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“Railways consider private terminals as their competitors”

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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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Concrete

Cement Makers Reaffirm Commitment to Sustainable Growth

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World Environment Day spotlight on innovation and circularity

On World Environment Day, the Indian cement industry reiterated its commitment to supporting India’s climate ambitions through sustainable manufacturing, resource efficiency and the adoption of cleaner technologies.

The Cement Manufacturers’ Association (CMA) said the sector remains aligned with the Government of India’s Net Zero commitments and is accelerating efforts to reduce its environmental footprint while supporting the country’s infrastructure and development agenda.

Parth Jindal, President, CMA and Managing Director, JSW Cement, said the industry is increasingly adopting cleaner technologies, improving energy efficiency and expanding the use of alternative fuels and raw materials. He also highlighted the growing importance of circular economy practices, where industrial by-products and waste streams from one sector are utilised as resources in another.

“The Indian Cement Industry is aligned to the Government’s commitments on carbon mitigation and is accelerating the adoption of cleaner technologies, resource efficiency and circular economy practices while actively exploring the potential of Carbon Capture, Utilisation and Storage (CCUS) as a critical pathway for deep decarbonisation,” said Jindal.

He added that coprocessing industrial waste and by-products helps conserve natural resources, reduce disposal requirements and lower the environmental footprint across multiple sectors.

According to Jindal, sustainability is no longer limited to manufacturing processes but is increasingly influencing investment decisions, innovation strategies and long-term growth plans within the industry.

Echoing similar views, Dr Raghavpat Singhania, Vice President, CMA and Managing Director, JK Cement, said sustainable development extends beyond emissions reduction and must also focus on responsible resource utilisation and waste minimisation.

“Sustainability in the built environment cannot be measured by emissions alone. It is equally about how efficiently we use resources, how effectively we minimise waste and how responsibly we create the infrastructure that will serve future generations,” said Singhania.

He noted that the cement industry is advancing its sustainability agenda through greater resource efficiency, increased circularity, technological innovation and continuous improvements in manufacturing practices. As a key contributor to India’s infrastructure development, the sector has a critical role to play in balancing economic growth with environmental responsibility.

On the occasion of World Environment Day, industry leaders reaffirmed their commitment to supporting India’s climate goals while delivering the materials required for resilient, durable and sustainable infrastructure.

 

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Concrete

Building a Greener Future Together

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Environmental sustainability requires immediate action, not just long-term commitments and discussions. Recycling, circular economy practices, and technology-driven waste management can help industries reduce environmental impact while supporting sustainable growth.

Author: Jignesh Kundaria, Director and CEO, Fornnax Technology

World Environment Day serves as an important reminder that environmental sustainability can no longer remain confined to discussions, reports, or long-term commitments. The environmental challenges facing the world today demand immediate, measurable, and collective action. Across industries and communities, waste generation continues to outpace our ability to process it responsibly, placing increasing pressure on ecosystems, natural resources, public health, and the well-being of future generations.

One of the most significant shifts required today is a change in how society perceives waste. Rather than being viewed as a material to be discarded, waste must be recognised as a valuable resource that can contribute to both economic growth and environmental protection when managed through the right technologies and systems. This mindset forms the foundation of the circular economy model that countries across the world are increasingly adopting to reduce landfill dependence, recover valuable materials, and create more sustainable industrial ecosystems.

India has made meaningful progress in strengthening awareness around sustainability, recycling, and environmental responsibility over the past decade. Significant efforts are being made to formalise the recycling sector through improved infrastructure, technology adoption, policy implementation, and broader stakeholder participation. These developments are creating a stronger foundation for responsible waste management and resource recovery across the country.

However, achieving long-term environmental impact requires collaboration from all stakeholders. Industries, policymakers, technology providers, and communities must work together with greater accountability to strengthen recycling ecosystems, encourage responsible waste management practices, and create sustainable outcomes through consistent execution rather than temporary interventions.

