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“The challenge is to move cement from the warehouse to the consumer?s site”

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Rohit Vohra Head Logistics, Reliance Cement

The total cost of logistics considering inbound and outbound movement can come up to 20 to 25 per cent of cement production cost. This is for companies having good infrastructure such as rail sidings, etc., and who transport 40 to 60 per cent product by rail. For companies that do not have such facilities, the cost can go as high as 30 per cent of the cement cost. Rohit Vohra highlights the challenges faced by cement companies in last mile deliveries. Excerpt from the interview.

How much is the cost contribution of logistical expenses to cement cost?
The cost of transporting cement via road comes to about Rs 1 to 3 /tonne/km. The wide range is due to the variation in lead distance, which can range from anywhere between 50-300 km. Longer the distance, lower is the cost of transport. Railway on other hand costs Rs 1.3 to 1.4/tonne/km. However, railway has additional fixed costs related to loading and unloading.

The handling cost is high for railways. So for a distance below 200 km rail is not viable. We generally outsource the unloading process to the C&F agents.

What are the losses experienced in cement transport via rail wagons?
Railways charge a fixed fare based on the number of wagons employed. If the wagon is not loaded completely, the company will still end-up paying for the entire wagon. One area where cement is lost is due to spillage from torn or damaged bags. Many a times the floor of the wagon is in bad constitution and may have sharp edges that damage the cement bags during transit. To minimise such loss we are using specialised packing material for our cement bags. These bags are not lifted using metal hooks. Instead the workers put a sort of wire loop around it and pick it up. Although the cost of loading and unloading too gets escalated with this, the end customer gets quality cement in quality packing.

What are the challenges faced by cement companies in last mile delivery?
The challenge in last mile delivery is that today we have lesser number of stockists. Now nobody wants to stock cement in warehouses. The rental charges of warehouses are too high for stocking a low margin product like cement. So dealers prefer ordering the material straight from the plant to the consumer site.

Now consumers require quick delivery, and on several occasions the delivery is to be made in congested city areas. These locations often have limitations on the size of trucks that could ply on the roads. Hence, we have to use smaller vehicles, which are cost inefficient. Companies then have to set up a very good network of warehouses close to the market so as to be able to reach the customer as quickly as possible. But again, setting up a warehouse means additional loading and unloading at the company?s expense. The moment you create an additional node in your supply chain, the cost of handling and distribution goes up. Plus, dispatch from these warehouses is also costly since transporters are moving material over short distances. So the cost of transport per tonne per km is high.

What are the constraints that you have to deal with in cement transport?
We put cement delivery process in two buckets. One is from plant to the warehouse and the other is where we transport cement from warehouse to the site. When we are moving cement from the plant to the warehouse we have the loading and unloading process and the associated cost in our control. The material is transported in multi-axle carriers with a capacity of around 27 tonnes. Mostly the approach road to the warehouse is good and the time required to load and unload is fixed and short. So here the costs are very much in the company?s control.

The challenge is to move cement from the warehouse to the consumer?s site. Many cities have restrictions on the size of trucks that can move round the clock. Cities like Nagpur, Bhopal, etc., do not allow trucks with more than 8-tonne capacity to ply on the roads. While at some places like Rajasthan, where highways are good we transport cement in 60-tonne trailers. Often the size of order placed by end consumers is small and we have to dispatch 4-5 tonnes of material.

Today the customers to want delivery of cement as and when required. They usually do not have space to store cement and other construction materials. Storing cement is a hassle and implies additional cost. Simply handling a cement bag costs Rs 2-3 and so everyone tries to avoid it. The traders to want the cement to be delivered directly from company warehouse to the site, not to the shop.

What can be done to cut down that cost?
We have a system where dealers can order at ex-warehouse price and can arrange for their own vehicle. That creates a synergy since the dealer can ship other items such as steel, paint, bricks, etc., in the same truck.

How about outsourcing this function?
We have been considering outsourcing this function. However, service providers do not find cement transport as profitable as they would find transporting high value retail products like electronic goods, etc. In cement the margins are low, and so it is less attractive to external logistics service providers.

Railways have plenty of surplus land, however they do not have clear policy for land allotment. Most major companies have their own cement siding. What the industry needs is rail side warehouses. We are looking for opportunities to set up terminals close to siding. Having a rail side warehouse minimises cost of product handling.

How to you manage the fluctuations in cement demand?
There are basically two types of fluctuations, the seasonal and the demand driven. Seasonal changes are seen in the trade segment while demand driven fluctuations are seen in non-trade segment. We have kept a balance of having trade to non-trade segment in 70:30 ratio. That stabilises the demand pattern.

