Economy & Market
“Railways consider private terminals as their competitors”
Published
12 years agoon
By
admin
Yogesh Mehta Joint Vice President – Commercial, Shree Cement
Government policies must be so framed as to encourage bulk cement transport in India. There are many ways to boost logistical efficiencies at plant and government level. Yogesh Mehta shares with ICR what Shree Cement is doing at its plant and how the government can help to do more. Excerpts from the interview…
How much is the contribution of the logistical expenses to the cost of the product? How can one reduce this cost?
Logistics is one of the major cost contributors to cost and has significant influence on the final price of the product. Factors leading to the high cost mainly include transportation and warehousing costs, maintaining distribution networks and the expenses of procuring raw materials. Overall the cost amounts to almost 25 per cent of final cost of product.
There is a need to identify major cost drivers in logistics and to replace traditional forms of cost allocation structures with more appropriate methods. Well organised logistics management can have significant impact on overall return on investment and ultimately bring value to the stakeholder.
To reduce logistical expenditure, the cement industry can adopt the following measures:
- Encourage big cement users for bulk/loose cement transport. This will reduce packing cost and is also eco-friendly. It is beneficial for both – the seller and the buyer
- Establish grinding units, blending or packing units in big market area for direct delivery of materials
- Plan dispatches in a way that reduce rail freight/rail freight on return journeys availed for procurements
- Maximise dispatches directly to the end user so that warehousing/distribution cost can be reduced, and
- Optimise truck size/fleet capacity, timing of vehicle engaged in cement and raw material loading, unloading as well as the transit time, so that operational cost of vehicle is reduced by maximising efficiency of every trip made by the vehicle.
How do you synchronise your production volume with respect to fluctuating market demands?
Looking at the nature of cement commodity, no one can produce excess and store it for long period. Hence all cement industries plan their production according to their sale projections/targets. Being a smart producer of cement, the industry maintains cement stock just sufficient to meet the demand for next to 2-3 days at production centre and similarly a stock of 2-3 days in kept in transit and at godowns. So on an average the company maintains around 5 days stock to absorb fluctuations in a timely manner.
Besides that, most importantly, extra cement grinding capacity can be planned while setting up various production units based on future projected demand/fluctuation.
What are the problems faced by the cement industry in the last mile delivery?
Hurdles in last mile delivery may be classified as encountered with big and small consumers. Both have different types of problems, which need to be resolved in manner that ensures that the deliveries are made in minimum lead time. These challenges are as under:
Big consumer:
- Maintaining supply according to their consumption schedules
- Cement storage constraints at consumption sites
- Labour unavailability and unloading issues at night
- Sudden spurt in demand in short of period making it difficult to arrange vehicles for transport, and
- Lack of rail wagons for small delivery for far-off destination, where road delivery is not feasible.
Small consumer:
- Meeting demands of small quantity with minimum lead time
- Requirement of product at remote locations, and
- Lack of storage space.
The problems mentioned above can be tackled by doing well-planned supply co-ordination with consumer, supported by strong logistic backbone having commitment towards costumer?s satisfaction. Big consumers have their own planning of consumption which is fulfilled from plant directly by adopting any mode, i.e., rail or road. To overcome storage issues, stock on wheels is one of the best options considering unloading of cement vehicles within stipulated time frame with excellent coordination with consumer. However, small users may be served better by the cement dealer networks or from nearest warehouses. Therefore such delivery networks/warehouses need to be situated at strategic locations from where supply can be made effectively.
In SCL, we encourage regular and big consumer to use bulk (loose) cement, which can be stored easily in vertical silos with minimum requirements. Here we faced a hurdle where the bulk cement users were not able to use their existing compressor facility. The pumps were not compatible with all of the individual bulk carrying vehicles. To overcome this, we have installed compressors mounted on mobile vans.
By using loose cement, customers, industry and builders can reduce their dependency on manual intervention to a great extent. The labour involvement in cement bag unloading as well as feeding in silos could be avoided.
To give delivery at long distances, SCL has established cement production units near consumer areas, from where multiple consumer deliveries are clubbed together for last mile delivery with minimum lead time.
