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Cement Industry: Wish-List

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Keeping in view the forthcoming Union Budget 2012-13, the Cement Manufacturers’ Association (CMA) has submitted a wish list of suggestions and demands to Finance Minister Pranab Mukherjee in order to ensure the profitability and competitiveness of the Indian cement Industry. Indian Cement Review takes a look at some of the important demands made by CMAFinance Minister Pranab Mukherjee will be presenting the Union Budget on March 15, 2012. The financial year 2011-12 was marked by a depreciation of the rupee and a fall in industrial production in India. Though there was a marginal impact of the weak global economy on the Indian cement industry, it exhibited remarkable resilience and recorded a growth of 7.9 per cent in 2008-09, compared to the average of 9.7 per cent during the period 2005-08. The industry registered appreciable improvement in its performance during the year 2009-10 and posted a double digit growth of 12.7 per cent. However, withdrawal of stimulus packages resulted in slowdown of the economy and growth in cement industry has come down to 5 per centThough cement is the most essential infrastructure input, the tax on cement is the highest among the items required for building infrastructure. The levies and taxes on cement in India are far higher compared to those in countries of the Asia-Pacific region. Average tax on cement in the Asia-Pacific region is just 11.4 per cent with the highest levy of 20 per cent being in Sri Lanka. In this backdrop, the Cement Manufacturers’ Association has forwarded the following suggestions for the consideration of Finance Minister Pranab Mukherjee in order to help the cement industry sustain a healthy growth :Uniform and Specific rate of excise duty on cementTill Feb. 28, 2007, specific rate of excise duty was applicable on cement and thereafter upto Feb. 28, 2011, different rates of excise duty based on retail sale price were levied on cement. However in the Union Budget 2011-12, the excise duty rates on cement have been replaced with composite rates having an ad valorem and specific component. For the purpose of ad valorem component, the transaction value determined under section 4 of the Central Excise Act, 1944 is considered as value. The present rates of excise duty applicable for cement and clinker are as under.Cement meant for clearanceHaving retail sale price declared, not exceeding Rs190/- per bag of 50 kg or Rs.3800 per tonne of cement: 10 per cent ad-valorem+Rs80/- per tonneHaving retail sale price declared exceeding Rs190/- per bag of 50 kg or Rs 3800 per tonne of cement:10 per cent ad-valorem +Rs 160/- per tonneAs packed cement for industrial & institutional consumers & other than packed cement i.e loose cement 10 per cent ad-valoremClinker 10 per cent ad-valorem+ Rs 200/- per tonneThe excise duty on cement and cement clinker has become ad-valorem cum specific duty and is further also related to the declared MRP of the product. For example, if MRP of cement is more than Rs 190 per bag, then excise duty is 10 per cent ad-valorem+Rs160 per MT. These are causing a lot of avoidable confusions. To encourage cement industry and bring it at par with other core and infrastructure industries, it has been recommended that the excise duty rate be rationalized from 10 per cent to 6-8 per cent. In addition, the duty structure be simplified to be either on specific rate per MT or on ad-valorem basis and without relating to MRP etc.Customs Duty on Coal, Pet Coke, Gypsum and other inputsPet-coke and gypsum attracts 2.5 per cent duty and coal attracts 5 per cent duty, if imported while there is no duty on imported cement. This leads to an anomaly in that "Import duty on inputs is higher than the finished product." Therefore, the CMA has requested that government to scrap the import duty on coal, pet coke, gypsum and other fuels. The cement industry is heavily dependent on imported coal and pet coke due to short supply of indigenous coal.Levy of import duty on cement importsPresently, import of cement into India is freely allowed without paying basic customs duty. However, all the major inputs for manufacturing cement such as coal, limestone, gypsum, pet coke, packing bags etc attract customs duty. Because of this anomaly, duty free imports causes further hardships to the Indian cement industry. CMA has requested that to provide a level playing field, basic customs duty be levied on cement imports into India. Alternatively, it has requested that import duties on goods required for manufacture of cement be abolished and freely allowed without any levy of duty.Treatment of waste heat recovery as renewable energy sourceCement industry is putting up waste heat recovery plants so as to derive more energy from the same energy resource. In a way, this is akin to green energy. All of this requires further capital investments. To help the industry in its endeavor to produce more such environment friendly energy, CMA has requested that such energy generation be treated as renewable energy source.Abolition of import duty on tyre chips

