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India can certainly adopt the ‘polluter pays’ principle

Published

7 years ago

June 30, 2017

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Ulhas Parlikar Deputy Head, Geocycle India
This, according to Ulhas Parlikar, Deputy Head, Geocycle India, involves levying prohibitive tax on the options of waste management that are not environmentally acceptable.

What are the challenges you face in the use of alternative fuels and raw materials (AFR)? Also what were the challenges faced in terms of cost-investment and operational?
AFR utilisation in the Indian cement industry is a need of the hour. Our country is generating large quantum of industrial, municipal and agricultural wastes which are posing huge environmental concerns today. Cement kilns due to their unique feature of having high temperatures up to 2,000oC and long residence times in the range of 6-10 seconds above 1,100oC, can co-process these wastes as AFRs in an environmentally sound manner.

The New Waste Management Rules notified in 2016 have given preferred technology status to the technology of co-processing in cement kilns and waste generators have been mandated to evaluate and implement the option of co-processing for their wastes before deciding to send them for landfill and incineration options. As per the new Rules State Pollution Control Boards (SPCBs) are required to authorise co-processing of all kinds of hazardous and non-hazardous waste streams without mandating co-processing trial of these waste streams. Only condition is that the cement plants should have appropriate facilities to handle these wastes in an environmentally sound manner and should comply to the emission standards that are notified by MoEFCC for cement kilns undertaking co-processing.

These rules have also mandated that Central Pollution Control Board (CPCB) must publish appropriate guidelines for environmentally sound pre-processing and co-processing of wastes.

As these guidelines are not yet published by CPCB, SPCBs are posing difficulty in granting following authorisations:
1.To waste generators to implement co-processing of their wastes.
2.To pre-processing facilities to pre-process different kinds of wastes into processed AFRs.
3.To cement kilns for implementing co-processing.
Several applications of waste generators, pre-processors and cement plants are therefore pending for action in different SPCB offices. This is leading to a large quantum of waste still getting disposed in landfills and incinerators without recovering the resource value present them. As these authorisations are still pending for action, the development of pre-processing facilities for converting wastes to AFRS and the implementation of co-processing facilities for utilising these AFRs are not still taking place.

This delay in action is impacting the management of Segregated Combustible Fractions (SCF) from the Municipal Solid Waste and hazardous wastes substantially. Large quantum of SCF and hazardous waste is still getting disposed in the landfills or incineration facilities rather than getting them utilised as a resource. Due to difficulties prevailing in the regulatory processes, the investments in pre-processing and co-processing also are yet not flowing in at the pace that is feasible. Only companies with commitment to the sustainability goals are currently implementing the desired investments.

In terms of operation of these facilities, almost all the agencies in our country associated with pre-processing and co-processing are going through the learning curve. The capacity building of the skilled personnel for these operations are required to be implemented on the job as these are not a part of any curriculum yet.

How do you define the extent of AFR use in the cement industry? By this yardstick, where do you stand as a company and your targets for 2020?
AFR utilisation in cement kiln is defined conventionally in terms of Thermal Substitution Rate (TSR), which is the ratio of the energy utilised from AFR to the total energy used in the cement kiln. This parameter defines the quantum of fossil fuel substituted with AFR in the kiln. The other parameter is the extent of replacement of natural raw material with alternative raw materials.

The utilisation of AFR in our country in year 2016 is >4 per cent. With so much waste still around for tapping the resource value present in it, there is large opportunity to increase the AFR consumption of our country. Based on the low technology road map prepared for the Indian cement industry, the forecast on the waste becoming available to use, the expected ease in permitting processes and the infrastructure that will be created to pre-process and co-process wastes as AFRs, it is expected that Indian cement industry can target and achieve a TSR of about 25 per cent in 2025 – the ’25-25 GOAL’ of the Indian cement industry. The required skilled man-power also is an essential requirement for successful implementation of this goal and it is expected that a clear focus that this initiative will receive in future will drive academic institutions and professional agencies to built suitable manpower development programs for the same.