As someone closely associated with the recycling industry, I firmly believe that technology will play a decisive role in addressing future environmental challenges. Advanced recycling systems have the potential to recover valuable resources, reduce pollution, minimise landfill burdens, and conserve energy, creating a more sustainable future for generations to come. This belief is deeply reflected in Fornnax’s motto, “Committed to Create a Green Future,” which embodies our commitment to building long-term environmental value through innovation and responsible action.

At the same time, technology alone cannot deliver meaningful change. Real progress requires intent, awareness, participation, and a shared sense of responsibility. Sustainable development can only be achieved when innovation is supported by collective action and a genuine commitment to environmental stewardship.

On this World Environment Day, let us move beyond conversations and take meaningful steps towards creating a cleaner, greener, and more sustainable planet. By embracing innovation, strengthening recycling ecosystems, and acting responsibly today, we can create lasting environmental impact and secure a better future for generations to come.

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Concrete

Dalmia Bharat Acquires Jaiprakash Associates Cement Assets for ₹2,850 Crore

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Dalmia Cement executed a Business Transfer Agreement with Jaiprakash Associates and Adani Infra, to acquire 5.2 MnTPA of cement capacity across Madhya Pradesh and Uttar Pradesh.

Dalmia Cement (Bharat) announced on May 22, 2026 that it had signed a Business Transfer Agreement with Jaiprakash Associates Limited and Adani Infra (India) Limited for the acquisition of cement plants located at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh. The deal was struck at an enterprise value of ₹2,850 crore and is expected to close within two weeks of execution.

The acquired assets from Jaiprakash Associates include 5.2 MnTPA of cement capacity and 3.3 MnTPA of clinker capacity. The package also covers 99 MW of thermal power capacity and railway sidings at Rewa, Chunar, and a common siding at Churk. This infrastructure gives the acquisition immediate operational utility beyond just production tonnage.

The transaction has a long backstory. Dalmia Cement had originally entered into a framework agreement with Jaiprakash Associates in December 2022, covering the sale of these business assets along with a long-term clinker supply arrangement. However, before the deal could be completed, Jaiprakash Associates was admitted to insolvency proceedings under the Insolvency and Bankruptcy Code. The earlier agreements could not be consummated as a result.

In an official statement, Puneet Dalmia, Managing Director & CEO, Dalmia Bharat, said, “I am very excited about addition of these assets in our portfolio. This serves as a great strategic fit for Dalmia. It helps us move forward in our journey to be a pan India player and provide a strong head start to serve the high potential markets in Central region. I am optimistic that the expansion potential of these assets along with close proximity with Dalmia’s captive mines will help us create a capacity hub for the future”.

Following the approval of Adani Group’s resolution plan for Jaiprakash Associates under the IBC framework, Dalmia approached the new management to revive discussions. The fresh Business Transfer Agreement was executed to settle all pending disputes, legal proceedings, and arbitration matters arising from the original framework agreement with Jaiprakash Associates.

Expanding market reach

Dalmia added, “Our familiarity with these assets under the earlier tolling arrangement gives us a deep understanding of the facilities and helps us establish strong connect with channel partners and vendors. We believe that this will help us in faster ramp up of capacities and quicker inroads into the market. As we look forward, I am very confident that we will be able to leverage the strengths of Dalmia to operate these assets in a manner where we can maximise value creation for all our stakeholders.”

With the addition of these plants, Dalmia Bharat’s total installed cement capacity will rise to 54.7 MnTPA upon consummation. The company has further expansion projects underway at Belgaum, Pune, and Kadapa, which are expected to take overall capacity to 66.7 MnTPA by Q2 to Q3 FY28.

The Central India location of the Jaiprakash Associates plants gives Dalmia Bharat faster access to markets in Madhya Pradesh and Uttar Pradesh than a greenfield build would have allowed. The company also cited debottlenecking and brownfield expansion as near-term opportunities at the acquired sites. Dalmia Bharat said the assets were expected to contribute positively to EBITDA and overall returns, given the pricing environment in the region and the company’s cost structure.

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