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Subdued demand hits cement cos

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Indian cement industry hit a slowdown in the beginning of this year as cement production was down by 0.5 per cent in the Jan-March 2015 period. Cement price also came under pressure due to weak demand.

Due to weak demand from end-user segment, the nationwide cement demand remained sluggish. Cement price also came under pressure due top the weak demand.

Cement demand remains subdued due to weak demand from end user indusries Cement demand has remained sluggish in Q4 FY15 which is traditionally a seasonally strong quarter for the cement industry. All-India cement production declined by 0.5% YoY during Jan-Mar 2015 as against an increase of 9.7% during Apr-Sept 2014. While pre-election spending and delayed monsoon had supported the growth in cement demand in H1 FY15, the growth slowed down in H2 FY15 once the election cycle was over. Cement demand was also impacted by cut down in government spending in Q4 FY15, muted demand from real estate and construction projects and slow recovery in infrastructure spending. Further, decline in kharif crops production owing to poor monsoons affected agricultural incomes and post-monsoon rural demand for cement for housing and other purposes. Regional factors such as extension of monsoon in South, extremely cold weather in North India and unseasonal rains in North in Q4 FY15 also affected construction activities and consequently cement demand in some areas. The demand has showed no signs of recovery in April 2015 with cement production declining by 2.4% YoY during the month.

Significant slowdown in fresh capacity addition in FY17 to aid improvement in capacity utilisation
The industry has seen slowdown in addition of new capacities due to supply glut faced in recent times. For instance, between FY11-FY15, the industry added 92 MTPA cement capacities as against 122 MTPA in the preceding 4-year period FY07-FY11. However, slowdown in demand (cement production grew by 6.0% during FY11-FY15 as against 7.6% during FY07-FY11) resulted in decline in capacity utilization from 77% in FY12 to 72% in FY14 despite slowdown in fresh capacity addition. Going forward, we expect the industry to add 28 MTPA capacities during FY16-FY17- 21 MTPA in FY16 and 8 MTPA in FY17 as against the peak addition of 50 MTPA in FY10. Eastern region will lead the capacity expansion and is expected to witness about 12 MTPA capacity additions during FY16-FY17.

Southern region, which had witnessed the highest capacity addition in the last five years, will see a considerable slowdown adding only 6 MTPA of capacity addition in the next 2 years. Assuming a demand growth of 7% over the next two years, the incremental demand will be 19-20 MTPA, which will just match the incremental supply in FY16 resulting in stable capacity utilization vis-a-vis previous year. However, with slowdown in new project execution in FY17, the all-India cement capacity utilisation is likely to improve to 75% in FY17.

Prices come under pressure due to weak demand1

  • North: Cement companies in North raised prices by Rs. 20/bag in Jan 2015 ahead of the busy season in anticipation of recovery in demand. However, they were unable to sustain these hikes due to weak demand and unseasonal rains. For example, average wholesale cement prices in Chandigarh increased from Rs. 264/bag in Dec 2014 to Rs. 285/bag in Jan 2015 but declined to Rs. 276/bag in Feb 2015 due to subdued demand. Cement companies again raised prices by Rs. 10-15/bag in the month of Mar 2015 but prices corrected by Rs. 20/bag in May 2015. Cement prices in North have slid below last year?s prices.
  • West: Western region, particularly Maharashtra has seen a steep decline in prices. Average wholesale prices in Mumbai have declined to Rs. 285/bag from their peak level of Rs. 364/bag in Jan 2015. Prices in Ahmedabad have also declined by Rs. 15-20.bag due to weak demand.
  • East: The average wholesale prices in Kolkata market remained in the range of Rs. 340-360/ bag during FY15 and have increased to Rs. 363/bag in May 2015.
  • South: Cement companies took a major price hike in Dec 2014 to pass on the rising costs. For example, in the Hyderabad market, cement prices rose sharply by Rs. 60/bag MoM to Rs. 350/bag in Jan 2015. While there has been some disruption in pricing discipline in May 2015, the prices continue to be significantly higher on a YoY basis.

