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Cement Outlook 2012: Not as bleak as it looks

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Every other news that pertains to the cement sector presents a gloomy picture and leading the posse are research analysts who are not very optimistic of cement stocks with the exception of a few leading companies that have consistently performed well even under duress. Indian Cement Review checks out whether it is time to call the doctor….The Indian cement industry had witnessed a dream run in the recent past. Consumption of cement in the country had grown at a CAGR of 9.9 per cent during the period FY 06-10. The cement demand growth had surpassed the economic growth rate during the same period. In FY10, cement demand grew at 11.1 per cent recording a multiplier of 1.4 times with the economic growth rate. However, in FY11, cement demand grew at merely 5.1 per cent on YoY basis. The multiplier of cement demand growth to the GDP growth declined below one. Construction activities remained subdued in the last fiscal owing to various reasons. Prolonged monsoon, heavy winter, delay in execution of infrastructural projects due to environmental hurdles and end of construction activities related to Commonwealth Games all together led to lower cement demand growth in FY11. Slowdown in the housing sector due to rising interest rates also impacted cement off take.The long-term cement demand in the country is expected to remain intactGoing forward, cement demand will largely be driven by the increased focus of the government on the infrastructure development and promotion of low-cost affordable housing in the country. The real estate sector continues to dominate as the largest cement-consuming sector in the country. Decent economic growth, rising income levels of a growing middle class, concept of nuclear families catching pace, tax incentives and modern attitudes towards home ownership (the average age of a new homeowner has declined to 32 years compared with 45 years a decade ago) will continue to boost the housing demand and real estate related to the retail segment. The measures announced in the recent budget also indicate continued support of the government to the affordable housing segment which will help the real estate sector to continue its growth momentum and in turn cement demand. CARE Research estimates that in the next four to five years, cement demand to the tune of about 250-260 mn tonne is expected to emanate from the construction of new dwellings in the urban region alone.Infrastructure sector will need more than 600 million tonne of cement during the Twelfth Five Year PlanCement demand is expected to pick up as government expenditure on infrastructure projects catches momentum. In the recent budget, GoI has taken various initiatives to attract foreign funds towards the infrastructural sector. Such measures will help in providing the much-needed financial support to the infrastructural projects and in turn enable faster execution which will boost the cement demand. GoI has envisaged an investment of more than Rs 4000 bn for infrastructure development under the Twelfth Five Year Plan. This will augur well for the cement industry, currently almost 25 per cent of the total cement consumption in the country is contributed by the infrastructure sector. Based on the cement component in the civil construction, CARE Research has estimated that the investments planned under various sub-sectors of the infrastructure sector during the Twelfth Five Year Plan will derive a cement demand of more than 600 million tonne. The share of the infrastructure sector in the total cement consumption is estimated to reach a level of 35 per cent by the end of FY17. Cement demand which is expected to emanate on the back of the planned investments under different infrastructure sub-segments in the Twelfth five year plan is shown in the following chart: Cement demand is expected to grow at a CAGR of 9.3 per cent during the period FY 12-14. The following table gives the overall cement demand-supply situation over next three years:Capacity utilisation rate to remain in the range of 74-76 per cent during FY 12-14In past few years, the gap between cement demand and capacity has been widening due to substantial capacity addition. The cement industry witnessed a capacity addition of about 142.2 million tonne during the period of FY05-11. Out of this, about 67 million tonne of capacity was added in last two fiscals which is almost 23 per cent of industry’s total capacity as on March 31, 2011. As a result, the overall utilisation rate of the industry dropped from the peak of 93 per cent in FY07 to 75 per cent in FY11.Cement industry is expected to add capacity of about 86 million tonne in the period FY 12-14. The industry will continue to face a surplus situation. The operating rate of the industry will remain in the narrow range of 74 – 76 per cent during FY 12-14.Even though the Break-even Cushion is at comfortable level, prices to remain under pressureEven with the decline in the operating rate to a level below 80 per cent, the cement industry has been able to hold the prices on the back of high break-even cushion value.Break-even CushionBreak-even cushion is defined as the ratio of overall capacity utilisation rate of the industry to the utilisation rate at the break-even point in a particular year.Although the break-even cushion value has declined in the past three years, it is still at the comfortable level of two times. With this, cement industry is in better position to avoid substantial price cuts. However, CARE Research expects cement prices to remain under pressure in the current fiscal.(Revati Kasture, Head – Industry Research & Chaitanya Raut, Sr. Manager CARE Ratings)Operating rates will be challenged, profitability headed towards decadal lowCRISIL Research expects cement profitability to decline to its lowest level in the past 10 years by 2012-13. A huge demand-supply imbalance, fueled by supply glut, will drive cement profitability down. The supply glut will slacken cement manufacturers’ operating rates, restricting their ability to pass on a sharp rise in power and fuel costs to consumers.Over the next two years, while cement capacities rise by 60 million tonne per annum (mtpa), demand will increase by a mere 30 mtpa. Operating rates of cement manufacturers will therefore plunge to around 72 per cent in 2012-13 from an already subdued 78 per cent in 2010-11. Cost of power and fuel, a major input for cement, will increase by around 18 per cent in 2011-12, given a steep increase in coal prices by the industry’s dominant supplier, Coal India Ltd. In addition, an increase in effective excise duty rates will lower cement manufacturers’ net price realisations by 2-4 per cent."The magnitude of the demand-supply imbalance and cost escalation will halve the cement industry’s EBITDA margins from the current 20 per cent to around 10 per cent in 2012-13 – the lowest level in the past 10 years," Prasad Koparkar, Head – Industry and Customised Research, CRISIL Research said. Small-sized cement manufacturers – with capacities of less than 2 mtpa – are likely to post losses of about 2 per cent at the EBITDA level in 2012-13. Large