Bulk cement small deliveries are also catered through bulk cement loading terminal, where customers can take loose cement delivery in short lead time and in small lots as per their convenience. In this way all customers are served by SCL in the loose cement too. SCL is one of the leaders in implementing eco-friendly initiatives. The company has converted PP bag-using consumers into bulk cement users.
How do you ensure that your fleet is performing at its best?
There is a variety of vehicles that ply cement for us. Some vehicles are dedicated for cement dispatches, which form 80 per cent of the fleet. The rest of the cement dispatch is done through return vehicles, which normally ply in open market. Market trucks are attracted to us due to surety of load availability, i.e., assurance. Dedicated vehicles require load planning with lowest turnaround trip time. So the optimum use of vehicles achieved by maximum quantity loaded to earn more revenue in defined period serves as an incentive to them. In SCL?s case, we have a fixed size of our truck fleet that plies on our dedicated route dispatches. After restricting the number of trucks (by reducing fleet strength by 25 per cent), we observed that the rate of vehicle utilisation has improved. Now maximum quantity is dispatched using minimum number of vehicles. As a result, our benchmarking freights are achieved as well as revenue to truckers has also increased.
To further improve the performance of the fleet, SCL increased laden run km of vehicles by 9 per cent in last fiscal year, i.e., 53 per cent in FY 2013-14 from 44 per cent in FY 2012-13, by providing return load of raw material to dedicated fleets. This ensures increased revenue for every run km.
Also, while ensuring dedicatedly fleet performance, SCL encourages market fleet to approach SCL?s independent/impartial reverse freight bidding system, in which they can decide their own revenue, as result of their own choice routes available for transit.
Do you think that it is a good idea to outsource logistical functions?
Looking at the huge involvement of logistics cost in total cost of product, at first instant the obvious answer is NO to outsource logistical functions in SCL. In logistic function huge dedication is required for customer satisfaction which is possible with personal involvement only, with an object of cost reduction.
By outsourcing, it is not necessary that we get financial benefits but on the contrary, purity of work and quality of service both may disturb or get affected and the result may not up to the mark. Scarcity of expert and experienced employees will always be there since none of the outsourced party will give preference to priority work in a dynamic company which is objective/essence of logistics. Secondly the pipeline of experienced manpower, in a growing organisation which has need of expert people, will become dry because outsource people do not necessarily have cultural acquaintances.
How do you assess the potential of coastal shipping and IWT? What are the major hurdles that dent the growth potential of IWT?
Coastal shipping can be a very good option for reduction of cost for plants located close to water bodies. However, there is an unmet need of small jetties for delivery at unloading point as well as connecting with road to consumption centres across coast. In Bihar, industries are located in Southern region, but the main consumer market of Bihar lies in north. As of now no infrastructure is available to let heavy commercial vehicles cross Ganges River, except rail, which is already insufficient to meet the growing demand.
IWT has very good potential in India. IWT can be used where we have limitations in road/rail transportation, but are blessed with plenty of rivers and other water bodies. SCL is one of the first cement companies to associate with Inland Waterways Authority of India (IWAI) to move cement trucks via waterways by Roll on-Roll off of trucks from vessels. IWAI provides facility for cement laden trucks to disembark vessels at Patna (South Bihar) and then roll-off at Chhapra road (North Bihar) accounting to a lead distance reduction by 60 km. This not only conserves natural resources like fuel but also prevents congestion on overburdened road/rail infrastructure.
To make IWT a success, the government is expected to build the infrastructure of small loading and unloading jetties through IWAI as-well-as dredge the river channels regularly. The government should provide freight subsidy for using IWT to encourage its use at large scale.
Why has cement transport via BCCW not picked up that well in the country?
In India, the use of bulk (loose) cement is not as popular as it is in the international market. Compared to packed cement, use of bulk cement is just 8-9 per cent since no infrastructure or encouragement is provided for bulk cement transport and use. BCCW transport to be economically viable requires minimum order size of 3000+ MT of cement in one way single trip and the wagon must bring back fly ash from the nearest source from the cement dispatch point. Consumers are not always located near to the railway line. Cement companies have to establish packing units at rail site to take two way advantage. Since two way movement of cement and fly ash cannot be done on rail line, use of BCCW has not yet picked up in India.
