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The Indian cement industry needs to explore more avenues for tapping alternate fuels, say RA Krishnakumar, Executive Director and R Rajamohan, Senior General Manager (IE, Environment and PH), Dalmia Cement (Bharat) Ltd.
The Indian cement industry is the second largest in the world with a total installed capacity of 390 million tonnes per annum (MTPA) with a forecast to reach 600 MTPA by 2025, in tandem with increases in the country’s aggregate energy demand. Though the Indian cement industry has achieved excellence in energy efficiency, Alternative Fuel and Raw Material (AFR) usage still remains a concern. The current Thermal Substitution Rate (TSR) in the Indian cement industry is less than 3 per cent, as compared to some European countries that have a TSR as high as 80 per cent. Every 10 per cent TSR is estimated to reduce emissions by 22 kg CO2/MT of cement. Increased use of AFR is identified as one of the key levers to reduce CO2 emission in the Indian cement industry. Co-processing and Municipal Solid Waste
Co-processing ranks higher in the waste hierarchy, in comparison to disposal through landfills or incineration, and cement kilns have an important role to play in processing waste in an environmentally sustainable way. Based on the existing quantity of waste gen-eration and future forecasting of different waste-derived fuels, Municipal Solid Waste (MSW) accounts for about 57 per cent, equivalent to 14 per cent TSR (refer to Table 1 and Chart 1). Table 1

MSW and Refuse Derived Fuel
MSW is a heterogeneous mixture, and includes biodegradable, inert, recyclable, electrical & electronic, pesticides and hazardous wastes. Currently, of the estimated 62 million tonnes (MT) of MSW generated annually in urban areas, more than 80 per cent is disposed of at dump yards in an unhygienic manner leading to problems of health and environmental degradation. Refused Derived Fuel (RDF) which is generated from MSW can be utilised as an effective alternate fuel in cement plants, which can result in reduction of waste going to landfills, and can ensure a sustainable way of waste management in the country. These processes have become even more important in light of the Centre’s Smart Cities and Swatch Bharat missions. (Refer to Table 2). Segregation of MSW and pre-processing before it is sent to cement plants is essential to ensure increase in availability of waste to cement plants for co-processing. Share of Alternate Fuels on TSR (%)

Waste processing at Dalmia Cement’s Dalmiapuram Unit
In line with the company’s corporate vision where sustainability plays a critical role, AFR is a focus area with TSR of around 11 per cent at Dalmia’s Dalmiapuram unit in Tamil Nadu. Among the various alternate fuels being used, the cement major has also explored RDF from Tiruchirapalli City MSW, in collaboration with the City Corporation and the city MSW processing agency. At Tiruchirappalli City Corporation, the MSW generated per day is 436 MT and MSW composition is as given in Table 3. The City MSW processing agency receives the MSW at its allotted site from the Corporation everyday and processes the same for output of compost (50 tonnes per day) and RDF (80 tonnes per day) and the balance is rejected. After reaching the MSW processing site, raw segregation is carried out by removing plastics and non-biodegradable wastes, followed by screening for segregation of +120 mm size wastes. Subsequently, the process allows <120 mm size wastes for microbial reaction by creating a heap for 30-40 days. After degradation, it is allowed for screening to segregate <4 mm, 4-35 mm and 35-120 mm sizes. Waste with size of 4 mm is used for compost preparation, 4-35 mm is used as RDF and 35-120 mm particles are sent to landfills as reject. In this process, about 80 tonnes per day of RDF is generated. The expected CV is 2,000 to 2500 Kcal/kg, and the moisture content is around 15-20 per cent, but actual CV is around 1,800 Kcal/kg and moisture is over 25 per cent. Dalmia Cement Bharat has tried this RDF in its Dalmiapuram plant along with other AFR materials in its existing AFR feeding system. This AFR feeding system – with a capacity of 50 TPD – was developed by the company’s in-house team with an innovative idea. An abandoned passenger lifts up the fuel feed to the pre-calciner floor at 48 m height, followed by a hopper and feeding arrangement with belt/screw conveyors, supported by a triple feed gate. Table 2

The cement industry can be a useful conduit for processing of waste. Co-processing of waste in cement kilns is a scientific and proven option, more so with the recent proposed statutory changes in environmental laws.
With this, the cement industry, which had been branded as a high polluter, has actually become a solution provider, with its consumption of waste from other industries. For MSW RDF co-processing in cement kilns, source-segregated collection is critical, and pre-processing to maintain consistency in fuel quality, calorific value, size and moisture is a must.
These measures can help in the meeting the following objectives:

  • 25 per cent Thermal Substitution Rate in Indian Cement Industry (target: Year 2025)
  • India’s COP21 commitment on carbon emission reduction
  • Meeting the increased energy demands in a sustainable way, as Indian cement annual production capacity is estimated to reach 600 MT by 2025 (it is currently 390 MT). The ‘polluter pays’ principle must be practiced in our country, as it is done in developed countries. Our Indian cement plants can be an effective option for disposal of municipal, industrial and hazardous waste. This will create a win-win situation for both local administrations and cement plants.

Table 3

Challenges Faced
The challenges encountered while trying this RDF usage were:

  • Inconsistency in specifications and quantity availability;
  • Less Calorific Value;
  • Higher moisture content, requiring additional fuel to dry the feed;
  • Odour emitted during the process. However, Dalmia Bharat has overcome the above problems in coordination with the city MSW processing agency and ensuring potential quantity availability with consistency.

The article has been authored by RA Krishnakumar, Executive Director and R Rajamohan, Senior General Manager (IE, Environment and PH), Dalmia Cement (Bharat) Ltd, Dalmiapuram.

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





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).

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Wonder Cement shows journey of cement with new campaign





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


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.

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





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.

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