Connect with us

Economy & Market

Forecast 2013

Published

on

Shares

ICR examines and studies the cement, concrete, concrete equipment sector for the coming year. The study was done basically to comprehend and analyse the current state of each sector. Also, ICR bring to you the opinions of dealers, who know the real pulse of the market.The first half of the year 2012 of the cement industry witnessed a sluggish demand and almost the other half felt the cost pressure. In the states like Andhra Pradesh, the year ended on a discouraging note since the prices dipped further by Rs 40-45. However as per the Working Committee report on cement industry suggests that the Government of India plans to increase its investment in infrastructure to US $ 1 trillion in the Twelfth Five Year Plan (2012-17) as compared to US $ 514 billion expected to be spent on infrastructure development under the Eleventh Five Year Plan (2007-12). Further, infrastructure projects such as the dedicated freight corridors, upgraded and new airports and ports are expected to enhance the scale of economic activity, leading to a substantial increase in cement demand. Housing sector and road also provide significant opportunities. The cement demand is likely to be sensitive to the growth in these sectors and also the policy initiatives. Further, capacity addition in cement would continue to be preferably front loaded. It may be desirable to create some excess capacity rather than operate with shortages or supply bottlenecks. Keeping in view the factors responsible for the increasing demand for the sector and the assumptions mentioned below, four lines of projection in the demand for cement up to next 25 years (2027) have been given. The annual average growth in the demand, production and installed capacity of the cement during the period could be within the range of 10-11.75 per cent. The production of cement would be sensitive to the GDP growth and the growth of sectors which are major users of cement. A step up in demand of these sectors could provide some stimulus to the cement sector as well.Assumptions??Base line growth from 2014-15 is kept at assumed GDP growth, or an elasticity of 1.0.??The growth is expected to increase by 1 per cent above the base line in scenario 2 assuming NH and SH to be initially covered.??In scenario 3, assuming a further increase in growth by 0.5 per cent and in scenario 4 growth is scaled up further by 0.25 per cent.??Base Growth kept a little lower than GDP growth in first three years because of pickup in demand may take some time.??With all the three expectations being met, growth improves to 10.75 per cent or with an assumed elasticity of roughly 1.2, as against observed elasticity of 1.07 during 12th Plan and further to 11.75 per cent in the next 10 years. Elasticity tapers off to 1.175.12 The Task Force for the 11th Plan for the Cement sector also mentioned that the concrete roads, besides providing an excellent surface, enjoy a lower life cycle cost. In the current scenario, however, concrete roads enjoy an initial cost advantage as well.2012 a mixed bagThe year 2012 for the cement industry was full of controversies. Be it the issue of catelisation, wherein the 11 cement giants were penalised with a mammoth amount of Rs 6,304 crore or the reduction in prices of cement by the end or the year. The cement market was volatile and slowed signs of improvement. The acquisition of Calcom in the beginning of the year and Adhunik in September 2012 by Dalmia proved that consolidation remains the key for the cement business. By the end of the year they increased their stake in Calcom by 26 per cent.Expressing his opinion on the market scenario in the year 2012, Jagdeep Verma, Head- Business Consulting, Holtec Consulting said, "The good news was that cement consumption grew by 8 per cent, despite a slowdown in GDP growth. Retail prices too increased by an average 6-7 per cent over the last year, though there were large price fluctuations in some states and key consumption centres on account of consumption-supply imbalances. The price increase enabled most producers to offset the increased cost of inputs, significant offenders being fuel and logistics."He further explained the negative side of the sector. "On the flip side, industry sentiment was adversely affected, not only by the penalty proposed by the Competition Commission of India, but also by general economic sluggishness, the current prevalence of market surplus, high borrowing rates/ poor liquidity conditions in user segments, difficulties faced in land acquisition/ procuring environmental clearances and ambivalent perceptions regarding the emerging politico-economic scenario. All this manifested itself in a reining in of capacity addition initiatives. Firms with high costs pressures are opening up to M&A possibilities and PE funding in order to smoothen their cash flow obligations."However Prakash Raja, the Committee Member of Cement Dealers’ Stockist Association feels that on one hand where there was a hike in cement prices, on the other hand, the demand that showed signs of pick up never really caught on, which brought a lot of volatility in the market. "We have seen cement companies, which have been region specific for almost decades, now venturing out in hunt for newer markets. Consequently, a mini price war was witnessed this year. In fact the rates are still far from being stable. Since many construction companies do not utilise input Value Added Tax (‘VAT’) credit, they prefer buying material against C-form, ensuring concessional rate of Central Sales Tax (‘CST’) and consequently, lowering of input costs. This has made it worthwhile for the new market seeking companies to do business across states, without really breaking the bank." The slump has impacted their business in a threefold manner. Jugal Raja, King’s Trade Links said that the slump has a threefold effect on the dealers. "Higher borrowing costs, higher prices of cement and elongation of credit period offered to the buyers are the three negatives that have ensured that most of our revenues are literally wiped out. To illustrate, if we take the cement price hike on a smoothened average basis to be Rs.40, the cost of borrowings rise at 2.5-3 per cent per annum and the elongation of credit period on an average by 40-60 days, the income remaining constant, one can imagine the impact on the margins. Given the slow down and overall slug-gishness, lowering volumes have made this worse than it looks. Many dealers have been raising their voice against the stagnant commission and pass-on since the last 5 years.Although the prices of cement have risen, the absolute value of dealers’ pass-on has been kept constant by the manufacturers, citing growth in volumes to be enough to compensate the dealers. Now that there is slow down, there is a strong case for the hike in dealers’ margins, albeit only at the manufacturers’ discretion."Even the concrete equipment sector witnessed severe disappointment. Anand Sundaresan, Managing Director, Schwing Stetter said that the entire industry went through a bad phase and the concrete equipment industry was no exception to that which led to drop in their numbers. Talking about the percentage in slouch he said,"It will be very difficult to talk about by what percentage has our business gone down since the Finance Minister is also trying his level best to improve the sector by introducing new policies which might work out and we might be in a better position."Recently Lucky Cement, Pakistan’s largest cement manufacturer was keen on setting up a cement plant in India. Generally cements from Pakistan are said to be of a cheaper rate and of a better quality. But Jugal Raja, Dealer, King’s Trade Links believes that India being the second largest producer of cement in the world is producing almost three times the total output of the third largest producer – Iran. We firmly believe there is no case, be it quality or affordability that makes our economy open up to such imports, more so when such notorious activities have been un-earthed. If the pricing is so enticing, there must be a reason for it. We see it and it’s high time the end users as well as the authorities see it. This may sound like a very Nationalist and even slightly jingoistic view, but imagine where cement companies from South of India are finding it difficult in terms of costs to move the material to areas such as Mumbai at Rs 270 per bag, how would it be a profitable affair for an economy such as Pakistan which is surviving on external aid to push it from longer distances at Rs 220 per bag."Challenges

