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Vaibhav Agarwal of PhillipCapital India reviews the ups and downs of the cement industry in 2017 and also shares the expectations from the industry in 2018.
The year 2017 has remained a challenging year for the cement industry. As per the Department of Industrial Policy & Promotion, cement production fell 2 per cent yoy in April-October 2017. However, the validity of these numbers is uncertain. GV’s checks pointed at 3-4 per cent industry growth in this period, most of which was led by east-India markets. The demand in the east remains most robust (in double digits) followed by central, north, south, and west markets. Cement manufacturers who have been through a consolidation phase or have increased their capacities (organically or inorganically) continue to outperform in terms of volume growth. The industry saw multiple challenges in 2017, most of which were structural and permanent, including:
Latent effect of demonetisation – mainly dented the southern markets
GST rollout – though this was not a major concern, it created teething troubles in the initial months
Strict loading compliances severely dampened the earnings of several manufacturers – Shree Cement remains the worst affected (led to its de-rating by nearly 20 per cent)
Accommodating the largest consolidation move in the sector – UltraTech acquiring Jaypee
Sand mining bans dented cement demand in several states
Pet-coke ban (implemented by the Supreme Court of India, subsequently withdrawn on a conditional basis)Latent effect of demonetisation
In the initial phases of demonetisation, the southern markets, being less-cash, were least impacted. However, this less-cash nature was limited to the cement distribution system while end markets such as real estate and contractors continued to depend on cash and were negatively affected, which in turn hurt distributors. In order to keep business as usual, cement distributors sought support from cement manufacturers in the form of extended credit periods, which increased the working capital cycle of the industry, especially of southern manufacturers.GST rollout for the cement sector
The rollout was smooth, except for initial teething troubles and a few structural changes in the distribution system, which impacted short-term demand dynamics. The rollout led to the proportion of ex-factory sales increasing multifold, as all buyers were inclined to take full credit of the GST impact by paying the requisite GST on freight component. Because of GST, the differential EBITDA contribution gap between trade and non-trade sales reduced significantly (to just about Rs 10 per bag say from Rs 20-25 earlier), as the differential in cost of sales for cement manufacturers narrowed. While this was more of an initial challenge (now streamlined), it is a key structural change in the distribution system of the sector (but for the better).Strict loading compliances: The dampener
After GST, and given the very strong retaliation on overloading by various NGOs/environmentalists, it is a thing of the past for the cement sector. Ground checks revealed extremely strict adherence to overloading norms in almost all regions of the country. GST has made it extremely difficult for cement manufacturers to not to comply with truck-loading norms, as the processes of invoicing and transportation have become much more transparent. It is very unlikely that this will reverse, and ground checks suggest a sustained impact of Rs 4-10 per bag (depending on region of operation and lead distance travelled).
North and east markets have seen very high overloading in the past, so much so that few plants in east India were shut on grounds on non-compliance to environmental norms. The overloading practices of these plants were severely damaging the roads around the plant and hurting the local habitat. In order to avoid local agitation, in many cases, loading compliance has also been applied to dumpers for limestone transfer from mines. Manufacturers such as Shree Cement have been worst hit, visible in the structural de-rating of the stock by nearly 20 per cent.UltraTech buying Jaypee
This was the sector’s largest consolidation move which had wide-ranging implications. It impacted the distribution dynamics of the states in which the acquisitions were made as UltraTech needed to be accommodated in terms of volume share. Volume pushers such as Shree Cement had to compromise on its volume push strategy – likely to be visible in its Q3 numbers. Another problem was the difference in the mindsets of the managements of UltraTech and Jaypee. While UltraTech has always been predominantly a brand-conscious company, Jaypee’s business model has been based on a volume-push strategy. It was difficult to convince erstwhile Jaypee distributors to come on board UltraTech’s strategy.Sand-mining bans dent demand
Sand is essential for cement usage. For manufacturing concrete, with every tonne of cement nearly four tonnes of sand is needed. For all other usage, for every one tonne of cement nearly eight tonnes of sand is required. Broadly, the ballpark ratio of cement to sand is 1:6. Many state governments of the country such as Tamil Nadu, Bihar, West Bengal, Rajasthan, and Uttar Pradesh have been regularly intervening in sand mining, denting the availability of sand. The worst impacted state is Tamil Nadu, where no resolution seems to be in sight. Various NGOs and environmentalists have raised regular concerns about sand mining, because in many cases this activity is done beyond the allotted quota, leading to illegal sand mining. As a result, many states are now depending on ‘crush sand’ for their requirements. The problem is that all states do not have enough crush-sand infrastructure (factories, licenses) – and this continues to affect sand availability. Though this issue is longstanding, 2017 was one of the worst years for cement demand because of lack of sand availability in the states mentioned above.
Pet coke ban implemented by the Supreme Court, subsequently withdrawn In November 2017, the Supreme Court of India issued an order implementing a ban on pet coke usage by cement manufacturers in overall plant operations in Rajasthan, Haryana, and Uttar Pradesh. GV found that many cement manufacturers in other regions voluntarily changed their fuel (to coal from pet coke) anticipating a ban. Few state governments also issued ‘soft notices’ to cement manufacturers; while these did not outright ban pet coke, they seemed to advise cement manufacturers to stop using or avoid using pet coke.
The industry filed a petition arguing that as long as emission norms of cement factories are within prescribed environmental norms, the industry should be allowed to use any fuel. This plea was partially successful and cement manufacturers were allowed to use pet coke in kiln operations, subject to the plant fulfilling environmental norms. However, the power plants may not be able to use pet coke again. This was another setback for the industry in 2017, and if this stay, which lasted for nearly a month, is implemented permanently, it will definitely have cost implications for cement manufacturers.
All the issues that the industry faced in 2017 are structural and will have long-term implications for the sector:

