Economy & Market

Logistics harbinger of next disruptive change

Published

12 years ago

August 31, 2014

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Though the industry is elated about improving sale volumes, rising input costs in manufacturing have drastically shrunk the profit margins. The industry is already performing at its peak efficiency. So where is the scope to lift the bottom-line? Perhaps, logistics will be the next game changer for cement industry.

The last decade has by and large been very good for Indian cement industry. The industry has grown at a CAGR of 8.4 per cent and has made record capacity addition of 130 million tonnes over the last ten years. However, the recent hiccups in Indian economy have rattled the industry. As growth slows down the gap between demand and supply has widened. Add to this the dilemma that while costs are spiraling upwards the prices are struggling to rise. No wonder the industry?s margins are under huge pressure and Indian cement industry faces its toughest challenge so far. So what does the future hold for the industry? Let?s start with the good news first. Many believe things are improving. The economy is likely to turn around in the next 2-3 quarters. Investment cycle is picking up. The growth in economy will lead to concurrent growth in cement demand and the latter is expected to bounce back and reach a level of 7-8 per cent this year. This will help bridge some gap between demand and supply.

Now what?s the bad news? The bad news is that though the economy seems to have bottomed out inflation remains stubbornly high. This means that costs will continue to rise and if prices do not gallop faster than costs the industry?s margins will remain subdued despite increase in sales volumes. So where does this leave us? The message for the industry is clear. Hope for the best and prepare for the worst. The Cement Industry in India has no choice but to keep a very watchful eye on its costs. Its cost structure has got badly bruised in last 3-4 years and the same needs to be repaired. Let us dwell deeper.

Indian cement industry has three major cost buckets – Taxes, Manufacturing costs (including fuel and power costs) and Logistics & Distribution costs. Let us examine each of them closely. The first bucket is beyond industry?s control. It can represent, coax and pray to the government but the latter may not oblige, as it had not in the past. The second bucket of manufacturing costs has been industry?s favourite whipping boy. The industry has made a steady progress in keeping a tab on manufacturing costs. Indian cement industry today is comparable to the best in the world in respect of quality standards, fuel and power consumption, environmental norms, use of latest technology and capacity. However the productivity parameters are now nearing the theoretical bests and further improvements will only have a marginal impact and be governed by law of diminishing returns. As such there is little scope in any major savings in manufacturing costs

Finally let?s fix our gaze on the third and the last bucket – Logistics & Distribution costs. It would not be an exaggeration to state that industry has been unduly kind and generous towards this bucket. The logistics & distribution practice in cement industry has been relatively stable and nothing much has changed in the manner in which we handle and transport cement to our customers. This despite the fact that logistics, both inbound and outbound, constitutes nearly 30 per cent of the total unit delivered cost of cement and that the sector is craving for innovation. So can logistics be the harbinger of next disruptive change in the industry. To answer this question we need to examine things closely.

In my opinion apart from the overwhelming cost compulsions there is strong convergence of internal and external factors, which will drive innovation in logistics & distribution practice and foster new thinking in this area.

Internal Factors
The Indian Cement Industry has long benefited from a fairly uniform availability of limestone deposits throughout the country. Barring eastern India, availability of limestone in most parts of India has ensured that cement does not have to travel huge distances for consumption. However, this is likely to change in near future. The low hanging fruit in respect of limestone deposits has already been grabbed. Fresh, good quality, environmentally sustainable limestone deposits are now abundantly available only in far-flung areas of Kutch in Gujarat and Jaisalmer in Rajasthan. Sooner or later these deposits will have to be harnessed to satisfy nation?s growing appetite for cement. Capacity additions in future will therefore require large investments in logistics infrastructure to enable economic transportation of cement to consumption centres in northern, central and western India.

Likewise, the fly ash footprint of India is rapidly changing. Pit head and coastal based thermal plants are fast replacing old and relatively inefficient thermal power plants set up close to consumption centres owing to heavy costs of moving coal. Huge investments planned in power transmission infrastructure in next 4-5 years are only going to accentuate this change. About 45 per cent of the total cement sold in India today is fly ash based. The industry will have to find ways and means of transporting fly ash in big volumes over large distances economically to stay competitive.