The industry has been developing alternative energy sources like tyre chips etc. However, tyre-chips are presently put under the negative list of imports whereby the same cannot be imported into India. To increase supply of energy sources as well as for conserving the domestic energy sources, CMA has requested that tyre chips be allowed to be imported by removing it from the negative list by reducing import duty on the same to zero.Classifying cement as "Declared Goods"

CMA has requested that cement be stipulated as "Declared Goods" under section 14 of Central Sales Tax Act so that it is put on an equal footing with other core sector goods like coal, steel, crude oil, jute, cotton yarn etc.Goods & Service Tax (GST)Central Government has announced its intention to introduce GST w.e.f from 1.4.2012. The Association has given the following suggestions:a) Single rate of tax : Central Government has made proposal to state governments for dual rate under GST which would be brought to single rate over a period of three years. However, the Association has suggested that single rate may be introduced from the first year itself, so that all disputes/litigation towards classification can be avoided from first year itself.b) Common law & enforcement : The Empowered Committee of state finance ministers (EC) has agreed to introduce dual GST with separate Act for SGST to be levied by each state. CMA has sought uniformity in the law to be enacted by various states and process/procedures of different states are similar, as otherwise, the basic purpose behind introduction of GST would get defeated. It is suggested that change in statute of any state, after introduction of GST, be made with the concurrence of all states.c) Cenvat/Input tax credit : Input tax credit may be made available for all the inputs and capital goods in or in relation to manufacturing and business activities. No condition be imposed for availing Input tax credit as long as it relates to the business or industrial activity. Exclusion (negative list) for availing Input Tax Credit in respect of items used for or in relation to manufacture be abolished. Hundred per cent input tax credit be allowed on capital goods in the year of purchase itself and conditions like capitalization/put to use not to be imposed.d) Common Dispute resolution mechanism : To reap the full benefit of GST, it has been recommended by CMA that a common dispute resolution mechanism be applicable throughout all the states so that unnecessary litigation can be avoided and one common authority be established for all states for advance ruling.e) Continuance of Exemptions/Incentives: The association has requested that following the implementation of GST, various Central/state level exemption and incentives which are currently being enjoyed under the Excise/VAT laws be continued for the remaining unexpired period.Project importCMA has recommended that basic custom duty rate in case of project import be reduced from the current five per cent to three per cent, so that imports of capital goods for projects can be availed at concessional duty and accordingly project costs be reduced.Cement industry issues needing urgent attention1) Support required from government for promotion of cement/clinker exports : Benefits for cement/clinker exports such as Focus Product Scheme (FPS) are not allowed for cement industry. CMA has requested that FPS benefits be also allowed to the cement industry.2) Duty drawback benefits: The present duty drawback rates of 1% do not cover the import duty content of imported items used in manufacture and thus adversely affect exports. Hence in order to neutralize the incidence of import duties, CMA has suggested that duty drawback may kindly be enhanced to 3 %( existing DEPB rates) to sustain exports.3) Reduction of customs duty on imports under EPCG scheme: The association has suggested that the duty of 3 % on imports under EPCG scheme also be abolished to promote growth and investment. Recognizing this, the government has already reduced duty to 0% for certain sectors and the association has requested that this benefit be extended to cement industry as well.4) Exemption of plant, machinery and equipment from customs duty : In view of the fact that the initial cost for setting up solar power plants is relatively higher when compared to other sources of energy, CMA has requested that the import of plant, machinery, equipment etc be fully exempted from levy of custom duty.5) Royalty on limestone to be included as part of drawback: Royalty on limestone is one of the levies for which credit is not allowed at present. The association has requested that the element of royalty be included in the calculation of drawback rates. Alternatively, exemption from royalty on limestone be allowed on the cement/clinker manufacturing for export.Recommendations on Cenvat1) CMA has recommended that royalty paid on limestone as well as duty/cess paid on indigenous coal be allowed as credit- either as Cenvat Credit or VAT credit. It has also been urged to make suitable amendments or issue notification to state that Cenvat credit is eligible on all items used in relation to business activity if the same is liable to either excise duty or service tax. The Association has also requested that Cenvat credit be allowed on clean energy cess so as to mitigate the impact on costs. It has also been recommended that 100 per cent credit be allowed on capital goods in the first financial year itself. Considering the important role being placed by equipment like dumpers in the cement manufacturing process and that credit may be allowed on these equipments and suitable amendment be made in the rules to cover these equipments in the definition of "capital goods". CMA has also recommended that Cenvat be permitted on Light Diesel Oil (LDO).Disputes were being raised by the Excise Department as to whether Cenvat credit was allowed on duty free supplies made to SEZ units/developers/contractors. To dispel this, CBEC issued a notification no.50/2008-CE dated 31.12.2008. CMA has requested that it be expressly clarified by a circular that the said notification is clarificatory and hence has retrospective effect. In order to remove the ambiguity on Cenvat credit for service tax paid on outward transportation, CMA has recommended that proper explanation/clarification be provided in the relevant rules so as to allow credit of service tax on transportation of goods which is delivered at the buyers’ place from the factory/depot of the manufacturer.SHIS benefit for cementVarious industries are allowed benefit of Status Holder Incentive Scrip under the foreign trade policy. However, cement industry does not figure in the list of eligible industries. The Association has requested that the benefit of SHIS scrip be extended to cement industry.Service TaxCenvat credit on service used for civil work has been withdrawn w.e.f April 1, 2011. Hence, CMA has requested that credit may be allowed on service used in civil work for setting up of a factory.