Q4 FY15 revenue growth remains modest due to weak demand; South based companies report healthy profitability in Q4 FY15
Most cement companies in ICRA Sample2 reported either a decline or a modest YoY increase in revenues in Q4 FY15. Only two companies, namely OCL India Limited and JK Cement Limited registered a double-digit YoY revenue growth due to volumetric growth aided by capacity expansion. The revenues of companies in ICRA sample registered mere 0.6% YoY growth. On a sequential basis, all companies reported an increase in revenues with revenues for ICRA Sample increasing by 9.0% QoQ in Q4 FY15.

The profitability margins of most cement companies declined on a YoY basis (except for South based companies). Despite this, the operating margins of ICRA Sample increased by 100 basis points to 19.2% n Q4 FY15 driven by performance of South based cement companies as well as ACC Limited. The operating profitability margins of South based companies namely, The Ramco Cements Limited and The India Cements Limited improved significantly both on a sequential and YoY basis due to significant hike in cement prices in South in Dec 2014. Cement companies in North had witnessed healthy profitability margins in Q4 FY14 driven by shutdown of 6MTPA capacity of Binani cement Limited and subsequent increase in cement prices in the region. As a result, on a YoY basis, the profitability margins in North (JK Cement Limited, JK Lakshmi Cement Limited, shree Cement Limited) came under pressure in Q4 FY15.

1Source for region-wise price data: CMIE
2ICRA Sample Includes ACC Limited, Ambuja Cements Limited, OCL India Limited, Shree Cement Limited, Ultratech cement Limited, JK Cement Limited, JK Lakshmi Cement Limited, Prism Cement Limited, the India Cements Limited, The Ramco Cements Limited

By Sabyasachi Majumdar, Sr.VP, Co-head, Corporate Sector Ratings, ICRA Ltd

Exhibit 3: Revenues and Profitability of Key Cement Players (Q4 FY15)
Revenue
(Rs.
Billion)
YoY
Revenue
Growth
QoQ
Revenue
Growth
Operating Profits
(Rs. Billion)
Operating Profitability
Margin (%)
Q4
FY15
% % Q4
FY14
Q4
FY15
Q3
FY15
Q4
FY14
Q4
FY15
Q3
FY15
ACC Limited 30.8 1.8% 8.6% 4.25 6.09 2.57 14.0% 19.8% 9.1%
Ambuja Cements
Limited
24.6 -7.1% 2.4% 5.89 5.10 3.58 22.2% 20.7% 14.9%
JK Cement Limited 9.2 10.0% 14.7% 1.63 1.64 1.01 19.6% 17.9% 12.6%
JK Lakshmi Cement
Limited
5.8 -10.8% 4.0% 1.12 0.71 0.75 17.3% 12.4% 13.6%
OCL India Limited 6.7 24.4% 22.2% 0.92 1.01 0.87 17.2% 15.2% 16.0%
Prism Cement Limited 15.3 0.4% 14.3% 1.19 0.84 0.37 7.8% 5.5% 2.7%
Shree Cement Limited 15.8 -5.3% 2.1% 4.31 3.41 3.06 25.9% 21.6% 19.8%
The India Cements
Limited
10.4 -7.3% 0.3% 1.19 2.00 1.63 10.6% 19.2% 15.7%
The Ramco Cements
Limited
10.0 1.2% 22.2% 1.29 2.74 1.30 13.1% 27.5% 15.9%
Ultratech Cement
Limited
62.1 4.3% 10.9% 12.71 13.10 9.57 21.3% 21.1% 17.1%
TOTAL (ICRA
Sample)
190.6 0.6% 9.0% 34.50 36.65 24.71 18.2% 19.2% 14.1%
Source: Financial Results of Companies, ICRA92s estimates

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Economy & Market

Smart Pumping for Rock Blasting

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SEEPEX introduces BN pumps with Smart Joint Access (SJA) to improve efficiency, reliability, and inspection speed in demanding rock blasting operations.
Designed for abrasive and chemical media, the solution supports precise dosing, reduced downtime, and enhanced operational safety.

