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2015 Forging Ahead

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The expected higher government spending on infrastructure and a robust growth in housing sector will trigger the demand for cement in 2015, a year that is also expected to be another year of consolidation in the industry.
The Indian cement industry is the second largest market after China accounting for about eight per cent of the total global production. It had a total capacity of over 360 million tonne (mt) as of the financial year 2013-14. The industry grew at a rate in the previous decade, registering a compounded growth of about eight per cent. The housing sector is the biggest demand driver of cement, accounting for about 67 per cent of the total consumption, followed by infrastructure – 13 per cent; commercial construction – 11 per cent; and industrial construction – nine per cent. To meet the rise in demand, cement companies are expected to add 56 mt capacity over the next three years. The cement capacity in India may register a growth of eight per cent by end of next year to 395 mt from the current level of 366 mt. It may increase further to 421 mt by the end of 2017. The country?s per capita consumption stands at around 190 kg.

The market scenario
The cement production remained subdued during FY14 growing by a modest three per cent during April-March 2014 as against 7.7 per cent in the corresponding period of the previous year. The cement demand remained weak primarily due to weak demand from end-user industries. Delays in environmental clearances for industrial and infrastructure projects and unavailability of sand in some states contributed to slow growth. In fact, as against year-to-date growth of three per cent, cement production registered an even lower growth of two per cent during Q3 FY14 and 1.2 per cent in Q4 FY14 which are seasonally strong quarters for the cement industry, as per a recent ICRA report.

Companies are taking steps to optimise their overhead costs, improve efficiency and lower consumption norms. They have increasingly started using pet coke and lignite instead of expensive coal as a source of fuel and utilising waste heat gases to produce power. Steps are also being taken to optimise power consumption norms and reduce the power consumed per tonne of cement. Further, companies are focusing on using higher proportion of additives such as fly ash and cement to bring down their cost of production. As a result, the power and fuel cost as well as raw material cost has seen some easing.

Growth and demand outlook
Highlighting the industry scenario, Arvind Pathak, Chief Executive Officer, Reliance Cement Company, had this to say. ?With cement capacity touching ~390 million tonne and likely demand of 275 million tonne in 2015, there is expected to be a surplus capacity of ~115 million tonne during the year. Industry is projected to operate at a rate of 70-72 per cent of capacity utilisation in 2015.?

On the expected CAGR growth, Pathak says, ?With expected pick up in GDP growth rate and considering a multiplier of 1.2, cement demand is expected to grow at the rate of 7-8 per cent during FY15-16.? On the demand front he observes, ?Demand is mostly expected to come from government-backed projects in 2015. Concretisation of roads, dedicated freight corridors, development of smart cities, metro rail projects, construction of toilets under ?Swacch Bharat Abhiyan? are the major thrust areas the government is going to focus on which will drive cement consumption from 2015 onwards. Further, with new rules on funding for infrastructure projects under 5:25 rule, and revival of many stalled projects, the overall demand is expected to be high.? He adds, ?With easing of rules for FDI in real estate sector and the likely reduction of interest rates, commercial and real estate sector are also likely to drive cement consumption.? According to him, the likely demand mix in 2015 is expected to be housing (60 per cent), infrastructure ( 22 per cent) and commercial (18 per cent).

Vinod Juneja, Managing Director, Binani Group of Industries, ups the growth curve further. According to him, with various projects and expansion plans both by the state and central governments, the cement industry will grow by 10-11 per cent in the coming financial year. The demand will also grow high in the coming years. It is estimated that infrastructure will drive demand in the coming years from airports, highways and railway activities. Juneja adds, ?The National Highways Authority of India (NHAI) has sought to end all its pending issues and litigation regarding land acquisition, cost over-run etc; NHAI and Airports Authority of India (AAI) have got big expansion plans both in metro and non-metro sectors, hence cement market will grow minimum 10-11 per cent.? He further adds, ?The decrease in the housing loan interest rate and the increase in the tenure of the loans repayment will further boost the cement sector leading the cement industry to a sunshine industry.?

VP Sharma, Managing Director & Chief Executive Officer, ABG Cement, confidently avers, ?I am bullish about cement demand going high. The important sectors which will drive the cement demand are infrastructure and housing. The various initiatives taken by the present government, particularly in the areas of concrete roads, railways, ports, smart cities, and low-cost housing will drive the demand. Towards the end of 2015, demand for cement should be close to 8-9 per cent, which will become double-digit by the end of 2015.? Sharma adds, ?The year 2015 will see excess supply of cement to the tune of 50 to 60 million tonne. But consistent increase in demand will help us to absorb excess supplies going forward.?

Sharma cements the arguments, ?From the time the present government came to power, they have emphasised on building the infrastructure, i.e., concrete roads, railways, ports and low-cost housing. This will certainly increase cement demand. Recently, the Minister for Road Transport and Highways and Shipping, Nitin Gadkari quoted that all central road projects will be done by concrete. This would result in increase in cement demand.?