With the mismatch of demand and supply faced by the cement industry is expected to encounter with a lot of challenges, which will further impact all the related industries.According to Sundaresan, the major challenge faced by the equipment manufacturing sector is substantial increase in input costs due to a hike in commodity prices, increase in interest rates, increase in employee and power costs and almost an increase of 25 per cent in the dollar exchange rate between April 2011 and average exchange rate in the year 2012.Whilst Verma feels that the cement industry will face a series of challenges like dwindling natural resources, cost reduction, optimisation of logistics, acute shortage of dom-estic coal and the increase in costs and gestation period. "Shortage of natural resources is a serious cause of concern. Among these, limestone, fossil fuel and water, if not conserved, could definitely inhibit the long term growth of the industry. The onus of conservation, till now, has generally been technology-based and, therefore, largely driven by equipment suppliers. Wasteful practices need much higher attention and cement producers must pick up the baton on directly arresting these in the course of normal operations." He further said that the life of limestone reserves being limited to the next 40 years or so, initiatives to use poorer grades appear imminent; despite conventional wisdom, high quality limestone imports are, possibly, inevitable.Cost reduction will be another issue which is expected to dominate the upcoming two to three fiscals. The biggest costs in cement business are energy and logistics, thus adequate attention has, only been recently directed at one of the largest components of delivered cost, viz. input and output freight. Given the acute shortage of domestic coal and the increase in costs in imported coal, alternate fuels would continue to receive enhanced attention and could provide 7-10 per cent of the total thermal fuel requirements by FY 2015-16. The usage of gas, especially in plants enjoying logistical proximity to gas resources, could well become a reality. While Greenfield plants would setup captive power plants to ensure reliable power supply, the existing plans would consider use of alternative fuels and also installation of Waste Heat Recovery systems to keep costs under control Verma further explained, "An analysis of the components of the final delivered cost of cement shows that 40 per cent is constituted by production costs, 25 per cent by the transport costs of inputs and outputs and 35 per cent by direct and indirect taxes. Optimisation of transportation logistics, spanning modes, nodes and routes, is thus an area deserving a higher degree of focused attention.The potential for reducing costs in non-equipment related domains, e.g. material inventories, consumable consumption rates and tariffs, financial expenses, etc. has still not been adequately harnessed.Also with the pre-project activities, such as land acquisition and statutory clearances, being expected to consume more time, the gestation period in the future is likely to be in the range of 5-7 years.Industry players could attempt to bring down actual construction time by employing more steel in civil engineering structures.According to SN Subrahmanyan, Member of the Board and Sr. EVP (Infrastructure & Construction), L&T Construction, the cement equipmeny industry is also going through alot of changes. The current focus is on savings in energy consumption and emission control methods, with stringent pollution control norms which are tightened day by day and the introduction of PAT (Perform, Achieve and Trade) scheme. "Cement manufacturers are expected to operate their plant in optimised conditions all the time. Power availability is also a key factor that affects cement plant operations. Clients are looking for equipment which reduces energy, fuel consumption, and effective utilisation of waste heat. Due to this trend waste heat recovery systems and alternate fuel firing systems have become common requirements in cement plant tenders."Regarding future trends:In India Municipal Waste Firing (MWF) in cement plants is an area with great potential but still underutilised. The reason for that is non-homogeneity and lack of continuous availability of the wastes. This irregularity creates fluctuations in the cement process and causes undesirable emission levels, increase in energy consumption patterns and also affects clinker quality. Every state should have waste collection centres to ensure continuous supply of wastes to cement plants. Substantial research is required to develop municipal waste firing systems suitable for Indian conditions considering mode of transport and hygiene. Existing designs are predominantly based on western country municipal wastes, but the wastes generated in western countries are quite different from the municipal wastes generated in Indian cities due to cultural differences. This change in type of waste impacts the system performance and firing rate. Availability of municipal waste is also inconsistent in India. If flexible firing systems are developed then Municipal wastes can be substituted for fossil fuels by 20-30 per cent. Currently cement plants are able to substitute only 5-15 per cent of waste for fuel fired in the system due to above said reasons. We believe with increasing coal prices and non-availability of power may encourage more cement plant clients to prefer municipal waste firing systems in the near future.Government intervention

