Connect with us

Economy & Market

Budget Analysis

Published

on

Shares

Union Budget was presented in the parliament on February 29th, 2016. ICR team has tried to capture the impact of the budget on cement, infrastructure and real estate as viewed by CRISIL Research and various experts in the industry.

CRISIL Budget Analysis
Cement, impact positive
Higher spending on infrastructure to benefit in medium term Positive

Key budget proposals:

  • Investment towards national highways increased by 49 per cent to Rs 1032 billion (budgetary plus internal and extra budgetary resources).
  • Rs 170 billion for irrigation projects under Accelerated Irrigation Benefit Project.
  • Outlay towards urban infrastructure increased 11 per cent to Rs 166 billion.
  • Ready mix concrete manufactured at the site of construction exempted from excise duty.
  • Clean energy cess on coal (domestic and imported) doubled to Rs 400 per tonne.

CRISIL Research?s View:
The government?s focus on infrastructure is evident with the total targeted spending in FY17 increasing 28 per cent over FY16.
This, along with a number of benefits provided on affordable housing, would aid recovery in cement demand. Further, the rise in duties and tariffs in the form of clean cess on coal is expected to have a muted impact on total cost, which is expected to increase 0.2 per cent. Power and fuel cost (~25 per cent of cost of sales) will increase 1 per cent. However, amid rising demand, players will be able to offset this with a hike in prices.

Infrastructure, impact positive
Focus on dispute redressal, tax clarifications to aid investor confidence Positive Key budget proposals:
Budgetary allocation: Total outlay for infrastructure has been increased by 28 per cent to Rs 3.4 trillion (roads, railways and power the biggest beneficiaries). Of this, Rs 1.29 trillion is on account of budgetary support
Roads: Investments for development of national highways is proposed to be hiked 49 per cent on-year to Rs 1032 billion.
This is on the backdrop of spending being 16 per cent lower than FY16 budgeted estimates in the segment
Railways: Total outlay raised by 24 per cent to Rs 1,210 billion. In Railway Budget FY17, there have been numerous announcements for improvement of port connectivity and three new dedicated freight corridors
Airports & ports: No new projects announced barring Rs 8 billion earmarked for greenfield ports and national waterways. Overall, outlay for civil aviation has been reduced by 30 per cent to Rs 44 billion, mainly in line with reduced equity support to Air India
Funding availability: The government has provided flexibility for select state entities to raise capital up to Rs 313 billion by way of bonds across infra segments
Other measures: Dividend distribution tax waiver to be applicable on income distributed from SPVs to INVIT holding entity. Furthermore, a mechanism to renegotiate of contracts and a public utility bill will be introduced to streamline resolution of disputes in infrastructure related construction contracts

CRISIL?s View
The Budget reiterated focus on roads and railways with almost 76 per cent of the incremental government spending (budgetary allocation plus inter and extra budgetary resources) focused on these two segments. Also, the increase in budgetary allocations of Rs 250 billion towards various infra segments were muted compared with Rs 1090 billion in the last Budget.

This clearly reinforces a shift in funding dependence from government outlays to cash flows of government entities and their borrowing capability to drive public investments in the sector.Of the Rs 250 billion incremental budgetary support, almost Rs 130 billion is directed towards railways, followed by Rs 40 billion towards power, Rs 30 billion for urban development and Rs 25 billion, for roads, respectively. Given the targets relating to electrification of villages, the Budget provides a thrust on investments in the distribution segment of power with a 84 per cent on-year increase in planned expenditure for key schemes.

For EXIM-focused sectors such as airports and ports, focus on single window customs clearance, backed by process simplification, is targeted towards de bottlenecking of capacity amid lower budgetary allocations.

The Budget continued to build up investor confidence for investing in infrastructure segments by providing clarity on dividend distribution tax for entities like INVITs and giving confirmation on contract renegotiation and introduction of the public disputes utility bill. This comes at a time when private sector interest in infrastructure development is low and the balance sheets of many developers in the sector remain stretched.

