Economy & Market

Forecast 2013

Published

13 years ago

December 31, 2012

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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.

Economy & Market

SEW-EURODRIVE India Opens Drive Technology Centre in Chennai

Published

2 weeks ago

March 25, 2026

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The new facility strengthens SEW-EURODRIVE India’s manufacturing, assembly and service capabilities

SEW-EURODRIVE India has inaugurated a new Drive Technology Centre (DTC) in Chennai, marking a significant expansion of its manufacturing and service infrastructure in South India. The facility is positioned to enhance the company’s responsiveness and long-term support capabilities for customers across southern and eastern regions of the country.

Built across 12.27 acres, the facility includes a 21,350-square-metre assembly and service setup designed to support future industrial growth, evolving application requirements and capacity expansion. The centre reflects the company’s long-term strategy in India, combining global engineering practices with local manufacturing and service capabilities.

The new facility has been developed in line with green building standards and incorporates sustainable features such as natural daylight utilisation, solar power generation and rainwater harvesting systems. The company has also implemented energy-efficient construction and advanced climate control systems that help reduce shopfloor temperatures by up to 3°C, improving production stability, product quality and working conditions.

A key highlight of the centre is the 15,000-square-metre assembly shop, which features digitisation-ready assembly cells based on a single-piece flow manufacturing concept. The facility also houses SEW-EURODRIVE India’s first semi-automated painting booth, aimed at ensuring uniform surface finish and improving production throughput.

With the commissioning of the Chennai Drive Technology Centre, SEW-EURODRIVE India continues to strengthen its manufacturing footprint and reinforces its long-term commitment to supporting industrial growth and automation development in India.

Concrete

Material Flow Efficiency

Published

3 weeks ago

March 18, 2026

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We explore how material handling systems are becoming strategic assets in cement plants, enabling efficient movement of raw materials, clinker and finished cement. Advanced conveying, automation and digital technologies are improving plant productivity while supporting energy efficiency and sustainability goals.

Material handling systems form the operational backbone of cement plants, enabling the efficient movement of raw materials, clinker and finished cement across complex production networks. With India’s cement industry producing over 391 million tonnes of cement in FY2024 and possessing an installed capacity of around 668 mtpa, according to the CRISIL Research Industry Report, 2025, efficient material logistics have become critical to maintaining plant productivity and cost competitiveness. At the same time, cement production is highly energy intensive and contributes around 7 per cent to
8 per cent of global CO2 emissions, making efficient material flow and logistics optimisation essential for reducing operational inefficiencies and emissions states the International Energy Agency Cement Technology Roadmap, 2023. As plants scale capacity and integrate digital technologies, modern material handling systems, ranging from automated conveyors to intelligent stockyards, are increasingly recognised as strategic assets that influence plant stability, energy efficiency and environmental performance.

Strategic role of material handling
Material handling is no longer viewed as a secondary utility within cement plants; it is now recognised as a strategic system that directly influences production efficiency and process stability.
Cement manufacturing involves the continuous movement of large volumes of limestone, clay, additives, clinker and finished cement across multiple production stages. Even minor disruptions in conveying systems or storage infrastructure can lead to kiln feed fluctuations, production delays and significant financial losses. According to Indian Cement Industry Operational Benchmarking Study, 2024, unplanned downtime in large integrated cement plants can cost between Rs.15–20 lakh per hour, highlighting the economic importance of reliable material handling systems.
Modern cement plants are therefore investing in advanced mechanical handling systems designed for high throughput and operational reliability. Large integrated plants can process over 10,000 tonnes per day of clinker, requiring highly efficient conveying systems and automated stockyards to maintain continuous material flow, suggests the International Cement Review Industry Analysis, 2024. Efficient material handling also reduces spillage, minimises dust emissions and improves workplace safety. As cement plants become larger and more technologically advanced, the role of material handling is evolving from simple transport infrastructure to a critical operational system that supports both productivity and sustainability.