External factors
After being in slumber for years the Indian Road Transportation sector is undergoing massive transformation. There is a renewed thrust on building new highways and widening of existing ones. This along with general improvement in pavement quality and planned electronic tolling system would help truckers increase their average speed from a dismal 30-40 km per hour at present to 50-60 km per hour in future.

Additionally, entry of MNCs like Volvo, Daimler, Navistar, etc., will facilitate progressive introduction of heavier, large size, multi-axle trucks, powered by efficient engines that burn less diesel for every ton km of cargo movement. All these developments will have a major impact on the cost dynamics of road transportation in India going forward.

Next let us look at the railways. Herein, I believe, is the biggest opportunity. Railway perhaps, is the only segment is the Indian transportation sector, which is yet to reap the benefits of liberalised industrial policy of GoI. With opening of this sector to FDI and huge investments envisaged in construction of dedicated freight corridors, private freight terminals, up-gradation of signalling and civil infrastructure of existing network and investment in rolling stock, the freight carrying capacity of railways is likely to increase manifold going forward. Add to this, the broad thrust of Indian railways towards longer, faster, bigger and heavier trains, this sector will offer plethora of opportunities for the industry to join hands with railways and invest in specialised wagons and state-of-the-art handling infrastructure for bulk transportation of clinker, fly ash and cement. Rail siding warehouses is another exciting opportunity and could be game changer for both Indian cement industry and railways. The industry in collaboration with railways can set up warehouses for cement storage alongside railway sidings thus saving on huge costs incurred in handling and transporting cement bags to warehouses located outside the yards. Railways in turn can gainfully utilise its land assets and make them productive. Inland waterways provide yet another opportunity for moving bulk cargo from central and northern India to eastern India and vice-versa. With the renewed focus on cleaning and refurbishing of the river, the Ganga National Waterway 1, spanning from Allahabad in central India to Haldia in West Bengal, can provide a viable and economical means of transportation for bagged/bulk cement, coal and clinker.

However, the benign environment will lead to nothing if the industry does not shed its inhibitions and proactively embraces the change. So what does the industry need to do to benefit from this historic opportunity? Broadly two things – first logistics & distribution function will have to play a proactive role in business planning and core strategy. Traditionally, logistics practice has always been reactive in its approach. Instead of finding a best fit solution for a given business plan it should be driving it particularly in areas of new project development and capacity addition plans. Ideally the function should span across design, engineering, raw material sourcing and culminate at finished goods movement Secondly, the industry needs to segregate distribution function from sales. This will have twin benefits. One it will bring transparency in channel discounts/margins and save distribution from being a source for income for the sales channel.

It will help bring specialised agencies in cement handling and distribution and throw open the door to increased mechanisation in this sector, which is presently labour intensive. Herein it will be interesting to note that channel network in cement industry, which earlier shouldered a dual responsibility of stock keeping and selling, has gradually transformed into a pure selling role. This has increased the need for warehousing and secondary transportation. Since the storage and distribution costs are anyway now being borne by cement companies this is the right time to separate this role form sales network. A dedicated and focussed distribution network functioning in parallel and collaboratively with sales network will help reduce multiple handling a cement bag undergoes before it reaches the end user. It will also prepare the industry for yet another historic opportunity, which is knocking on its doors – E sales – selling cement direct to consumers.

Concrete

Nuvoco Vistas, CleanMax Partner for Wind-Solar Hybrid Project in Rajasthan

Published

1 day ago

September 29, 2026

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The project – comprising 20 MW of wind and 26.4 MWdc of solar capacity – will support Nuvoco’s cement operations with cleaner power while strengthening its renewable energy and decarbonisation strategy.

Mumbai, September 29, 2026

Nuvoco Vistas Corp Ltd, part of Nirma Group and one of India’s leading cement companies, has partnered with Clean Max Enviro Energy Solutions Limited (CleanMax), a renewable energy solutions provider for the commercial and industrial (C&I) sector, to develop a 46.4 MW wind-solar hybrid renewable energy project in Rajasthan.

