Process

We believe in a holistic approach and support our customers with complete systems and processes

Published

9 years ago

July 31, 2016

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Carsten Riisberg Lund, Managing Director – FLSmidth India

FLSmidth has been in business in India for more than 100 years. Carsten Riisberg Lund, Managing Director, FLSmidth India, speaks on his company?s operations and the state of the Indian cement industry.

You have had a very long association with India as a company, what have been the milestones in your relationship? How do you see the future?
In India, we have been doing business for more than 100 years. We delivered our first cement plant in India during 1904, our first step to establish our foothold in India. With sound strategy and innovative thinking, FLSmidth has grown into a major player in the Indian cement industry over the past 100 years. For a long period, we have also worked in close collaboration with Larsen & Toubro and shared knowledge about our cement industry products and technologies.

The Indian cement industry saw a tremendous boom during the early 2000s in sync with the Indian economy, which provided a solid foundation for FLSmidth to ex-pand its operations. We witnessed the various phases of the country?s development and we grew along.

The Indian operations of the company are based in the state-of-the-art and LEED certified facility in Chennai. As a part of FLSmidth?s globalisation, our R&D centre was also built in Chennai which conducts cement tests and advanced analysis for global projects as well as meets our Indian customers? requirements.

We have also expanded our production capabilities even before ?Make in India? was launched. Our manufacturing units in Haryana and Tamil Nadu support the entire FLSmidth Group to serve the domestic and international customers of global cement and mineral industries.

Today, with a more than 3000-strong workforce and as a major project and technology centre, we have firmly established our presence in India. We continue to look forward to participate in our customers? growth in India and abroad, having adopted a holistic approach in our business strategy. We are here to support our customers with all aspects of their production; from single machinery to combined systems and complete turnkey projects. We also help customers with a comprehensive range of services, including plant process and performance optimisation, preventive maintenance programme, Computerized Maintenance Management System and many more.

Tell us something on FLSmidth?s overall business worldwide, and operations specific to India….
We are a one source, full service provider to the global cement and minerals industries. ?Full-service provider? means supplying everything from single products and services to complete plants or production lines and full operation and maintenance solutions.

We focus on cement, coal, copper, gold, iron ore and fertilizers, providing one source for the products, complete solutions and services they need. With offices in more than 50 countries and 13,000 employees worldwide, we are on the spot locally to help customers with every stage of their operational process, from strategic planning to overcoming everyday challenges and facility lifecycle management.

We have supplied more than 100 kiln systems in India which accounts for more than 1/3rd of the kiln capacity in India. We have the strongest engineering, project execution and service setup to fulfill the range of customer requirements and help them achieve high levels of productivity and efficiency of their cement plants.

How do you maintain your technological lead in whatever you do?
We constantly aim our efforts to improve the product portfolio as well as basic research to fulfill customers? future needs for innovative technical solutions, high reliability and availability, minimum environmental impact and the lowest possible lifecycle costs. FLSmidth spends a significant amount on R&D to ensure environmentally sound solutions to the challenges faced by our customers. Our experience from designing and installing plants and from supplying all core equipment and technologies critical for the process flow, is what enables us to be the industry leader in service. And our practical experience from maintaining and operating the plants is fed straight back into our product innovation which helps shorten our time-to-market.

We strongly believe in a collaborative approach to R&D. We increasingly develop solutions together with our customers or form partnerships with other industry process leaders, like the joint development with one of the catalysis experts Haldor Tops++e A/S, and most recently with world leading chemical company BASF GmbH, to ensure a targeted co-development with rapidly commercialised products.

Give us some details of the simulator-based training you offer to industry personnel. What are the success factors?
ECS/CEMulator? is a high technological breakthrough in development of an advanced environment for training of process operators and engineers in the cement industry. It is an absolute realistic simulator of cement plant process.

It is risk-free training which helps operators and engineers to understand the fundamentals as they are able to get realistic responses to their actions and practice different scenarios and train correct actions without jeopardising the plant equipment. ECS/CEMulator? has helped many of our customers in developing the skills of their operators and process engineers, which in turn improved their plant operational efficiency.

Your expertise in process engineering has been encapsulated in your various products. Give us some basic information on the same.
Process design forms the backbone for providing the complete flow sheet of the cement plant. Our primary focus areas of process are raw material sampling and analysis from the quarry so that the right process design for raw mix design can be made. This also means the capability to test the raw material for grindability and burnability. Consequently the grinding, pyro and other core areas are optimally designed to meet the customers? requirements.