  • After demonetisation, the distribution network, aggregate manufacturers, and other raw material suppliers have learned to be more organised.
  • GST brought more parity to the industry’s product mix and in many markets the realisations and EBITDA contribution from trade and non-trade sales have moved more closer.
  • The largest cement major of the sector UltraTech acquiring Jaypee has brought major consolidation into the sector, which will take a couple of quarters more to play out. It will be a challenging task for both UltraTech and as well as the industry to accept this consolidation move – from UltraTech’s perspective the key challenge will be to ramp up its consolidated capacity utilisation and garner additional premium for products sold from acquired Jaypee plants. This implies improving base cement prices in these markets, which is a long-term structural positive for the sector.
  • The most crucial issue, which may continue to overhang the industry in 2018, will be sand – and it will remain state-specific. Tamil Nadu does not seem to have a resolution in the medium term; hence, demand is likely to remain low in this state. Rajasthan has implemented fresh bans towards the end of November 2017. Availability issues in other states are yet to be fully resolved. The key takeaway from this issue in 2017 is that respective states are likely to roll out permanent measures to address the problem of sand availability (by installing more crush sand factories, issuing new licenses, monitoring sand mining more stringently). Though these measures will take time to fall in place, they should help to prevent sand issues cropping up again.
  • The pet-coke ban overhang is over for now, but the learning for cement manufacturers is that their plant operations can be interrupted if they do not comply with environmental norms. It is fair to assume that all cement manufacturers are now making doubly sure that plants consistently remain environment friendly, as this will mean lesser complications in the future.

Overall, 2017 has set a roadmap for cement manufacturers and largely addressed or has brought clarity to many structural issues that were directly or indirectly affecting the sector over the last many years. Going forward, the focus of cement manufacturers will remain limited to core business issues. Their performance will be more consistent as norms are now prescribed or being prescribed for several issues which have been impacting them consistently in the past.2018 roadmap
Demand will pick up in 2018 with the pre-election period round the corner; general elections are due to be held in India by 2019 to constitute the seventeenth Lok Sabha. Therefore, 2018 is the only year left for the government to prove its on-theground execution. Construction activity picks up generally 15 months before general elections and this momentum sustains until about 2-3 months before elections. Historically, cement demand growth in pre-election years has been 5-7 per cent. The key risk to 2018 is that if demand does not revive in 2018, cement demand revival will remain questionable until the end of CY19.
With Aachar Sanhita (model code of conduct for political parties) being implemented before elections, new projects cannot be executed. Demand until the end of election will remain sustainable only from the existing projects. Even after the general elections are over, the new elected government usually remains preoccupied with the making policy agendas and cabinet formation. Hence, a good six months in 2019 can be written off with no incremental demand likely from any new projects except for projects that were already under execution before the Aachar Sanhita is announced.Ear to the ground

