Economy & Market

Logistics, a crucial business link

Published

9 years ago

December 30, 2016

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Of late, logistics is being looked upon in a different light. Better technology is being used for truck movement, and greater attention is being paid towards ease of working for drivers.

The distribution of cement to the end user from the manufacturer is a major cost factor in the landed cost of cement at the user?s end. Approximately 30-35 per cent of the cost of cement can be attributed to the cost of distribution, which begins at the gates of the cement facility. Currently, for every 50-kg bag of cement, the logistics cost comes to around Rs 19-25 by road and Rs 14-17 by the Railways, depending on the distance involved.

For example, the country?s third-largest cement maker, Ambuja Cements, opted for sea-routes to transport its cement from Gujarat to its southern market. Today, 70 per cent of the cement movement worldwide is by sea compared to just 3-4 per cent in India. However, the scenario is changing, with most of the big players like Ambuja, UltraTech, Sanghi and ABG Cement having set up their bulk terminals.

The most inexpensive method of moving cement is in bulk by water, but the optimum solution is always a combination of methods. In today?s technologically advanced world, it is possible to use the power of information technology to arrive at such optimum solutions using mathematical modelling and algorithms. About 3 per cent of the gross revenue is spent on inward logistics while outward logistics accounts for another portion of 15 per cent.

Inward logistics includes coal and limestone transportation, while outward logistics is mostly the final product, cement. Some companies also incur outbound logistics cost of transporting clinker to their grinding plants. For plants that are closer to the collieries, the inbound transportation costs are less. For plants located far away from the collieries they have the option to import coal.

In case of final product, the costs of handling and secondary movement are very high. Although transportation by sea is the cheapest option, unless there is right connectivity from the port to the consuming centre, the gains are minimal. In the past, the freight cost could be optimised on imported coal but the case no more exists since import of coal is a matter of the past. The costs of handling and secondary movement are very high in cement transport. Although transportation by sea is the cheapest option, unless there is right connectivity from the port to the consuming centre, the gains are minimal. In case of final product, companies which have plants located closer to the markets as well as to the source of raw materials have an advantage over their peers, as this leads to lower freight costs. Also, plants located in coastal belts find it much cheaper to transport cement by the sea route in order to cater to the coastal markets such as Mumbai and the states of Gujarat and Tamil Nadu.

GST and Logistics cost
The new GST regime will drive efficiency in logistics, and yield tax savings. Complex and cascading indirect taxes have been one of the key reasons impacting the competitiveness of Indian manufacturers over the years. Alongside operational efficiency, tax avoidance has influenced the supply chain decisions of corporates, resulting in small and inefficient warehouses and high logistics costs. Once the GST is introduced, ?tax avoidance? will no longer influence decisions concerning distribution network and total warehouse space can be reduced partially.

As far as tax savings are concerned, elimination of the cascading effect of taxes will be taken more seriously. There will be phasing out of the 2 per cent CST for companies who move goods across state borders for sale. There will be optimisation of warehouses and consolidation of inventories for companies which historically choose to set up multiple warehouses across states so as to avoid paying CST. Elimination of check posts offers additional cost savings – while most states have replaced octroi with a local body tax (LBT), it has still not reduced the waiting time for vehicles. Similarly, at check posts on state borders, different requirements for documentation and tax payment lead to considerable delays.

While GST will subsume taxes such as octroi and LBT, a parallel dismantling of check posts too will ensure faster transit of goods, and in turn, reduce companies? need to maintain buffer inventories.

Dismantling of check posts will boost logistical gains. Estimates suggest that a quarter of the journey time is typically spent at check posts, state borders, city entrances, and other regulatory stoppages. This adds to the cost of transporting goods and forces companies to maintain buffer inventories. Dismantling of check posts is critical to maximise benefits from the GST rollout. Such a move will structurally benefit firms, especially those which have a large, pan-India distribution network.

To ensure faster transit of goods through check posts, implementing e-permit/e-tolling systems could be one alternative. Such systems work on radio-frequency identification technology, where the tax status of goods being transported is automatically scanned as the vehicle passes through the check post. Pilot studies are already being conducted in states like Haryana and Gujarat. The relevance of automation is also highlighted by some stark statistics. While vehicles at one of India?s major check posts (Walayar, Kerala) spend at least 6-8 hours in transit (going up to a full day if traffic is heavy), Karnataka provides a breather by allowing vehicles to be moved in less than an hour by opting for online declaration of goods and electronic scanning of vehicles.