Zeroing on the demand scenario, Ashutosh Rampal, Vice President, Marketing, KJS Cement, Maihar, says, ?The cement demand in FY15-16 will be driven by government spending on public infrastructure, in spite of the newly elected government?s pressing need to curb fiscal deficit. This has been clearly stated policy line. Private enterprise has a low share in nation building and the much touted Public-Private-Partnership (PPP) has not gathered mass, thanks to the economic downturn and policy paralysis of the UPA government. Public infrastructure spending by the government is expected to lead the growth in cement consumption in FY15-16, till the PPP model becomes robust and the private companies start taking interest in the infra projects. Retail housing off take was sluggish last year due to high interest rates and fragile economic stability. This is expected to change for better in FY15-16 due to relaxation of land utilisation norms and easing interest rates. The ambitious NCR-Kandla industrial freight corridor is awaiting rejuvenation by Japanese funding who in turn are treading cautiously due to ambivalence of Indian Babudom. To conclude, the industry will do well subject to the government taking effective steps to rev up the system.?

Highlighting the ground reality, Rampal adds, ?The NDA government has promised government expenditure on building public infrastructure as a means to boost the income generation in the economy. In addition to this, the easing of land acquisition norms for key infrastructure projects and government focus on manufacturing and infra industry is expected to boost the demand scenario. Since no significant new capacity is coming up, the year is expected to be good for cement industry.PPP projects are stuck because of cost escalation and poor availability of long- term low-cost funds. Renegotiation of stalled PPP infra projects, especially those of NHAI and take off of Indo-Japanese NCR-Delhi-Kandla freight corridor require urgent attention to boost the cement and steel consumption across the country.? The demand outlook for FY15 remains relatively more favourable given the new government?s focus on revival of infrastructure and investment spending. The growth in FY15 will also be supported by a low base as cement production grew by merely three per cent in FY14. During April-May 2014, cement production has grown by 7.7 per cent YoY as against 3.9 per cent in the corresponding period last year. Pick-up of real estate and industrial activity, infrastructure projects and overall investment cycle will remain critical for the sector over the near-term.

As per ICRA report, the initiatives announced to promote infrastructure and housing investment in Union Budget are likely to have a positive impact on cement demand. Increased provision under Rural Housing Fund and interest deduction on housing loans will boost urban and rural housing demand and in turn, demand for cement. Further, government measures to promote investment in ports, roads, airports and other infrastructure projects are also likely to support cement demand. Cement companies are also likely to benefit from the increase in long term funding availability for infrastructure projects which is likely to facilitate more investment in these sectors.

2015: A year of further consolidation
According to Sharma, 2015 will be another year of more consolidation in the cement industry. He says, ?The bigger players will look for consolidation as we have seen in 2014 to have better price control. The prices may stabilise towards end of 2015. Our company will work towards increasing the capacity utilisation rather than any capacity addition in the present circumstances. However, based on market scenario, we may look towards end of 2015 for any capacity addition.?

Pathak also is on the same page. According to him, consolidation in cement industry will continue with non-serious and marginal players exiting the market and entry of large multinational cement players. He adds, ?Our current plan of capacity expansion of 10 million tonne is on track (5 million tonne in Maihar, Madhya Pradesh and another 5 million tonne in Yavatmal, Maharashtra). This will take our total installed capacity to 15.5 million tonne. However, immediately in 2015, there is not going to be any new capacity addition.? Pathak further adds, ?With increased focus of the government on infrastructure and real estate development, demand is expected to be better in 2015. This, coupled with slowdown in capacity additions, will enable industry to pass on cost increases and boost profitability.

Says Rampal, ?I clearly see consolidation of industry. The quality players will take over the smaller inefficient and high-cost players with weak cash flows. Ultratech Cement, Shree Cement and Bharat Dalmia Cement will straddle the space of mergers and acquisitions. Allocation of coal blocks and increased capacity utilisation of government undertakings will help reduce the manufacturing costs. FY15-16 will see a fillip in demand and the market prices. This in turn will create enterprise value and bolster balance sheets for cement companies.? He adds, ?We are planning to increase capacity to 5 mtpa shortly by adding another 2.10 mtpa clinkerisation unit at Maihar with forward grinding units in Bihar, Odisha and Uttar Pradesh. By this time, our own railway siding would be functional, thereby helping us in evacuation of cement.?

Pricing pressures
During the past two years the industry witnessed high operating costs, including all major cost heads such as raw materials, energy and freight. The steep depreciation of the rupee and hike in rail freight and diesel prices further aggravated the concerns. Cement manufacturers still continue to be under the pressure of rising input costs. According to ICRA report cement manufacturers witnessed significant increase in freight costs over the past two years, due to increase in freight rates by railways, consistent increase in diesel prices and increased dependence on costlier road transport due to shortage of railway wagons. Apart from this, the prices of key raw materials limestone and gypsum have also increased. Further, increase in domestic coal prices by CIL in May 2013, declining availability of low cost linkage coal have increased power and fuel costs. However, declining international coal and pet coke price have provided some benefits to Indian cement companies; but the extent of this benefit has partly been offset by rupee depreciation.

According to Rampal, cement prices directly depend upon three parameters: the capacity expansion that disturbs the equilibrium of demand-supply in a region; the quality of players; and the difference in variable cost of production of players. He says, ?Firm prices and the capacity utilisation of 85-90 per cent in FY15-16 is expected to stay for next 2-3 years.?