cement manufacturers – capacities of 10 mtpa or higher, however, will fare better than the industry average, with EBITDA margins of about 12 per cent.The key reasons for the better performance of large cement manufacturers will be their greater use of captive power and their inherent economies of scale. These companies meet three-fourth of their power requirements through captive generation. Small cement companies, in contrast, meet a mere 5 per cent of their power requirements through the captive route, and source the remainder from the more expensive grid power. "Captive power can make a critical difference to cement profitability," Ajay D’souza, Head, CRISIL Research explained. "Every 10 percentage point increase in captive power consumption can improve cement companies’ EBIT DA margins by 50 basis points."An expert from the industry however dismisses the fears and says that the environment is being painted gloomier than it actually is. "If you look at some established companies they have been doing well despite the hardships and constraints. We expect the agriculture sector to grow and with the good monsoons we have had so far, we are looking at greater rural demand – NREGA spending is up. In a bid to counter global slowdown the government is already planning to boost up internal spending on infrastructure."Sumit Banerjee, CEO, Reliance Cementation, has this to say on the scenario: "Cement sector is cyclical and what we are seeing today is hopefully the bottom of the cycle. The current imbalance in the demand-supply situation is temporary and that too regional in nature. While a near equilibrium exists between demand and supply in some regions, there is excess capacity in South. With consumption growth expected to remain under pressure on account of delays in infrastructure and reality projects, rising capital cost, etc. the average all India capacity utilisation level in FY 12 is expected to touch less then 75 per cent, lowest in the past decade, and then gradually climbing back to 77 per cent in FY 13 and more than 78 per cent in FY14. However, on a longer term basis, with a GDP growth back on track, and thrust on development of physical infrastructure, we expect the growth in cement demand to be robust at around 10% in future. Moreover, with fewer limestone deposits now available to support new plants, coupled with constraints of acquiring land and getting statutory approvals, capacity additions through new green field projects will also slacken in the coming few years. Together, both these factors are likely to result in shortening the down cycle time for the industry and 90 per cent capacity utilization level could be reached earlier than expected."On the drop of prices in the month of July he says, "The drop in cement prices in July is on expected lines due to onset of monsoon as there is an overall slowdown in construction activities. Prices are expected to remain under pressure until Oct 11 and thereafter we may see some upward correction."According to him the eastern and central regions are expected to show higher growth as compared to the other regions.Don’t call the doctor yet….Bleak as it looks, the industry has the capability to withstand the onslaught of varied negative factors and still come out a winner. Despite many analysts predicting dark days ahead for cement companies, shares of some of the larger companies have managed to hold their own while other sectors have dipped. Post the announcement of RBI on credit tightening, domestic benchmark indices have lost 12 per cent in value. The Bombay Stock Exchange’s benchmark Sensex lost 2,194.54 points, to close at 16,676.75 on August 30. But cement stocks have not only stood steady some of them have appreciated. At the time of going to press, UltraTech Cement had gained 7.1 per cent since then and Ambuja Cements was up by 1.4 per cent and ACC gained 0.4 per cent. While it may be true that the June quarter results may have something to do with their performance experts agree that it is definitely better than expected.True cement companies are facing problems that stretch from over-capacity, low price realisation to falling demand for building material, rising input costs, lack of major infrastructure projects and, a charge of cartelisation, but the days ahead still hold some hope. Comes the good news from some companies that dispatches are on the rise. Jaiprakash Associates has announced that its cement shipments in August rose 21 percent from a year earlier to 1.32 million tonne. ACC has announced that its production & despatch figures for the month of August 2011 recorded an increase in sales at 1.88 million tonne compared to 1.57 million tonne in the corresponding period. Also the production increased from 1.56 million tonne to 1.88 million tonne.With the monsoon coming to an end, demand is surely going to pick up soon. The government may also quick track many infrastructure projects to balance the global downgrade and help the economy and this also bodes well for the cement sector.10 Per cent growth, a possibilityWorldwide cement consumption is forecast to reach a record 3,859 million tonne in 2012, 17 per cent up from 2010 levels. Global cement consumption growth had slowed to 2.4 per cent in 2008, the crisis ridden year, recovered to 5.9 per cent in 2009 with volumes touching 2,998 million tonne and further to 3,294 million tonne in 2010, giving annual growth rate of 9.9 per cent. China dominates world cement statistics consuming 1,851 million tonne in 2010, almost double of 2004 levels, while India, the world’s second-largest consumer registered 212 million tonne in 2010. The United States, the third-largest consumer, saw demand fall down to 69 million tonne.What happened in India? The Indian cement industry sustained its growth rate even in the tough conditions of economic slowdown. According to FIRST Infocentre, the Indian cement industry witnessed tremendous growth on the back of continuously rising demand from the housing sector, increased activity in infrastructure, and construction boom. Recent industry developments and the government supportive policies are attracting global cement giants and sparking off a spate of mergers and acquisitions to spur growth. Numerous domestic and international cement companies are striving hard to establish their production base in the country.Majority of the cement companies expanded their installed capacity against the backdrop of government backed infrastructure construction projects as these projects created strong demand for cement. With the growth in real estate activities and boom in the development of infrastructure, cement industry was on a roll in India.Before venturing into forecast for 2012, it would be necessary to dwell into the base year, 2011. After growing by less than 5 per cent in 2010, cement consumption is projected to grow by 11 per cent to 240 million tonne in 2011.Cement consumption has a very strong correlation with the economic growth as construction activities pick-up with the rise income levels. Construction GDP is projected to grow 10 per cent.FIRST Infocentre provides three scenarios for cement consumption forecast for 2012 based on the correlation of past drivers, challenges, and opportunities for expansion;