We believe the rise in overall government spends will boost execution of national highway projects to about 5,200 km annually in 2016-17 and create a robust construction opportunity for road and railway engineering procurement & construction companies.

While the Budget provisions are positive, it will continue to put to test the execution capability of implementing agencies such as the National Highways Authority of India and Indian Railways. This comes on the backdrop of overall spending in national highways being 16 per cent lower in FY16 as compared with the allocations. Addressing on-ground issues such as clearances and land acquisition becomes extremely critical to ensure a sharp increase in project execution.

Real Estate:
Affordable housing gets a shot in the arm; commercial realtors also benefit Positive

Key budget proposals:

  • Measures on affordable housing projects

  • Interest deduction limit under Sec 80EE increased from Rs 1 lakh to Rs 1.5 lakh for first-time home buyers (applicable only on loans not exceeding Rs 35 lakh for houses costing below Rs 50 lakh and sanctioned during April 1, 2016, to March 31, 2017) for the entire loan duration

  • Under the Pradhan Mantri Awas Yojana, 100 per cent deduction on profits from housing projects approved between June 2016 and March 2019, and completed in three years of getting approval and satisfying the following conditions, refer to Table 1

  • Service tax exemption on construction of affordable houses up to 60 square meters (646 sq ft) under any central or state government scheme, including public-private partnerships (PPPs)

  • Phasing out of deductions allowed on capital expenditure (other than land, goodwill and financial assets) under Sec 35AD from 150 per cent to 100 per cent w.e.f. April 1, 2017, for affordable housing projects

  • Exemption of dividend distribution tax (DDT) on distribution made by special purpose vehicles (SPVs) to real estate investment trusts (REITs)

  • Revival of national land record digitisation scheme with a funding of Rs 1.5 billion

  • 0.5 per cent Krishi Kalyan Cess on all taxable services

CRISIL Research?s View
Boost to affordable housing – especially tier II and tier III cities

Affordable housing segment has received a shot in the arm with the abovementioned measures and will see increased demand and PPPs in the medium term.

Increase in interest deduction for first-time home buyers will boost demand for homes priced in that bracket. Currently, nearly 40 per cent of the upcoming supply in the 10 major cities tracked by CRISIL Research is priced under Rs 50 lakh. The proportion of upcoming supply in this price bracket in tier II and tier III cities is expected to be even higher.
Refer to Graph 1

Table-1

(sq mt) 4 Metros Other cities
Maximum size of house 30 60
Minimum size of land parcel 1,000 2,000
Other,Within 25 km of municipal limit

However, the phasing out of deductions on capital expenditure will be a dampener to some extent.
Removal of DDT for SPVs distributing income to REITs is a positive for developers with significant exposure to rental-yielding real estate assets.
Digitisation of land records will aid transparency in the real estate sector and help tap foreign capital inflows in the medium to long term.
Krishi Kalyan Cess, applicable for under-construction projects, will hurt the industry marginally.
However, minimum alternate tax will apply.
Union Budget 2016-17 brings hopes of revival for the cement industry

?Rs 97,000 crore of outlay that has been kept for roads and infra by the finance minister is very promising and the industry will get a lot of benefits from this particular allocation of funds,? said Amandeep Gupta, joint CEO of OCL Cement, the flag ship company of Dalmia Group.

Middle and low income groups are benefitted by providing exemption on service tax on construction of affordable home and increase in tax exemption on home loan, a boost to first time home buyers. That makes housing more affordable. Infrastructure being part of the key pillars of the budget is something to look forward to in the long run. With 85% road projects coming back on track.

The industry has also acknowledged that the finance minister?s approach for this budget has been very targeted. ?He has laid a structure for an inclusive growth rather than distributing subsidies,? said Gupta.

The cement sector for quite some time had been asking for the removal of excise duty on ready-made cement, which was 12.5 per cent. The industry among its recommendations to the government has also been asking for the initiatives to lower the tax burden on the industry. In its annual report 2014-15, CMA acknowledged that cement is highly taxed at 60 per cent of ex-factory price, which is even more than the taxes levied on the luxury items.