Pathak explains, ?With demand picking up and rate of new capacity additions slowing down, industry would be able to pass on the cost increase to consumers and cement prices are likely to grow in the range of 5-7 per cent in 2015.?

In many regions prices have gone over Rs. 300 per bag. Says Juneja, ?Cement prices have already reached above Rs 300 per bag which includes excise, octroi, sales tax, primary and secondary transportation and handling charges.? Sharma observes, ?There will be pressure on the prices as in the past. However, focus will be to keep the current price stable and increase volumes.?

From the dealers point of view, Rahul Gandhi, Director, Mahaveer Building Material, had this to say. ?Currently, the basic issue is the price, which has gone up drastically in the last couple of months. At the same time, there is no change in sales margins. The government has to introduce some policy initiative by setting a minimum earning margin for the dealer and the margin should be according to the price, if the price is increased, the margin should be revised accordingly. This will help the dealer stay in the business in difficult times. GST will be a good initiative as the anomalies in tax structure will go and it will be uniform.? Ravi Lunawat, Partner, Lunawat Agency, supports the view. According to him, from the government, GST is a major initiative everybody is waiting for. He says, ?Last year when LBT started, it reduced the business of dealers in cities because that time the market was closed for almost two months and the builders bought cement from other markets. Once the GST starts, the price will be uniform everywhere, which will be good for us.?

SR Agarwal, Proprietor, Kirtee Enterprises is also on the same page. ?The Central government?s initiative to introduce GST is a good move for dealers,? he says. He further explains, ?Before LBT, the rate of cement in the rural area was different from city areas, which makes a difference of Rs 10-20 per bag. And now after the authorities upgraded octroi to LBT, the transport system is very fast and the material handling is also very easy. And the material is distributed at the same rate in the rural and urban areas. GST will definitely make the difference as it will benefit the complete value chain of the company, trader, transporter and the end-user. The overall procedure will be transparent.?

According to ICRA report, cement prices in North India had seen a significant hike of Rs 50 per bag during Q4 FY14, driven by temporary supply side disruptions following closure of two cement plants of Binani Cement with a total capacity of 6 mtpa in Rajasthan. The average wholesale cement price in Delhi increased from Rs 275 per bag (50 kg) in January 2014 to Rs 323 per bag in March 2014. Similarly, the average wholesale cement price in Chandigarh increased by Rs 58 per bag between January-March 2014 to Rs 334 per bag. The prices in certain parts of Western India, particularly Gujarat, were also impacted by the aforementioned shutdown. Wholesale prices in Ahmedabad market increased by Rs 47 per bag to Rs 300 per bag between January-March 2014. However, cement prices in these regions came under pressure in April-May 2014, following resumption of cement supply from Binani. Wholesale prices declined by Rs 15-30 per bag in Delhi, Ahmedabad and Chandigarh between April-June 2014. Prices in Mumbai market continued to remain under pressure and declined by Rs 20 per bag during January-May 2014 due to transfer of cement from Southern markets. However, with rise in prices in South in June 2014, the wholesale prices in Mumbai also increased by Rs 5-10 per bag in June 2014. Cement prices in Eastern markets increased by Rs 20-25 per bag during January-June 2014 as cement companies raised prices in the busy season to recover the rising costs.

South India remained the only major region which saw consistent decline in prices by about Rs 10-30 per bag during January-May 2014 due to overcapacity, disruption of production discipline and low demand during April-May 2014. However, cement companies raised prices significantly by about Rs 70 per bag in June 2014 to pass on the rising costs. However, the real estate companies and builders association have protested against such a steep price hike. During April-June 2014, the average price in Delhi was higher by 10 per cent, 22 per cent higher in Ahmedabad, 7 per cent higher in Chandigarh as compared to prices in the corresponding period of the previous year. Prices in Mumbai are flat while those in South and certain parts of East India are lower on YoY basis.

Great expectations
Rampal spells out the expectation from the government. He says, ?NDA government is already sending out message that it wants to kickstart manufacturing to facilitate the growth of labour income. Simplifying land acquisition, labour reforms and simplifying federal taxation through implementation of GST across the nation are the steps industry has already welcomed. Specifically, for the cement industry, the government spending will directly increase the cement demand, followed by take-off of retail housing and PPP infra projects. Government must analyse and find cure as to why infra companies are exiting from the BOT to EPC models. Is the policy environment or the trust missing for the private capital to consider incubating in these projects?? He adds, ?The Railways can facilitate the industry through preferential allocation of cement rakes (at the factory head) and raw material rakes (at the ports).?

According to Pathak, for increasing demand curve post initiation of different initiatives, government should now focus on implementation of its dream projects like 100 smart cities, bullet train and metro rail projects, house for every citizen by 2022, concretisation of national highways, etc, which will drive cement consumption. He further points out, ?To attract investments in railway infrastructure, government need to review the ?Own your Wagon Scheme? and make it more attractive for the industry players. Enough focus should be given to develop inland waterways, which would reduce the burden on existing rail and road network and also bring down the logistics cost.? As far as availability of power is concerned, Pathak adds, ?The government needs to focus on resolving the issues being faced by power sector by bring in clarity on coal auctioning, land acquisition bill, etc. A lot of power projects that are stuck/stalled due to various issues should be revived.?