The project will support Nuvoco’s cement operations with cleaner power while strengthening its renewable energy and decarbonisation strategy. It is expected to increase the share of renewable energy in Nuvoco’s power mix, reducing fossil fuel consumption and associated emissions.

Developed by CleanMax, an Independent Power Producer (IPP), at Bhikamkhore, Rajasthan, the project will comprise 20 MW of wind capacity and 26.4 MWdc of solar capacity, along with a 2-MWh Battery Energy Storage System (BESS). Power generated from the facility will be supplied to Nuvoco through the State Transmission Utility (STU) Open Access network.

The hybrid project is expected to generate approximately 100 million units (MU) of renewable electricity annually and help avoid around 1,25,485 tonnes of CO₂ emissions every year across Scope 1 and Scope 2 emissions.

The initiative supports Nuvoco’s ongoing efforts to reduce the carbon intensity of its manufacturing operations through renewable energy adoption, Waste Heat Recovery Systems (WHRS), energy-efficiency measures and increased use of alternative fuels. It also aligns with the company’s DIRE (Digitalisation, Innovation and Renewables) agenda, which focuses on climate action, renewable energy transition, water stewardship, circularity and biodiversity conservation across its manufacturing ecosystem.

Commenting on the initiative, Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas Corp Ltd, said, “This marks an important step in advancing Nuvoco’s journey towards more sustainable and resilient operations. Our collaboration with CleanMax will increase the share of renewable energy across our Rajasthan operations, strengthening our energy mix while improving long-term cost efficiency and reducing our dependence on conventional power sources. Initiatives such as these reinforce our commitment to operational excellence and responsible growth, while supporting our vision of Building a Safer, Smarter and Sustainable World.”

Kuldeep Jain, Founder and Managing Director, CleanMax, said, “Cement plants run continuously, so the power behind them has to be dependable for decades, not years. We’re seeing manufacturing industries view clean energy as an integral part of their core operations and long-term strategy. Our partnership with Nuvoco reflects that shift, and we’re pleased to support its decarbonisation journey. This wind-solar hybrid project is designed to deliver long-term cost certainty while supporting the Company’s transition to cleaner power.”

Nuvoco has been advancing its sustainability initiatives through renewable energy, operational efficiency and technology-driven solutions. The company operates across Cement, Ready-Mix Concrete (RMX) and Modern Building Materials (MBM) segments, with a presence across East, North and West India.

The company began operations in 2014 with a greenfield cement plant in Nimbol, Rajasthan, and later acquired Lafarge India Limited, which entered India in 1999, along with Emami Cement Ltd in 2020 and Vadraj Cement Limited in April 2025. With planned expansion initiatives, including a new grinding mill at the Arasmeta Cement Plant and multiple debottlenecking projects, Nuvoco aims to achieve a cement capacity of 35 MMTPA.

The company reported total income of Rs 113.62 billion in FY 2025-26, reflecting its continued growth trajectory. Its cement portfolio includes Concreto, Duraguard, Double Bull, PSC, Nirmax and Infracem brands, while its RMX business offers products under Concreto, Artiste, InstaMix, X-Con and Ecodure brands. Nuvoco also provides construction solutions under its Zero M range of modern building materials.

Concrete

UltraTech Cement achieves 100% green energy milestone at Chhattisgarh plant

Published

1 day ago

September 29, 2026

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UltraTech Cement’s Kukurdih Works becomes its first integrated unit to meet 100 per cent electricity needs through green energy every month.

Raipur (Chhattisgarh)

UltraTech Cement Limited, the world’s largest cement company outside China, has achieved a significant decarbonisation milestone, with its Kukurdih Cement Works integrated unit in Chhattisgarh meeting 100 per cent of its electricity requirement through green energy every month since April 2026.

Commissioned in 2024, Kukurdih Cement Works has an installed grey cement capacity of 3.3 million tonnes per annum. The unit achieved this milestone through a combination of renewable power sourcing and Waste Heat Recovery Systems (WHRS), which now collectively meet its entire electricity demand while ensuring operational reliability.

Since April 2026, nearly one-third of UltraTech’s 76 manufacturing units in India have maintained green energy utilisation above 50 per cent of their electricity requirements. Five units, including Kukurdih, have exceeded 95 per cent green energy utilisation. The company is also progressively deploying Battery Energy Storage Systems (BESS) across its network to enable deeper renewable energy integration.