The industry generally experiences good demand during the October-June period. This is the time when the company builds up reserve stock of cement at the plant. The industry experiences low demand during the July-August period. During this period we conduct operation and maintenance tasks at the plant.

Major fluctuations are taken care by the surplus stocks at the plant while minor fluctuations are dealt with at the warehouse level.

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Economy & Market

Hindalco Buys US Speciality Alumina Firm for $125 Million

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This strategic acquisition marks a significant investment in speciality alumina, a key step by Aditya Birla Group’s metals flagship towards becoming future-ready by scaling its high-value, technology-led materials portfolio.

Hindalco Industries, the world’s largest aluminium company by revenue and the metals flagship of the $28 billion Aditya Birla Group, has announced the acquisition of a 100 per cent equity stake in US-based AluChem Companies—a prominent manufacturer of speciality alumina—for an enterprise value of $125 million. The transaction will be executed through Aditya Holdings, a wholly owned subsidiary.

This acquisition represents a pivotal investment in speciality alumina and advances Hindalco’s strategy to expand its high-value, technology-led materials portfolio.

Hindalco’s speciality alumina business, a key pillar of its value-added strategy, has delivered consistent double-digit growth in recent years. It has emerged as a high-growth, high-margin vertical within the company’s portfolio. As speciality alumina finds expanding applications across electric mobility, semiconductors, and precision ceramics, the deal positions Hindalco further up the innovation curve, enabling next-generation alumina solutions and value-accretive growth.

Kumar Mangalam Birla, Chairman of Aditya Birla Group, called the acquisition an important step in their global strategy to build a leadership position in value-added, high-tech materials.

“Our strategic foray into the speciality alumina space will not only accelerate the development of future-ready, sustainable solutions but also open new pathways to pursue high-impact growth opportunities. By integrating advanced technologies into our value chain, we are reinforcing our commitment to self-reliance, import substitution, and building scale in innovation-led businesses.”

Ronald P Zapletal, Founder, AluChem Companies, said the partnership with Hindalco would provide AluChem the ability and capital to scale up faster and build scale in North America.

“AluChem will benefit from their world-class sustainability and safety standards and practices, access to integrated operations and a consistent, reliable raw material supply chain. Their ability to leverage R&D capabilities and a talented workforce adds tremendous value to our innovation pipeline, helping drive market expansion beyond North America.”

An Eye on the Future

The global speciality alumina market is projected to grow significantly, with rising demand for tailored solutions in sectors such as ceramics, electronics, aerospace, and medical applications. Hindalco currently operates 500,000 tonnes of speciality alumina capacity and aims to scale this up to 1 million tonnes by FY2030.

Commenting on the development, Satish Pai, Managing Director, Hindalco Industries, said the deal reinforced their commitment to innovation and global expansion.

“As alumina gains increasing relevance in critical and clean-tech sectors, AluChem’s advanced chemistry capabilities will significantly enhance our ability to serve these fast-evolving markets. Importantly, it deepens our high-value-added portfolio with differentiated products that drive profitability and strengthen our global competitiveness.”

AluChem adds a strong North American presence to Hindalco’s portfolio, with an annual capacity of 60,000 tonnes across three advanced manufacturing facilities in Ohio and Arkansas. The company is a long-standing supplier of ultra-low soda calcined and tabular alumina, materials prized for their thermal and mechanical stability and widely used in precision engineering and high-performance refractories.

Saurabh Khedekar, CEO of the Alumina Business at Hindalco Industries, said the acquisition unlocked immediate synergies, including market access and portfolio diversification.

“Hindalco plans to work with AluChem’s high performance technology solutions and scale up production of ultra-low soda alumina products to drive a larger global market share.”

The transaction is expected to close in the upcoming quarter, subject to customary closing conditions and regulatory approvals.

 

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Concrete

Shree Cement reports 2025 financial year results

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Shree Cement posted revenue of US$2.38 billion for FY2025, marking a 5.5 per cent decline year-on-year. Operating costs rose 2.9 per cent to US$2.17 billion, resulting in an EBITDA of US$528 million—down 12 per cent from the previous year. Net profit fell 50 per cent to US$141 million. The company reported cement sales of 9.84Mt in Q4 FY2025, a 3.3 per cent increase from 9.53Mt in Q4 FY2024, with premium products making up 16 per cent of total sales.

Image source:https://newsmantra.in/

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Concrete

Rekha Onteddu to become director at Sagar Cements

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Sagar Cements has announced the appointment of Rekha Onteddu as a non-executive independent director, effective 30 June 2025. According to People in Business News, Rekha Onteddu is currently serving in a similar capacity at Andhra Cements, the parent company of Sagar Cements.

Image source:https://sagarcements.in/

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