Tax issues
Speaking on the issues related to different tax and lack of uniform tax structure, Pathak says, ?Cement is one of the highest taxed commodities in India. The total taxes and levies include royalties and import duties on input materials, electricity duties, sales tax, and excise duties account for one-third of the overall price of cement. Taxation rates in India are almost double of China. Government needs to focus on resolving raw materials and logistics issues to help cement sector getting clarity on policies. Clear roadmap for improvement in infrastructure sector is needed to help generating cement consumption in the country. Implementation of GST should start with more clarity on tax structure. The government should also reduce some of the taxes by providing it a status of core infrastructure sector.?

Explains Rampal, ?Out of the market price of a bag of cement 35-40 per cent is taken away by VAT, excise and railway freight (cost of manufacturing and limestone being extra) putting a massive burden on the industry. In spite of being a priority sector for nation building, cement taxation in the country is at par with the prohibitive industries worldwide.? Rampal suggests, ?Reduction in excise duty by 3-4 per cent will be able to sustain the industry longer. Government should study the possibility of subsidising rail freight for food, cement and steel which will directly boost the movement and clear up all logistics bottlenecks in addition to keeping the inflation of essential commodities low.?

Juneja avers, ?Until and unless GST is implemented, there cannot be effective interstate movement due to cascading effect of multiple taxes. We are awaiting the Budget on 28 February 2015.? Sharma mirrors the observation. According to him India is one of the countries where there is higher tax structure in cement sector. Government has to rationalise excise duty, royalty and sales tax to help the sector to grow.

Raw material availability
According to Rampal, raw material availability of coal and gypsum is not a constraint. However he adds, ?The limestone availability is fast becoming a constraint as applications for mining lease for limestone are stuck either at the state level or at the central ministry level due to environmental or social impact assessment issues.

Government must speed these up through e-governance initiatives.? Says Sharma, ?I don?t see much action from the present government in this area; however, cement industry has to improve its raw material inventories, particularly limestone. Moreover, government has to speed up with coal block allotments.?

Sharma further adds, ?With increase in demand, pressure will be on logistics. We are yet to see action from the new government in this area.? As far as the availability of power is concerned, he says, ?Most of the cement plants are self-sufficient in power with captive power plants. We will require continuing import of coal due to the current uncertainties in the domestic coal supply. Cement industry is importing coal also due to favourable coal prices.

However, the industry has to focus more on alternative sources of power from waste heat etc to reduce energy cost.?

Moving forward
Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. With the Government of India providing a boost to the infrastructure and various housing projects coming up in urban as well as rural areas, the cement sector has enough scope for development in the future. The weakness in the international crude oil prices and other commodities should help bring costs under control and improve profitability of the sector. If inflation comes under control, a likely lowering of interest rates would be a big positive for the cement sector. Despite the current challenges that dent the growth of the industry, the long term drivers for growth remain intact. Higher government spending on infrastructure, robust growth in rural housing and rising per capita incomes are likely to augur well for the cement sector.
Agith G Antony

2015 is expected to be another year of market consolidation. Cement companies expected to add 56 mt capacity over the next three years. The installed capacity may increase to 421 mt by the end of 2017. Demand is expected to grow at a rate of 7-8 per cent during FY15-16. The year 2015 will see excess supply of cement to the tune of 50-60 mt.

Government needs to review the ?Own your Wagon Scheme?.
Develop inland waterways, which would reduce the burden on existing rail and road network.
GST implementation should start with more clarity on tax structure. Government has to speed up with coal block allotments.

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Economy & Market

Fornnax Names Lukas Baur as Authorised Service Partner to Bolster EU Operations

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Strapline: Fornnax Technology has appointed NOBA Maschinenservice’s Lukas Baur as its authorised service partner for the European Union, strengthening its commitment to delivering fast, reliable, and localised after-sales support across the region.

Fornnax Technology, a leading manufacturer of industrial shredding solutions, has announced the appointment of Mr. Lukas Baur of NOBA Maschinenservice as its authorised service partner for the European Union. The partnership, formalised under the authorisation of Fornnax CEO Mr. Jignesh Kundaria, reinforces the company’s commitment to providing dependable, localised service support to its expanding customer base across Europe.

Strengthening Service Through Proven Expertise

With over two decades of experience in servicing, maintaining, and overhauling industrial shredders, Mr. Baur brings extensive technical expertise to the partnership. His capabilities span welding, hardfacing, shaft and knife rebuilding, complex assembly, hydraulics, and complete electrical engineering services, delivered in collaboration with a trusted partner company based in Halle/Saale.

Operating from Worbis, Germany, Mr. Baur is strategically positioned to provide emergency support across the European Union within 24 hours, covering an operational radius of approximately 1,000 kilometres.

Supporting this capability is a well-equipped service infrastructure comprising 12 Mercedes Sprinter service vans, a team of 24 skilled technicians, specialised bearing-change tools, a fully equipped hydraulic workshop, and a 1,000-square-metre facility with a five-ton crane track. Together, these resources position his team to manage the complete spectrum of Fornnax’s European service requirements efficiently and reliably.