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Concrete

Merlin Prime Spaces Acquires 13,185 Sq M Land Parcel In Pune

Rs 273 crore purchase broadens the developer’s Pune presence

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Merlin Prime Spaces (MPS) has acquired a 13,185 sq m land parcel in Pune for Rs 273 crore, marking a notable expansion of its footprint in the city.

The transaction value converts to Rs 2,730 mn or Rs 2.73 bn.

The parcel is located in a strategic area of Pune and the firm described the acquisition as aligned with its growth objectives.

The deal follows recent activity in the region and will be watched by investors and developers.

MPS said the acquisition will support its planned development pipeline and enable delivery of commercial and residential space to meet local demand.

The company expects the site to provide flexibility in product design and phased development to respond to market conditions.

The move reflects an emphasis on land ownership in key suburban markets.

The emphasis on land acquisition reflects a strategy to secure inventory ahead of demand cycles.

The purchase follows a period of sustained investor interest in Pune real estate, driven by expanding office ecosystems and residential demand from professionals.

MPS will integrate the new holding into its existing portfolio and plans to engage with local authorities and stakeholders to progress approvals and infrastructure readiness.

No financial partners were disclosed in the announcement.

The firm indicated that timelines will depend on approvals and prevailing market conditions.

Analysts note that strategic land acquisitions at scale can help developers manage costs and timelines while preserving optionality for future projects.

MPS will now hold an enlarged land bank in the region as it pursues growth, and the acquisition underlines continued corporate appetite for measured expansion in second tier cities.

The company intends to move forward with detailed planning in the coming months.

Stakeholders will assess how the site is positioned relative to existing infrastructure and connectivity.

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Adani Cement and Naredco Partner to Promote Sustainable Construction

Collaboration to focus on skills, technology and greener practices

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Adani Cement has entered a strategic partnership with the National Real Estate Development Council (Naredco) to support India’s construction needs with a focus on sustainability, workforce capability and modern building technologies. The collaboration brings together Adani Cement’s building materials portfolio, research and development strengths and technical expertise with Naredco’s nationwide network of more than 15,000 member organisations. The agreement aims to address evolving demand across housing, commercial and infrastructure sectors.

Under the partnership, the organisations will roll out skill development and certification programmes for masons, contractors and site supervisors, with training to emphasise contemporary construction techniques, safety practices and quality standards. The programmes are intended to improve project execution and on-site efficiency and to raise labour productivity through standardised competencies. Emphasis will be placed on practical training and certification pathways that can be scaled across regions.

The alliance will function as a platform for knowledge sharing and technology exchange, facilitating access to advanced concrete solutions, innovative construction practices and modern materials. The effort is intended to enhance structural durability, execution quality and environmental responsibility across developments while promoting adoption of low-carbon technologies and green cement alternatives. Companies expect these measures to contribute to longer term resilience of built assets.

Senior executives conveyed that the partnership reflects a shared commitment to strengthening quality and sustainability in construction and that closer engagement with developers will help integrate advanced materials and technical support throughout the project lifecycle. Leadership noted the need for responsible construction practices as urbanisation accelerates and indicated that the association should encourage wider adoption of green building norms and collaboration within the real estate and construction ecosystem.

The organisations said they will also explore integrated building solutions, including ready-mix concrete offerings, while supporting initiatives aligned with affordable and inclusive housing. The partnership will progress through engagements, conferences and joint training programmes targeting rapidly urbanising cities and growth centres where demand for efficient and environmentally responsible construction grows. Naredco, established under the aegis of the Ministry of Housing and Urban Affairs, will leverage its policy and advocacy role to support implementation.