  • The worst-case scenario forecast pegs cement consumption growth at 8 per cent in 2012 if real GDP grows by 6.5 per cent and prices of fuel inputs rise faster than in 2011.
  • The most likely scenario is around 10 per cent increase in cement consumption, wherein, the GDP will grow by 8 per cent and fuel costs move up moderately in line with the general inflation rate.
  • The optimistic projection pegs consumption growth at 12.2 per cent, assuming GDP grows 9.5 per cent and fuel prices rise slower than the general inflation rate.

Thoroughly examining all emerging trends and drivers fueling growth in the cement industry, the regional cement demand-supply dynamics varies from state to state. The Twelfth Five Year Plan is expected to spend over US$1 trillion on infrastructure sector over the five year period beginning 2012-13. During the first year, more of spill over projects will be targeted for completion, along with the addition of new plan projects. This will boost demand for cement in states that attract more investment projects. For example, Orissa has been seeing number of projects increasing rapidly.Courtesy: FIRST Infocentre

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Concrete

Powering Cement Through Intelligent Motion

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Gears, drives, and motors have evolved from essential mechanical components into strategic enablers of reliability, efficiency, and sustainability in modern cement plants. ICR explores how advanced motion technologies, predictive maintenance, digitalisation, and intelligent drive systems are helping cement manufacturers reduce downtime, optimise energy use, and build future-ready operations.

As the Indian cement industry prepares for another phase of capacity expansion, the focus is shifting from merely increasing production volumes to improving operational efficiency, reliability, and sustainability. According to industry estimates, India is expected to add nearly 160–170 million tonnes of cement capacity between FY26 and FY28, driven by infrastructure investments, urbanisation, and housing demand. In this environment, gears, drives, and motors have emerged as critical enablers of productivity, forming the backbone of every major process from raw material extraction and grinding to clinker production and cement dispatch.
Motors alone account for nearly 60 per cent to 70 per cent of industrial electricity consumption globally, according to the International Energy Agency (IEA), while rotating equipment failures remain among the leading causes of unplanned downtime across heavy industries. In cement plants, where equipment operates under high loads, extreme dust conditions, elevated temperatures, and continuous-duty cycles, the performance of gears, drives, and motors directly influences energy consumption, maintenance costs, plant availability, and overall profitability. As digitalisation and Industry
4.0 technologies gain momentum, these systems are evolving from passive mechanical components into intelligent assets capable of delivering real-time operational insights.

Why gears, drives, and motors are the backbone of cement plant operations
Every major process in a cement plant depends on the seamless operation of gears, drives, and motors. Raw mills, vertical roller mills, crushers, kiln drives, conveyor systems, fans, and clinker coolers all rely on rotating equipment to maintain continuous production. A failure in any one of these systems can disrupt entire process chains, highlighting their strategic importance.
Modern cement plants process thousands of tonnes of material daily, requiring equipment capable of transmitting enormous torque while maintaining precision and reliability. Kiln drives and grinding systems, in particular, operate under some of the highest mechanical loads found in industrial manufacturing. The ability of gears and motors to withstand these conditions directly impacts plant throughput and production stability.
Satish Maheshwari, Chief Manufacturing Officer, Shree Cement says, “Effective lubrication management remains one of the most critical factors in extending the lifespan of cement plant drive systems. Proper lubrication, supported by regular oil analysis, vibration diagnostics, and condition monitoring, helps minimise wear, prevent unexpected failures, and maintain the integrity of critical components such as gearboxes, motors, and drive assemblies. By identifying potential issues at an early stage, plants can move from reactive maintenance to a more proactive and reliability-focused approach.”
“Smart motors, intelligent drives, and next-generation gearboxes are set to redefine cement plant maintenance and performance. Equipped with embedded sensors, IoT connectivity, digital twins, and AI-driven diagnostics, these technologies enable real-time condition monitoring, predictive maintenance, and seamless digital integration. As the industry embraces Industry 4.0, smart drive systems will play a pivotal role in improving energy efficiency, reducing downtime, and optimising asset performance across the cement manufacturing value chain” he adds.
Industry studies suggest that rotating equipment accounts for a significant proportion of maintenance expenditure in process industries. Effective design, selection, and maintenance of gears, drives, and motors therefore have a direct influence on asset utilisation, operational efficiency, and total cost of ownership.