Broadly, CRISIL Research believes that eliminating check post delays will cut transportation costs by 10-15 per cent and trim inventory carrying costs, owing to more certainty in transit times. This will result in additional savings of 0.4-0.8 per cent of net sales for players across sectors. This, including the direct cost savings, will take the overall logistics costs savings to up to1.5-2 per cent of sales for companies. However, the proposed additional tax of 1 per cent by states on supply of goods in lieu of CST for 2 years could delay dismantling of check-posts.

Sales of high-tonnage, high-performance trucks will get a fillip. Realigning supply chains and dismantling of checkposts is expected to take at least two-three years after GST is implemented. This will drive demand for larger, more efficient trucks such as multi-axle vehicles and tractor-trailers as loads consolidate on primary routes. These vehicles will carry heavier cargo per trip and reduce overall shipment costs for companies on primary routes. Accordingly, we envisage a faster shift to 31-tonne MAVs from 25-tonne MAVs and to 40-tonne trailers from 35-tonne trailers.

We also expect players to shift from traditional, low-cost trucks to slightly mid-premium trucks (higher-powered trucks with better cabin comfort that cost at least 15 per cent higher but aid in faster turnaround times). While most commercial vehicle manufacturers began launching mid-premium and premium trucks four-five years ago (like Tata?s Prima series, Mahindra?s trucks, Eicher?s Pro range, etc.), these models failed to gain significant market share (they still comprise just 5-7 per cent of total revenues in the MHCV segment) as faster transportation was required to make these models a viable option. Consolidation of truck loads and dismantling of check posts can aid seamless transport and drive demand for such trucks.

Economy & Market

TSR Will Define Which Cement Companies Win India’s Net-Zero Race

Published

3 days ago

April 27, 2026

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Jignesh Kundaria, Director and CEO, Fornnax Technology

India is simultaneously grappling with two crises: a mounting waste emergency and an urgent need to decarbonise its most carbon-intensive industries. The cement sector, the second-largest in the world and the backbone of the nation’s infrastructure ambitions, sits at the centre of both. It consumes enormous quantities of fossil fuel, and it has the technical capacity to consume something else entirely: the waste our cities cannot get rid of.

According to CPCB and NITI Aayog projections, India generates approximately 62.4 million tonnes of municipal solid waste annually, with that figure expected to reach 165 million tonnes by 2030. Much of this waste is energy-rich and non-recyclable. At the same time, cement kilns operate at material temperatures of approximately 1,450 degrees Celsius, with gas temperatures reaching 2,000 degrees. This high-temperature environment is ideal for co-processing, ensuring the complete thermal destruction of organic compounds without generating toxic residues. The physics are in our favour. The infrastructure is not.

Pre-processing is not the support act for co-processing. It is the main event. Get the particle size wrong, get the moisture wrong, get the calorific value wrong and your kiln thermal stability will suffer the consequences.

The Regulatory Push Is Real

The Solid Waste Management (SWM) Rules 2026 mandate that cement plants progressively replace solid fossil fuels with Refuse-Derived Fuel (RDF), starting at a 5 per cent baseline and scaling to 15 per cent within six years. NITI Aayog’s 2026 Roadmap for Cement Sector Decarbonisation targets 20 to 25 per cent Thermal Substitution Rate (TSR) by 2030. Beyond compliance, every tonne of coal replaced by RDF generates measurable carbon reductions which is monetisable under India’s emerging Carbon Credit Trading Scheme (CCTS). TSR is no longer a sustainability metric. It is a financial lever.

Yet our own field assessments across multiple Indian cement plants reveal a sobering reality: the primary barrier to scaling AFR adoption is not waste availability. It is the fragmented and under-engineered pre-processing ecosystem that sits between the waste and the kiln.

Why Indian Waste Is a Different Engineering Problem

Indian municipal solid waste is not the material that imported shredding equipment was designed for. Our waste streams frequently exceed 40 per cent to 50 per cent moisture content, particularly during monsoon cycles, saturated with abrasive inerts including sand, glass, and stone. Plants relying on imported OEM equipment face months of downtime awaiting proprietary spare parts. Machines built for segregated, low-moisture waste fail quickly and disrupt the entire pre-processing operation in Indian conditions.