What is the scope of AFR and what are the steps initiated by your company?
As elaborated above, the scope for co-processing wastes as AFRs in the cement industry in our country is very large. With a clear commitment to the causes of environmental betterment, climate change mitigation, resource conservation, and sustainability targets, we are implementing several activities related to use of wastes as AFRs in our kilns of ACC Limited and Ambuja Cement Ltd., through our Geocycle India initiatives.

The most important activity that we have implemented in the recent past was to achieve proper recognition of co-processing option in our Waste Management Policy Framework. It is very important to note that our country’s new policy framework of 2016 for waste management is based on the principle of sustainability rather than the principle of disposal in which co-processing option has been granted higher preference of implementation than landfill and incineration.

The other important initiative of ours was the implementation of large number of co-processing trials – more than 60 – in our different cement kilns spread across the country. These trials were carried out to demonstrate the suitability of co-processing technology for environmentally sound management of different kinds of waste streams. These waste streams were both hazardous and non-hazardous and were having substantially varying waste characteristics from one another. The results of all these trials, which were evaluated by CPCB demonstrated that cement kiln co-processing of these wastes does not influence the cement kiln emissions and the cement product quality.

We also designed and proposed the business model for undertaking co-processing of non-recyclable wastes derived from industrial, agricultural and municipal activities to the National Task Force on co-processing that was constituted by CPCB. This was substantially deliberated and the same was accepted as sustainable.

We have also set up state of co-processing facilities with Continuous Emission Monitoring Systems in all our cement plants and also set up seven pre-processing platforms in our different plants that meet the stringent requirements for environmentally sound management of hazardous and other wastes. These platforms have AFR laboratories, pre-processing facilities, adequate storage with impervious floor and leachate collection and management system, fire control and fire water management systems, trained personnel in the area of waste management and pre and co-processing, These platforms have the capability of processing different kinds of hazardous and non-hazardous wastes having varying physico-chemical characteristics into a uniform quality AFR for utilising as a resource in our cement kilns.

Do you think that India can adopt the principle of ‘polluter pays first’, especially when it comes to waste generation?
India can certainly adopt the polluter pays principle. For this proper policy framework needs to be put in place. This involves levying prohibitive tax on the options of waste management that are not environmentally acceptable. Further, the policy framework also needs to encourage environmentally sound options by either mandating them as the first priority as only acceptable options for waste management or by giving suitable fiscal or other incentives to the implementing agencies.

With regard to hazardous material used, what are the challenges in terms of safety?
As per the definition given in HOWM Rules 2016, ‘hazardous waste’ means any waste which by reason of characteristics such as physical, chemical, biological, reactive, toxic, flammable, explosive or corrosive, causes danger or is likely to cause danger to health or environment, whether alone or in contact with other wastes or substances.

While handling these wastes – particularly in cement plants – proper care needs to be taken by implementing adequate processes, systems and infrastructure that ensures required level of safety in operation. The design and implementation of these processes, systems and infrastructure needs to be complying to the specifications provided by CPCB. While handling these wastes, care needs to be taken to ensure that the incompatible wastes are not mixed, waste for which the designed infrastructure is not designed should not be used, man power with proper skills and capabilities are trained and engaged in the operational activity, Proper Disaster Management measures are designed, implemented and kept up-to-date to deal with likely emergencies, etc.

What kind of legislation is there in developed countries for the industry to make long term investments to reach very high levels of TSR like 60-80 per cent? What is the Indian scenario?
The legislation in the countries that have cement plants operating at a TSR lever of 60-80 per cent is similar to the one that we have put in place in our country now. The major difference is that their legislation is mature and has additional provisions that facilitate clarity and ease in permitting. Hence the implementation is at a very high level. Their legislation framework has also higher clarity in terms of the dos and don’ts and its awareness and understanding is substantially high in the stakeholder segment. Further, the waste availability, its quality considerations and transportability are substantially better due to maturity in waste market.

There are pre-processing operators who convert wastes into AFRs having desired quality, etc. The stakeholder segment also is highly mature and the other disposal options are more expensive which directs the waste for co-processing.

–RAHUL KAMAT

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

Published

3 years ago

October 21, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source:moneycontrol.com

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Wonder Cement shows journey of cement with new campaign

Published

3 years ago

October 21, 2021

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

ETBrandEquity

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

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

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

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

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

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

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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)

Published

3 years ago

October 21, 2021

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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.