From quarry to plant
The transport of raw materials from quarry to processing plant represents one of the most energy-intensive stages of cement production. Traditionally, limestone and other raw materials were transported using diesel-powered trucks, which resulted in high fuel consumption, dust generation and increased operational costs. However, modern plants are increasingly adopting long-distance belt conveyors and pipe conveyors as a more efficient alternative. These systems allow continuous material transport over distances of 10–15 kilometres, significantly reducing fuel consumption and operating costs while improving environmental performance, states the FLSmidth Cement Industry Technology Report, 2024.
Milind Khangan, Marketing Manager, Vertex Market Research & Consulting, says, “Efficient and enclosed handling of fine materials such as cement, fly ash and slag requires modern pneumatic conveying systems. By optimising the air-to-material ratio, these systems can reduce energy consumption by 10 per cent to 15 per cent while ensuring smooth material flow. Closed-loop conveying further minimises dust loading and improves the performance of bag filters, supporting cleaner plant operations. In addition, flow-regulated conveying lines help prevent clogging and maintain reliable dispatch performance. Overall, automation in pneumatic conveying delivers immediate operational benefits, including improved equipment uptime, lower energy use, reduced material spillage and more stable kiln and mill performance.”
Pipe conveyor systems are particularly gaining traction because they provide a completely enclosed transport system that prevents material spillage and dust emissions. According to global cement engineering studies, conveyor-based transport can reduce energy consumption by up to 30 per cent compared to truck haulage, while also improving operational reliability. Several cement plants in India have already implemented such systems to stabilise quarry-to-plant logistics while reducing carbon emissions associated with diesel transport.

Stockyard management and homogenisation
Stockyards play a critical role in maintaining raw material consistency and stabilising kiln feed quality. Modern cement plants use advanced stacker and reclaimer systems to ensure efficient storage and blending of raw materials before they enter the grinding and pyroprocessing stages. Automated stacking methods such as chevron or windrow stacking enable uniform distribution of materials, while bridge-type or portal reclaimers ensure consistent extraction during kiln feed preparation. These systems are essential for maintaining stable chemical composition of raw meal, which directly influences kiln efficiency and clinker quality. The Cement Plant Operations Handbook, 2024 indicates that advanced homogenisation systems can reduce raw mix variability by up to 50 per cent, significantly improving kiln stability and energy efficiency. Integrated stockyard management systems also incorporate sensors for monitoring bulk density, moisture levels and stockpile volumes, enabling real-time control over material blending processes.

Clinker and cement conveying technologies
Once clinker is produced in the kiln, it must be efficiently transported to storage silos and subsequently to grinding and packing units. Modern cement plants rely on high-capacity belt conveyors, bucket elevators and pneumatic conveying systems to manage this stage of material flow. Steel-cord belt bucket elevators are now capable of lifting materials to heights exceeding 120 metres with capacities reaching 1,500 tonnes per hour, making them suitable for large-scale clinker production lines, states the European Cement Engineering Association Technical Paper, 2023.
For fine materials such as cement, fly ash and slag, pneumatic conveying systems provide a reliable and dust-free solution. These systems transport powdered materials using controlled airflow, ensuring enclosed and contamination-free movement between grinding units, silos and packing stations. Optimised pneumatic systems can reduce energy consumption by 10 per cent to 15 per cent compared to older conveying technologies, while also improving plant cleanliness and environmental compliance, according to the Global Cement Technology Review, 2024.

Automation and digitalisation
Digitalisation is transforming material handling systems by introducing real-time monitoring, predictive maintenance and automated control. Advanced sensors and Industrial Internet of Things (IIoT) platforms enable plant operators to track conveyor health, stockpile levels and equipment performance in real time. Predictive maintenance systems analyse vibration patterns, temperature fluctuations and equipment load data to detect potential failures before they occur. According to McKinsey’s Industry 4.0 Manufacturing Report, 2023, for heavy industries, digital monitoring and predictive maintenance technologies can reduce equipment downtime by up to 30 per cent and increase productivity by 10 per cent to 15 per cent. Digital control centres also integrate data from conveyors, stacker reclaimers and dispatch systems, enabling centralised management of material flows from quarry to dispatch.