As part of its decarbonisation strategy, UltraTech has not invested in additional captive thermal power capacity for greenfield projects or brownfield expansions at its integrated units for over a decade.

As of Q1FY27, the company’s captive green energy capacity stood at 1,897 MW, comprising 1,463 MW of renewable energy capacity from solar, wind and hybrid sources, along with 434 MW of WHRS capacity. Under its RE100 commitment, UltraTech aims to increase the share of green power in its total energy mix to 85 per cent by 2030 and achieve 100 per cent by 2050.

UltraTech Cement Ltd, the cement flagship company of the Aditya Birla Group, is a $10-billion building solutions company and the largest cement producer globally by sales volume outside China. The company has a total grey cement capacity of 210.1 MTPA and white cement/putty capacity of 3.5 MTPA. It is a signatory to the GCCA Climate Ambition 2050 and has committed to the Net Zero Concrete roadmap announced by GCCA.

Economy & Market

From First Mile to Last Mile

Published

3 days ago

September 28, 2026

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Praveen Vashistha, Founder, Gxpress Solutions, speaks about building a holistic logistics network that encompasses latest technology and current challenges faced by logistics service providers.

Logistics may seem to only entail transporting a package from one location to another. However, there is more to this term than just that. Logistics refers to the entire process of controlling all movement, transfers and decisions in the correct way at the right time and cost and with the desired level of visibility.

People nowadays want to receive more than just the delivery. They want quick, efficient, reliable and transparent logistics service. On the other hand, companies are facing higher operating costs, broken supply chains, congested cities, changing habits of consumers and growing complexity of logistics services. In this situation, a full logistics package is gaining importance not only as a competitive advantage but also as a necessity for a successful business.

The main challenge lies in uniting the first mile, the middle mile and the last mile into one seamless process.

The journey begins before the package moves

First-mile logistics may be the least recognised part of the logistics chain, but they have a crucial influence on all that follows.

This stage starts from the moment the shipment leaves the manufacturer, supplier, farm, warehouse or distribution centre. Depending on the industry, first-mile logistics may involve grouping shipments from multiple suppliers, compiling paperwork and checking the inventory before sending the shipments to a central hub.

Flaws in first-mile logistics produce effects later down the supply chain. Delays in cargo pickup can affect warehouse operations; improper packaging can damage goods in transit; and incorrect inventory information may cause stockholding or unnecessary replenishments.

This is why building a reliable network involves simplifying the operations done at the beginning of the supply chain.

Companies require accurate demand forecasts, supplier visibility, standard procedures, and software to capture information from the moment a shipment enters the supply chain. Route planning and fleet management are also important at this stage, especially as it may involve contacting multiple suppliers.

The main goal is simply to make the first mile predictable.

The middle mile: Where scale meets complexity

When products leave the original site, they travel through the ‘middle mile,’ which connects fulfilment centres, warehouses, sorting centres, and regional distribution points. In this phase, logistics networks begin operating on a large scale. A shipment can pass through several facilities before reaching the final destination. Each additional transfer entails the risk of delay or damage and information losses. Accordingly, the ideal solution is not to minimise the number of transfers but rather to optimise them. The use of hub-and-spoke networks, regional distribution centres, and strategically placed distribution centres can help companies shorten transportation routes and optimise distribution costs. Besides, data can be used to determine the optimal placement of inventories.

For instance, a retailer may find that it takes more time and is more expensive to deliver goods to customers if everything is stored in a central warehouse. Meanwhile, regional distribution helps meet the customer’s needs quicker and more efficiently.

The last mile is where the customer judges you

When it comes to the logistics experience, the customer experience comes down to the delivery. While the last mile might comprise a small part of the entire journey in actual distance, it could also entail expensive and difficult processes. Delivery runs through densely populated cities, through traffic jams, through unsuccessful delivery attempts, and through changing consumer preferences and narrowed time frames.

Customers want to have control over their delivery. Delivery means that customers expect to know the exact moment when their order is delivered. They need to receive current updates about their orders and the ability to decide whether they want scheduled deliveries, or whether they want their order to be dropped off at a designated location far from their house.