The cost of downtime: reliability challenges in rotating equipment
Unplanned downtime remains one of the most expensive challenges facing cement manufacturers. Industry estimates indicate that a major failure involving a critical gearbox, kiln drive, or grinding mill can result in production losses running into lakhs of rupees per hour, depending on plant capacity and operating conditions.
Sanjeev Arora, President – Motion Business & IEC LV Motors Division, ABB India says, “One of the most significant shifts taking place in industrial decision-making today is moving away from evaluating equipment based solely on upfront capital cost toward understanding total cost of ownership (TCO). In a typical motor system, the purchase price often represents only a small fraction of the total lifecycle cost however energy consumption, maintenance requirements, downtime and operating efficiency account for the vast majority of long-term operational expenses. For cement manufacturers operating in highly competitive markets, this distinction is critical.”
“A high efficiency motor paired with an appropriately configured variable speed drive may require a higher initial investment, but the long-term benefits are substantial. Reduced electricity consumption, lower maintenance needs, longer service intervals and improved process stability can deliver faster payback and stronger profitability over time” he adds.
Cement plants present a particularly challenging environment for rotating equipment. Dust ingress, thermal fluctuations, shock loads, vibration, shaft misalignment, and lubrication contamination contribute significantly to equipment degradation. Studies by SKF indicate that nearly 50 per cent of bearing failures are linked to lubrication issues and contamination, while improper alignment and vibration-related problems remain leading causes of gearbox and motor failures.

Energy-efficient motors and drives: unlocking operational savings
Energy is one of the largest operating expenses for cement manufacturers, often accounting for 25 per cent to 35 per cent of total production costs. Grinding operations alone can consume nearly 60 per cent to 70 per cent of a plant’s electrical energy, making energy-efficient motors and drives a strategic investment.
According to the International Energy Agency, high-efficiency motors combined with Variable Frequency Drives (VFDs) can reduce energy consumption by 20 per cent to 30 per cent in suitable applications. By matching motor speed and torque to actual process requirements, VFDs minimise unnecessary power consumption while reducing mechanical stress on equipment, improving both efficiency and reliability.

Advances in gearbox design and power transmission technologies
Modern gearbox technology has evolved significantly in response to the increasing demands of cement manufacturing. Advanced materials, case-hardened gears, optimised tooth profiles, improved surface finishing, and enhanced lubrication systems are helping reduce friction, wear, and thermal loading.
Girish Hanchate, Director – Industrial Market, India SKF India (Industrial) says, “Smart diagnostics are significantly improving the lifecycle of gears, motors, and other rotating equipment by enabling a shift from reactive maintenance to condition-based asset management. Hidden issues such as vibration anomalies, bearing defects, misalignment, and temperature fluctuations can quietly reduce plant throughput by 10 per cent to 20 per cent while increasing energy consumption long before a breakdown occurs. By leveraging advanced sensors, predictive analytics, machine learning, and real-time monitoring of vibration, temperature, and motor current, cement manufacturers can detect developing faults early, optimise maintenance schedules, and prevent costly secondary damage. This not only improves reliability but also supports energy efficiency and sustainability objectives.”
“The next major evolution in drive and bearing technology lies in the development of fully integrated smart mechanical ecosystems that combine high-performance bearings, advanced lubrication management, and digital intelligence. Sensor-enabled condition monitoring embedded directly within bearings and drive systems allows operators to capture critical operational data at the source, enabling predictive maintenance and real-time performance optimisation. Innovations such as SKF’s VA9A1 Spherical Roller Bearing series, engineered specifically for demanding cement applications such as crushers and kilns, demonstrate this trend. By increasing internal bearing space and optimising lubricant flow, these designs improve grease retention, reduce wear, minimise downtime, and create more resilient, energy-efficient rotating equipment systems for the future of cement manufacturing” he adds.
Manufacturers are increasingly focusing on compact, high-torque gearbox designs capable of delivering higher power density while maintaining service life. Innovations such as condition-monitored gear systems, improved sealing technologies, and modular gearbox architectures are simplifying maintenance while enhancing operational reliability.