  • Demand in many pockets such as Andhra Pradesh, Telangana, and the whole of east India remains robust. These regions continue to register double-digit yoy growth. Demand in Andhra Pradesh and Telangana is being driven by fast-track execution of irrigation and infrastructure projects while in east India, infrastructure, housing, and projects to build toilets are driving demand.
  • Underperforming states like Karnataka have registered a near double-digit yoy growth in recent months. Recovery is seen as a given in Maharashtra and Gujarat.
  • Tamil Nadu and Kerala are unlikely to turn around in 2018 because of lack of political stability and sand issues.
  • Rajasthan was impacted by sand issues towards the end of November 2017. Still, the demand in this state remains reasonable. Building toilets has contributed significantly to demand in Rajasthan.
  • Demand in other pockets of north India is also picking up. Demand in Uttar Pradesh has gained momentum after sand issues were been partially resolved. Strong revival is seen in this state in 2018.
  • Overall, demand sentiment is seen rising in 2018 driven by infrastructure, housing, irrigation, and projects related to building toilets gathering pace. Signs of recovery are already visible in specific areas. The worst in terms of demand seems over and demand should improve from here.

What to expect
The industry has been able to gain clarity on several structural issues in 2017. The way forward in 2018 will only be consistency in performance, improvement in operating matrix, and improvement in overall operating parameters. There are still a few notable consolidation moves pending in the industry, which would be meaningfully favorable in the long term. Recent media articles have suggested a strong possibility of Binani Cement being taken over by few cement majors. Names such as UltraTech, Dalmia Bharat, Shree Cement, and a few PE funds have been in the limelight for this deal. Dalmia Bharat has also already confirmed through a press release that it is looking at acquiring Murli Industries. These deals are likely to be executed in 2018, but since these cases are referred to NCLT, the execution timelines may elongate.
Dalmia Bharat seems the strongest and most aggressive candidate to grow inorganically in 2018. Cement majors such as UltraTech and Shree may face the CCI hurdle in large acquisitions in north India. For other mid-tier cement manufacturers such as JK Cement, JK Lakshmi Cement, and India Cements, improving their operating-cost matrix, garnering better market shares through ramp up of utilisations and improving EBITDA contribution through better branding and cost savings will be
the key.
Composite cement is also likely to be a new and big change for the industry in 2018. Cement manufacturers such as Ambuja and JK Lakshmi have already taken this initiative in a few pockets of east India and have been able to garner a premium of Rs 15-20 per bag. Composite cement will add a big cost lever to the industry, as it significantly improves the blending ratio, though the prospects of manufacturing composite cement will be limited to markets where slag is available. 2018 should be a turnaround year for the cement industry and the beginning of a fresh upcycle. Stability of the cost curve, better brand premium and branding exercises, and steady ramp ups in utilisations are the key factors to watch. On the downside, if 2018 proves disappointing, the industry will continue to struggle until CY19.
The article is authored by Vaibhav Agarwal of PhillipCapital India

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Economy & Market

SEW-EURODRIVE India Opens Drive Technology Centre in Chennai

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The new facility strengthens SEW-EURODRIVE India’s manufacturing, assembly and service capabilities

SEW-EURODRIVE India has inaugurated a new Drive Technology Centre (DTC) in Chennai, marking a significant expansion of its manufacturing and service infrastructure in South India. The facility is positioned to enhance the company’s responsiveness and long-term support capabilities for customers across southern and eastern regions of the country.

Built across 12.27 acres, the facility includes a 21,350-square-metre assembly and service setup designed to support future industrial growth, evolving application requirements and capacity expansion. The centre reflects the company’s long-term strategy in India, combining global engineering practices with local manufacturing and service capabilities.

The new facility has been developed in line with green building standards and incorporates sustainable features such as natural daylight utilisation, solar power generation and rainwater harvesting systems. The company has also implemented energy-efficient construction and advanced climate control systems that help reduce shopfloor temperatures by up to 3°C, improving production stability, product quality and working conditions.

A key highlight of the centre is the 15,000-square-metre assembly shop, which features digitisation-ready assembly cells based on a single-piece flow manufacturing concept. The facility also houses SEW-EURODRIVE India’s first semi-automated painting booth, aimed at ensuring uniform surface finish and improving production throughput.