There is lack of co-ordination amongst government enterprises both at the Centre and at State level. The Railways department should develop industrial parks along the rail terminals jointly with the state governments. The suggestions for rail terminal location should be invited from industrial organisations. As government initiative, a high level coordination committee should be formed, consisting of experts from industry, railway, and the Centre and State governments with an objective to promote return logistic in railway.
This initiative will develop many industries at a small cost of coordination. Cement industry alone cannot bear the cost of huge fly ash evacuation system at power plant. It should be a part of the government policy for power project?s in-built approvals that they should compulsorily develop fly ash filling system at their railway siding for BCCW type wagons.
The cement industry can develop infrastructure at their plants, but they cannot build infrastructure at fly ash sourcing point. Huge costs are involved at factory level for creation of storage silos for cement/fly ash, with compressor and transportation system from rail siding to their main plant.
What are the hindrances in setting-up private rail terminals?
Basic hindrances in setting-up private terminals are as under:
- Discouraging policies of railways towards private terminals. It is as if railway considers private terminals as their competitors, instead as supporters who will take on the load from overburdened rail system.
- Long and difficult approval process prevalent at various railway departments where approvals are required separately from commercial, technical, civil, rail transporter department, etc.
- Difficulties inland acquisition and high lease licensing for railways land for siding takeoffs.
- Clearances from various government bodies, i.e., road/highways authorities for ROB and RUB, State Electricity Boards for relocation of cable tower, etc. Take too much time.
- No incentive is offered by railway for cost recovery of infrastructure created by private terminals. Earlier Rs 40/- PMT was committed by railway as terminals charges but they have been withdrawn unexpectedly.
The Liberalised Wagon Investment Scheme (LWIS) seems to be skewed in favour of Railways. What is your take on this and what needs to be done?
LWIS policy does not correlate with huge investment. A wagon costs around Rs 60 lakh, whereas railway policy gives rebate on railway freight instead of ensuring return on investment (ROI) for a wagon. Only if the scheme is modified by way of freight rebate to investment based return will the LWIS be successful. Even if railway plans to give return by way of freight rebate then they have to ensure free movement of wagons on railway infrastructure, without any restriction. The freight rebate should match ROI at 15 per cent. This will help LWIS serve its true purpose.
Cement being the 3rd largest revenue earner for Indian railways, should there be preferential treatment given to the industry especially when restrictions are necessary to be imposed?
Cement is put on ?D? category for wagon allotment preference by railways. Hence, cement has low priority in comparison to ?B? category food grains and fertilisers. The cement industry has to suffer heavily on account of wagon shortages, being non priority in wagon allotment. Choking of rail infrastructure at loading and unloading points with large storage areas occupied by ?B? category seasonal items, puts restrictions on cement industry. Cement should be considered in par with other commodities.
Coastal shipping can be a good option for plants located close to water bodies. However, there is an unmet need of small jetties for delivery at unloading point as well as connected road network.
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TSR Will Define Which Cement Companies Win India’s Net-Zero Race
Published
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April 27, 2026By
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Jignesh Kundaria, Director and CEO, Fornnax Technology
India is simultaneously grappling with two crises: a mounting waste emergency and an urgent need to decarbonise its most carbon-intensive industries. The cement sector, the second-largest in the world and the backbone of the nation’s infrastructure ambitions, sits at the centre of both. It consumes enormous quantities of fossil fuel, and it has the technical capacity to consume something else entirely: the waste our cities cannot get rid of.
According to CPCB and NITI Aayog projections, India generates approximately 62.4 million tonnes of municipal solid waste annually, with that figure expected to reach 165 million tonnes by 2030. Much of this waste is energy-rich and non-recyclable. At the same time, cement kilns operate at material temperatures of approximately 1,450 degrees Celsius, with gas temperatures reaching 2,000 degrees. This high-temperature environment is ideal for co-processing, ensuring the complete thermal destruction of organic compounds without generating toxic residues. The physics are in our favour. The infrastructure is not.
Pre-processing is not the support act for co-processing. It is the main event. Get the particle size wrong, get the moisture wrong, get the calorific value wrong and your kiln thermal stability will suffer the consequences.