Pollution control equipment, both in terms of particulate emissions and gaseous emissions such as NOx and SOx, are areas of expertise for FLSmidth and can meet the stringent pollution norms. We believe that our collaborative global platform of experience and expertise is an important aspect in providing competitive and reliable process knowhow.

We strongly ensure that while we address process (and product) engineering, our customer?s main expectations are met regarding low energy consumption, low emissions, high productivity and availability, with ease of operation and maintenance.

As an important partner of the industry, in which direction do you see the Indian cement sector heading?
India is one of the fastest growing economies in the world and the country?s demand for cement is expected to experience a significant increase as the Government of India prioritises infrastructure development, and has mega constructions projects, like Smart Cities in the pipeline.

We also expect that the Indian cement industry will come out of the current imbalance on the ?capacity vs demand? front within the next two or three years, because of the positive growth trajectory. We anticipate a slow upward development with a cement demand to be in the range of 9-10 per cent in the near future. We also have other reasons to be optimistic about the Indian cement industry growth – mainly significant reforms of laws and regulations and increased infrastructure spend. So, it is going to move up.

You have a manufacturing base and clients both in China and India. How are the two markets different?
India and China are quite different markets; be it cement industry or cement players. Cement equipment suppliers in China traditionally focus on individual products. But, as I mentioned earlier, we believe in a holistic approach and support our customers with complete systems and processes. We continue to strive to develop products and technologies to optimise cost, increase plant efficiency, reduce energy consumption and deliver low-cost maintenance. Our approach strongly supports the Indian cement players who focus on achieving global standards in production, safety and energy, by utilising new technology and innovative solutions.

What are the technological advancements which are available with you but have not found a market in India?
India has a high absorption of latest technological advancements in general – especially within the products that reduce energy consumption, like vertical roller mills, roller presses and high efficiency clinker coolers.

Still, some of our products have not reached the Indian market yet. For instance, the FLSmidth HOTDISC? combustion device that can burn bulk alternate fuels (like full automobile tyres) has not been successful in India compared to other countries. The reason behind is that India has many reuses for automobile tyres traditionally – hence availability of whole tyres is an issue.

We have also launched many automation and pollution control products for which we hope to expand our market share in India. Soon, our new JETFLEX? burner will be launched.

Give us a brief on your CSR activities. How do you involve your employees in the initiative?
The underlying rationale behind all our CSR activities is to create value for our main stakeholders: customers, shareholders, employees, suppliers and the community. We have signed the UN Global Compact in November 2008 and we are committed to support the United Nations? ten principles regarding human rights, labour, environment and anti-corruption.

We strive to give back to the country and communities whom we work with. We were actively involved in providing relief activities and much-needed supplies for the affected during the floods in Chennai last year. We have also contributed to the Prime Minister?s Relief Fund. We partner with institutions to support children?s education and hospitals for healthcare. We have a team, with a representation from employees and management, which monitors the implementation of these projects and also finds new opportunities to give back to society in coordination with top management.

FLSmidth India
FLSmidth has a strong focus on doing business in India and adjacent markets, as it has done for more than 100 years. FLSmidth India is a manufacturing hub as well as a technical and project centre since 1906.

One-third of the total 13,000 strong workforce of FLSmidth is based in India with Chennai as the main office. FLSmidth globally generates annual revenue of approximately DKK 20 billion.

In addition to catering to the Indian business, FLSmidth India supports off-shoring of its capabilities to other centres of the company. The global services include engineering, after-sales services, financial services, quality and supplier development, R&D and IT services.

Carsten Riisberg Lund
Carsten Riisberg Lund (53) has been Managing Director and Country Head of FLSmidth India since January 2015. He has been working for FLSmidth since 1988. Lund was formerly President of Material Handling Division (2012-2015); Global ERP Programme Director, FLSmidth (2011-2012); CEO FLSmidth Airtech, (2007-2011); Business Unit Manager, Gas Cleaning Systems, FLSmidth Airtech (2004-2007) and Global Products and Technology, FLSmidth Airtech (2002-2004).