With the commissioning of the Chennai Drive Technology Centre, SEW-EURODRIVE India continues to strengthen its manufacturing footprint and reinforces its long-term commitment to supporting industrial growth and automation development in India.

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Concrete

Material Flow Efficiency

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We explore how material handling systems are becoming strategic assets in cement plants, enabling efficient movement of raw materials, clinker and finished cement. Advanced conveying, automation and digital technologies are improving plant productivity while supporting energy efficiency and sustainability goals.

Material handling systems form the operational backbone of cement plants, enabling the efficient movement of raw materials, clinker and finished cement across complex production networks. With India’s cement industry producing over 391 million tonnes of cement in FY2024 and possessing an installed capacity of around 668 mtpa, according to the CRISIL Research Industry Report, 2025, efficient material logistics have become critical to maintaining plant productivity and cost competitiveness. At the same time, cement production is highly energy intensive and contributes around 7 per cent to
8 per cent of global CO2 emissions, making efficient material flow and logistics optimisation essential for reducing operational inefficiencies and emissions states the International Energy Agency Cement Technology Roadmap, 2023. As plants scale capacity and integrate digital technologies, modern material handling systems, ranging from automated conveyors to intelligent stockyards, are increasingly recognised as strategic assets that influence plant stability, energy efficiency and environmental performance.

Strategic role of material handling
Material handling is no longer viewed as a secondary utility within cement plants; it is now recognised as a strategic system that directly influences production efficiency and process stability.
Cement manufacturing involves the continuous movement of large volumes of limestone, clay, additives, clinker and finished cement across multiple production stages. Even minor disruptions in conveying systems or storage infrastructure can lead to kiln feed fluctuations, production delays and significant financial losses. According to Indian Cement Industry Operational Benchmarking Study, 2024, unplanned downtime in large integrated cement plants can cost between Rs.15–20 lakh per hour, highlighting the economic importance of reliable material handling systems.
Modern cement plants are therefore investing in advanced mechanical handling systems designed for high throughput and operational reliability. Large integrated plants can process over 10,000 tonnes per day of clinker, requiring highly efficient conveying systems and automated stockyards to maintain continuous material flow, suggests the International Cement Review Industry Analysis, 2024. Efficient material handling also reduces spillage, minimises dust emissions and improves workplace safety. As cement plants become larger and more technologically advanced, the role of material handling is evolving from simple transport infrastructure to a critical operational system that supports both productivity and sustainability.

From quarry to plant
The transport of raw materials from quarry to processing plant represents one of the most energy-intensive stages of cement production. Traditionally, limestone and other raw materials were transported using diesel-powered trucks, which resulted in high fuel consumption, dust generation and increased operational costs. However, modern plants are increasingly adopting long-distance belt conveyors and pipe conveyors as a more efficient alternative. These systems allow continuous material transport over distances of 10–15 kilometres, significantly reducing fuel consumption and operating costs while improving environmental performance, states the FLSmidth Cement Industry Technology Report, 2024.
Milind Khangan, Marketing Manager, Vertex Market Research & Consulting, says, “Efficient and enclosed handling of fine materials such as cement, fly ash and slag requires modern pneumatic conveying systems. By optimising the air-to-material ratio, these systems can reduce energy consumption by 10 per cent to 15 per cent while ensuring smooth material flow. Closed-loop conveying further minimises dust loading and improves the performance of bag filters, supporting cleaner plant operations. In addition, flow-regulated conveying lines help prevent clogging and maintain reliable dispatch performance. Overall, automation in pneumatic conveying delivers immediate operational benefits, including improved equipment uptime, lower energy use, reduced material spillage and more stable kiln and mill performance.”
Pipe conveyor systems are particularly gaining traction because they provide a completely enclosed transport system that prevents material spillage and dust emissions. According to global cement engineering studies, conveyor-based transport can reduce energy consumption by up to 30 per cent compared to truck haulage, while also improving operational reliability. Several cement plants in India have already implemented such systems to stabilise quarry-to-plant logistics while reducing carbon emissions associated with diesel transport.