With over 200 major construction projects pending in India, the entire construction industry is suffering with losses. "First and the foremost, the government should push investment in infrastructure projects, and bring in whatever policies changes that are necessary to speed this up and make it investment friendly," said Sundaresan. The other hindrance faced by the industry is most road contractors talk about land acquisitions as one of the major bottlenecks for speedy completion of projects.Definitely, this issue has to be addressed, which is pending for quite some time. Coming to the equipment industry he commented, "Concerning the equipment industry, the government should bring in similar kind of sops like what was done during the budget 2009, i.e., reduction in excise duty for capital equipments. In addition to that, we have other usual grievances like abolition of entry tax, GST, Uniform Tax Policy, etc."Even the dealers are of the opinion that the Government needs to clearances to the pending projects. "We require only one support and that is the clearing of proposed and further issuance of quality projects which will help build a new India. The money injected will churn into the economy fastest through this route as we have witnessed in the past. To supplement this, we believe India has a top-notch infrastructure funding mechanism in the form of multiple lending institutions. Perhaps, easing of certain eligibility criteria will do a host of good." He further added, "Maybe, a different, more ‘ambitious projects’ centric version of IDFC is the need of the hour. Also, as mentioned earlier, there is disparity among VAT and concessional rate of CST for end-users not utilising input VAT to pay output VAT. This disparity should be mitigated with the introduction of GST as early as possible."At a general level, the industry would like stable economic policies and lowering of interest rates leading to positive growth sentiments and increase in GDP, GFCF and thereby construction related investment. This would enable the industry to systematically plan its capacity expansions and focus on ways to meet cement demand.At an industry level, cogent policies to own mines and coals blocks, as also those associated with land acquisition, would be desired. This would facilitate ease of setting up cement plants within acceptable gestation periods, generate acceptable returns to stakeholders and keep debt related cash outflows low-in turn downward inflowing cement prices.According to Verma, "A regulatory body to ensure adherence to India Standards by all concrete producers (commercial and captive) would help the industry to ensure quality concrete is made available to all end users. With such an intervention, the industry could then further educate its customers on concrete production and usage. Malpractices followed by small-scale concrete producers would come to an end and prices narrow down within an acceptable band. This could impel more cement producers to forward integrate into the RMC industry and serve their customers better."Also for the dealers logistics remains the biggest challenge for the year 2013. Mumbai, (which is considered a separate region altogether, giving exclusivity to this market, separate from the rest of the Western region) has the threshold logistical permissibility of 750,000- 800,000 metric tonne a month. With rising demand in satellite areas and the ambitious projects waiting in the flanks, there is consensus that this constraint be dealt with. Same goes for Bangalore and even for some up and coming tier-two cities such as Mangalore and Bhopal, where demand has been robust. Another challenge that the industry faces is really something which is not in control of the industry, viz, the log-jam of various projects, both private and state/central funded. This log-jam is expected to be cleared out before the last budget of the UPA-2 on a populist count. Be that as it may be, the opportunity for the cement industry is huge, considering that the Indian growth story is still very much intact.Forecast 2013Most of the industries related to cement are expecting a sluggish year ahead. For the concrete equipment industry the year is expected to grow marginally. "Even though the government is bringing in a lot of policy reforms and steps for improving the economic growth, the award of contracts will take some time. Besides that, concreting comes at a much later stage, i.e. after excavation or earth moving. Therefore, for the concreting equipment industry, I feel 2013 will be a flat year or it will be with a marginal growth," said Anand. To combat the same the company is all set to launch new equipment in the upcoming bCIndia 2013.Cement consumption is expected to sustain in the range of 8-9 per cent, taking estimated cement consumption in FY 2013 from around 260 mio t to 280-285 mio t in FY 2014.Due to public perceptions of high cement prices, cement demand (not to be mistaken with consumption) would remain unfulfilled. Producing "affordable cement" without compromising the quantum (not per cent) of EBIDTA is possibly the one major initiative that would possibly dwarf all other initiatives. This would necessitate the harnessing of technology, amending operating practices and modifying customer mindsets. The net effect could be significant increase in customer base and consequentially a mini-explosion in the size of the cement market pie. There is also a strong likelihood of players announcing greenfield capacity additions, in order to ensure plants are operational by the time cement consumption overtakes capacity (FY 2018). Possible pre-conditions for these announcements to be translated into action would include a lowering of interest rates and expeditious action on statutory clearances.The likelihood of PE Firms playing a higher role to fund the cash-strapped companies would increase. M&A activities are also likely to accelerate, particularly with larger cement players having an opportunity to acquire plants under financial pressures.Capacities would most probably exchange ownership if the agreed valuation is in the range of USD 145-165/ t.On the technology front, efforts to utilise Alternative Fuels and install Waste Heat Recovery are initiatives which are likely to become much more widespread.For the dealers the summer of 2013 is touted to be the start of the new bull run for the entire infra space. With both, the Holcim group (ACC and Ambuja) and Aditya Birla group (Ultratech) having the right arsenal in place in the form of increased capacities, and with the other upcoming brands, the total tally of consumption in cement will see a huge pick up owing to moderated base of last two years. There were times when demand would be so high that companies were compelled to allocate the total arrivals in preference of consumer loyalty and buying patterns.We believe that won’t happen in the next bull run since the easing of logistical situation backed by the expansion of capacity has taken place since then.Thus only time will show that if the industry will regain its old pace or will deteriorate further.

Continue Reading
Click to comment

Leave a Reply

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

Concrete

Concrete Through the Lens

Published

on

By

Shares

The Concrete in Life Photography Contest 2024-25 by Global Cement and Concrete Association (GCCA) showcased artistic entries, capturing the versatility and beauty of concrete in various settings worldwide.

