Connect with us

Economy & Market

Consolidation in cement industry: Gobbling Up!

Published

on

Shares

The cement industry has been going through consolidation phase with large Indian cement players preying on smaller ones and foreign cement majors acquiring controlling stake in Indian majors. Prakash Patil looks at the M&A scenario and what it holds for the future of cement industry in India.It’s mergers and acquisitions season in the Indian cement industry and the latest big ticket deal is the acquisition of 51 per cent controlling stake by Irish cement major CRH in the two 2.4 MTPA plants of the Jaypee Group in Gujarat. A buoyant trend in prices could reportedly fetch the Jaypee Group at least $160 per tonne as replacement value, as it puts on the block its hived-off plants in western (2 units of 2.4 MT each) and southern India (1 unit of 5 MTPA). The deal for the two 2.4 MTPA plants is reportedly valued at Rs 4,200 crore. However, as Jaypee Group has its third plant with a capacity of 5 MTPA in Andhra Pradesh and the three plants would be valued at about Rs 9,000 crore. For CRH, this will be the second acquisition in India. The company had forayed into India in 2008 with the acquisition of 50 per cent stake in Hyderabad-based cement producer My Home Industries, which had an installed capacity of 4.2 MTPA.The latest CRH-Jaypee Group deal is an indication of the churning the Indian cement industry is going through over the last decade or so. The big fishes are on the prowl to gobble up smaller fries in the business and considering that there are 139 large cement plants and 365 mini cement plants in the country currently with 40 major and mid-size players having pan-India presence, the opportunities for acquisitions for the large cement players are enticing. And, it’s not just the small fries that are on the radar of the big players, even some of the biggest cement companies have been taken over in the past and many more are being wooed. After all, the cement business of Jaypee Group being acquired by CRH makes Jaypee Group the third largest cement player in India after UltraTech and Ambuja Cements.The big ticket dealsApart from the latest big ticket deal between the CRH-Jaypee Group, there have been quite a few large takeovers since 1999. When Gujarat Ambuja Cements (GACL) picked up 7.2 per cent stake in India’s then largest cement manufacturer ACC at a price of Rs 370 per share when the market price hovered around Rs 240 per share from the Tatas in December 1999, it created sensation. Later in 2000, GACL acquired the balance 7.2 per cent from the Tatas to become the largest shareholder in ACC. But the twist to this tale came when Swiss cement major Holcim picked up 14.8 per cent stake in Gujarat Ambuja Cements (later to merge with Ambuja Cements Eastern to become Ambuja Cements) for Rs 2,100 crore through the creeping acquisition route and later picked up another 20 per cent stake for Rs 2,400 crore. Subsequently, Holcim hiked its stake in Ambuja Cements to over 50 per cent, thereby acquiring complete management control over Ambuja Cements. The Holcim transaction and valuation provides an excellent indication of the extent to which investors and strategic players are ready to buy the India growth story. In 2005, Holcim acquired stake in ACC at an enterprise value (EV) of $111 per tonne and the next year Holcim acquired stake in Ambuja Cement at an EV of $193 per tonne. In 2007, Holcim again increased its stake in Ambuja Cements at an EV of $301 per tonne!With this acquisition, Holcim also acquired management control over ACC as Ambuja Cements had hiked its stake in ACC to more than 50 per cent. So, Holcim upped the ante for other global cement companies by acquiring majority stake and management control over two of India’s largest cement companies.Lafarge, the French cement major, got late into action in the M&A space and decided to take the acquisition route to fast track it cement business in India. The company declared in 2010 that it was open to consolidation in India and, according to Bruno Lafont, Chairman & CEO, Lafarge, the timeframe for acquisitions was the next five years. "We see consolidation happening (in the cement industry) in India in the mid term period. We are confident of our ability to deliver our investments in India and are open to seizing new opportunities, be it consolidation or greenfield projects," said Lafont while inaugurating the clinker line at Lafarge India’s cement plant in January 2010 at Sonadih in Chhattisgarh. The company entered the Indian market in 1999 with the acquisition of Tata Steel’s cement plant. This was followed by the purchase of the Raymond Cement facility in 2001 and the acquisition of L&T’s concrete business in 2008.The takeover of L&T’s cement business by Grasim Industries in June 2003 also created buzz in the market since this takeover catapulted Grasim Industries (later its cement division being merged into UltraTech Cement) from the third position to the numero uno position in India. After the takeover, UltraTech’s installed capacity went up from 13 MTPA to 31 MTPA. Grasim Industries had to shell out Rs 2,200 crore over a period of three years for a majority stake in Ultratech Cement. Today, UltraTech maintains its leadership position with an installed capacity of 52 MTPA, with Holcim at the no. 2 position with combined capacity of 45 MTPA through ACC and Ambuja Cement.These are just a few samples of big ticket deals that have happened in the cement sector in India since late nineties. There have been many more big and small takeovers and mergers by domestic players since mid-1990s and by foreign players since late-1990s (see box). According to the data published by the Department of Industrial Policy and Promotion, the cement sector attracted foreign direct investments (FDI) worth US$ 2.62 bn between April 2000 to May 2012, which is an ample indication of the fact that the cement sector has been attracting foreign investors in droves.The key M&A triggersClearly, the cement biggies have gone on a shopping spree since during the last decade or so. And not without reason. There are compelling reasons why domestic and foreign cement majors appear to be so bullish on India. "Major reasons for consolidation were excess capacity and entry of foreign players who wanted a pie of untapped Indian market…Apart from above two reasons, another factor that is leading to consolidation is the rising cost of greenfield capacity which also tends to have longer gestation period. Existing players are eyeing companies who are unable to meet rising cost of raw materials due to increasing imported coal prices. On the other hand, the top players who want to spread their reach are tapping such companies as it saves on time factor of greenfield capacities," says Alok Sanghi, Director, Sanghi Industries.
Commenting on the reasons for consolidation, Jailesh Dalal, Director, JAYCEE Buildcon (India), says "The Indian cement industry is fragmented and large domestic and international players would try to consolidate their position going forward for geographical diversification, concentrated focus on operational efficiency, challenges in acquiring land/limestone resources, exit of smaller players and divesture of cement businesses by diversified groups."Now, let’s look at each of these reasons why Indian cement industry is passing through the consolidation phase.Overcapacity