Stockyard management and homogenisation
Stockyards play a critical role in maintaining raw material consistency and stabilising kiln feed quality. Modern cement plants use advanced stacker and reclaimer systems to ensure efficient storage and blending of raw materials before they enter the grinding and pyroprocessing stages. Automated stacking methods such as chevron or windrow stacking enable uniform distribution of materials, while bridge-type or portal reclaimers ensure consistent extraction during kiln feed preparation. These systems are essential for maintaining stable chemical composition of raw meal, which directly influences kiln efficiency and clinker quality. The Cement Plant Operations Handbook, 2024 indicates that advanced homogenisation systems can reduce raw mix variability by up to 50 per cent, significantly improving kiln stability and energy efficiency. Integrated stockyard management systems also incorporate sensors for monitoring bulk density, moisture levels and stockpile volumes, enabling real-time control over material blending processes.

Clinker and cement conveying technologies
Once clinker is produced in the kiln, it must be efficiently transported to storage silos and subsequently to grinding and packing units. Modern cement plants rely on high-capacity belt conveyors, bucket elevators and pneumatic conveying systems to manage this stage of material flow. Steel-cord belt bucket elevators are now capable of lifting materials to heights exceeding 120 metres with capacities reaching 1,500 tonnes per hour, making them suitable for large-scale clinker production lines, states the European Cement Engineering Association Technical Paper, 2023.
For fine materials such as cement, fly ash and slag, pneumatic conveying systems provide a reliable and dust-free solution. These systems transport powdered materials using controlled airflow, ensuring enclosed and contamination-free movement between grinding units, silos and packing stations. Optimised pneumatic systems can reduce energy consumption by 10 per cent to 15 per cent compared to older conveying technologies, while also improving plant cleanliness and environmental compliance, according to the Global Cement Technology Review, 2024.

Automation and digitalisation
Digitalisation is transforming material handling systems by introducing real-time monitoring, predictive maintenance and automated control. Advanced sensors and Industrial Internet of Things (IIoT) platforms enable plant operators to track conveyor health, stockpile levels and equipment performance in real time. Predictive maintenance systems analyse vibration patterns, temperature fluctuations and equipment load data to detect potential failures before they occur. According to McKinsey’s Industry 4.0 Manufacturing Report, 2023, for heavy industries, digital monitoring and predictive maintenance technologies can reduce equipment downtime by up to 30 per cent and increase productivity by 10 per cent to 15 per cent. Digital control centres also integrate data from conveyors, stacker reclaimers and dispatch systems, enabling centralised management of material flows from quarry to dispatch.

Handling of AFR
The growing adoption of Alternative Fuels and Raw Materials (AFR) has introduced new challenges and opportunities for material handling systems in cement plants. AFR materials such as refuse-derived fuel (RDF), biomass and industrial waste often have irregular particle sizes, variable moisture content and lower bulk density compared to conventional fuels. As a result, specialised storage, dosing and feeding systems are required to ensure consistent kiln combustion. According to the Cement Sector Decarbonisation Roadmap published by NITI Aayog in 2026, increasing the use of AFR could enable India’s cement sector to achieve thermal substitution rates of around 20 per cent in the coming decades. To support this transition, plants are investing in automated receiving stations, shredding units, drying systems and precision dosing equipment to stabilise AFR supply and combustion performance.

Energy efficiency and dust control
Material handling systems also play a crucial role in improving plant energy efficiency and environmental performance. Modern conveyor systems equipped with variable speed drives and energy-efficient motors can significantly reduce electricity consumption. Permanent magnet motors used in conveyor drives can deliver 8 per cent to 12 per cent energy savings compared to conventional induction motors, improving overall plant energy efficiency according to the IEA Industrial Energy Efficiency Study, 2023. Dust control is another major concern in cement plants, particularly during material transfer and storage operations. Enclosed conveyors, dust extraction systems and advanced bag filters are widely used to minimise particulate emissions and improve workplace safety.

Future trends in material handling
The future of material handling in cement plants will be shaped by automation, digitalisation and sustainability considerations. Emerging technologies such as AI-driven logistics optimisation, autonomous mobile equipment and digital twins are expected to further improve plant efficiency and operational visibility. Digital twin models allow engineers to simulate material flow patterns, optimise stockyard operations and predict equipment performance under different operating conditions. According to the International Energy Agency Digitalisation and Energy Report, 2024, the adoption of advanced digital technologies could improve industrial energy efficiency by up to 20 per cent in heavy industries such as cement manufacturing. As cement plants expand capacity and adopt low-carbon technologies, intelligent material handling systems will play a critical role in maintaining productivity and reducing environmental impact.