Process

Price hikes, drop in input costs help cement industry to post positive margins: Care Ratings

Published

4 years ago

October 21, 2021

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Region-wise,the southern region comprises 35% of the total cement capacity, followed by thenorthern, eastern, western and central region comprising 20%, 18%, 14% and 13%of the capacity, respectively.

The cement industry is expected to post positive margins on decent price hikes over the months, falling raw material prices and marked drop in overall production costs, said an analysis of Care Ratings.

Wholesale and retail prices of cement have increased 11.9% and 12.4%, respectively, in the current financial year. As whole prices have remained elevated in most of the markets in the months of FY20, against the corresponding period of the previous year.

Similarly, electricity and fuel cost have declined 11.9% during 9M FY20 due to drop in crude oil prices. Logistics costs, the biggest cost for cement industry, has also dropped 7.7% (selling and distribution) as the Railways extended the benefit of exemption from busy season surcharge. Moreover, the cost of raw materials, too, declined 5.1% given the price of limestone had fallen 11.3% in the same aforementioned period, the analysis said.

According to Care Ratings, though the overall sales revenue has increased only 1.3%, against 16% growth in the year-ago period, the overall expenditure has declined 3.2% which has benefited the industry largely given the moderation in sales.

Even though FY20 has been subdued in terms of production and demand, the fall in cost of production has still supported the cement industry by clocking in positive margins, the rating agency said.

Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. The cement sector will be seeing a sharp growth in volumes mainly due to increasing demand from affordable housing and other government infrastructure projects like roads, metros, airports, irrigation.

The government’s newly introduced National Infrastructure Pipeline (NIP), with its target of becoming a $5-trillion economy by 2025, is a detailed road map focused on economic revival through infrastructure development.

The NIP covers a gamut of sectors; rural and urban infrastructure and entails investments of Rs.102 lakh crore to be undertaken by the central government, state governments and the private sector. Of the total projects of the NIP, 42% are under implementation while 19% are under development, 31% are at the conceptual stage and 8% are yet to be classified.

The sectors that will be of focus will be roads, railways, power (renewable and conventional), irrigation and urban infrastructure. These sectors together account for 79% of the proposed investments in six years to 2025. Given the government’s thrust on infrastructure creation, it is likely to benefit the cement industry going forward.

Similarly, the Pradhan Mantri Awaas Yojana, aimed at providing affordable housing, will be a strong driver to lift cement demand. Prices have started correcting Q4 FY20 onwards due to revival in demand of the commodity, the agency said in its analysis.

Industry’s sales revenue has grown at a CAGR of 7.3% during FY15-19 but has grown only 1.3% in the current financial year. Tepid demand throughout the country in the first half of the year has led to the contraction of sales revenue. Fall in the total expenditure of cement firms had aided in improving the operating profit and net profit margins of the industry (OPM was 15.2 during 9M FY19 and NPM was 3.1 during 9M FY19). Interest coverage ratio, too, has improved on an overall basis (ICR was 3.3 during 9M FY19).

According to Cement Manufacturers Association, India accounts for over 8% of the overall global installed capacity. Region-wise, the southern region comprises 35% of the total cement capacity, followed by the northern, eastern, western and central region comprising 20%, 18%, 14% and 13% of the capacity, respectively.

Installed capacity of domestic cement makers has increased at a CAGR of 4.9% during FY16-20. Manufacturers have been able to maintain a capacity utilisation rate above 65% in the past quinquennium. In the current financial year due to the prolonged rains in many parts of the country, the capacity utilisation rate has fallen from 70% during FY19 to 66% currently (YTD).

Source:moneycontrol.com

Process

Wonder Cement shows journey of cement with new campaign

Published

4 years ago

October 21, 2021

admin

The campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV…

ETBrandEquity

Cement manufacturing company Wonder Cement, has announced the launch of a digital campaign ‘Har Raah Mein Wonder Hai’. The campaign has been designed specifically to run on platforms such as Instagram, Facebook and YouTube.

#HarRaahMeinWonderHai is a one-minute video, designed and conceptualised by its digital media partner Triature Digital Marketing and Technologies Pvt Ltd. The entire journey of the cement brand from leaving the factory, going through various weather conditions and witnessing the beauty of nature and wonders through the way until it reaches the destination i.e., to the consumer is very intriguing and the brand has tried to showcase the same with the film.