Predictive maintenance, condition monitoring, and asset health management
The shift from reactive to predictive maintenance is transforming asset management across the cement industry. Technologies such as vibration monitoring, thermography, oil analysis, ultrasound testing, and motor current signature analysis are enabling operators to identify potential failures before they occur.
Research by Deloitte suggests that predictive maintenance can reduce breakdowns by up to 70 per cent and lower maintenance costs by 25 per cent. In cement plants, where shutdown windows are limited and equipment operates continuously, predictive maintenance offers a powerful tool for improving reliability and extending asset life.
Digitalisation, industry 4.0, and the rise of intelligent drive systems
Industry 4.0 technologies are redefining the role of gears, drives, and motors. Smart sensors embedded within motors, bearings, and gear systems can continuously monitor temperature, vibration, load, lubrication condition, and energy consumption.
Girish Hanchate says, “As the industry embraces automation, sustainability, and digital transformation, the importance of intelligent motion technologies will continue to grow. The convergence of advanced engineering, predictive maintenance, and Industry 4.0 solutions is creating a new generation of cement plants where reliability, efficiency, and sustainability work together to deliver long-term value. For cement manufacturers navigating increasing production demands and environmental expectations, investing in smarter gears, drives, and motors is no longer optional—it is a business imperative.”
Cloud-based monitoring platforms and Industrial Internet of Things (IIoT) architectures enable maintenance teams to access equipment health data remotely, improving visibility across geographically dispersed operations. Advanced analytics and
artificial intelligence are further enhancing fault detection capabilities, enabling more accurate maintenance planning.
The emergence of digital twins represents another significant development. By creating virtual replicas of physical assets, operators can simulate operating conditions, predict failures, optimise maintenance schedules, and improve lifecycle management decisions. These technologies are helping transform rotating equipment into intelligent assets that actively contribute to operational decision-making.

Building future-ready cement plants through smart motion technologies
The future of cement manufacturing will depend heavily on the ability to integrate mechanical reliability with digital intelligence. Smart motion technologies combine high-efficiency motors,
intelligent drives, condition monitoring systems, and automation platforms to create more responsive and efficient operations.
Sustainability goals are also accelerating investment in advanced motion technologies. Reduced energy consumption, improved equipment efficiency, and extended asset life contribute directly to lower carbon emissions and reduced resource consumption.
These benefits align closely with the industry’s decarbonisation objectives.
As capacity expansions continue across India, future-ready cement plants will increasingly prioritise reliability, flexibility, and data-driven decision-making. Organisations that successfully integrate smart motion technologies into their operations will be better positioned to reduce costs, improve productivity, and maintain a competitive advantage in a rapidly evolving market.

Conclusion
Gears, drives, and motors are no longer viewed solely as mechanical components; they have become strategic assets that influence every aspect of cement plant performance. Their reliability affects production continuity, their efficiency impacts operating costs, and their digital capabilities increasingly shape maintenance and operational strategies.

  • Kanika Mathur

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Concrete

Liquid Intelligence

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Lubrication has evolved from a routine maintenance activity into a critical driver of reliability, energy efficiency, and sustainability in cement manufacturing. ICR explores how advanced lubricants, predictive maintenance, and Total Lubrication Management are helping cement plants reduce downtime, optimise performance, and achieve long-term operational excellence.

In the cement industry, discussions around operational excellence often focus on kiln efficiency, alternative fuels, digitalisation, and process optimisation. Yet one of the most influential factors affecting equipment reliability, energy consumption, maintenance costs, and sustainability often receives far less strategic attention: lubrication. From vertical roller mills and kiln drives to crushers, conveyors, clinker coolers, and large industrial gearboxes, every critical asset depends on effective lubrication to minimise friction, reduce wear, and ensure uninterrupted operation.
The importance of lubrication extends far beyond routine maintenance. According to tribology research, nearly 23 per cent of global energy consumption is associated with overcoming friction and replacing worn components. Researchers have estimated that implementing advanced tribological practices could reduce global energy consumption by as much as 8.7 per cent in the long term. For cement manufacturers operating in highly demanding environments characterised by abrasive dust, heavy loads, high temperatures, vibration, and continuous operations exceeding 8,000 hours annually, lubrication has evolved from a maintenance function into a strategic lever for reliability, sustainability, and profitability.
The significance of this opportunity becomes even clearer when viewed against the backdrop of the cement industry’s environmental challenges. According to the International Energy Agency (IEA), cement manufacturing accounts for approximately 7–8 per cent of global CO2 emissions and consumes nearly 5 per cent of industrial energy worldwide. While much attention is rightly directed toward alternative fuels, clinker factor reduction, and carbon capture technologies, maintenance practices such as lubrication remain one of the most practical and immediately deployable avenues for improving efficiency and reducing emissions.

Why lubrication is critical to cement plant reliability
Cement manufacturing relies on some of the most heavily loaded rotating equipment found in industrial production. Kiln support rollers, girth gears, vertical roller mills, crushers, conveyors, ID fans, and large gearboxes operate under extreme conditions where temperatures, loads, and contamination levels routinely challenge equipment integrity. Under such circumstances, lubricants serve not merely as friction-reducing agents but as essential protective barriers that prevent metal-to-metal contact, dissipate heat, minimise wear, and extend component life.
A modern integrated cement plant may contain thousands of lubrication points distributed across critical and auxiliary equipment. Even a minor lubrication-related issue can escalate rapidly when equipment operates continuously around the clock. Unlike batch manufacturing operations, cement plants often have limited opportunities for shutdowns, making asset reliability a key business priority. Effective lubrication directly contributes to machine availability, process stability, and production continuity.
Industry studies consistently demonstrate the relationship between lubrication and reliability. Research published by SKF indicates that approximately 36 per cent of premature bearing failures are caused by poor lubrication practices, while bearing damage accounts for nearly 50 per cent of rotating equipment failures globally. Similarly, studies by Machinery Lubrication have found that improper lubrication contributes to roughly 43 per cent of mechanical failures and more than half of bearing-related breakdowns. These statistics highlight a critical reality: lubrication is not simply a maintenance task but a reliability strategy.
The consequences of lubricant failure extend well beyond replacement parts. A failed bearing in a vertical roller mill, kiln drive, or critical conveyor system can trigger extended downtime, emergency maintenance costs, production losses, and supply chain disruptions. In large integrated cement plants, even a few hours of unplanned downtime can result in significant financial losses, making lubrication one of the most cost-effective reliability investments available.

