Economy & Market

Demonetisation impacts cement industry

Published

10 years ago

November 30, 2016

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With majority of cement bags sold at the retail level in cash, new purchases would be hit, analysts say.
Cement sector may witness 15-20 per cent drop in demand after the currency demonetisation and subdued 3 per cent growth in the fourth quarter of this fiscal, a Deutsche Bank Markets Research report said. According to the report, up turn is expected only in FY20 as compared to FY19 earlier. ?We see some infra sector demand offsetting weakness in demand from the housing segment. We may also see a gradual reduction in mortgage rates, which could bring back some genuine demand,? said Chockalingam Narayanan, Research Analyst. He added, ?Looking at the demand-supply model, we expect the regional balance to first shift in favour in Northern and Central India. Eastern India is likely to see the largest reduction in utilisation over the next 12-18 months? The cement sector is hopeful that infrastructure projects to offset weakness in realty sector. With the government?s balance sheet likely to be in a much better fiscal position, the industry expects a sharp pick-up in infra demand – in line with the government?s vision to push public spending. Currently, only road and railway sector spending is primarily driven by Central Government agencies. State government finances, on the other hand, may come under some pressure, as a good 5-10 per cent of their revenue receipts come from the property sector. To that extent, their infrastructure sector spend on rural roads, urban development projects (metro/mono rail), affordable housing, irrigation, etc may see a dent. ?This is likely to be mitigated if the Central Government passes on a higher proportion of its improved finances to the states,? the report said. The sector was expecting 55-65 per cent of demand from housing (35-40 per cent rural and 20-25 per cent urban); 17-20 per cent from infra and 25 per cent from institutions and commercial realty. In urban housing, the already subdued levels over the last 3-4 years may be prolonged, but may not necessarily deteriorate, the report said. Commenting on cement prices, Narayanan said,?Following demand volatility, we anticipate a correction in cement prices in the near term. Looking at our cost curve analysis, however, we don?t expect a very sharp drop in cement prices on a sustained basis. Currently, a good 30 per cent of players are not breaking even on a cash cost basis. If this were to take into account, the recent spike in fuel costs of both pet coke and imported coal, at current prices over 43 per cent of the industry would not be at break even. To that extent the room for prices to correct on a sustained basis looks low, he said.

Speaking on demonetisation, Sanjay Ladiwala, Chairman, Cement Stockists & Dealers Association of Bombay, commented, ?November will see a drop of 10 per cent in sales volume. It may continue in December too in case the current cash withdrawal limits don?t change.? Real estate sector will witness pain due to demonetisation for a longer time than other sectors, said Ladiwala adding that correction in land prices too are expected. However, infrastructure segment is unlikely to be affected, he said. For the cement sector, he said although the sales may not grow at the rate of 5-5.5 per cent as envisaged earlier, it will definitely be higher than last year. However, the demand will be lower till the end of next year, he added.

N. Srinivasan, Vice-Chairman and Managing Director, The India Cements Ltd, commenting on demonetisation, said, ?So far, in the last 15 days, we have not seen fall in sales. It is business as usual for our company. Recently, I went to some markets in Chennai. I met dealers and stockists. As it is their bread and butter business, they are somehow managing the situation. They are also said to be using cheques apart from swipe machines for card payments,? he pointed out. Asserting that cement consumption won?t go away, he said that cement demand would not be abandoned.?It will get slightly postponed by a few months. Once the liquidity is restored in the system and more new currency notes come into circulation, it will ease the situation in the market and help the trade do business without any hardship,? he said.

Real estate is generally seen as an industry where cash works and cement as an ingredient in construction is not insulated. With majority of cement bags sold at the retail level in cash, new purchases would be hit, analysts said.

?Cement is an organised sector and there is no problem between suppliers and wholesalers. The problem is at the retail level where customers deal in cash,? said HM Bangur, Chairman and Managing Director, Shree Cement. According to him, unorganised parts of the construction industry like bricks and sand would be under pressure due to demonetisation.

(Courtesy: The Hindu, Moneycontrol.com)

Concrete

Cement Makers Reaffirm Commitment to Sustainable Growth

Published

1 week ago

June 5, 2026

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World Environment Day spotlight on innovation and circularity

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

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

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

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

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

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

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

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

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

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

Concrete

Building a Greener Future Together

Published

1 week ago

June 4, 2026

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

Author: Jignesh Kundaria, Director and CEO, Fornnax Technology

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

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

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

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

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

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

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

Concrete

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

Published

3 weeks ago

May 25, 2026

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

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

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

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

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

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

Expanding market reach

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

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

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