Partnership Driven by Industry Insight

Having spent years servicing Eldan, Lindner, and Vecoplan shredders across the European recycling industry, Mr. Baur’s decision to collaborate with Fornnax is rooted in his understanding of market needs and customer expectations. His experience has provided valuable insight into what recycling plant operators require—not only from their machinery but also from the service teams supporting them.

According to Mr. Baur, Fornnax’s reputation for robust machine construction, superior wear protection, and maintenance-friendly design made the partnership a natural fit.

The collaboration comes at a time when Europe’s tyre recycling industry is facing mounting challenges, including rising cost pressures, shrinking margins, delayed investments, and a shortage of skilled labour. Mr. Baur believes these conditions reinforce the need for technically strong service partners capable of delivering rapid, dependable support.

Commenting on the partnership, he said, “Fornnax, with its exceptional price-performance ratio and superior quality, has the potential to become a market leader in Europe. We would like to be their service partner in this journey.”

Comprehensive Support Across the Equipment Lifecycle

As Fornnax’s authorised service partner, Mr. Baur will oversee the complete lifecycle support of the company’s equipment throughout the European Union. His responsibilities will include installation, commissioning, preventive maintenance, emergency repairs, and spare parts support across mechanical, hydraulic, and electrical systems.

Looking ahead, he also plans to develop a centralised spare parts distribution hub for European customers, particularly if Fornnax establishes a warehouse facility in Worbis to facilitate faster deliveries. To further strengthen service coverage, Mr. Baur intends to expand operations by adding two to three additional service teams and vehicles each year, progressively increasing capacity across the continent.

A Shared Commitment to Customer Excellence

Highlighting the strategic importance of the partnership, Mr. Jignesh Kundaria, Director and CEO of Fornnax, said:

“We strongly believe that by continuously improving our service quality and customer satisfaction index, we can build long-term relationships with our customers. Higher customer satisfaction leads to greater trust, which significantly increases repeat orders and ultimately drives sustained growth in our sales revenue.”

This customer-first philosophy underpins Fornnax’s strategy of building a dedicated European service partner network instead of relying solely on remote support. With Mr. Baur joining this network, customers across the European Union will benefit from faster response times, expert technical assistance, and dedicated on-ground support from a partner with extensive experience in high-throughput shredding operations.

Mr. Baur’s appointment also reflects Fornnax’s broader ambition to establish itself as the preferred shredding solutions provider for the European recycling industry, marking another important milestone in the company’s international growth strategy.

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Concrete

Nuvoco Vistas launches Limla cement plant, expands Gujarat footprint

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Nuvoco Vistas opens a 2 MMTPA grinding unit at Limla, entering Gujarat and advancing its target of 35 MMTPA capacity by FY 2028.

Surat (Gujarat)

Nuvoco Vistas Corporation Ltd, a part of Nirma Group and one of India’s leading building materials company, has inaugurated the Limla Cement Plant in Surat (Gujarat), one of Vadraj Cement Limited’s (VCL) principal manufacturing facilities. The commissioning represents a key milestone in Nuvoco’s acquisition and restoration of VCL, while supporting the company’s expansion across the Western Indian cement market.

Vadraj Cement Limited is a subsidiary of Nuvoco Vistas Corporation Limited and has installed cement capacity of 6 MMTPA across its assets. The Limla inauguration therefore represents the first operational step in the acquired platform’s wider revival, while the Kutch facilities provide clinker supply, mineral security and coastal logistics support for the western business.

Nuvoco completed its acquisition of Vadraj Cement Limited, then under the Corporate Insolvency Resolution Process, after paying a consideration of Rs 1,800 crore in June 2025. VCL’s asset portfolio comprises a clinker unit at Kutch and a grinding unit at Limla in Surat. It also includes high-quality captive limestone reserves and a captive jetty at Kutch, supporting more efficient logistics. Following the takeover, Nuvoco began an extensive programme of restoration, refurbishment and expansion at both locations, leading to the commissioning of the Limla plant.

The Limla Cement Plant is expected to support a phased increase in sales volumes across Gujarat. It will also help Nuvoco supply neighbouring markets in Western Maharashtra and release cement capacity from its northern plants, which can consequently be redirected towards markets in North India. The plant will manufacture a full portfolio comprising Ordinary Portland Cement, Portland Slag Cement, Portland Pozzolana Cement and Portland Composite Cement. It will additionally produce the complete Nuvoco Duraguard range, including the premium Nuvoco Duraguard Microfibre product. The acquisition is also expected to generate operational synergies with Nuvoco’s existing plants at Nimbol and Chittorgarh in Rajasthan, improving logistics optimisation and market reach across important regional markets.

The grinding unit at the Limla Cement Plant was completed ahead of schedule, with 2 MMTPA of capacity now inaugurated to expand Nuvoco’s operating scale and customer reach. After Vadraj Cement’s assets become fully operational, plants in North and West India are expected to account for nearly 40 per cent of Nuvoco’s total cement capacity. This will broaden the company’s manufacturing network, strengthen access to high-growth markets and support its plan to increase consolidated cement capacity to 35 MMTPA by FY 2028, reinforcing its longer-term growth strategy.