As a result, last-mile logistics must incorporate both efficiency and experience. The technology may be used to ensure timely and accurate delivery, through such products as route optimisation and real-time delivery tracking.

However, technology is not enough to guarantee success in terms of last-mile delivery. Knowledge of the local area is still an important aspect that contributes to successful delivery.

One network, not three separate operations

First, the common mistake that organisations can make is treating the first mile, the middle, and the last mile separately.

An effective first mile of logistics does not matter much if the shipment waits in a hub for many hours. A perfectly working warehouse does not make a happy customer if the last-mile delivery fails. Therefore, even the fastest last-mile delivery can become an expensive operation if the supply is not well geographically positioned.

The three moments should work together as one whole system.

This implies having a common view on inventory, transport capacities, shipment statuses and demand. The Transportation Management System, Warehouse Management System and order management system should give information to each other instead of acting like separate islands.

That is where real-time information comes into play!

If something happens, such as a vehicle gets delayed, the company has to know that from the start. If not, someone from Customer Service should be informed about the situation.

Visibility is the new infrastructure

Previously, companies had to rely on physical assets, such as warehouses, trucks, and sorting facilities, to create their logistics networks. Today, they have an additional layer of technology providing visibility.

Command-and-control systems now include GPS tracking, Internet of Things devices, bar-coding, RFID, cloud computing, artificial intelligence, and analytics, which allow companies to know what the goods are doing, how well they are doing, and what is going to happen next.

Predictive analytics reveal possible delays. AI-powered forecasting increases availability. Digital dashboards enable the manager to monitor all operations in one place. The efficiency of such technologies is not measured in the amount of information they gather, but rather in their capability of converting data into knowledge.

Logistics managers should be able to answer the following questions: Where is it? When is it supposed to arrive? What causes the delay? What impact does it have? Can it be delivered some other way? How much will it cost?

The sooner the answers are given, the more resilient the logistics system is.

Resilience must be designed into the network

The events of recent years have highlighted the vulnerability of interconnected supply chains. Geopolitical tensions, bad weather, a lack of labour, poorly developed infrastructure and an unexpected spike in demand are some events that can cause problems for logistics systems without prior notice. Thus, companies should create an end-to-end network not just for normal times but also capable of functioning quickly in problematic situations. In order to create such a network, it is necessary to find alternative suppliers, use several means of transportation, create several routes of delivery, and establish inventory. It is also important to use scenario planning to define what to do if the main hub becomes unavailable or any means of transportation is blocked.

Sustainability: Part of the delivery equation

The future of logistics will also be shaped by environmental considerations.

As delivery volumes rise, businesses are under increasing pressure to reduce emissions without compromising service. Better route planning, load optimisation, electric vehicles, alternative fuels, renewable-energy-powered warehouses and consolidated deliveries can all contribute. The most sustainable shipment is often the one that does not require unnecessary movement in the first place.

Better demand forecasting and inventory placement can reduce empty miles and avoid repeated transportation. Consolidating deliveries can improve vehicle utilisation. Reverse logistics can ensure that products, packaging and materials return efficiently instead of becoming waste.

Sustainability, therefore, should not be treated as a separate initiative. It should be incorporated into network design itself.

The future belongs to connected logistics

An end-to-end logistics network ultimately seeks to close existing gaps between various processes.

Every mile of the process should be interconnected with the other miles. Warehouses should be aware of the restraints imposed by transportation. Delivery crews should be able to know at every moment the inventory at their disposal. Clients must have access to this useful information.

Companies that will be successful in this area will not necessarily be the ones with the biggest fleets or the most warehouses. They will simply be the ones that can employ their resources in the most effective manner.

The future of logistics will be represented by an ecosystem consisting of the combination of the physical aspect, digital intelligence, and personnel decisions. Every mile in the process of delivery is important. However, the key advantage here is getting those miles to work together.

For companies, it means having minimal resistance, enhancing their efficiency and improving customer care. For clients, it means simply having the right product delivered at the right time.

About the author: Praveen Vashistha, Founder, Gxpress Solutions,