprisingly, the greater resistance comes from the public sector or government departments who for reasons best known to them continues to insist on usage of OPC. I feel there would have to be greater intervention by the government to ensure that usage of blended cement is made compulsory.

Cement companies are selling PPC at the same price as they would have sold OPC by adding flyash and hence there is more margin for cement companies in selling PPC. Your comments.
It would be incorrect to generalise that cement companies are selling PPC at the same price as that of OPC. In major parts of our markets, for instance, OPC commands a premium of Rs 15 to 20 a bag over PPC. In the markets where the price gaps are lower cement companies lose by selling more of OPC. In a way it is only appropriate that the cement companies should gain by manufacturing PPC and that is the only way the industrial waste like fly ash, slag, etc can be utilised in greater quantity.

RMC, being value-added product, is still in its nascent stage. What steps can be taken to encourage the use of RMC?
RMC off late in mature market is showing a trend of good growth. We expect this trend to continue and the use of RMC to grow in Tier II and III cities. The industry has to take certain steps to make RMC available, acceptable and affordable to the customers in Tier II and III cities.

Cement demand is driven by the housing market to the extent of 70 per cent and balance by infrastructure, etc. Given the pace of investment happening in infrastructure, do you foresee a shift in demand drivers?
To the best of our judgement, the consumption of cement in building construction is about 60-65 per cent and that would include building for housing as well as for commercial and infrastructure. Clearly, with greater emphasis on infrastructure development there would be gradually higher requirement by the infrastructure sector.

Many cement companies have reported loss in Q3. What are the factors affecting the companies? What remedial measures would you suggest in this regard?
Cement industry in the Q2 and Q3 has faced twin pressures, viz, falling cement prices and increasing cost of production. Fuels, both nationally and internationally, have seen a great upsurge in its prices thereby putting pressure on the cost of production while additional capacities which have created a situation of surplus, impacted the prices negatively.

Do you see mergers and acquisitions happening in near future? Is the cement industry ready for consolidation?
The current level of valuations do not make mergers and acquisitions attractive as the cost of acquiring capacity is higher than the cost of creating new capacity. In the past mergers and acquisitions have taken place as many MNCs who were wanting to establish themselves/or expand in India paid premiums. In immediate future with the current level of valuations I do not see much activity on this front but there could be surprises, I can’t be sure.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Concrete

India donates 225t of cement for Myanmar earthquake relief

Published

on

By

Shares

On 23 May 2025, the Indian Navy ship UMS Myitkyina arrived at Thilawa (MITT) port carrying 225 tonnes of cement provided by the Indian government to aid post-earthquake rebuilding efforts in Myanmar. As reported by the Global Light of Myanmar, a formal handover of 4500 50kg cement bags took place that afternoon. The Yangon Region authorities managed the loading of the cement onto trucks for distribution to the earthquake-affected zones.

Continue Reading

Concrete

Reclamation of Used Oil for a Greener Future

Published

on

By

Shares

In this insightful article, KB Mathur, Founder and Director, Global Technical Services, explores how reclaiming used lubricants through advanced filtration and on-site testing can drive cost savings, enhance productivity, and support a greener industrial future. Read on to discover how oil regeneration is revolutionising sustainability in cement and core industries.

The core principle of the circular economy is to redefine the life cycle of materials and products. Unlike traditional linear models where waste from industrial production is dumped/discarded into the environment causing immense harm to the environment;the circular model seeks to keep materials literally in continuous circulation. This is achievedthrough processes cycle of reduction, regeneration, validating (testing) and reuse. Product once
validated as fit, this model ensures that products and materials are reintroduced into the production system, minimising waste. The result? Cleaner and greener manufacturing that fosters a more sustainable planet for future generations.

The current landscape of lubricants
Modern lubricants, typically derived from refined hydrocarbons, made from highly refined petroleum base stocks from crude oil. These play a critical role in maintaining the performance of machinery by reducing friction, enabling smooth operation, preventing damage and wear. However, most of these lubricants; derived from finite petroleum resources pose an environmental challenge once used and disposed of. As industries become increasingly conscious of their environmental impact, the paramount importance or focus is shifting towards reducing the carbon footprint and maximising the lifespan of lubricants; not just for environmental reasons but also to optimise operational costs.
During operations, lubricants often lose their efficacy and performance due to contamination and depletion of additives. When these oils reach their rejection limits (as they will now offer poor or bad lubrication) determined through laboratory testing, they are typically discarded contributing to environmental contamination and pollution.
But here lies an opportunity: Used lubricants can be regenerated and recharged, restoring them to their original performance level. This not only mitigates environmental pollution but also supports a circular economy by reducing waste and conserving resources.

Circular economy in lubricants
In the world of industrial machinery, lubricating oils while essential; are often misunderstood in terms of their life cycle. When oils are used in machinery, they don’t simply ‘DIE’. Instead, they become contaminated with moisture (water) and solid contaminants like dust, dirt, and wear debris. These contaminants degrade the oil’s effectiveness but do not render it completely unusable. Used lubricants can be regenerated via advanced filtration processes/systems and recharged with the use of performance enhancing additives hence restoring them. These oils are brought back to ‘As-New’ levels. This new fresher lubricating oil is formulated to carry out its specific job providing heightened lubrication and reliable performance of the assets with a view of improved machine condition. Hence, contributing to not just cost savings but leading to magnified productivity, and diminished environmental stress.

Save oil, save environment
At Global Technical Services (GTS), we specialise in the regeneration of hydraulic oils and gear oils used in plant operations. While we don’t recommend the regeneration of engine oils due to the complexity of contaminants and additives, our process ensures the continued utility of oils in other applications, offering both cost-saving and environmental benefits.