The annual Concrete in Life Photography Contest 2024/25, organised by the Global Cement and Concrete Association (GCCA), has once again showcased the artistic and functional significance of concrete in daily life. This prestigious global competition attracted over 20,000 entries from professional photographers and amateur smartphone users.
The title of Concrete in Life Photo of the Year 2024-25 was awarded to Henrik Hagerup for his remarkable image taken at Venice Beach Skatepark, Los Angeles, USA. Inspired by the historic 1970s skate culture that repurposed abandoned swimming pools, the image encapsulates the dynamic interplay between concrete and human creativity. As the grand prize winner, Hagerup received a monetary award of $10,000.
Thomas Guillot, Chief Executive, GCCA, who was part of the judging panel, emphasised the competition’s role in highlighting concrete’s essential contributions to infrastructure, architecture and daily life. He noted that this year’s submissions were among the most impressive in the competition’s six-year history, reflecting concrete’s role in shaping urban and rural landscapes. The competition serves as a platform for photographers worldwide to showcase concrete’s aesthetic and functional dimensions.
Hagerup expressed his appreciation for the recognition, stating that his image symbolises how concrete, when integrated with creativity and passion, fosters social connections and opportunities. He emphasised its significance beyond skateparks, extending to communities globally.
The submissions received represented every continent and captured a wide array of concrete applications, from towering skyscrapers and transportation networks to sea defences, bridges and community structures. Many images also depicted intimate human interactions in playgrounds, villages and contemporary architectural designs, illustrating the material’s impact on everyday life.

In addition to the overall winner, the competition recognised four category winners, each awarded $2,500:

  • Urban Concrete: Urban Flow by Anvar Sadath TA (Dubai, UAE), featuring the iconic Burj Khalifa.
  • Concrete Infrastructure: Structure as Aesthetics by Wentao Guo (Washington, D.C., USA), highlighting a subway station.
  • Concrete in Daily Life: Bedok Jetty by Wellington Kuswanto (Singapore), emphasiding the material’s role in everyday settings.
  • Beauty and Design: Broken Building by Artemio Layno (Amsterdam, Netherlands), showcasing an artistic perspective on concrete structures.

The People’s Vote Award, determined through a public voting process, was presented to Mohamed Rafi for his image Fluttering Through Life, taken in Pondicherry, India. Rafi received a cash prize of $5,000.

Diane Hoskins, Global Co-Chair of Gensler, a leading design and architecture firm, served as a competition judge and underscored the importance of sustainable concrete practices. She highlighted that while concrete remains a fundamental element in modern infrastructure, ongoing efforts to reduce its carbon footprint are crucial. The competition not only celebrates concrete’s architectural and functional strengths but also encourages industry innovations aimed at sustainability.

PEOPLE’S VOTE – WINNER
Fluttering Through Life by Mohamed Rafi Pondicherry, India
To me, it symbolises resilience, unseen beauty,and how our surroundings shape us in ways we don’t always realise. Street photography is about finding meaning in fleeting moments, and I’m thrilled that this image resonated with so many people.”

URBAN CONCRETE – WINNER
Urban Flow by Anvar Sadath TA Dubai, UAE
“My winning photograph captures the dynamic relationship between concrete structures and the vibrant cityscape, reflecting how concrete shapes our urban experiences. This recognition reinforces my passion for storytelling through photography, and I hope my image inspires others to find beauty in the everyday structures that define our cities.”

OVERAL – WINNER
Venice Beach Skating by Henrik Hagerup Venice Beach, Los Angeles, USA
“My image is a tribute to the way concrete, when embraced by creativity and passion, fosters connection, dreams, and boundless potential not just in skate parks, but in communities across the world.”

CONCRETE INFRASTRUCTURE – WINNER
Structure as Aesthetics by Wentao Guo Washington D.C. USA
“I was captivated by the moment when the transience of transportation runs into the permanence of concrete. Its obscurity becomes its greatest presence: its functionality, its aesthetic and its enduringness. Concrete is such an essential part of our lives and it constructs so many characters of our built environment.”

CONCRETE IN DAILY LIFE – WINNER
Daily Life in Bedok Jetty by Wellington Kuswanto Bedok Jetty, Singapore
“Bedok Jetty holds a special place for me, as I cycle and hang out there every weekend. It inspired me to submit the image of this particular place for the competition, as it showcases a public space made of concrete structure that is actively used by many people engaging in various activities as part of their daily lives.”

CONCRETE BEAUTY AND DESIGN – WINNER
Broken Building by Artemio Layno Amsterdam, Netherlands
“I took the photo at Amsterdam, Netherlands and I was amazed how creative and modern the design of the building is, it looks like it was cut-out and separated in the middle of the main structure, the design is created by a large number of terraces. Concrete is not just used as a necessity in creating structures but it can also be used to showcase artistic works that are amazingly beautiful.”

Continue Reading

Concrete

Bridging the Skill Gap in Manufacturing

Published

on

By

Shares

Dr SB Hegde analyses the changing trend in the cement industry as it faces a growing skill gap as ageing workers retire and new talent turns away, threatening efficiency and sustainability.

Cement is the backbone of roads, buildings and cities worldwide. In 2023, the world produced 4.1 billion tonnes of cement, and that number could grow to 4.7 billion tonnes by 2030 (US Geological Survey, 2024). However, there’s a big problem — the cement workforce is ageing and not enough young workers have the skills to operate modern machines or meet new environmental standards. This skill gap — the difference between what the industry needs and what workers can do — is growing quickly. It’s a hidden threat that could slow down construction projects and
hurt economies.
Cement drives development worldwide, but countries like India are feeling the pressure the most. In 2022, India produced 410 million tonnes of cement, making it the second-largest producer after China (Statista, 2024a). With major infrastructure plans for roads and railways, India needs skilled workers more than ever. However, many cement plants are struggling to find workers who understand modern tools or environmentally friendly methods.
This article explores why this skill gap exists, how it impacts the industry, and what can be done to fix it—both globally and in India. With updated statistics and real-world examples, it sends a clear message: cement companies must take action before the problem gets worse.