?Exemption of excise duty on RMC is one of the encouraging moves taken by the finance minister. This step is another value addition in making the budget positive for the cement sector,? said MS Mani, senior director, Deloitte.

Source: ECONOMIC TIMES

Doubled Coal Cess to increase power tariff by 15 paisa/unit
The effort of the NDA government to give enhanced push to clean energy and environment conservation would lead to spiking of power price. The government for the third time in a row increased the cess on coal, lignite and pite production to Rs 400 per tonne to fund clean energy projects.

As the increase in price of coal comes under ?change of law? regulation of the Electricity Act and Tariff Policy, any change in price would be reflected in the final power tariff. As per industry calculations, this would amount to a change of 12-15 paisa per unit in the final power tariff.

Indian power industry consumes close to 500 million tonne of coal annually and with doubling of cess, close to 800 billion units of electricity will witness the impact of increased price of coal.

During the current fiscal, the coal cess collected was around Rs 12,000 crore taking the total to Rs 50,000 crore.

In the last Union Budget, cess on coal was doubled to Rs 200 per tonne. In his maiden budget in July 2014, Arun Jaitley increased it to Rs 100 per tonne from Rs 50 per tonne. The cess is collected as National Clean Energy Fund and is disbursed for renewable energy based initiatives and power projects.

But with the change in name to Clean Environment Fund, it is expected that the fund would be used for environment conservation drives of the government as well.

The heavy weight projects depending on NCEF for their funding are Rs 40,000 crore Green Energy Corridor project and to be launched National Wind Energy Mission, which will entail a total expenditure of Rs 18,000 crore.

Source: BUSINESS STANDARD

Steel, cement to cost more
Shailendra Chouksey, President, Cement Manufacturers? Association, and whole-time director, JK Lakshmi Cement, said cement prices would rise by? 3-4 a bag just on account of the clean environment cess.

?The total tax incidence on cement is over 60 per cent of the ex-factory realisation. The Krishi Kalyan Cess at 0.5 per cent on all taxable services from June 1 will push up production costs further,? he added.

Ready-mix woes
Ready-mix concrete (RMC) players believed that their long-pending demand of exemption of excise duty on RMC plants has finally been addressed but it is applicable only to dedicated RMC plants on site, the percentage of which is almost negligible, said Chouksey.

Ajay Kapur, Managing Director, Ambuja Cements, said while profitability of the cement industry would be impacted by the increase in cess, the excise on HDPE (high-density polyethylene) packaging bags (for 12.5 per cent to 15 per cent) and decrease in sale commission (from 10 per cent to 5 per cent) would add to the industry?s woes.

Source: THE HINDU BUSINESS LINE

Mahendra Singhi, Group CEO-Dalmia Cement in conversation with ICR
The focus of the budget has been on rural India and finance minister has thought ?how to boost up the economy?? Larger attention has been paid to the farm sector. FM?s efforts will have multiplying effect on the economy.

The second important aspect of the budget is allocation for infrastructure. Never before such allocation was done. There are many projects which have been held up and some remedial measures are required to be taken to rescue these projects. Funds have been made available for not just highways but also for ?Pradhan Mantri Gram Sadak Yojana? which is mainly for rural India. The allocation for MNREGA is another positive feature of rural focus.

We were expecting industry status will be given to infrastructure but that did not happen. Irrigation has been provided separate funding which is a long term investment and it is certainly a welcome feature of the budget.

The enhancement of carbon cess to Rs. 400 will have some impact but it is a movement in the direction of Green Energy. It will support generation of Solar and Wind power.

While giving concessions, the budget takes into account affordable housing, rental housing and first time home buyers.The taxation on provident fund withdrawn is some how difficult to digest. It is slightly going against the principles of saving habits.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Concrete

Green Construction Through Cement Innovation

Published

on

By

Shares

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

Participate in Cement Expo 2026 and discover how next-gen infrastructure can be built with innovations in cement.