Regeneration process
Our regeneration plant employs state-of-the-art advanced contamination removal systems including fine and depth filters designed to remove dirt, wear particles, sludge, varnish, and water. Once contaminants are removed, the oil undergoes comprehensive testing to assess its physico-chemical properties and contamination levels. The test results indicate the status of the regenerated oil as compared to the fresh oil.
Depending upon the status the oil is further supplemented with high performance additives to bring it back to the desired specifications, under the guidance of an experienced lubrication technologist.
Contamination Removal ? Testing ? Additive Addition
(to be determined after testing in oil test laboratory)

The steps involved in this process are as follows:
1. Contamination removal: Using advanced filtration techniques to remove contaminants.
2. Testing: Assessing the oil’s properties to determine if it meets the required performance standards.
3. Additive addition: Based on testing results, performance-enhancing additives are added to restore the oil’s original characteristics.

On-site oil testing laboratories
The used oil from the machine passes through 5th generation fine filtration to be reclaimed as ‘New Oil’ and fit to use as per stringent industry standards.
To effectively implement circular economy principles in oil reclamation from used oil, establishing an on-site oil testing laboratory is crucial at any large plants or sites. Scientific testing methods ensure that regenerated oil meets the specifications required for optimal machine performance, making it suitable for reuse as ‘New Oil’ (within specified tolerances). Hence, it can be reused safely by reintroducing it in the machines.
The key parameters to be tested for regenerated hydraulic, gear and transmission oils (except Engine oils) include both physical and chemical characteristics of the lubricant:

  • Kinematic Viscosity
  • Flash Point
  • Total Acid Number
  • Moisture / Water Content
  • Oil Cleanliness
  • Elemental Analysis (Particulates, Additives and Contaminants)
  • Insoluble

The presence of an on-site laboratory is essential for making quick decisions; ensuring that test reports are available within 36 to 48 hours and this prevents potential mechanical issues/ failures from arising due to poor lubrication. This symbiotic and cyclic process helps not only reduce waste and conserve oil, but also contributes in achieving cost savings and playing a big role in green economy.

Conclusion
The future of industrial operations depends on sustainability, and reclaiming used lubricating oils plays a critical role in this transformation. Through 5th Generation Filtration processes, lubricants can be regenerated and restored to their original levels, contributing to both environmental preservation and economic efficiency.
What would happen if we didn’t recycle our lubricants? Let’s review the quadruple impacts as mentioned below:
1. Oil Conservation and Environmental Impact: Used lubricating oils after usage are normally burnt or sold to a vendor which can be misused leading to pollution. Regenerating oils rather than discarding prevents unnecessary waste and reduces the environmental footprint of the industry. It helps save invaluable resources, aligning with the principles of sustainability and the circular economy. All lubricating oils (except engine oils) can be regenerated and brought to the level of ‘As New Oils’.
2. Cost Reduction Impact: By extending the life of lubricants, industries can significantly cut down on operating costs associated with frequent oil changes, leading to considerable savings over time. Lubricating oils are expensive and saving of lubricants by the process of regeneration will overall be a game changer and highly economical to the core industries.
3. Timely Decisions Impact: Having an oil testing laboratory at site is of prime importance for getting test reports within 36 to 48 hours enabling quick decisions in critical matters that may
lead to complete shutdown of the invaluable asset/equipment.
4. Green Economy Impact: Oil Regeneration is a fundamental part of the green economy. Supporting industries in their efforts to reduce waste, conserve resources, and minimise pollution is ‘The Need of Our Times’.

About the author:
KB Mathur, Founder & Director, Global Technical Services, is a seasoned mechanical engineer with 56 years of experience in India’s oil industry and industrial reliability. He pioneered ‘Total Lubrication Management’ and has been serving the mining and cement sectors since 1999.

Continue Reading

Concrete

Charting the Green Path

Published

on

By

Shares

The Indian cement industry has reached a critical juncture in its sustainability journey. In a landmark move, the Ministry of Environment, Forest and Climate Change has, for the first time, announced greenhouse gas (GHG) emission intensity reduction targets for 282 entities, including 186 cement plants, under the Carbon Credit Trading Scheme, 2023. These targets, to be enforced starting FY2025-26, are aligned with India’s overarching ambition of achieving net zero emissions by 2070.
Cement manufacturing is intrinsically carbon-intensive, contributing to around 7 per cent of global GHG emissions, or approximately 3.8 billion tonnes annually. In India, the sector is responsible for 6 per cent of total emissions, underscoring its critical role in national climate mitigation strategies. This regulatory push, though long overdue, marks a significant shift towards accountability and structured decarbonisation.
However, the path to a greener cement sector is fraught with challenges—economic viability, regulatory ambiguity, and technical limitations continue to hinder the widespread adoption of sustainable alternatives. A major gap lies in the lack of a clear, India-specific definition for ‘green cement’, which is essential to establish standards and drive industry-wide transformation.
Despite these hurdles, the industry holds immense potential to emerge as a climate champion. Studies estimate that through targeted decarbonisation strategies—ranging from clinker substitution and alternative fuels to carbon capture and innovative product development—the sector could reduce emissions by 400 to 500 million metric tonnes by 2030.
Collaborations between key stakeholders and industry-wide awareness initiatives (such as Earth Day) are already fostering momentum. The responsibility now lies with producers, regulators and technology providers to fast-track innovation and investment.
The time to act is now. A sustainable cement industry is not only possible—it is imperative.

Continue Reading

Trending News

SUBSCRIBE TO THE NEWSLETTER

 

Don't miss out on valuable insights and opportunities to connect with like minded professionals.

 


    This will close in 0 seconds