The hidden crisis
The skill gap in the cement industry is a growing problem that’s not always easy to see. Across the world, experienced workers who have spent decades mastering cement production are retiring. A 2023 report shows that 30 per cent of them are over 50, and new workers aren’t stepping in fast enough, especially in Europe and the US (World Cement Association, 2024).
At the same time, cement plants are becoming more advanced, using technology like smart sensors, automated systems and robots. These systems require workers with technical and computer skills—not just physical strength and basic knowledge.
India is also feeling the heat. With the capacity to produce 690 million tonnes of cement yearly, the industry employs over 1 million people (IBEF, 2024). But according to a 2024 study, 65 per cent of plant managers report not having enough skilled workers to handle modern machinery (CII, 2024). This problem is even worse in southern India, where too many plants compete for limited talent, and low wages push skilled workers to better-paying city jobs.
This skill shortage affects the industry in several ways:

  • Higher maintenance costs: Without skilled workers, machines break down more often.
  • Reduced cement quality: Poorly operated machinery affects the consistency and quality of cement.
  • Increased production costs: Inefficiencies lead to higher operational costs.

The crisis is reshaping how cement is made and forcing companies to rethink their strategies. If the industry doesn’t tackle this problem soon, it could face severe setbacks in productivity, quality and profitability.

From skill to crisis
Cement production used to rely heavily on hands-on skills. Workers learned through experience—breaking rocks, firing kilns and mixing materials. But today, machines handle most of that work. Around 80 per cent of the world’s cement now comes from dry processes, which require less labour but more technical expertise (Rhodium Group, 2024).
The older generation of workers, who mastered traditional methods, often struggle to adapt to modern systems. Meanwhile, younger workers are not being trained quickly enough to fill the gap. This shift is making the industry less efficient and more vulnerable.
India is a prime example of this transformation. Small cement plants once thrived on local skills and traditional methods. But now, large companies like UltraTech, which produces 79 million tonnes of cement annually, are using advanced technologies like waste heat recovery systems (WHRS) to save energy and reduce emissions (IBEF, 2024).
However, a 2023 survey by the National Skill Development Corporation (NSDC) revealed that only 20 per cent of cement workers in India are capable of handling these modern systems (NSDC, 2024). This lack of expertise leads to several problems:

  • Inefficiencies in production: Poorly operated technology slows down manufacturing.
  • Reduced sustainability efforts: Without skilled workers, eco-friendly systems like WHRS are not fully effective.
  • Higher operating costs: More downtime and maintenance result from improper handling of equipment.

The old craftsmanship is fading, leaving the industry at a crossroads. Without immediate action, this skill shortage could severely impact cement production’s ability to meet growing demands and adopt sustainable practices.

Technology’s double-edged sword
Technology is both a solution and a challenge for the cement industry. Around the world, new tech is making cement production faster, cleaner and more efficient. For example, Cemex tested solar-powered cement in 2023, aiming for eco-friendly production, while Heidelberg invested €450 million in carbon capture technology in Belgium (World Cement Association, 2024). These innovations are part of why the global cement market could reach $686 billion by 2032 (Fortune Business Insights, 2025).
However, the catch is that these high-tech solutions require skilled workers who understand how to operate and maintain advanced systems—not just traditional manual labour.
India is also riding the wave of automation. Cement plants are now getting 20–25 per cent of their power from WHRS, which save energy and reduce costs (World Cement, 2025). When Adani acquired Sanghi Industries for $606.5 million in 2023, it added more advanced technology to its operations. But the problem remains: local workers often lack the skills needed to handle this new machinery effectively.
While technological advancements have helped India produce 375 million tonnes of cement in 2023, they are also creating a divide within the workforce. The industry is splitting into two groups:

  • Tech-savvy workers: A small group trained to handle automation, digital systems and advanced equipment.
  • Traditional workers: A much larger group lacking the skills needed to work with modern technology.

This divide leads to several challenges:

  • Underutilised technology: Many high-tech systems are not fully used due to a lack of trained operators.
  • Increased operational costs: Companies spend more on training and maintenance when technology is poorly managed.
  • Job insecurity: As automation grows, workers with outdated skills face the risk of being left behind.

The cement industry must find a balance between adopting new technologies and ensuring workers have the skills to operate them effectively. Without doing so, the push for efficiency and sustainability could leave a large part of the workforce struggling to keep up.

Why is the young talent avoiding the cement industry?
Young people are not interested in working in the cement industry. Globally, only about 5 per cent of engineering graduates from the US and Europe consider manufacturing jobs, according to a 2023 report (McKinsey, 2023). They see cement jobs as dirty, boring and outdated compared to high-paying tech jobs with modern offices and exciting projects.
India faces the same problem. Although the cement industry contributes around 6 per cent to the country’s economy, it struggles to attract fresh talent. In 2023, the IT sector hired 1.5 million graduates, while the cement industry managed to recruit only about 50,000 (NSDC, 2024). Cities like Bengaluru, known for their booming tech hubs, lure young engineers who prefer coding jobs over working in hot, dusty cement plants in places like Rajasthan.
The perception problem is real. A 2024 survey revealed that 70 per cent of Indian engineering students described cement work as ‘dull’ and ‘unappealing,’ even though starting salaries can be quite competitive, ranging from `8 to Rs.12 lakh per year (CII, 2024). They don’t see cement as a modern, innovative field with growth opportunities.

Beyond the factory floor
The skill shortage in the cement industry isn’t just a factory problem—it’s a major issue for big construction projects worldwide. When cement plants struggle to find skilled workers, everything slows down, causing costly delays.
In the US, the $1.2 trillion infrastructure plan aimed at upgrading roads, bridges and railways is already feeling the pressure. Cement shortages caused by untrained workers are holding back progress (Fortune Business Insights, 2025).
Africa faces a similar problem. Cement demand on the continent is expected to grow by 77 per cent by 2030. But without skilled workers, meeting that demand will be nearly impossible, stalling economic growth and infrastructure development (World Cement Association, 2024).
India is feeling the pinch more than most. The country’s $14.59 billion infrastructure plan, which includes building highways, smart cities and bullet train projects, heavily relies on cement (IBEF, 2024). One of the most ambitious projects, the Mumbai-Ahmedabad Bullet Train, requires a staggering 20,000 cubic metres of cement daily. But skill shortages are disrupting supply, leading to delays.
The problem isn’t just limited to mega-projects. For example, Chennai’s metro expansion faced major delays in 2023 because local cement plants couldn’t meet demand on time. The skill gap is directly impacting the speed and quality of these projects.