SEEPEX has introduced BN pumps with Smart Joint Access (SJA), engineered for the reliable and precise transfer of abrasive, corrosive, and chemical media in mining and construction. Designed for rock blasting, the pump features a large inspection opening for quick joint checks, a compact footprint for mobile or skid-mounted installations, and flexible drive and material options for consistent performance and uptime.

“Operators can inspect joints quickly and rely on precise pumping of shear-sensitive and abrasive emulsions,” said Magalie Levray, Global Business Development Manager Mining at SEEPEX. “This is particularly critical in rock blasting, where every borehole counts for productivity.” Industry Context

Rock blasting is essential for extracting hard rock and shaping safe excavation profiles in mining and construction. Accurate and consistent loading of explosive emulsions ensures controlled fragmentation, protects personnel, and maximizes productivity. Even minor deviations in pumping can cause delays or reduce product quality. BN pumps with SJA support routine maintenance and pre-operation checks by allowing fast verification of joint integrity, enabling more efficient operations.

Always Inspection Ready

Smart Joint Access is designed for inspection-friendly operations. The large inspection opening in the suction housing provides direct access to both joints, enabling rapid pre-operation checks while maintaining high operational reliability. Technicians can assess joint condition quickly, supporting continuous, reliable operation.

Key Features

  • Compact Footprint: Fits truck-mounted mobile units, skid-mounted systems, and factory installations.
  • Flexible Drive Options: Compact hydraulic drive or electric drive configurations.
  • Hydraulic Efficiency: Low-displacement design reduces oil requirements and supports low total cost of ownership.
  • Equal Wall Stator Design: Ensures high-pressure performance in a compact footprint.
  • Material Flexibility: Stainless steel or steel housings, chrome-plated rotors, and stators in NBR, EPDM, or FKM.

Operators benefit from shorter inspection cycles, reliable dosing, seamless integration, and fast delivery through framework agreements, helping to maintain uptime in critical rock blasting processes.

Applications – Optimized for Rock Blasting

BN pumps with SJA are designed for mining, tunneling, quarrying, civil works, dam construction, and other sectors requiring precise handling of abrasive or chemical media. They provide robust performance while enabling fast, reliable inspection and maintenance.With SJA, operators can quickly access both joints without disassembly, ensuring emulsions are transferred accurately and consistently. This reduces downtime, preserves product integrity, and supports uniform dosing across multiple bore holes.

With the Smart Joint Access inspection opening, operators can quickly access and assess the condition of both joints without disassembly, enabling immediate verification of pump readiness prior to blast hole loading. This allows operators to confirm that emulsions are transferred accurately and consistently, protecting personnel, minimizing product degradation, and maintaining uniform dosing across multiple bore holes.

The combination of equal wall stator design, compact integration, flexible drives, and progressive cavity pump technology ensures continuous, reliable operation even in space-limited, high-pressure environments.

From Inspection to Operation

A leading explosives provider implemented BN pumps with SJA in open pit and underground operations. By replacing legacy pumps, inspection cycles were significantly shortened, allowing crews to complete pre-operation checks and return mobile units to productive work faster. Direct joint access through SJA enabled immediate verification, consistent emulsion dosing, and reduced downtime caused by joint-related deviations.

“The inspection opening gives immediate confidence that each joint is secure before proceeding to bore holes,” said a site technician. “It allows us to act quickly, keeping blasting schedules on track.”

Framework agreements ensured rapid pump supply and minimal downtime, supporting multi-site operations across continents

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Concrete

Digital process control is transforming grinding

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Satish Maheshwari, Chief Manufacturing Officer, Shree Cement, delves into how digital intelligence is transforming cement grinding into a predictive, stable, and energy-efficient operation.

Grinding sits at the heart of cement manufacturing, accounting for the largest share of electrical energy consumption. In this interview, Satish Maheshwari, Chief Manufacturing Officer, Shree Cement, explains how advanced grinding technologies, data-driven optimisation and process intelligence are transforming mill performance, reducing power consumption and supporting the industry’s decarbonisation goals.