Continue Reading

Concrete

Indian Railways Plans Green Fly Ash Transport Network

Published

on

By

Shares

Specialised rail logistics will move fly ash from power plants to infrastructure industries.

New Delhi

Indian Railways is planning a large-scale green logistics initiative to transport fly ash from thermal power plants to industries where it can be reused in infrastructure and construction activities.

The initiative was discussed during a review meeting chaired by Union Minister for Railways Ashwini Vaishnaw. Union Ministers of State for Railways V Somanna and Ravneet Singh Bittu were also present.

India generates nearly 340 million tonnes of fly ash every year from thermal power plants. The proposed initiative aims to create an efficient rail-based transport system using specialised containers and dedicated logistics arrangements to move fly ash safely from power plants to end-use industries.

Fly ash is widely used in road construction, cement manufacturing, brick production, concrete, blocks and boards. By improving its movement through the railway network, the initiative is expected to support better utilisation of this industrial by-product while reducing environmental concerns linked to storage and disposal.

The move also aligns with India’s circular economy goals by converting waste from thermal power generation into a useful raw material for the construction and infrastructure sectors. Wider availability of fly ash can help reduce material costs in areas such as bricks and cement, supporting more affordable infrastructure and housing development.

Through this initiative, Indian Railways aims to provide a cleaner, safer and more organised transport solution for fly ash, turning an environmental challenge into an infrastructure resource.

Continue Reading

Concrete

Powering Cement Through Intelligent Motion

Published

on

By

Shares

Gears, drives, and motors have evolved from essential mechanical components into strategic enablers of reliability, efficiency, and sustainability in modern cement plants. ICR explores how advanced motion technologies, predictive maintenance, digitalisation, and intelligent drive systems are helping cement manufacturers reduce downtime, optimise energy use, and build future-ready operations.

As the Indian cement industry prepares for another phase of capacity expansion, the focus is shifting from merely increasing production volumes to improving operational efficiency, reliability, and sustainability. According to industry estimates, India is expected to add nearly 160–170 million tonnes of cement capacity between FY26 and FY28, driven by infrastructure investments, urbanisation, and housing demand. In this environment, gears, drives, and motors have emerged as critical enablers of productivity, forming the backbone of every major process from raw material extraction and grinding to clinker production and cement dispatch.
Motors alone account for nearly 60 per cent to 70 per cent of industrial electricity consumption globally, according to the International Energy Agency (IEA), while rotating equipment failures remain among the leading causes of unplanned downtime across heavy industries. In cement plants, where equipment operates under high loads, extreme dust conditions, elevated temperatures, and continuous-duty cycles, the performance of gears, drives, and motors directly influences energy consumption, maintenance costs, plant availability, and overall profitability. As digitalisation and Industry
4.0 technologies gain momentum, these systems are evolving from passive mechanical components into intelligent assets capable of delivering real-time operational insights.

Why gears, drives, and motors are the backbone of cement plant operations
Every major process in a cement plant depends on the seamless operation of gears, drives, and motors. Raw mills, vertical roller mills, crushers, kiln drives, conveyor systems, fans, and clinker coolers all rely on rotating equipment to maintain continuous production. A failure in any one of these systems can disrupt entire process chains, highlighting their strategic importance.
Modern cement plants process thousands of tonnes of material daily, requiring equipment capable of transmitting enormous torque while maintaining precision and reliability. Kiln drives and grinding systems, in particular, operate under some of the highest mechanical loads found in industrial manufacturing. The ability of gears and motors to withstand these conditions directly impacts plant throughput and production stability.
Satish Maheshwari, Chief Manufacturing Officer, Shree Cement says, “Effective lubrication management remains one of the most critical factors in extending the lifespan of cement plant drive systems. Proper lubrication, supported by regular oil analysis, vibration diagnostics, and condition monitoring, helps minimise wear, prevent unexpected failures, and maintain the integrity of critical components such as gearboxes, motors, and drive assemblies. By identifying potential issues at an early stage, plants can move from reactive maintenance to a more proactive and reliability-focused approach.”
“Smart motors, intelligent drives, and next-generation gearboxes are set to redefine cement plant maintenance and performance. Equipped with embedded sensors, IoT connectivity, digital twins, and AI-driven diagnostics, these technologies enable real-time condition monitoring, predictive maintenance, and seamless digital integration. As the industry embraces Industry 4.0, smart drive systems will play a pivotal role in improving energy efficiency, reducing downtime, and optimising asset performance across the cement manufacturing value chain” he adds.
Industry studies suggest that rotating equipment accounts for a significant proportion of maintenance expenditure in process industries. Effective design, selection, and maintenance of gears, drives, and motors therefore have a direct influence on asset utilisation, operational efficiency, and total cost of ownership.