Commenting on the development, Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas Corp Ltd, said: “The inauguration of the Limla Grinding Unit in Surat is an important milestone in Nuvoco’s growth journey and demonstrates our commitment to disciplined, value-accretive expansion. Gujarat is strategically significant for Nuvoco, with substantial opportunities arising from infrastructure investment, industrial growth, rapid urbanisation and continuing demand from the housing and construction sectors. The facility strengthens our regional footprint, improves operational flexibility and increases our ability to serve customers across northern and western markets with greater reliability and efficiency.”

He added: “Through the Vadraj acquisition, we have refurbished and restarted a strategically important asset, returning it to operations in record time through strong execution and collaboration between teams. The achievement demonstrates our ability to create value from acquired assets, fulfil our commitments and retain the confidence of stakeholders. It also highlights the strength of our project delivery capabilities and our continued focus on building sustainable, profitable growth over the long term.”

Nuvoco Vistas Corporation Limited is a building materials company whose vision is to build a safer, smarter and more sustainable world. It is among the leading players in East India and has a significant presence across North and West India. Nuvoco began operations in 2014 with a greenfield cement plant at Nimbol, Rajasthan. It later acquired Lafarge India Limited, which had entered India in 1999, followed by Emami Cement Limited in 2020 and Vadraj Cement Limited in April 2025. The company has also announced an expansion in eastern India through a new grinding mill at the Arasmeta Cement Plant, supported by several debottlenecking programmes involving equipment upgrades, process improvements and internal capacity initiatives. These developments place Nuvoco on track to achieve total cement capacity of approximately 35 MMTPA. The company reported total income of Rs 11,362 crore in FY 2025-26, reflecting its continuing growth trajectory.

Nuvoco operates a diversified portfolio across three segments: Cement, Ready-Mix Concrete and Modern Building Materials. Its cement portfolio includes Concreto, Duraguard, Double Bull, PSC, Nirmax and Infracem, covering Ordinary Portland Cement, Portland Slag Cement, Portland Pozzolana Cement and Portland Composite Cement. Its pan-India RMX business provides value-added products under Concreto for performance concrete, Artiste for decorative concrete, InstaMix for ready-to-use bagged concrete, X-Con covering M20 to M60 grades, and Ecodure for specialised green concrete. Nuvoco has supplied materials to projects including the Mumbai-Ahmedabad Bullet Train, Birsa Munda Hockey Stadium in Rourkela, Aquatic Gallery at Science City in Ahmedabad, and metro railway projects in Delhi, Jaipur, Noida and Mumbai.

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Concrete

Green Construction Through Cement Innovation

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Indian Cement Review (ICR) and Fuller Technologies brought industry, policy and technology leaders together to discuss how cement innovation can drive green construction at scale, writes Rakesh Rao.

India is building at a pace few countries can match. Highways, airports, housing, logistics parks, industrial corridors and urban infrastructure are reshaping the country’s economic geography. But beneath this growth story lies a difficult question: can India continue to build at scale without locking itself into a high-carbon future?

That question formed the core of an online panel discussion titled “Driving Green Construction Through Cement Innovation”, organised by Indian Cement Review (ICR) in association with Fuller Technologies as the Presenting Partner on June 25, 2026. The webinar brought together experts from cement technology, R&D, global industry platforms, building performance policy and international development cooperation to examine how low-carbon cement and material innovation can accelerate India’s green construction transition.

The discussion came at a crucial time. India has committed to achieving net-zero emissions by 2070 and reducing the carbon intensity of its economy by 45 per cent by 2030. At the same time, the country’s construction sector is expanding rapidly, driven by urbanisation, infrastructure development, housing demand and industrial growth. Cement, as one of the most widely used construction materials, sits at the heart of this transition. It is indispensable to development, but also central to the challenge of reducing embodied carbon in buildings and infrastructure.

Moderated by Nitika Krishan, Senior Urban Infrastructure and Sustainable Policy Consultant, the panel featured:

  • Kiranmai Sanagavarapu, Director, Low Carbon Solutions, Fuller Technologies;
  • Dr Hemantkumar Aiyer, VP and Head R&D, Nuvoco Vistas Corp Ltd;
  • Devika Wattal, Innovation Lead, Global Cement and Concrete Association (GCCA);
  • Dr Sunita Purushottam, MD, GBPN India (Global Buildings Performance Network); and
  • Vaibhav Rathi, Senior Technical Advisor, GIZ (the German Agency for International Cooperation)

Setting the tone for the discussion, Nitika Krishan underlined the scale of the challenge before the sector. “The question before us is no longer whether we build, but how we build sustainably,” she said. She pointed out that construction accounts for nearly 40 per cent of global energy-related carbon emissions when both operational and embodied carbon are considered. Cement production, she added, remains one of the hardest industrial processes to decarbonise.

For India, this is not merely an environmental issue. It is a development issue, a competitiveness issue and increasingly, a market issue. As one of the world’s largest cement producers and among the fastest-growing construction markets, India’s material choices will influence the carbon trajectory of its built environment for decades. As Krishan observed, sustainability solutions in economies such as India must not remain limited to laboratory success. They must be scalable, commercially viable and practical at national level.