What’s at risk?

  • Job creation: India’s construction boom is expected to create around 1 million jobs, but if the cement industry can’t keep up, those opportunities will be lost.
  • Economic growth: Infrastructure development contributes significantly to GDP. Delays in cement supply can slow down the entire economy.
  • Global competitiveness: If India and other countries can’t resolve this skill gap, their ability to compete on a global scale will be compromised.

Bridging the gap
The skill gap in the cement industry isn’t impossible to fix—new training models worldwide are making a difference. Countries and companies are trying out fresh ideas to build a skilled workforce.
In Germany, a dual education system that combines classroom learning with hands-on factory training is producing 60,000 skilled workers every year (IEA, 2023). It’s a practical approach where students gain real-world experience while studying, making them job-ready from day one.
Companies are also stepping up. Holcim introduced virtual reality (VR) training in 2024, allowing workers to practice operating complex cement plants in a simulated environment. This approach saves time, money, and reduces accidents during training.
India is making efforts too. UltraTech’s skill centres trained 10,000 workers in 2023, focusing on areas like automation, machine handling, and safety (IBEF, 2024). The company is trying to bridge the skill gap by equipping workers with modern technical skills.
Collaborations are also happening. Shree Cement has partnered with IIT Kharagpur, producing 500 skilled engineers annually since 2022. This initiative aims to bring fresh talent into the industry, particularly in high-tech areas.
The National Skill Development Corporation (NSDC) and Ambuja Cement have even bigger plans. They aim to train 50,000 young people by 2029, with a special focus on green technologies and sustainable manufacturing.

Why this matters:

  • Reducing the skill gap: If these training programmes expand successfully, India’s 65 per cent skill shortage could be significantly reduced by 2030.
  • Improving productivity: Better-trained workers mean fewer machine breakdowns, improved cement quality and reduced costs.
  • Boosting economic growth: Skilled workers are essential for completing big infrastructure projects on time, directly supporting economic development.

Sustainability at risk
Achieving sustainability in cement production isn’t just about technology—it’s about having skilled workers who can operate and maintain green systems. The cement industry is responsible for 6–8 per cent of the world’s CO2 emissions, pushing companies to find eco-friendly solutions (IEA, 2023).
In 2024, a plant in the UK managed to cut its emissions by 85 per cent by adopting advanced technologies. But here’s the catch: running these systems needs highly trained workers who understand how to use and maintain them.
India is also striving for greener cement production. Major companies like JK Cement have set ambitious targets, aiming to use 50 per cent biomass fuel by 2030. However, only 15 per cent of the workforce currently has the necessary skills to handle this transition effectively (CII, 2024).
Ambuja Cement’s Concrete Futures Lab is one initiative trying to close the skill gap by training 2,000 workers each year in eco-friendly cement production. But compared to the scale of the industry, that’s not nearly enough.

Why this matters:

  • Carbon-neutral goals at risk: India’s target of achieving carbon-neutral cement production by 2050 is in danger if the workforce isn’t adequately skilled.
  • Need for better training programmes: Without widespread and advanced training programmes, green technologies will remain underutilised, slowing down the progress toward sustainability.
  • Global impact: What’s true for India is true for the world—if we don’t bridge the skill gap, the dream of reducing cement’s carbon footprint may stay out of reach.
  • The solution is clear: We need more training centres, better courses, and partnerships between companies, educational institutions, and the government to make green cement production a reality.

The global skill gap
The skill gap in cement manufacturing is a worldwide problem, but it looks different depending on where you are.
In the US, which produced 91 million tonnes of cement in 2023, the main issue is a shortage of workers with digital skills to operate advanced systems (World Cement, 2025).
In Africa, the problem is more basic. The industry lacks trained workers altogether, which could severely impact its cement demand expected to rise by 77 per cent by 2030 (World Cement Association, 2024).
India faces a mixed challenge. Northern cement plants struggle to find workers with the technical expertise to handle modern, automated systems. In contrast, southern plants have a surplus of workers, but their skills are outdated or irrelevant. NSDC trains around 50,000 workers annually, but that’s far too little compared to the rapidly growing demand (World Cement, 2025).
In China, the government takes a proactive approach, training 200,000 workers each year through organised programmes to support its massive production of 2.1 billion tonnes in 2022 (Statista, 2024b).

Why this matters:

  • India’s demand boom: Cement demand in India is projected to increase by 42 per cent by 2030, but without the right skills, meeting that demand will be difficult.
  • Learning from others: Countries need to collaborate, sharing training models and technologies to address skill shortages effectively.
  • Bridging the gap: Without the right skillsets, the cement industry’s growth and sustainability goals are at serious risk worldwide.

The urgent need to address the skill shortage
Time is running out. By 2024, the world will have a surplus of 1 billion tonnes of cement, but only skilled workers can make sure it’s used properly (World Cement Association, 2024). In India, the demand for cement could grow by 7–8 per cent every year through 2027, needing $14.89 billion in new plants (CRISIL, 2024). But without the right skills, this growth is at risk.
Here’s the hard truth for cement companies: current efforts aren’t enough. Training 10,000 workers, like UltraTech did, is a good start, but India needs 500,000 more skilled workers by 2030 to keep up with demand. Globally, companies are hoarding technology but aren’t sharing the necessary training, leaving developing regions behind. In India, companies often focus more on profits than on developing talent. Southern plants, for example, lower wages instead of investing in training, causing skilled workers to leave for better-paying jobs in IT. As for sustainability? Many green projects are just for show unless workers have the skills to run them.
So, what’s the solution? Companies need to think bigger. Globally, the cement industry should pool resources and create an industry fund for training, like the oil industry does for research and development. They should share training tools, like virtual reality, to help regions like Africa catch up. In India, companies like UltraTech and Adani should take the lead by partnering with all engineering colleges—not just the top ones—and offering scholarships to attract young talent. Rural plants should raise wages to compete with city jobs. Governments can help too, like India’s 2025 budget could offer tax cuts to companies that train workers, similar to Germany’s model.
But here’s the tough reality: many cement companies resist change. They prefer to squeeze more out of their current workforce rather than investing in new talent. That approach won’t work. If they don’t act now—really act—plants will shut down, projects will be delayed, and sustainability goals will fail. The choice is clear: build a skilled future or watch everything collapse. Which path will you take?