The Regulatory Push Is Real
The Solid Waste Management (SWM) Rules 2026 mandate that cement plants progressively replace solid fossil fuels with Refuse-Derived Fuel (RDF), starting at a 5 per cent baseline and scaling to 15 per cent within six years. NITI Aayog’s 2026 Roadmap for Cement Sector Decarbonisation targets 20 to 25 per cent Thermal Substitution Rate (TSR) by 2030. Beyond compliance, every tonne of coal replaced by RDF generates measurable carbon reductions which is monetisable under India’s emerging Carbon Credit Trading Scheme (CCTS). TSR is no longer a sustainability metric. It is a financial lever.
Yet our own field assessments across multiple Indian cement plants reveal a sobering reality: the primary barrier to scaling AFR adoption is not waste availability. It is the fragmented and under-engineered pre-processing ecosystem that sits between the waste and the kiln.
Why Indian Waste Is a Different Engineering Problem
Indian municipal solid waste is not the material that imported shredding equipment was designed for. Our waste streams frequently exceed 40 per cent to 50 per cent moisture content, particularly during monsoon cycles, saturated with abrasive inerts including sand, glass, and stone. Plants relying on imported OEM equipment face months of downtime awaiting proprietary spare parts. Machines built for segregated, low-moisture waste fail quickly and disrupt the entire pre-processing operation in Indian conditions.
The two most common failures we observe are what I call the biting teeth problem and the chewing teeth problem. Plants relying solely on a primary shredder reduce bulk waste to large fractions, but the output remains too coarse for stable kiln combustion. Others attempt to use a secondary shredder as a standalone unit without a primary stage to pre-size the feed, leading to catastrophic mechanical failure. When both stages are present but mismatched in throughput capacity, the system becomes a bottleneck. Achieving the 40 to 70 tonnes per hour required for meaningful coal displacement demands a precisely coordinated two-stage process.
Engineering a Made-in-India Answer
At Fornnax, our response to these challenges is grounded in one principle: Indian waste demands Indian engineering. Our systems are built around feedstock homogeneity, the holy grail of kiln stability. Consistent particle size and predictable calorific value are the foundation of stable kiln combustion. Without them, no TSR target is achievable at scale.
Our SR-MAX2500 Dual Shaft Primary Shredder (Hydraulic Drive) processes raw, baled, or loosely mixed MSW, C&I waste, bulky waste, and plastics, reducing them to approximately 150 mm fractions at throughputs of up to 40 tonnes per hour. The R-MAX 3300 Single Shaft Secondary Shredder (Hydraulic Drive), introduced in 2025, takes that primary output and produces RDF fractions in the 30 to 80 mm range at up to 30 tonnes per hour, specifically optimised for consistent kiln feeding. We have also introduced electric drive configurations under the SR-100 HD series, with capacities between 5 and 40 tonnes per hour, already operational at a leading Indian waste-processing facility.
Looking ahead, Fornnax is expanding its portfolio with the upcoming SR-MAX3600 Hydraulic Drive primary shredder at up to 70 tonnes per hour and the R-MAX2100 Hydraulic drive secondary shredder at up to 20 tonnes per hour, designed specifically for the large-scale throughput that higher TSR ambitions require.
The Investment Case Is Now
The 2070 Net-Zero target is not a distant goal for India’s cement sector. It starts today, with decisions being made on the plant floor.
The SWM Rules 2026 are already in effect, requiring cement plants to replace coal with RDF. Carbon credit markets are opening up, and coal prices are not going to get cheaper. Every tonne of coal a cement plant replaces with waste-derived fuel saves money on one side and generates carbon credit revenue on the other. Pre-processing infrastructure is no longer just a compliance requirement. It is a business investment with a measurable return.
The good news is that nothing is missing. The technology works. The waste is available in every Indian city. The government has provided the policy direction. The only thing standing between where the industry is today and where it needs to be is the commitment to build the right infrastructure.
The cement companies that move now will not just meet the regulations. They will be ahead of every competitor that waits.
About The Author

Jignesh Kundaria is the Director and CEO of Fornnax Technology. Over an experience spanning more than two decades in the recycling industry, he has established himself as one of India’s foremost voices on waste-to-fuel technology and alternative fuel infrastructure.
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