Hidden cost of poor lubrication management
Many organisations continue to treat lubrication as a consumable expense rather than a strategic asset management function. This mindset often results in inconsistent lubrication schedules, incorrect lubricant selection, contamination issues, over-lubrication, under-lubrication, and inadequate monitoring practices. The resulting impact is often far greater than the actual cost of the lubricant itself.
Professor Procyon Mukhejee says “Lubricant purchasing often followed a conventional sourcing model: negotiate annual contracts, standardise product grades and optimise price. That logic is still relevant but no longer sufficient. In a cement plant, a lower-cost lubricant that reduces purchase spend may increase oil replacement frequency, raise wear rates or contribute to avoidable downtime. That trade-off is forcing procurement teams to think differently.”
According to industry research, up to 70 per cent of mechanical failures can be linked to contamination, improper lubricant selection, or inadequate lubrication practices. Noria Corporation estimates that world-class lubrication programmes can reduce maintenance costs by 20–40 per cent and extend equipment life by as much as 50 per cent. Conversely, reactive lubrication practices increase spare-part consumption, raise labour requirements, accelerate equipment wear, and elevate operational risk.
The hidden costs are particularly severe in cement plants because contaminants such as dust, moisture, and wear particles are ever-present. Even microscopic contaminants can damage bearing surfaces and gear teeth, leading to premature failure. Poor lubrication management also increases energy consumption because higher friction levels require greater power input to maintain production rates. As a result, the true cost of poor lubrication extends far beyond maintenance budgets and directly impacts overall plant profitability.

Lubricants and energy efficiency
Energy represents one of the largest operating expenses in cement manufacturing. Grinding operations alone account for approximately 60–70 per cent of total electrical energy consumption within a typical cement plant. Consequently, any improvement in equipment efficiency can generate substantial cost savings over time.
Lubricants contribute directly to energy efficiency by reducing friction between moving surfaces. Lower friction means less resistance, lower operating temperatures, and reduced power requirements. Advanced lubricant formulations are specifically designed to optimise film strength while minimising energy losses across gears, bearings, and hydraulic systems.
Dr SB Hegde, Global Cement Industry Expert says, “One of the most overlooked aspects of lubrication in cement plant operations is effective contamination control combined with disciplined greasing practices. Cement dust, which is often harder than bearing steel, can mix with lubricants and create an abrasive grinding paste that accelerates wear and is responsible for a significant share of bearing failures. Despite this, many plants still rely on manual, time-based greasing and outdated sealing systems, resulting in higher energy consumption, premature component wear, and frequent unplanned shutdowns. Automatic lubrication systems, coupled with robust dust exclusion measures, remain one of the most underutilised yet effective reliability solutions in the industry.”
“Smart lubrication practices can have a direct and measurable impact on both profitability and sustainability. The use of high-performance synthetic lubricants, combined with predictive oil condition monitoring, can typically deliver energy savings of 3–4 per cent, translating into substantial annual cost reductions for cement manufacturers. In one notable case, a large cement producer implemented wireless condition monitoring alongside advanced lubrication practices on critical assets and achieved a 57-times return on investment within six months. The initiative generated savings exceeding `8.4 crore and prevented a major bearing failure that could have caused more than 160 hours of downtime, highlighting the significant financial value of proactive lubrication management” he adds.
Research by ExxonMobil and other lubricant manufacturers has demonstrated that synthetic lubricants can reduce energy consumption in industrial gear systems by 2–6 per cent under appropriate operating conditions. While these savings may appear modest on an individual machine basis, the cumulative impact across multiple mills, fans, conveyors, and drive systems can be considerable. For large cement manufacturers operating energy-intensive facilities, even a 2 per cent reduction in power consumption can translate into significant annual cost savings.
Furthermore, reduced friction contributes to improved equipment performance and lower heat generation, enabling machinery to operate more consistently under demanding conditions. In an industry where energy efficiency and carbon reduction targets are becoming increasingly important, lubrication represents a practical pathway for achieving measurable improvements.

Advances in synthetic and high-performance lubricants
The lubricant industry has undergone significant transformation over the past decade. Traditional mineral oils are increasingly being supplemented or replaced by synthetic and semi-synthetic formulations engineered specifically for demanding industrial applications.
Modern synthetic lubricants provide superior oxidation resistance, thermal stability, viscosity retention, load-carrying capacity, and wear protection compared to conventional products. These characteristics are particularly valuable in cement applications where equipment is exposed to extreme temperatures, heavy loads, and continuous operation.
Many premium synthetic lubricants now deliver service lives two to five times longer than traditional mineral oils. This not only reduces lubricant consumption but also minimises maintenance interventions and associated downtime. For cement manufacturers, extended oil drain intervals can significantly improve equipment availability and reduce lifecycle costs.
Synthetic gear oils have gained widespread acceptance in applications such as kiln drives, vertical roller mills, and high-load gearboxes. Field studies have reported gearbox temperature reductions of up to 10°C following conversion from conventional lubricants to advanced synthetic alternatives. Lower operating temperatures contribute directly to improved component life, reduced oxidation, and enhanced overall reliability.