Handling of AFR
The growing adoption of Alternative Fuels and Raw Materials (AFR) has introduced new challenges and opportunities for material handling systems in cement plants. AFR materials such as refuse-derived fuel (RDF), biomass and industrial waste often have irregular particle sizes, variable moisture content and lower bulk density compared to conventional fuels. As a result, specialised storage, dosing and feeding systems are required to ensure consistent kiln combustion. According to the Cement Sector Decarbonisation Roadmap published by NITI Aayog in 2026, increasing the use of AFR could enable India’s cement sector to achieve thermal substitution rates of around 20 per cent in the coming decades. To support this transition, plants are investing in automated receiving stations, shredding units, drying systems and precision dosing equipment to stabilise AFR supply and combustion performance.

Energy efficiency and dust control
Material handling systems also play a crucial role in improving plant energy efficiency and environmental performance. Modern conveyor systems equipped with variable speed drives and energy-efficient motors can significantly reduce electricity consumption. Permanent magnet motors used in conveyor drives can deliver 8 per cent to 12 per cent energy savings compared to conventional induction motors, improving overall plant energy efficiency according to the IEA Industrial Energy Efficiency Study, 2023. Dust control is another major concern in cement plants, particularly during material transfer and storage operations. Enclosed conveyors, dust extraction systems and advanced bag filters are widely used to minimise particulate emissions and improve workplace safety.

Future trends in material handling
The future of material handling in cement plants will be shaped by automation, digitalisation and sustainability considerations. Emerging technologies such as AI-driven logistics optimisation, autonomous mobile equipment and digital twins are expected to further improve plant efficiency and operational visibility. Digital twin models allow engineers to simulate material flow patterns, optimise stockyard operations and predict equipment performance under different operating conditions. According to the International Energy Agency Digitalisation and Energy Report, 2024, the adoption of advanced digital technologies could improve industrial energy efficiency by up to 20 per cent in heavy industries such as cement manufacturing. As cement plants expand capacity and adopt low-carbon technologies, intelligent material handling systems will play a critical role in maintaining productivity and reducing environmental impact.

Conclusion
Material handling systems have evolved from basic transport infrastructure into strategic operational systems that directly influence plant efficiency, reliability and sustainability. From quarry transport and automated stockyards to digital dispatch platforms and advanced conveying technologies, modern material handling solutions enable cement plants to manage large production volumes while maintaining process stability.
As India’s cement industry continues to expand to meet infrastructure and urban development demands, investments in advanced material handling technologies will become increasingly important. By integrating automation, digital monitoring and energy-efficient systems, cement manufacturers can improve operational performance while supporting the industry’s long-term sustainability and decarbonisation goals.

Kanika Mathur

Concrete

Modernise to Optimise

Published

3 weeks ago

March 18, 2026

admin

Cement plant modernisation is reshaping the industry through upgrades in
kilns, energy systems, digitalisation, AFR integration and advanced material
handling. We explore these technologies that improve efficiency, reduce
emissions, strengthen competitiveness, while preparing the industry for India’s
next phase of infrastructure growth.

India’s cement industry, the world’s second-largest, is undergoing a rapid transformation driven by infrastructure demand, decarbonisation targets and technological advancement. The sector’s installed capacity stood at approximately 668 million tonnes per annum (mtpa) in FY2025 and is projected to reach 915–925 mtap by 2030, supported by large-scale capacity expansions and infrastructure investment cycles, suggests CRISIL Intelligence Industry Report, 2025. At the same time, cement production remains highly energy intensive and contributes about 6 per cent to 7 per cent of India’s total greenhouse gas emissions, making efficiency improvements and modernisation critical for long-term sustainability as stated in CareEdge ESG Research, 2025. As a result, cement manufacturers are investing in advanced kiln technologies, digital monitoring systems, waste heat recovery, alternative fuels, and modern material handling infrastructure to enhance productivity while aligning with global decarbonisation pathways.