The cost of downtime: reliability challenges in rotating equipment
Unplanned downtime remains one of the most expensive challenges facing cement manufacturers. Industry estimates indicate that a major failure involving a critical gearbox, kiln drive, or grinding mill can result in production losses running into lakhs of rupees per hour, depending on plant capacity and operating conditions.
Sanjeev Arora, President – Motion Business & IEC LV Motors Division, ABB India says, “One of the most significant shifts taking place in industrial decision-making today is moving away from evaluating equipment based solely on upfront capital cost toward understanding total cost of ownership (TCO). In a typical motor system, the purchase price often represents only a small fraction of the total lifecycle cost however energy consumption, maintenance requirements, downtime and operating efficiency account for the vast majority of long-term operational expenses. For cement manufacturers operating in highly competitive markets, this distinction is critical.”
“A high efficiency motor paired with an appropriately configured variable speed drive may require a higher initial investment, but the long-term benefits are substantial. Reduced electricity consumption, lower maintenance needs, longer service intervals and improved process stability can deliver faster payback and stronger profitability over time” he adds.
Cement plants present a particularly challenging environment for rotating equipment. Dust ingress, thermal fluctuations, shock loads, vibration, shaft misalignment, and lubrication contamination contribute significantly to equipment degradation. Studies by SKF indicate that nearly 50 per cent of bearing failures are linked to lubrication issues and contamination, while improper alignment and vibration-related problems remain leading causes of gearbox and motor failures.

Energy-efficient motors and drives: unlocking operational savings
Energy is one of the largest operating expenses for cement manufacturers, often accounting for 25 per cent to 35 per cent of total production costs. Grinding operations alone can consume nearly 60 per cent to 70 per cent of a plant’s electrical energy, making energy-efficient motors and drives a strategic investment.
According to the International Energy Agency, high-efficiency motors combined with Variable Frequency Drives (VFDs) can reduce energy consumption by 20 per cent to 30 per cent in suitable applications. By matching motor speed and torque to actual process requirements, VFDs minimise unnecessary power consumption while reducing mechanical stress on equipment, improving both efficiency and reliability.

Advances in gearbox design and power transmission technologies
Modern gearbox technology has evolved significantly in response to the increasing demands of cement manufacturing. Advanced materials, case-hardened gears, optimised tooth profiles, improved surface finishing, and enhanced lubrication systems are helping reduce friction, wear, and thermal loading.
Girish Hanchate, Director – Industrial Market, India SKF India (Industrial) says, “Smart diagnostics are significantly improving the lifecycle of gears, motors, and other rotating equipment by enabling a shift from reactive maintenance to condition-based asset management. Hidden issues such as vibration anomalies, bearing defects, misalignment, and temperature fluctuations can quietly reduce plant throughput by 10 per cent to 20 per cent while increasing energy consumption long before a breakdown occurs. By leveraging advanced sensors, predictive analytics, machine learning, and real-time monitoring of vibration, temperature, and motor current, cement manufacturers can detect developing faults early, optimise maintenance schedules, and prevent costly secondary damage. This not only improves reliability but also supports energy efficiency and sustainability objectives.”
“The next major evolution in drive and bearing technology lies in the development of fully integrated smart mechanical ecosystems that combine high-performance bearings, advanced lubrication management, and digital intelligence. Sensor-enabled condition monitoring embedded directly within bearings and drive systems allows operators to capture critical operational data at the source, enabling predictive maintenance and real-time performance optimisation. Innovations such as SKF’s VA9A1 Spherical Roller Bearing series, engineered specifically for demanding cement applications such as crushers and kilns, demonstrate this trend. By increasing internal bearing space and optimising lubricant flow, these designs improve grease retention, reduce wear, minimise downtime, and create more resilient, energy-efficient rotating equipment systems for the future of cement manufacturing” he adds.
Manufacturers are increasingly focusing on compact, high-torque gearbox designs capable of delivering higher power density while maintaining service life. Innovations such as condition-monitored gear systems, improved sealing technologies, and modular gearbox architectures are simplifying maintenance while enhancing operational reliability.