How has the grinding process evolved in Indian cement plants to meet rising efficiency and sustainability expectations?
Over the past decade, Indian cement plants have seen a clear evolution in grinding technology, moving from conventional open-circuit ball mills to high-efficiency closed-circuit systems, Roller Press–Ball Mill combinations and Vertical Roller Mills (VRMs). This shift has been supported by advances in separator design, improved wear-resistant materials, and the growing use of digital process automation. As a result, grinding units today operate as highly controlled manufacturing systems where real-time data, process intelligence and efficient separation work together to deliver stable and predictable performance.
From a sustainability perspective, these developments directly reduce specific power consumption, improve equipment reliability and lower the carbon footprint per tonne of cement produced.

How critical is grinding optimisation in reducing specific power consumption across ball mills and VRMs?
Grinding is the largest consumer of electrical energy in a cement plant, which makes optimisation one of the most effective levers for improving energy efficiency. In ball mill systems, optimisation through correct media selection, charge design, diaphragm configuration, ventilation management and separator tuning can typically deliver power savings of 5 per cent to 8 per cent. In VRMs, fine-tuning airflow balance, grinding pressure, nozzle ring settings, and circulating load can unlock energy reductions in the range of 8 per cent to 12 per cent. Across both systems, sustained operation under stable conditions is critical. Consistency in mill loading and operating parameters improves quality control, reduces wear, and enables long-term energy efficiency, making stability a key operational KPI.

What challenges arise in maintaining consistent cement quality when using alternative raw materials and blended compositions?
The increased use of alternative raw materials and supplementary cementitious materials (SCM) introduces variability in chemistry, moisture, hardness, and loss on ignition. This variability makes it more challenging to maintain consistent fineness, particle size distribution, throughput and downstream performance parameters such as setting time, strength development and workability.
As clinker substitution levels rise, grinding precision becomes increasingly important. Even small improvements in consistency enable higher SCM utilisation without compromising cement performance.
Addressing these challenges requires stronger feed homogenisation, real-time quality monitoring and dynamic adjustment of grinding parameters so that output quality remains stable despite changing input characteristics.

How is digital process control changing the way grinding performance is optimised?
Digital process control is transforming grinding from an operator-dependent activity into a predictive, model-driven operation. Technologies such as online particle size and residue analysers, AI-based optimisation platforms, digital twins for VRMs and Roller Press systems, and advanced process control solutions are redefining how performance is managed.
At the same time, workforce roles are evolving. Operators are increasingly focused on interpreting data trends through digital dashboards and responding proactively rather than relying on manual interventions. Together, these tools improve mill stability, enable faster response to disturbances, maintain consistent fineness, and reduce specific energy consumption while minimising manual effort.

How do you see grinding technologies supporting the industry’s low-clinker and decarbonisation goals?
Modern grinding technologies are central to the industry’s decarbonisation efforts. They enable higher incorporation of SCMs such as fly ash, slag, and limestone, improve particle fineness and reactivity, and reduce overall power consumption. Efficient grinding makes it possible to maintain consistent cement quality at lower clinker factors. Every improvement in energy intensity and particle engineering directly contributes to lower CO2 emissions.
As India moves toward low-carbon construction, precision grinding will remain a foundational capability for delivering sustainable, high-performance cement aligned with national and global climate objectives.

How much potential does grinding optimisation hold for immediate energy
and cost savings?
The potential for near-term savings is substantial. Without major capital investment, most plants can achieve 5 per cent to 15 per cent power reduction through measures such as improving separator efficiency, optimising ventilation, refining media grading, and fine-tuning operating parameters.
With continued capacity expansion across India, advanced optimisation tools will help ensure that productivity gains are not matched by proportional increases in energy demand. Given current power costs, this translates into direct and measurable financial benefits, making grinding optimisation one of the fastest-payback operational initiatives available to cement manufacturers today.

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Concrete

Refractory demands in our kiln have changed

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Radha Singh, Senior Manager (P&Q), Shree Digvijay Cement, points out why performance, predictability and life-cycle value now matter more than routine replacement in cement kilns.

As Indian cement plants push for higher throughput, increased alternative fuel usage and tighter shutdown cycles, refractory performance in kilns and pyro-processing systems is under growing pressure. In this interview, Radha Singh, Senior Manager (P&Q), Shree Digvijay Cement, shares how refractory demands have evolved on the ground and how smarter digital monitoring is improving kiln stability, uptime and clinker quality.