Need for modernisation
The need for plant modernisation is closely linked to the sector’s rapid capacity expansion and rising operational complexity. India’s installed cement capacity has grown significantly in the last decade and is expected to exceed 900 mtpa by 2030, driven by demand from housing, infrastructure and urban development projects, as per the CRISIL Intelligence Industry Report, 2025. However, increasing scale also places pressure on energy efficiency, logistics, and production stability. The report also suggests that the cement plants must upgrade equipment and processes to operate at higher utilisation rates, which are projected to reach 75 per cent to 77 per cent by the end of the decade, compared to around 72 per cent to 74 per cent in FY2026.
Environmental imperatives are another major driver of modernisation. Cement manufacturing is responsible for a significant share of industrial emissions because clinker production requires high-temperature processes that depend heavily on fossil fuels. According to CareEdge ESG research, the cement sector contributes 6–7 per cent of India’s total greenhouse gas emissions, with approximately 97 per cent of emissions arising from direct fuel combustion and process emissions in kilns. Consequently, plant modernisation initiatives now focus not only on productivity improvements but also on reducing emissions intensity, energy consumption, and reliance on conventional fuels.
“One of the most impactful upgrades implemented at Shree Cement in the last five years has been the adoption of advanced data management platforms that provide real-time visibility across major process areas. This digital advancement has strengthened plant automation by enabling faster and more accurate responses to process variations while improving the reliability of control loops. Real-time dashboards, integrated analytics and automated alerts now support quicker, data-driven decision-making, helping optimise kiln and mill performance, improve energy control and detect deviations early. By consolidating data from multiple systems into a unified digital environment, the company has enhanced operational consistency, reduced downtime and improved both productivity and compliance. This shift towards intelligent automation and real-time data management has become a key driver of operational excellence and future-ready plant management,” says Satish Maheshwari, Chief Manufacturing Officer, Shree Cement.

Kiln and pyroprocessing upgradation
The kiln remains the technological heart of cement manufacturing, and modernisation efforts often begin with upgrades to pyroprocessing systems. Many older plants in India operate with four- or five-stage preheaters, while modern plants increasingly adopt six-stage preheater and pre-calciner systems that significantly improve heat efficiency and clinker output. These systems enhance heat transfer, reduce fuel consumption, and stabilise kiln operations under high throughput conditions.
Professor Procyon Mukherjee suggests, “Cement manufacturing is, at its core, a thermal process. The rotary kiln and calciner together account for energy consumption and emissions. The theoretical thermal requirement for clinker production is around 1700–1800 MJ per tonne, yet real-world plants often operate far above this benchmark due to inefficiencies in combustion, heat recovery and material flow. Modernisation, therefore, must begin with the
kiln system, and not peripheral automation or
isolated upgrades. The shift from wet to dry process kilns, combined with multi-stage preheaters and precalciners, has already delivered step-change improvements, making dry kilns nearly 50 per cent more energy efficient.”
Recent investment programmes across the industry have included kiln cooler upgrades, advanced burners, and improved refractory materials designed to increase operational reliability and reduce specific heat consumption. Such upgrades are essential because cement production remains highly energy intensive, and continuous efficiency improvements are required to meet global decarbonisation targets. According to the International Energy Agency (IEA) Cement Tracking Report, 2023, the cement sector must achieve annual emissions intensity reductions of around 4 per cent through 2030 to align with global net-zero scenarios.