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Operational Excellence Redefined!

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Operational excellence in cement is no longer about producing more—it is about producing smarter, cleaner and more reliably, where cost per tonne meets carbon per tonne.

Operational excellence in cement has moved far beyond the old pursuit of ‘more tonne’. The new benchmark is smarter, cleaner, more reliable production—delivered with discipline across process, people and data. In an industry where energy can account for nearly 30 per cent of manufacturing cost, even marginal gains translate into meaningful value. As Dr SB Hegde, Professor, Jain College of Engineering & Technology, Hubli and Visiting Professor, Pennsylvania State University, USA, puts it, “Operational excellence… is no longer about producing more. It is about producing smarter, cleaner, more reliably, and more sustainably.” The shift is structural: carbon per tonne will increasingly matter as much as cost per tonne, and competitiveness will be defined by the ability to stabilise operations while steadily lowering emissions.

From control rooms to command centres

The modern cement plant is no longer a handful of loops watched by a few operators. Control rooms have evolved from a few hundred signals to thousands—today, up to 25,000 signals can compete for attention. Dr Rizwan Sabjan, Head – Global Sales and Proposals, Process Control and Optimization, Fuller Technologies, frames the core problem plainly: plants have added WHRS circuits, alternative fuels, higher line capacities and tighter quality expectations, but human attention remains finite. “It is very impossible for an operator to operate the plant with so many things being added,” he says. “We need somebody who can operate 24×7… without any tiredness, without any distraction… The software can do that for us better.”

This is where advanced process control shifts from ‘automation spend’ to a financial lever. Dr Hegde underlines the logic: “Automation is not a technology expense. It is a financial strategy.” In large kilns, a one per cent improvement is not incremental—it is compounding.

Stability is the new productivity

At the heart of operational excellence lies stability. Not because stability is comfortable, but because it is profitable—and increasingly, low-carbon. When setpoints drift and operators chase variability, costs hide in refractory damage, thermal shocks, stop-start losses and quality swings. Dr Sabjan argues that algorithmic control can absorb process disturbances faster than any operator, acting as ‘a co-pilot or an autopilot’, making changes ‘as quick as possible’ rather than waiting for manual intervention. The result is not just fuel saving—it is steadier operation that extends refractory life and reduces avoidable downtime.

The pay-off can be seen through the lens of variability: manual operation often amplifies swings, while closed-loop optimisation tightens control. As Dr Sabjan notes, “It’s not only about savings… there are many indirect benefits, like increasing the refractory life, because we are avoiding the thermal shocks.”

Quality control

If stability is the base, quality is the multiplier. A high-capacity plant can dispatch enormous volumes daily, and quality cannot be a periodic check—it must be continuous. Yet, as Dr Sabjan points out, the biggest error is not in analysis equipment but upstream: “80 per cent of the error is happening at the sampling level.” If sampling is inconsistent, even the best XRF and XRD become expensive spectators.

Automation closes the loop by standardising sample collection, transport, preparation, analysis and corrective action. “We do invest a lot of money on analytical equipment like XRD and XRF, but if it is not put on the closed loop then there’s no use of it,” he says, because results become person-dependent and slow.

Raju Ramachandran, Chief Manufacturing Officer (East), Nuvoco Vistas Corp, reinforces the operational impact from the plant floor: “There’s a stark difference in what a RoboLab does… ensuring that the consistent quality is there… starts right from the sample collection.” For him, automation is not about removing people; it is about making outcomes repeatable.

Human-centric automation

One of the biggest barriers to performance is not hardware—it is fear. Dr Sabjan describes a persistent concern that digital tools exist to replace operators. “That’s not the way,” he says. “The technology is here to help operator… not to replace them… but to complement them.” The plants that realise this early tend to sustain performance because adoption becomes collaborative rather than forced.

Dr Hegde adds an important caveat: tools can mislead without competence. “If you don’t have the knowledge about the data… this will mislead you… it is like… using ChatGPT… it may tell the garbage.” His point is not anti-technology; it is pro-capability. Operational excellence now requires multidisciplinary teams—process, chemistry, physics, automation and reliability—working as one.

GS Daga, Managing Director, SecMec Consultants, takes the argument further, warning that the technology curve can outpace human readiness: “Our technology movement AI will move fast, and our people will be lagging behind.” For him, the industry’s most urgent intervention is systematic skilling—paired with the environment to apply those skills. Without that, even high-end systems remain underutilised.