Conclusion
The skill shortage in cement manufacturing is a serious issue, both globally and in India, and it can’t be ignored any longer. As older workers retire, technology is taking over, but young people aren’t interested in cement jobs. This is causing growth to slow down and impacting green initiatives worldwide. In India, with its massive cement production of 410 million tonnes a year and big plans for the future, the situation is even more critical—65 per cent of plants lack skilled workers, putting jobs and infrastructure at risk.
However, there’s hope. New training programmes, like UltraTech’s centres or global VR training tools, show progress, but these efforts aren’t enough yet. Companies must act quickly, share ideas and invest more in training their workforce. If India makes the right moves, it could boost its production to 599.7 million tonnes by 2032 (IMARC Group, 2024). The global cement industry can also thrive with the right investment in skills.
Ignoring the skill gap means risking the foundation of the cement industry—and the future of construction worldwide. Cement companies must decide now: invest in skilled workers and grow, or let the industry’s progress crumble.

References
1. Confederation of Indian Industry (CII). (2024). Skill shortages in Indian manufacturing: A sector-wise analysis. New Delhi: CII.
2. CRISIL. (2024). Cement sector to invest US$ 14.89 billion as capex by FY27. Mumbai: CRISIL Ratings.
3. Fortune Business Insights. (2025). Cement market size, share & trends: Growth report [2032].
4. India Brand Equity Foundation (IBEF). (2024). Indian cement industry analysis.
5. International Energy Agency (IEA). (2023). Cement: Reducing CO2 emissions while meeting demand.
6. IMARC Group. (2024). India cement market size, share, demand & growth – 2032.
7. McKinsey & Company. (2023). The future of manufacturing: Talent trends in 2023.
8. National Skill Development Corporation (NSDC). (2024). Skill gap assessment in the Indian cement sector. New Delhi: NSDC.
9. Rhodium Group. (2024). The global cement challenge.
10. Statista. (2024a). India’s cement production volume 2008–2022.
11. Statista. (2024b). China’s cement production volume 2010–2023.
12. Statista. (2025). Cement production global 2023.
13. US Geological Survey. (2024). Major countries in worldwide cement production in 2023.
14. World Cement Association. (2024). Global cement industry outlook: Trends and forecasts.
15. World Cement. (2025). India in focus: A comprehensive analysis of the Indian cement industry.

About the author:
Dr SB Hegde is a Professor with the Department of Civil Engineering, Jain College of Engineering and Technology, Hubli, India and a Visiting Professor at Pennsylvania State University, USA. He is a globally recognised cement industry expert and academic leader with over three decades of experience. He has held senior positions in leading cement companies and has authored over 235 research papers, holds 10 patents and guided 2 PhDs.

Continue Reading

Concrete

Solving AF Processing Challenge with Advanced Combustion

Published

on

By

Shares

Alternative fuels reduce cement plants’ carbon footprint, but infrastructure challenges limit adoption. Technologies like the HOTDISC® Reactor help overcome these barriers.

Alternative fuels are a relatively straightforward and readily available means of reducing a cement plant’s carbon footprint. The technology is proven and well used worldwide, and with the right controls in place the switch from fossil fuels to waste-derived fuels does not impact the quality of the end product. In some countries, cement plants are achieving near 100 per cent substitution in the calciner and high levels of substitution in the kiln. However, this trend is not universal, and some countries are struggling to achieve a thermal substitution rate (TSR) of 25 per cent. In this article, we will look at the obstacles to alternative fuels use and the technology that is available to overcome them.

Advantages of alternative fuels
Alternative fuels offer three key environmental advantages.
1) A lower carbon alternative to coal or petcoke.
2) A pathway for waste that might otherwise be landfilled, including hazardous waste.
3) An alternative to waste incineration, which is typically done at lower temperatures where emissions tend to be higher.
In addition, the cost of alternative fuels can often be lower than fossil fuels and is not subject to the fluctuations of the energy market.
The sources of alternative fuels are many and varied – to the extent that the supply chain looks vastly different from one region to the next. For example, whereas India has abundant sources of biomass such as rice husk, in Western Europe there are plentiful supplies of refuse-derived fuel (RDF). This is partly a matter of industry and partly of infrastructure. But given the importance of reducing the cement industry’s reliance on coal, a lack of infrastructure must not prevent greater utilisation of alternative fuels – which is why FLSmidth Cement has for some time been developing alternative fuels solutions that reduce the burden of pre-processing and enable cement plants to more easily and more cost-effectively utilise a wide variety of waste streams.

A solution for all waste
Direct calciner injection may seem like the simplest way to replace fossil fuels with alternatives. However, it’s not always the best. The options for alternative fuels are limited by the necessity to pre-process fuel in preparation for burning, which, as stated, requires established infrastructure, or additional facilities at the plant.
Though the CAPEX cost of direct calciner injection is low, the calciner fuel substitution rate is also low, so this method doesn’t enable cement plants to optimise the potential for fuel replacement. Plant operators must also consider the impact on the process of direct injection, which doesn’t allow the long residence time that can be required to reduce process volatility. No plant wants to contend with greater instability or an increase in emissions from adding alternative fuels to the mix. Fortunately, direct calciner injection is not the only option. There are other ways of extracting energy from waste that require no pre-processing at all.
The HOTDISC® Reactor can handle a wide variety of solid waste in sizes up to 1.2m – from sludge or grains to whole truck tyres. There’s no need for expensive shredding or pre-drying, or any pre-processing, which removes one of the obstacles to adopting alternative fuels. The broad range of accepted fuel types also means cement plants are free to shop the market and not tied into one supplier. This makes it a very cost-effective solution because cement plants can select the lowest cost fuel without worrying about the quality.