Energy efficiency and WHRS
Energy efficiency remains one of the most important areas of modernisation in cement manufacturing, given the sector’s heavy reliance on thermal and electrical energy. Modern plants deploy advanced process controls, efficient grinding systems, and improved combustion technologies to reduce specific energy consumption. The adoption of energy-efficient technologies is particularly important in India, where energy costs account for a large share of production expenses. As demand grows and plants expand capacity, improving energy performance becomes essential to maintain competitiveness.
Waste Heat Recovery Systems (WHRS) have emerged as a key solution for improving plant energy efficiency. During cement production, large volumes of high-temperature gases are released from kilns and coolers. WHRS technology captures this waste heat and converts it into electricity, thereby reducing reliance on external power sources. According to energy benchmarking studies for the Indian cement industry, installed waste heat recovery capacity in the sector has reached approximately 840 MW, with an additional potential of around 500 MW states the Green Business Centre, Energy Benchmarking Report, 2023. Several leading producers have already implemented large WHRS installations; for example, UltraTech Cement has deployed systems with around 121 MW of waste heat recovery capacity, reducing carbon emissions by nearly 0.5 million tonnes annually according to the Energy Alternatives India Case Study, 2024.

Integration of AFR
The integration of Alternative Fuels and Raw Materials (AFR) is another critical dimension of cement plant modernisation. AFR refers to the use of industrial waste, biomass, refuse-derived fuel (RDF), and other non-fossil materials as substitutes for conventional fuels such as coal and petcoke. Increasing the use of AFR helps reduce fossil fuel consumption while simultaneously addressing waste management challenges. According to the NITI Aayog Decarbonisation Roadmap, 2026, scaling the use of RDF and other alternative fuels could enable the sector to achieve thermal substitution rates of around 20 per cent in the coming decades.
However, integrating AFR requires significant plant modifications and operational adjustments. Waste-derived fuels often have inconsistent calorific values, higher moisture content, and heterogeneous physical properties compared to traditional fuels. As a result, modern plants invest in advanced fuel preparation systems, dedicated feeding equipment, and automated dosing technologies to ensure stable kiln operation. These upgrades allow plants to maintain consistent clinker quality while increasing the share of alternative fuels in their energy mix.

Digitalisation and smart plant operations
Digitalisation is rapidly transforming cement plant operations by enabling data-driven decision-making and predictive maintenance. Industry 4.0 technologies such as IoT sensors, artificial intelligence (AI), and advanced analytics are now used to monitor equipment performance, optimise process parameters, and anticipate maintenance requirements. These digital tools enable plant operators to detect early signs of equipment failure, minimise unplanned downtime, and improve operational efficiency. Predictive maintenance systems, for example, analyse vibration, temperature, and acoustic signals from rotating equipment to identify potential faults
before they escalate into major breakdowns. Digital twins and integrated control systems further allow operators to simulate plant performance under different scenarios and optimise production strategies. Such technologies are becoming increasingly important as cement plants operate at larger scales and higher levels of process complexity.
Maheshwari also adds, “Plant modernisation is also increasingly central to the global competitiveness of Indian cement manufacturers. As cost pressures rise across energy, logistics and regulatory compliance, modern plants offer the structural efficiency required to operate reliably and competitively over the long term. Technologies such as AI-driven Advanced Process Control (APC) integrated with real-time data systems are emerging as essential investments for the future. These platforms use predictive algorithms, machine learning and live process inputs to optimise kiln, mill and utility operations with greater precision than traditional control systems. By continuously analysing variations in feed chemistry, temperature profiles, energy demand and equipment behaviour, APC enables stable operations, lower specific energy consumption, reduced emissions and improved product consistency. As regulatory expectations tighten and plants pursue higher efficiency with lower carbon intensity, AI-enabled APC will play a crucial role in strengthening automation, enhancing decision-making and ensuring long-term operational resilience.”