The innovation gap: From technology to market

Experts believe that there is a need to bridge the innovation gaps for making decarbonisation in cement and concrete scalable. Devika Wattal of GCCA, explained, “The starting point must be the core cement manufacturing process itself. The first and foremost is the heart of our process, the heart of cement manufacturing. How do we reduce clinker? That is always a topic where industry is working very intrinsically.”

Clinker reduction remains one of the most important pathways for lowering emissions in cement. Since clinker production is energy-intensive and chemically emits carbon dioxide, reducing the clinker factor through supplementary cementitious materials (SCMs), blended cements and new chemistries can have a significant impact. Wattal also noted that carbon capture, utilisation and storage (CCUS) will have a role, though it may not be the first lever for all markets.

However, she stressed that innovation cannot stop at technology development. A solution that works in the lab must also be adaptable to industry, scalable in production and acceptable in construction practice. “It is important for that innovation to be adaptable, to be scalable, and so that it can be executed in real time,” she said.

Wattal also called for stronger enabling systems around innovation. These include performance-based standards, product-level embodied carbon databases and clearer frameworks for evaluating green materials. Without these, low-carbon cement products may struggle to compete with conventional materials in procurement and design.

R&D must balance carbon, cost and performance

Bringing in the R&D perspective into the discussion, Dr Hemantkumar Aiyer of Nuvoco Vistas emphasised that low-carbon cement development cannot be treated as a single-variable exercise. Cement must perform in real construction conditions. It must deliver strength, durability, consistency and cost competitiveness, while also reducing carbon.

“The root of understanding and balancing all these aspects lies in materials, and knowing the materials,” he said.

According to Dr Aiyer, R&D teams must understand the variability of raw materials such as fly ash, slag and clinker. Different sources produce different material behaviours. This makes mix optimisation, material characterisation and processing-property relationships critical. When performance is affected, cement manufacturers must understand how strength enhancers, admixtures and other performance chemicals interact with the material system.

He also linked material science with process efficiency. Clinkerisation takes place at extremely high temperatures, around 1,400 to 1,450 degrees Celsius. Any improvement in raw mix design, process control or energy optimisation can, therefore, help reduce emissions and cost. Dr Aiyer pointed to artificial intelligence-based optimisation, Cement 4.0 tools and advanced software as important enablers for real-time process and material control.

“The more you understand the materials, the more you can control it,” he said.

LC3: The promise is proven, the sequencing is not

Limestone calcined clay cement, commonly referred to as LC3, has attracted global attention because it can reduce clinker content significantly by using calcined clay and limestone while maintaining performance in many applications. Kiranmai Sanagavarapu of Fuller Technologies said the technology itself has already moved beyond proof of concept. Fuller Technologies has worked with calcined clay technology for nearly two decades and has seen plants running in France and Ghana. These plants, she said, are meeting local and national specifications, while the economics are beginning to make sense.

“The calciner is performing, the economics is stacking up, it is making business sense to produce,” she said.

But if the technology is viable, why has adoption not scaled faster? For Sanagavarapu, the answer lies in project sequencing. Too often, clay characterisation happens after equipment is specified. This, she warned, is a backward approach because calciner design depends on clay mineralogy, kaolinite content, iron levels, reactivity, moisture and other variables.

“If you don’t know what your deposit looks like before you commit for the equipment, you are, in a way, going blind into designing,” she said.

She also identified permitting and plant integration as major bottlenecks. Environmental clearances, mining permissions and local regulatory approvals must begin early. Similarly, calcined clay must be integrated into existing grinding, blending and logistics systems from the design stage, not treated as an afterthought during commissioning.

India already has IS 18189:2023 standard for LC3, but Sanagavarapu pointed out that the standard is not yet visible enough in procurement documents. “The gap between what is technically being permitted and what the procurement is asking is the single biggest bottleneck,” she said.

In her view, successful scale-up depends on getting the sequence right: clay characterisation first, permitting in parallel, standards aligned with construction, and integration built into plant design.

India’s LC3 journey: Progress, but demand remains thin

Providing details of India’s LC3 commercialisation experience, Vaibhav Rathi of GIZ noted that JK Cement carried out the first commercial production of LC3 at its Rajasthan plant, followed by JK Lakshmi Cement three months later. These initiatives were supported by the International Climate Initiative of the Government of Germany, with IIT Delhi contributing deep institutional knowledge on LC3 research and BIS certification.

Rathi said India’s early experience has produced clear lessons. One of the biggest was the need to build capacity among regulators. While BIS certification existed, State Pollution Control Boards were unfamiliar with the technology and unsure about the approval pathway.

“The capacity building is not just needed amongst the producer and the users of the cement, but also the regulators who are working with this technology for the first time,” he said.

He also highlighted the need for better information on China clay deposits. Since China clay is currently classified as a minor mineral, centralised data on availability, quality and location is limited. If cement manufacturers are to adopt LC3 at scale, stronger mineral intelligence will be important.

The third issue is demand. LC3 has already been used in projects such as Palava City in Mumbai and Noida International Airport, but these remain limited examples. “It is in a chicken and egg situation,” Rathi said. “Cement companies are saying we need more demand, and users are saying there is not enough cement available.”