The two most common failures we observe are what I call the biting teeth problem and the chewing teeth problem. Plants relying solely on a primary shredder reduce bulk waste to large fractions, but the output remains too coarse for stable kiln combustion. Others attempt to use a secondary shredder as a standalone unit without a primary stage to pre-size the feed, leading to catastrophic mechanical failure. When both stages are present but mismatched in throughput capacity, the system becomes a bottleneck. Achieving the 40 to 70 tonnes per hour required for meaningful coal displacement demands a precisely coordinated two-stage process.

Engineering a Made-in-India Answer

At Fornnax, our response to these challenges is grounded in one principle: Indian waste demands Indian engineering. Our systems are built around feedstock homogeneity, the holy grail of kiln stability. Consistent particle size and predictable calorific value are the foundation of stable kiln combustion. Without them, no TSR target is achievable at scale.

Our SR-MAX2500 Dual Shaft Primary Shredder (Hydraulic Drive) processes raw, baled, or loosely mixed MSW, C&I waste, bulky waste, and plastics, reducing them to approximately 150 mm fractions at throughputs of up to 40 tonnes per hour. The R-MAX 3300 Single Shaft Secondary Shredder (Hydraulic Drive), introduced in 2025, takes that primary output and produces RDF fractions in the 30 to 80 mm range at up to 30 tonnes per hour, specifically optimised for consistent kiln feeding. We have also introduced electric drive configurations under the SR-100 HD series, with capacities between 5 and 40 tonnes per hour, already operational at a leading Indian waste-processing facility.

Looking ahead, Fornnax is expanding its portfolio with the upcoming SR-MAX3600 Hydraulic Drive primary shredder at up to 70 tonnes per hour and the R-MAX2100 Hydraulic drive secondary shredder at up to 20 tonnes per hour, designed specifically for the large-scale throughput that higher TSR ambitions require.

The Investment Case Is Now

The 2070 Net-Zero target is not a distant goal for India’s cement sector. It starts today, with decisions being made on the plant floor.

The SWM Rules 2026 are already in effect, requiring cement plants to replace coal with RDF. Carbon credit markets are opening up, and coal prices are not going to get cheaper. Every tonne of coal a cement plant replaces with waste-derived fuel saves money on one side and generates carbon credit revenue on the other. Pre-processing infrastructure is no longer just a compliance requirement. It is a business investment with a measurable return.

The good news is that nothing is missing. The technology works. The waste is available in every Indian city. The government has provided the policy direction. The only thing standing between where the industry is today and where it needs to be is the commitment to build the right infrastructure.

The cement companies that move now will not just meet the regulations. They will be ahead of every competitor that waits.

About The Author

Jignesh Kundaria is the Director and CEO of Fornnax Technology. Over an experience spanning more than two decades in the recycling industry, he has established himself as one of India’s foremost voices on waste-to-fuel technology and alternative fuel infrastructure.

Concrete

WCA Welcomes SiloConnect as associate corporate member

Published

2 weeks ago

April 13, 2026

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The World Cement Association (WCA) has announced SiloConnect as its newest associate corporate member, expanding its network of technology providers supporting digitalisation in the cement industry. SiloConnect offers smart sensor technology that provides real-time visibility of cement inventory levels at customer silos, enabling producers to monitor stock remotely and plan deliveries more efficiently. The solution helps companies move from reactive to proactive logistics, improving delivery planning, operational efficiency and safety by reducing manual inspections. The technology is already used by major cement producers such as Holcim, Cemex and Heidelberg Materials and is deployed across more than 30 countries worldwide.

Concrete

TotalEnergies and Holcim Launch Floating Solar Plant in Belgium

Published

2 weeks ago

April 13, 2026

admin

TotalEnergies and Holcim have commissioned a floating solar power plant in Obourg, Belgium, built on a rehabilitated former chalk quarry that has been converted into a lake. The project has a generation capacity of 31 MW and produces around 30 GWh of renewable electricity annually, which will be used to power Holcim’s nearby industrial operations. The project is currently the largest floating solar installation in Europe dedicated entirely to industrial self-consumption. To ensure minimal impact on the surrounding landscape, more than 700 metres of horizontal directional drilling were used to connect the solar installation to the electrical substation. The project reflects ongoing collaboration between the two companies to support industrial decarbonisation through renewable energy solutions and innovative infrastructure development.