How does the HOTDISC® work?
The HOTDISC® is a moving hearth furnace that is integrated into the pyroprocess below the calciner bottom and above the kiln riser. Coarse alternative fuels are fed onto a slowly rotating disc. Hot tertiary air is directed into the HOTDISC to provide an oxidising atmosphere for the alternative fuel to burn. As the alternative fuel slowly travels around approximately 270 degrees on the rotating disc, almost all of it fully combusts. Depending on the nature of the alternative fuel (size, heat content, moisture, etc.), the rotational speed of the HOTDISC can be adjusted to optimise the residence time (up to 45 minutes) and combustion rate. In addition, the temperature inside the HOTDISC is controlled by directing a portion of the preheated raw meal into the HOTDISC. The HOTDISC operation generates a controlled mix of hot gases, combustion residue (ash) and calcined raw meal that exits the HOTDISC. The combustion gases and finer materials are carried with the hot gases into the bottom of the calciner, while the coarser residues meet a scraper at the end of the 270 degrees rotation, where they are directed down into the riser duct. From there, this material falls into the kiln and is incorporated into the clinker.
The HOTDISC is designed to achieve a calciner substitution rate in the range of 50 to 80 per cent – or even higher – of the calciner fuel. Results vary by the specific plant conditions and fuel specification, but based on over 20 years of plant data it is possible to predict the substitution rate in each application.
The HOTDISC was originally designed for use with In-Line Calciners (ILCs), but new models are now available for use with Separate Line Calciners (SLCs), enabling the HOTDISC to be installed under the calciner and still deliver the same benefits. The HOTDISC-S is installed in the bottom part of the SLC calciner on the ground, the reject will be cooled and transported to a container or back into the system, gas flow and AF flow operates counter current.
For cement plants that wanted to utilise a wide range of alternative fuels, the HOTDISC®-S is a cost-saving solution that avoids the expense of changing the SLC to an ILC while enabling a high substitution of alternative fuels. Another model, the HOTDISC®-HMT (Hot Material Transport), enables quicker and easier installation of the HOTDISC in existing plants. Instead of directly integrating the exit of the HOTDISC reactor to the calciner and riser duct, the new layout allows the HOTDISC reactor to be mounted two to five metres away. It is then connected to the calciner and riser duct via a hot material transport chute for gas flows and combustion ashes.

Further advances in alternative fuels technologies
Low or varying quality alternative fuels can be another inhibitor to substitution, given the requirements of the relatively delicate cement pyro process. FLSmidth Cement has expended considerable R&D effort developing solutions that can accommodate a wide range of fuel types, knowing that this is the easiest path to greater substitution and ultimately the near-elimination of fossil fuels. The FUELFLEX® Pyrolyzer was one result of this effort and offers an exciting prospect for cement plants wishing to achieve near – 100 per cent substitution in the calciner and minimise NOx emissions.

The FUELFLEX® Pyrolyzer utilises hot meal from the lower preheater cyclones (yellow arrows) to dry and pyrolyze RDF or biomass. Either part or the full stream of hot meal from a lower preheater cyclone is admitted to the Pyrolyzer via the U-Lock (controlled by two dividing gates). The U-Lock fluidises the hot meal, forming a U-shaped gas lock that prevents pyrolysis gases from flowing backwards through the process. Subsequently the hot meal stream flows into the Pyrolyzer vessel, which also has a U-shaped lower aerated section to contain the hot fluidised meal. Fuel is pneumatically fed to the pyrolyzer vessel wherein through contact with the hot meal, it is dried, heated and pyrolyzed to form reactive gases and char. The gases push upwards into the main pyrolyzer vessels while the char falls down into the fluidised meal bed, before being reunited and fed as a very reactive stream into the calciner. Aeration panels are used to fluidise the hot meal and drain gates are used to drain out debris and meal from the pyrolyzer to the kiln system in a controlled manner. The reactive stream of pyrolysis products reacts with rotary kiln NO by so-called ‘re-burning’ reactions, utilising pyrolysis gases to convert NO into free N2 in the reduction zone prior to mixing with preheated combustion air in the calciner. In addition, the full fuel pyrolysis preceding the calciner helps limit calciner NOx formation by limiting access to oxygen when burning.

By using the FUELFLEX® Pyrolyzer, cement plants can achieve up to 100 per cent fossil fuel replacement in the calciner, with the following benefits:

  • Reduced CO2 emissions, as net CO2 emissions from alternative fuels generally are lower than from fossil fuels.
  • Increased utilisation of local waste streams, avoiding the need to dispose of or store this waste in other ways.
  • Reduced fuel costs, especially in times of fluctuating energy prices.
  • Reduced fossil fuel use saves the associated environmental impact of fossil fuel extraction and transport.

Conclusion
The challenge is on: cement plants must reduce carbon emissions now, and continue to do so for the next several decades until the target of net zero is met. While there are some solutions that are not ready yet – i.e. carbon capture – alternative fuels offer a valuable means of reducing the cement industry’s environmental impact immediately, with the added benefit of providing a controlled means of waste disposal. New and proven technologies will help the cement industry to overcome alternative fuel supply chain problems and achieve a dramatic reduction in fossil fuel use.

(Communication by the management of the company)

Continue Reading

Trending News

SUBSCRIBE TO THE NEWSLETTER

 

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

 


    This will close in 0 seconds