Predictive maintenance, condition monitoring, and asset health management
The shift from reactive to predictive maintenance is transforming asset management across the cement industry. Technologies such as vibration monitoring, thermography, oil analysis, ultrasound testing, and motor current signature analysis are enabling operators to identify potential failures before they occur.
Research by Deloitte suggests that predictive maintenance can reduce breakdowns by up to 70 per cent and lower maintenance costs by 25 per cent. In cement plants, where shutdown windows are limited and equipment operates continuously, predictive maintenance offers a powerful tool for improving reliability and extending asset life.
Digitalisation, industry 4.0, and the rise of intelligent drive systems
Industry 4.0 technologies are redefining the role of gears, drives, and motors. Smart sensors embedded within motors, bearings, and gear systems can continuously monitor temperature, vibration, load, lubrication condition, and energy consumption.
Girish Hanchate says, “As the industry embraces automation, sustainability, and digital transformation, the importance of intelligent motion technologies will continue to grow. The convergence of advanced engineering, predictive maintenance, and Industry 4.0 solutions is creating a new generation of cement plants where reliability, efficiency, and sustainability work together to deliver long-term value. For cement manufacturers navigating increasing production demands and environmental expectations, investing in smarter gears, drives, and motors is no longer optional—it is a business imperative.”
Cloud-based monitoring platforms and Industrial Internet of Things (IIoT) architectures enable maintenance teams to access equipment health data remotely, improving visibility across geographically dispersed operations. Advanced analytics and
artificial intelligence are further enhancing fault detection capabilities, enabling more accurate maintenance planning.
The emergence of digital twins represents another significant development. By creating virtual replicas of physical assets, operators can simulate operating conditions, predict failures, optimise maintenance schedules, and improve lifecycle management decisions. These technologies are helping transform rotating equipment into intelligent assets that actively contribute to operational decision-making.

Building future-ready cement plants through smart motion technologies
The future of cement manufacturing will depend heavily on the ability to integrate mechanical reliability with digital intelligence. Smart motion technologies combine high-efficiency motors,
intelligent drives, condition monitoring systems, and automation platforms to create more responsive and efficient operations.
Sustainability goals are also accelerating investment in advanced motion technologies. Reduced energy consumption, improved equipment efficiency, and extended asset life contribute directly to lower carbon emissions and reduced resource consumption.
These benefits align closely with the industry’s decarbonisation objectives.
As capacity expansions continue across India, future-ready cement plants will increasingly prioritise reliability, flexibility, and data-driven decision-making. Organisations that successfully integrate smart motion technologies into their operations will be better positioned to reduce costs, improve productivity, and maintain a competitive advantage in a rapidly evolving market.

Conclusion
Gears, drives, and motors are no longer viewed solely as mechanical components; they have become strategic assets that influence every aspect of cement plant performance. Their reliability affects production continuity, their efficiency impacts operating costs, and their digital capabilities increasingly shape maintenance and operational strategies.

  • Kanika Mathur

Continue Reading

Video Thumbnail

    SIGN-UP FOR OUR GENERAL NEWSLETTER


    Trending News

    SUBSCRIBE TO THE NEWSLETTER

     

    Don't miss out on valuable insights and opportunities to connect with like minded professionals.

     


      This will close in 0 seconds