During 2007-12, cement producers added capacity to the tune of 150 MTPA, thereby almost doubling the total installed capacity to 303 MTPA in FY2012-13. According to a report by research firm RNCOS, "It is anticipated that the cement industry players will continue to increase their annual cement output in coming years and the country’s cement production will grow at a compound annual growth rate (CAGR) of around 12 per cent during 2011-12 to 2013-14." According to projections, by 2017 the total capacity nationally would add up to 470 MTPA.The increase in capacities by many of the Indian companies was in anticipation of demand from the infrastructure sector which failed to materialise. In a situation where demand fails to keep pace with supply, the capacity utilization rate is bound to decelerate. The capacity utilisation rate for the cement industry in India has dropped from 93 per cent in FY2006-07 to 75 per cent in FY2011-12. The fall-out of such overcapacity situation is that the cement prices are likely to come under downward pressure which would make survival difficult for smaller cement companies with capacities less than 1 MTPA and therefore vulnerable for takeover. However, the fact that cement majors have built up capacities in advance is an indication that these companies expect demand for cement to remain firm due to construction activity, which is expected to gather momentum due to government’s policy to boost investments in infrastructure.Infrastructure PotentialIndia’s high housing and infrastructure deficits points to the huge potential for development of housing and infrastructure. The cement sector will benefit hugely as and when the momentum in housing and infra development picks up. This potential for development has been attracting major players in hordes from across the world. The demand for cement, being a derived demand, primarily depends on the industrial construction, real estate business, construction activities and investments in the infrastructure sector.Currently, the housing sector consumes 55-60 per cent of cement produced in India and this is expected to change in the next few years when the emphasis will shift on infrastructure development such as roads, bridges, airports, and railways, which will consume a significant percentage of cement produced in the country. The consumption of cement in agriculture is negligible today; but with a greater thrust on agriculture and the suggested ‘second green revolution’, this sector too will extensively use cement to build warehouses and other logistics.But instead of opting to set up cement plants themselves, it makes sense for the foreign players to take the acquisition route not just to make foray into India but also ramp up capacity quickly. The high potential for growth in demand for cement is amply evident from the fact that the per capita cement consumption in India was 230 kg in 2010, which is almost half of the global average of around 450 kg and way below the Chinese average per capita consumption of 1220 kg. Hence, domestic and foreign cement companies remain bullish on the prospects of cement industry in India.High capital cost & long gestation periodA cement plant is typically a capital intensive business and to establish a greenfield project takes about three years. The cost of setting up a greenfield capacity has reportedly shot up from $120 per tonne to $160 per tonne in just two years. Besides, the cement business has a long gestation period and, depending on the market situation, the break-even point may extend to three-four years at an operating level of 70-75 per cent. The high capital cost and long gestation period makes establishing a new cement plant an unattractive business proposition. Hence, established and large players may prefer to poach on the existing and established players to beat the competition and increase their market share. "The cement sector is slowly heading for a major consolidation as greenfield projects are becoming difficult to set up due to increased hassles in areas like mineral concession, land acquisition and related environmental and operational issues. This may lead the cement industry in India to be consolidated in the hands of a few major giant cement companies and only a few cement companies with single or smaller capacity plants shall continue to operate purely due to regional and local factors," says P K Ghosh, Chairman, Ercom Engineers.Entry barriers & cumbersome proceduresDifficulty in accessing limestone reserves, which is a key input in cement production, acts as a significant entry barrier for new entrants. To overcome this difficulty, takeover of companies with access to limestone reserves is the easiest route to crossing the entry barrier. No wonder, none of the foreign cement majors tried to set up a greenfield cement plant as prospecting for limestone reserves is a time-consuming process. Even if the limestone reserves are established, getting the mining rights, railway siding, etc. can reportedly take upto 7-8 years, with only 25 per cent chance of striking enough limestone reserves to last for the entire economic life-span of the plant. Hence, acquisition is bound to pick up further momentum as more cement majors enter the Indian market.The benefits of consolidationThe consolidation in the cement industry would prove to be beneficial both for the acquiring companies as well as for the cement industry. Some of the benefits that would ensue from consolidation are as follows:
Economies of scale
A large cement company enjoys the benefits of economies of scale. Mergers and acquisitions bring about consolidation of capacities which adds up the benefits of scale. The economies of scale enable the company to reduce the production costs so that it can reduce the cement price to maintain an edge over the competitors.Extended reach and increased revenuesWhen a company takes over the production and distribution facilities of another company, it immediately extends its geographical reach and increases its market share on account of expansion of the market for its product. The market expansion helps in ramping up the revenues of the company within a short span of time. The enhanced geographical reach may also result in substantial reduction in transportation costs which are quite high as cement is a bulk commodity.Technological upgradationThe new energy-efficient but capital-intensive "dry" production technology offers to the companies efficiencies that provide vital edge over the companies not deploying such technologies. Small manufacturers may not possess the requisite financial resources or production volumes to be able to afford the most efficient technology, which puts them at a competitive cost disadvantage. The entry of foreign players has led to technological upgradation and innovation in Indian cement industry. "Despite the fact that the technology used by Indian cement companies is among the best in the world, more innovation is required to ensure that cement plans are not only environment-friendly, but also low-cost in nature. M&As in last decade has helped Indian firms propel to global standards. Foreign firms who took over Indian firms have made most of the investments in India in the last decade for upgrading technology and raising capacity. With higher spend on technology, existing players are likely to focus more on ready mix concrete, bulk sales and blended cement to ensure improvement in quality as well as environment consciousness with sustainable construction," says Sanghi.The Road AheadGoing forward, the acquisitions space is going to get hotter, with lot of small and mid-sized cement companies up for grabs. Once the economies of scale kick in on account of consolidation, the cement prices are likely to remain competitive yet remunerative. This would benefit both the cement companies as well as cement consumers. Summarising the benefits of consolidation, Dalal says, "M&As would largely have a positive impact in the cement industry in India on account of value creation, economies of scale and cost efficiencies, operational and supply chain efficiencies, higher competitiveness, technology transfer, better research and development and high quality products, financial leveraging and optimization of profitability and increased focus on health, safety and environment. In the future as well, M&As would augur well for the industry as it would bring world-class technology, products and operational efficiencies into India." Sanghi too feels that M&As would be beneficial and says, "M&As in cement industry is likely to bring pricing power, improve profitability and reduce cost of branding for top players. Through M&As, top players would have higher vertical integration and locational advantage with respect to sourcing raw materials and market reach."Of course, there is always the possibility of major companies forming a cartel to keep the cement prices artificially high, but with the Competition Commission of India keeping a vigil over the production figures, capacity utilization and cement prices, the cement companies would be wary of indulging in such malpractices. Sanghi too dismisses fear of cartelization saying, "If there was (cartelisation) as is claimed, cement companies would not have reported losses in any quarter. Also, prices would have been same across the year, if there was cartelization. But every year, cement prices fall during monsoon because there is a slowdown in demand; while prices rise on and around Diwali due to surge in demand from real estate."To sum up, consolidation is good for the cement industry and there are sunny days ahead for the industry in times to come.

Continue Reading
Click to comment

Leave a Reply

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

Concrete

Powering Cement Through Intelligent Motion

Published

on

By

Shares

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

Continue Reading

Concrete

Liquid Intelligence

Published

on

By

Shares

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.

Continue Reading

Economy & Market

The Logistics Imperative

Published

on

By

Shares

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.

Continue Reading

Video Thumbnail

    SIGN-UP FOR OUR GENERAL NEWSLETTER


    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