Modern material handling and logistics
Material handling systems play a critical role in ensuring smooth plant operations and efficient logistics. Modern cement plants rely on advanced conveying systems, automated stockyards, and digital dispatch platforms to manage the movement of raw materials, clinker, and finished cement. Long-distance belt conveyors and pipe conveyors are increasingly replacing truck-based transport between quarries and plants, reducing fuel consumption, dust emissions, and operational costs. Automated stacker-reclaimers ensure consistent blending of raw materials,
which improves kiln stability and clinker quality. Meanwhile, advanced packing and dispatch systems equipped with high-speed rotary packers and robotic palletisers enhance throughput and reduce manual labour. These technologies allow cement plants to optimise logistics efficiency while supporting higher production capacities.

Emission control and environmental compliance
Environmental compliance has become a central focus of cement plant modernisation as regulators and investors place greater emphasis on sustainability performance. Modern plants deploy advanced emission control technologies such as high-efficiency bag filters, electrostatic precipitators, and selective non-catalytic reduction systems to reduce particulate matter and nitrogen oxide emissions.
Sine Bogh Skaarup, Vice President, Head of Green Innovation and R&D, Fuller Technologies says, “One of our key focus areas is decarbonisation. We help cement producers reduce CO2 and overall carbon emissions. We offer alternative fuel solutions and calcined clay technologies to enable the production of LC3 cement, which play a significant role in decarbonising the cement industry. By combining alternative fuels and calcined clay solutions, CO2 emissions can be reduced by up to 50 per cent, making this a highly impactful approach for sustainable cement production.”
Continuous emission monitoring systems are increasingly used to track environmental performance in real time and ensure compliance with regulatory standards. In addition to air pollution control, cement companies are also investing in water recycling systems, renewable energy integration, and carbon reduction initiatives. These measures are essential for aligning the sector with national climate goals and improving the environmental footprint of
cement manufacturing.

Economic benefits and future outlook
Beyond environmental and operational advantages, cement plant modernisation also delivers significant economic benefits. Energy efficiency improvements, digital process optimisation, and advanced material handling systems reduce operating costs and improve asset utilisation. Waste heat recovery and alternative fuels help lower fuel expenditure and reduce exposure to volatile fossil fuel markets. As the industry expands capacity to meet growing demand, modernised plants are better positioned to achieve higher productivity and maintain profitability. The long-term outlook for the sector remains positive, with India expected to continue large-scale infrastructure investments in roads, housing, railways, and urban development.
Milan R Trivedi, Vice President – Projects, Prod & QC, MR, Shree Digvijay Cement, says, “The main focus in case of modernisation projects drives through the investment decision, which is mainly based on IRR and impact on overall efficiency improvement, cost optimisation and improvement in reliability. However, there are certain modernisation, which has high impact on environmental impact, statutory requirements, etc. has higher priority irrespective of ROI or payback period.”
“The energy efficiency and reliability investment projects generally provide fast return on investment whereas strategic, digitalisation and environmental investment projects provide long term and compounded benefits. Typical modernisation investment projects are decided with IRR of about > 20 per cent, payback period of typically 2-3 years for fast-track projects,” he adds.
In this context, modernisation will remain a key strategic priority for cement manufacturers seeking to maintain competitiveness in an increasingly sustainability-focused market.

Conclusion
The modernisation of cement plants is no longer a purely technical upgrade but a strategic transformation that reshapes how the industry operates. As India’s cement sector expands capacity toward the next growth cycle, improvements in energy efficiency, digitalisation, alternative fuels and advanced logistics will determine the competitiveness of individual plants. Modern technologies allow producers to operate at higher productivity levels while simultaneously reducing energy consumption and emissions intensity.
Looking ahead, the pace of technological adoption will play a decisive role in shaping the future of
the cement industry. Companies that successfully integrate modern equipment, digital systems, and sustainable production practices will be better positioned to meet rising infrastructure demand while aligning with global climate commitments. In this evolving landscape, plant modernisation stands as the cornerstone of both operational excellence and environmental responsibility.