Public procurement, he suggested, could help break this cycle. If agencies such as CPWD and other public bodies begin testing, accepting and specifying LC3, it could create the market confidence needed for cement companies to invest in production and storage.

Building codes must catch up with innovation

Dr Sunita Purushottam of GBPN India argued that material choices will determine built environment emissions over the long term, but India’s current policy signals remain fragmented. Although LC3 has received BIS recognition, she pointed out that building codes, municipal bylaws, schedules of rates and sustainability codes do not yet provide uniform guidance on low-carbon cement.

“The current cement regulations are largely prescriptive and favouring traditional materials,” she said. This limits the ability of alternative materials to compete on performance, durability and emissions.

Dr Purushottam also raised the issue of taxation. Cement, including LC3, currently falls under the same GST bracket as conventional cement. A differentiated tax structure, she argued, could help accelerate market adoption. “In order for the market to demand LC3, that differentiation in the GST could go a long way,” she said.

She noted that green building certifications such as IGBC and GRIHA are already creating demand for low-carbon materials by assigning points for embodied carbon and sustainable material use. However, she said large-scale adoption will require regulatory mandates, particularly through building codes and state-level notifications.

She also cautioned that low-carbon cement alone does not solve the entire building performance problem. A material may reduce embodied carbon, but the operational carbon of a building depends on thermal performance, design, insulation and energy use. “The energy part has two elements,” she said. “One is the embodied carbon of the material itself, and the other is the operational carbon.”

Collaboration is the bridge between invention and impact

Wattal said GCCA sees innovation as a strategic priority and works through platforms that connect industry with academia and start-ups. “There is no way we will decarbonise our sector without innovation,” she said.

However, she stressed that research must be connected to actual industry challenges. Innovations developed in isolation may fail when they encounter real-world barriers such as raw material variability, plant integration, cost, standards and finance. Start-ups, too, need industry mentorship and scale-up pathways.

Wattal also flagged the importance of finance. Even strong technologies may struggle to attract investment if there is no common understanding of bankability. “We have always put projects into, is this a bankable project? But the definition of a bankable project has never been defined,” she said.

For India, she saw strong potential in its academic and start-up ecosystem, but said the challenge lies in alignment and prioritisation. The country has the research base, industrial capacity and market size. What it now needs is a coordinated route from innovation to deployment.

There is a practical concern for cement manufacturers: how can existing plants be adapted for lower emissions without compromising reliability or commercial viability?

Kiranmai Sanagavarapu addressed, “The reliability risk in calcined clay retrofit is definitely real, but it is almost always self-inflicted. The risk arises when a new process is added to an existing circuit without properly redesigning grinding and blending configurations.”

Existing cement plants, she explained, can take two broad routes. The first is external sourcing of calcined clay combined with mill optimisation. This requires lower capital investment and can potentially move in 12 to 18 months if other conditions are in place. It may reduce emissions by around 20 to 30 per cent. The second route is integrated calcination on site, which requires higher capital expenditure and longer lead times, but provides greater control over quality, supply and emissions reduction potential.

For Sanagavarapu, the principle is simple: low-carbon retrofits must be designed with intent. “Design it with an intent properly from the start. Start in the market conditions where the economics are already working,” she said.

Circularity: The overlooked advantage

According to Vaibhav Rathi, fly ash and slag are already well established in cement and construction (C&D), but construction and demolition waste remains underutilised. “C&D waste is a growing business opportunity which not many have taken up,” he said. India’s continuous construction and demolition activity creates huge volumes of waste, much of which contributes to air pollution, land degradation and material inefficiency. With the right processing and standards, this waste can be converted into useful construction products.

Rathi also pointed out that LC3 has a circular economy dimension that is often overlooked. It can use low-grade kaolin-rich clay left behind after high-grade clay is extracted for other applications. “LC3 is not only a low-carbon solution, but also a circular economy solution,” he said.

At the same time, he cautioned that LC3 in India is not yet cheap because it has not reached scale. Site-specific techno-commercial feasibility studies, supported jointly by development agencies and industry, could help companies assess whether LC3 production makes technical and financial sense at a given location.

Dr Purushottam added that India must address both low-carbon cement and construction waste together. “Both low-carbon cement and C&D waste go hand in hand. India does not have an option but to work on both,” she said.

Dr Aiyer called for policy shifts from both government and industry, including preferential purchasing of sustainable materials, minimum supplementary cementitious material requirements in public and public-private projects, and faster regulatory implementation. “If we can fast-track the regulatory standards and their implementation on the ground, that is the way to go,” he said.

From green ambition to green construction

Cement innovation is no longer only about chemistry. It is about systems. Low-carbon cement will scale only when technology, standards, procurement, finance, regulation, education and construction practice move together.

LC3 and other low-carbon technologies have shown promise. India has early commercial examples, strong research capability and growing market interest. But mainstream adoption will depend on whether demand can be created, regulators can be capacitated, standards can be embedded in procurement, and manufacturers can see a clear business case.

For a country building at India’s scale, the opportunity is enormous. Cement will continue to be central to infrastructure and urban development. The challenge now is to ensure that the cement used in India’s growth story carries a lower carbon burden.

  • Rakesh Rao

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