Predictive maintenance, oil analysis, and condition monitoring
The emergence of predictive maintenance has transformed lubrication from a reactive maintenance activity into a proactive asset management discipline. Rather than relying solely on time-based maintenance schedules, cement plants increasingly use oil analysis and condition monitoring technologies to assess equipment health continuously.
Oil analysis provides a wealth of information about both lubricant condition and machine health. Parameters such as viscosity, oxidation, contamination levels, moisture content, additive depletion, and wear particle concentrations can reveal developing problems long before equipment failure occurs. In many cases, lubrication-related abnormalities represent the earliest warning signs of impending mechanical issues.
Gaurav K Mathur says “Dust contamination remains the single biggest lubrication-related challenge affecting cement plant productivity today. Airborne silica and clinker dust penetrate bearings, gear housings, and lubrication systems, transforming lubricants from protective agents into abrasive mediums. These contaminants are often as hard as bearing steel and create a three-body abrasion mechanism that rapidly accelerates wear, especially under the high temperatures, shock loads, vibration, and continuous-duty operating conditions typical of cement plants. Poor sealing systems can increase wear rates by three to five times, leading to premature failures, rising maintenance costs, and reduced equipment life. Compounding the issue is a growing industry-wide shortage of experienced lubrication professionals, resulting in a loss of critical maintenance expertise and an increasing reliance on reactive rather than predictive maintenance.”
Reliability experts frequently describe oil analysis as a “blood test” for machinery because it provides valuable insights into internal equipment conditions without requiring disassembly. Studies suggest that every dollar invested in predictive maintenance can generate returns of five to ten dollars through avoided failures and reduced downtime.
Leading cement producers increasingly combine oil analysis with vibration monitoring, thermography, ultrasonic inspection, and digital condition monitoring platforms. This integrated approach enables maintenance teams to move from reactive maintenance to predictive asset management, reducing downtime while improving equipment lifespan and operational reliability.

Total lubrication management: a strategic approach to asset health
As reliability expectations continue to increase, many cement manufacturers are adopting Total Lubrication Management (TLM) programmes.
TLM extends beyond lubricant selection and incorporates every aspect of lubrication management, including storage, handling, contamination control, application methods, oil analysis, training, and continuous improvement.
Gaurav K Mathur, Director & Chief Executive, Global Technical Services says, “Smarter lubrication practices can significantly reduce both energy consumption and maintenance expenditure. The implementation of Total Lubrication Management (TLM), supported by careful lubricant selection, customised lubrication strategies, and robust contamination control, helps reduce friction across critical equipment and improve operational efficiency by up to 3 per cent. In energy-intensive cement plants, even marginal efficiency gains can translate into substantial cost savings. Improved lubrication practices also reduce wear, minimise overheating, extend equipment life, and lower the frequency of maintenance interventions, directly contributing to higher plant availability and lower total operating costs.”
“The most impactful innovation for the cement sector will not be a single lubricant product but the widespread adoption of Total Lubrication Management as a structured reliability framework. TLM integrates contamination control, oil analysis, condition-based maintenance, online filtration, lubricant regeneration, digital tracking, and condition monitoring into a unified system. This approach transforms lubrication from a routine maintenance activity into a strategic asset management function. The result is improved equipment reliability, reduced lubricant consumption, lower waste generation, enhanced energy efficiency, and a smaller carbon footprint. In an industry characterised by harsh operating environments and growing sustainability expectations, TLM offers a practical pathway to achieving higher reliability, improved profitability, and long-term operational sustainability” he adds.
One of the primary objectives of TLM is contamination control. Dust, moisture, and wear particles are widely recognised as the leading causes of lubricant degradation and equipment failure. Given the inherently dusty environment of cement plants, effective contamination control becomes essential for maintaining lubricant quality and equipment health. Another important component of TLM is lubricant consolidation. Many plants operate with dozens of lubricant grades, increasing inventory complexity and the risk of cross-contamination. Best-in-class lubrication programmes often reduce lubricant inventories by more than 30 per cent while simultaneously improving operational reliability.
Training also plays a critical role. Industry surveys suggest that fewer than half of lubrication technicians receive formal lubrication training. Yet organisations that invest in lubrication education consistently report lower failure rates, improved maintenance performance, and better asset utilisation. One widely cited industrial case study documented a reduction in bearing failures from nearly 400 per month to just 12 after implementing comprehensive lubrication excellence initiatives.