Digital energy management

Digital optimisation is no longer confined to pilots; its impact is increasingly quantifiable. Raghu Vokuda, Chief Digital Officer, JSW Cement, describes the outcomes in practical terms: reductions in specific power consumption ‘close to 3 per cent to 7 per cent’, improvements in process stability ‘10 per cent to 20 per cent’, and thermal energy reductions ‘2–5 per cent’. He also highlights value beyond the process line—demand optimisation through forecasting models can reduce peak charges, and optimisation of WHRS can deliver ‘1 per cent to 3 per cent’ efficiency gains.

What matters is the operating approach. Rather than patchwork point solutions, he advocates blueprinting a model digital plant across pillars—maintenance, quality, energy, process, people, safety and sustainability—and then scaling. The difference is governance: defined ownership of data, harmonised OT–IT integration, and dashboards designed for each decision layer—from shopfloor to plant head to network leadership.

Predictive maintenance

Reliability has become a boardroom priority because the cost of failure is blunt and immediate. Dr Hegde captures it crisply: “One day of kiln stoppage can cost several crores.” Predictive maintenance and condition monitoring change reliability from reaction to anticipation—provided plants invest in the right sensors and a holistic architecture.

Dr Sabjan stresses the need for ‘extra investment’ where existing instrumentation is insufficient—kiln shell monitoring, refractory monitoring and other critical measurements. The goal is early warning: “How to have those pre-warnings… where the failures are going to come… and then ensure that the plant availability is high, the downtime is low.”

Ramachandran adds that IoT sensors are increasingly enabling early intervention—temperature rise in bearings, vibration patterns, motor and gearbox signals—moving from prediction to prescription. The operational advantage is not only fewer failures, but planned shutdowns: “Once the shutdown is planned in advance… you have lesser… unpredictable downtimes… and overall… you gain on the productivity.”

Alternative fuels and raw materials

As decarbonisation tightens, AFR becomes central—but scaling it is not simply a procurement decision. Vimal Kumar Jain, Technical Director, Heidelberg Cement, frames AFR as a structured programme built on three foundations: strong pre-processing infrastructure, consistent AFR quality, and a stable pyro process. “Only with the fundamentals in place can AFR be scaled safely—without compromising clinker quality or production stability.”

He also flags a ground reality: India’s AFR streams are often seasonal and variable. “In one season to another season, there is major change… high variation in the quality,” he says, making preprocessing capacity and quality discipline mandatory.

Ramachandran argues the sector also needs ecosystem support: a framework for AFR preprocessing ‘hand-in-hand’ between government and private players, so fuels arrive in forms that can be used efficiently and consistently.

Design and execution discipline

Operational excellence is increasingly determined upstream—by the choices made in concept, layout, technology selection, operability and maintainability. Jain puts it unambiguously: “Long term performance is largely decided before the plant is commissioned.” A disciplined design avoids bottlenecks that are expensive to fix later; disciplined execution ensures safe, smooth start-up with fewer issues.

He highlights an often-missed factor: continuity between project and operations teams. “When knowledge transfer is strong and ownership carries beyond commissioning, the plant stabilises much faster… and lifecycle costs reduce significantly.”

What will define the next decade

Across the value chain, the future benchmark is clear: carbon intensity. “Carbon per ton will matter as much as cost per ton,” says Dr Hegde. Vokuda echoes it: the industry will shift from optimising cost per tonne to carbon per ton.

The pathway, however, is practical rather than idealistic—low-clinker and blended cements, higher thermal substitution, renewable power integration, WHRS scaling and tighter energy efficiency. Jain argues for policy realism: if blended cement can meet quality, why it shall not be allowed more widely, particularly in government projects, and why supplementary materials cannot be used more ambitiously where performance is proven.

At the same time, the sector must prepare for CCUS without waiting for it. Jain calls for CCUS readiness—designing plants so capture can be added later without disruptive retrofits—while acknowledging that large-scale rollout may take time as costs remain high.

Ultimately, operational excellence will belong to plants that integrate—not isolate—the levers: process stability, quality automation, structured AFR, predictive reliability, disciplined execution, secure digitalisation and continuous learning. As Dr Sabjan notes, success will not come from one department owning the change: “Everybody has to own it… then only… the results could be wonderful.”

And as Daga reminds the industry, the future will reward those who keep their feet on the ground while adopting the new: “I don’t buy technology for the sake of technology. It has to make a commercial sense.” In the next decade, that commercial sense will be written in two numbers—cost per tonne and carbon per tonne—delivered through stable, skilled and digitally disciplined operations.

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