Sanjay Joshi, executive director, Wonder Cement, said, "Cement as a product poses a unique marketing challenge. Most consumers will build their homes once and therefore buy cement once in a lifetime. It is critical for a cement company to connect with their consumers emotionally. As a part of our communication strategy, it is our endeavor to reach out to a large audience of this country through digital. Wonder Cement always a pioneer in digital, with the launch of our IGTV campaign #HarRahMeinWonderHai, is the first brand in the cement category to venture into this space. Through this campaign, we have captured the emotional journey of a cement bag through its own perspective and depicted what it takes to lay the foundation of one’s dreams and turn them into reality."

The story begins with a family performing the bhoomi poojan of their new plot. It is the place where they are investing their life-long earnings; and planning to build a dream house for the family and children. The family believes in the tradition of having a ‘perfect shuruaat’ (perfect beginning) for their future dream house. The video later highlights the process of construction and in sequence it is emphasising the value of ‘Perfect Shuruaat’ through the eyes of a cement bag.

Tarun Singh Chauhan, management advisor and brand consultant, Wonder Cement, said, "Our objective with this campaign was to show that the cement produced at the Wonder Cement plant speaks for itself, its quality, trust and most of all perfection. The only way this was possible was to take the perspective of a cement bag and showing its journey of perfection from beginning till the end."

According to the company, the campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV. No other brand in this category has created content specific to the platform.

Process

In spite of company’s optimism, demand weakness in cement is seen in the 4% y-o-y drop in sales volume. (Reuters)

Published

4 years ago

October 21, 2021

admin

Cost cuts and better realizations save? the ?day ?for ?UltraTech Cement, Updated: 27 Jan 2020, Vatsala Kamat from Live Mint

Lower cost of energy and logistics helped Ebitda per tonne rise by about 29% in Q3
Premiumization of acquired brands, synergistic?operations hold promise for future profit growth Topics

UltraTech Cement
India’s largest cement producer UltraTech Cement Ltd turned out a bittersweet show in the December quarter. A sharp drop in fuel costs and higher realizations helped drive profit growth. But the inherent demand weakness was evident in the sales volumes drop during the quarter.

Better realizations during the December quarter, in spite of the 4% year-on-year volume decline, minimized the pain. Net stand-alone revenue fell by 2.6% to ?9,981.8 crore.

But as pointed out earlier, lower costs on most fronts helped profitability. The chart alongside shows the sharp drop in energy costs led by lower petcoke prices, lower fuel consumption and higher use of green power. Logistics costs, too, fell due to lower railway freight charges and synergies from the acquired assets. These savings helped offset the increase in raw material costs.

The upshot: Q3 Ebitda (earnings before interest, tax, depreciation and amortization) of about ?990 per tonne was 29% higher from a year ago. The jump in profit on a per tonne basis was more or less along expected lines, given the increase in realizations. "Besides, the reduction in net debt by about ?2,000 crore is a key positive," said Binod Modi, analyst at Reliance Securities Ltd.

Graphic by Santosh Sharma/Mint
What also impressed analysts is the nimble-footed integration of the recently merged cement assets of Nathdwara and Century, which was a concern on the Street.

Kunal Shah, analyst (institutional equities) at Yes Securities (India) Ltd, said: "The company has proved its ability of asset integration. Century’s cement assets were ramped up to 79% capacity utilization in December, even as they operated Nathdwara generating an Ebitda of ?1,500 per tonne."

Looks like the demand weakness mirrored in weak sales during the quarter was masked by the deft integration and synergies derived from these acquired assets. This drove UltraTech’s stock up by 2.6% to ?4,643 after the Q3 results were declared on Friday.

Brand transition from Century to UltraTech, which is 55% complete, is likely to touch 80% by September 2020. A report by Jefferies India Pvt. Ltd highlights that the Ebitda per tonne for premium brands is about ?5-10 higher per bag than the average (A cement bag weighs 50kg). Of course, with competition increasing in the arena, it remains to be seen how brand premiumization in the cement industry will pan out. UltraTech Cement scores well among peers here.

However, there are road bumps ahead for the cement sector and for UltraTech. Falling gross domestic product growth, fiscal slippages and lower budgetary allocation to infrastructure sector are making industry houses jittery on growth. Although UltraTech’s management is confident that cement demand is looking up, sustainability and pricing power remains a worry for the near term.