Supporting sustainability
Sustainability has become a central priority across the cement industry. While alternative fuels and carbon capture technologies often dominate discussions, lubrication also contributes significantly to environmental performance.
Longer-lasting lubricants reduce waste oil generation and disposal requirements. Large integrated cement plants may consume tens of thousands of litres of lubricants annually, making lubricant lifecycle management an important sustainability consideration. Extending drain intervals by even 50 per cent can substantially reduce lubricant consumption and associated environmental impacts. Improved lubrication also extends equipment life, reducing demand for replacement components and lowering the environmental footprint associated with manufacturing, transportation, and installation activities. By reducing friction and wear, lubricants enable machinery to operate more efficiently while consuming less energy.
Tribology researchers Holmberg and Erdemir estimate that advanced friction-reduction technologies could potentially reduce global carbon emissions by up to 1,460 million tonnes annually. Although this figure spans multiple industrial sectors, it
highlights the enormous sustainability potential of improved lubrication practices. For cement manufacturers pursuing net-zero ambitions, lubrication represents one of the most accessible and cost-effective tools available.

Digitalisation, automation, and smart monitoring
The future of lubrication management is increasingly digital. Smart sensors, Industrial IoT platforms, automated lubrication systems, and artificial intelligence are changing how maintenance teams manage equipment health.
Modern lubrication monitoring systems can continuously track temperature, viscosity, moisture levels, contamination levels, and lubricant condition in real time. This enables maintenance personnel to identify emerging issues before they affect production, allowing interventions to be planned rather than forced by equipment failures.
“The future of lubrication management will be defined by the integration of smart, data-driven, and automated systems powered by IoT sensors, artificial intelligence, and real-time oil condition monitoring. These technologies are enabling a shift from traditional schedule-based lubrication to predictive and prescriptive maintenance, where lubricant quantity, frequency, and selection are optimised based on actual equipment condition. The result will be near-zero unplanned downtime, lower lubricant consumption, higher equipment reliability, and improved Overall Equipment Effectiveness (OEE). As India continues to add significant cement manufacturing capacity, early adopters of intelligent lubrication technologies will gain a competitive advantage through lower operating costs, greater reliability, and stronger sustainability performance” says Dr Hegde.
Automated lubrication systems are also becoming more prevalent throughout the cement industry. By delivering precise lubricant quantities at predetermined intervals, these systems eliminate many of the inconsistencies associated with manual lubrication practices. The result is improved equipment protection, lower lubricant consumption, and enhanced reliability.
Market analysts forecast the global predictive maintenance market to exceed $50 billion by 2030, reflecting the growing importance of data-driven maintenance strategies. As digital technologies continue to mature, lubrication will become an increasingly integrated component of broader asset performance management systems.

Conclusion
As cement manufacturers pursue greater productivity, higher sustainability standards, and improved operational resilience, lubrication must be recognised as a strategic business function rather than a routine maintenance activity. The evidence is overwhelming: effective lubrication improves reliability, reduces energy consumption, extends equipment life, lowers maintenance costs, and supports sustainability objectives simultaneously.
The next frontier of cement plant optimisation will not be driven solely by larger kilns, more efficient mills, or alternative fuels. It will also be shaped by how effectively operators manage the health of their critical assets. Through advanced lubricants, predictive maintenance, oil analysis, contamination control, and Total Lubrication Management programmes, cement manufacturers can unlock substantial gains in operational performance while supporting long-term environmental and business goals.
In an increasingly competitive industry, lubrication is no longer merely about reducing friction. It is about enabling reliability, protecting profitability, and creating a foundation for sustainable growth. The plants that recognise this shift and invest in lubrication excellence today will be best positioned to meet the performance demands of tomorrow.

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Economy & Market

The Logistics Imperative

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The Indian cement industry enters FY27 with a familiar paradox: strong long-term fundamentals coupled with short-term uncertainty.
Recent government data shows that India’s core infrastructure sectors grew by 1.7 per cent in April 2026, with cement emerging as the strongest performer among all eight core industries, recording a robust 9.4 per cent year-on-year increase in output. The numbers reaffirm the central role of cement in India’s infrastructure story and signal that construction activity continues to gather momentum despite global economic headwinds.
Yet, beneath this encouraging growth lies a more nuanced reality. Cement producers are entering the new fiscal year with cautious optimism. While infrastructure spending, housing demand and urbanisation remain powerful growth drivers, the prolonged geopolitical tensions in West Asia have introduced a fresh layer of uncertainty. Rising fuel prices, increasing freight costs and pressure on import-dependent supply chains are expected to impact profitability over the coming quarters. Consequently, industry demand projections have moderated, with many companies now expecting growth in the range of five-seven per cent rather than the eight-nine per cent anticipated earlier.
One area that is undergoing a remarkable transformation is logistics. Indian Railways has reported a dramatic increase in cement movement following the introduction of bulk cement tank containers, a development that underscores the industry’s search for cleaner, more efficient transportation alternatives. Companies are exploring electric mobility solutions for bulk transport, recognising that the journey to net zero extends far beyond the factory gate.
The future competitiveness of cement companies will depend on how effectively they manage not only production costs but also supply chain emissions. Green logistics is fast becoming a business necessity.
The upcoming Multi Logistics Expo and Conference 2026, co-located with Cement Expo 2026, will provide an important platform for stakeholders to examine the technologies, policies and partnerships shaping the future of cement logistics. The events will be held from 15th to 17th December 2026, at the India Expo Centre & Mart, Greater Noida.
In the years ahead, the race to decarbonise cement will be won not only at the kiln, but across every kilometre of the supply chain.

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