How have refractory demands changed in your kiln and pyro-processing line over the last five years?
Over the last five years, refractory demands in our kiln and pyro line have changed. Earlier, the focus was mostly on standard grades and routine shutdown-based replacement. But now, because of higher production loads, more alternative fuels and raw materials (AFR) usage and greater temperature variation, the expectation from refractory has increased.
In our own case, the current kiln refractory has already completed around 1.5 years, which itself shows how much more we now rely on materials that can handle thermal shock, alkali attack and coating fluctuations. We have moved towards more stable, high-performance linings so that we don’t have to enter the kiln frequently for repairs.
Overall, the shift has been from just ‘installation and run’ to selecting refractories that give longer life, better coating behaviour and more predictable performance under tougher operating conditions.

What are the biggest refractory challenges in the preheater, calciner and cooler zones?
• Preheater: Coating instability, chloride/sulphur cycles and brick erosion.
• Calciner: AFR firing, thermal shock and alkali infiltration.
• Cooler: Severe abrasion, red-river formation and mechanical stress on linings.
Overall, the biggest challenge is maintaining lining stability under highly variable operating conditions.

How do you evaluate and select refractory partners for long-term performance?
In real plant conditions, we don’t select a refractory partner just by looking at price. First, we see their past performance in similar kilns and whether their material has actually survived our operating conditions. We also check how strong their technical support is during shutdowns, because installation quality matters as much as the material itself.
Another key point is how quickly they respond during breakdowns or hot spots. A good partner should be available on short notice. We also look at their failure analysis capability, whether they can explain why a lining failed and suggest improvements.
On top of this, we review the life they delivered in the last few campaigns, their supply reliability and their willingness to offer plant-specific custom solutions instead of generic grades. Only a partner who supports us throughout the life cycle, which includes selection, installation, monitoring and post-failure analysis, fits our long-term requirement.

Can you share a recent example where better refractory selection improved uptime or clinker quality?
Recently, we upgraded to a high-abrasion basic brick at the kiln outlet. Earlier we had frequent chipping and coating loss. With the new lining, thermal stability improved and the coating became much more stable. As a result, our shutdown interval increased and clinker quality remained more consistent. It had a direct impact on our uptime.

How is increased AFR use affecting refractory behaviour?
Increased AFR use is definitely putting more stress on the refractory. The biggest issue we see daily is the rise in chlorine, alkalis and volatiles, which directly attack the lining, especially in the calciner and kiln inlet. AFR firing is also not as stable as conventional fuel, so we face frequent temperature fluctuations, which cause more thermal shock and small cracks in the lining.
Another real problem is coating instability. Some days the coating builds too fast, other days it suddenly drops, and both conditions impact refractory life. We also notice more dust circulation and buildup inside the calciner whenever the AFR mix changes, which again increases erosion.
Because of these practical issues, we have started relying more on alkali-resistant, low-porosity and better thermal shock–resistant materials to handle the additional stress coming from AFR.

What role does digital monitoring or thermal profiling play in your refractory strategy?
Digital tools like kiln shell scanners, IR imaging and thermal profiling help us detect weakening areas much earlier. This reduces unplanned shutdowns, helps identify hotspots accurately and allows us to replace only the critical sections. Overall, our maintenance has shifted from reactive to predictive, improving lining life significantly.

How do you balance cost, durability and installation speed during refractory shutdowns?
We focus on three points:
• Material quality that suits our thermal profile and chemistry.
• Installation speed, in fast turnarounds, we prefer monolithic.
• Life-cycle cost—the cheapest material is not the most economical. We look at durability, future downtime and total cost of ownership.
This balance ensures reliable performance without unnecessary expenditure.

What refractory or pyro-processing innovations could transform Indian cement operations?
Some promising developments include:
• High-performance, low-porosity and nano-bonded refractories
• Precast modular linings to drastically reduce shutdown time
• AI-driven kiln thermal analytics
• Advanced coating management solutions
• More AFR-compatible refractory mixes

These innovations can significantly improve kiln stability, efficiency and maintenance planning across the industry.

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