Conclusion
Material handling systems have evolved from basic transport infrastructure into strategic operational systems that directly influence plant efficiency, reliability and sustainability. From quarry transport and automated stockyards to digital dispatch platforms and advanced conveying technologies, modern material handling solutions enable cement plants to manage large production volumes while maintaining process stability.
As India’s cement industry continues to expand to meet infrastructure and urban development demands, investments in advanced material handling technologies will become increasingly important. By integrating automation, digital monitoring and energy-efficient systems, cement manufacturers can improve operational performance while supporting the industry’s long-term sustainability and decarbonisation goals.

  • Kanika Mathur

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Concrete

Modernise to Optimise

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Cement plant modernisation is reshaping the industry through upgrades in
kilns, energy systems, digitalisation, AFR integration and advanced material
handling. We explore these technologies that improve efficiency, reduce
emissions, strengthen competitiveness, while preparing the industry for India’s
next phase of infrastructure growth.

India’s cement industry, the world’s second-largest, is undergoing a rapid transformation driven by infrastructure demand, decarbonisation targets and technological advancement. The sector’s installed capacity stood at approximately 668 million tonnes per annum (mtpa) in FY2025 and is projected to reach 915–925 mtap by 2030, supported by large-scale capacity expansions and infrastructure investment cycles, suggests CRISIL Intelligence Industry Report, 2025. At the same time, cement production remains highly energy intensive and contributes about 6 per cent to 7 per cent of India’s total greenhouse gas emissions, making efficiency improvements and modernisation critical for long-term sustainability as stated in CareEdge ESG Research, 2025. As a result, cement manufacturers are investing in advanced kiln technologies, digital monitoring systems, waste heat recovery, alternative fuels, and modern material handling infrastructure to enhance productivity while aligning with global decarbonisation pathways.

Need for modernisation
The need for plant modernisation is closely linked to the sector’s rapid capacity expansion and rising operational complexity. India’s installed cement capacity has grown significantly in the last decade and is expected to exceed 900 mtpa by 2030, driven by demand from housing, infrastructure and urban development projects, as per the CRISIL Intelligence Industry Report, 2025. However, increasing scale also places pressure on energy efficiency, logistics, and production stability. The report also suggests that the cement plants must upgrade equipment and processes to operate at higher utilisation rates, which are projected to reach 75 per cent to 77 per cent by the end of the decade, compared to around 72 per cent to 74 per cent in FY2026.
Environmental imperatives are another major driver of modernisation. Cement manufacturing is responsible for a significant share of industrial emissions because clinker production requires high-temperature processes that depend heavily on fossil fuels. According to CareEdge ESG research, the cement sector contributes 6–7 per cent of India’s total greenhouse gas emissions, with approximately 97 per cent of emissions arising from direct fuel combustion and process emissions in kilns. Consequently, plant modernisation initiatives now focus not only on productivity improvements but also on reducing emissions intensity, energy consumption, and reliance on conventional fuels.
“One of the most impactful upgrades implemented at Shree Cement in the last five years has been the adoption of advanced data management platforms that provide real-time visibility across major process areas. This digital advancement has strengthened plant automation by enabling faster and more accurate responses to process variations while improving the reliability of control loops. Real-time dashboards, integrated analytics and automated alerts now support quicker, data-driven decision-making, helping optimise kiln and mill performance, improve energy control and detect deviations early. By consolidating data from multiple systems into a unified digital environment, the company has enhanced operational consistency, reduced downtime and improved both productivity and compliance. This shift towards intelligent automation and real-time data management has become a key driver of operational excellence and future-ready plant management,” says Satish Maheshwari, Chief Manufacturing Officer, Shree Cement.

Kiln and pyroprocessing upgradation
The kiln remains the technological heart of cement manufacturing, and modernisation efforts often begin with upgrades to pyroprocessing systems. Many older plants in India operate with four- or five-stage preheaters, while modern plants increasingly adopt six-stage preheater and pre-calciner systems that significantly improve heat efficiency and clinker output. These systems enhance heat transfer, reduce fuel consumption, and stabilise kiln operations under high throughput conditions.
Professor Procyon Mukherjee suggests, “Cement manufacturing is, at its core, a thermal process. The rotary kiln and calciner together account for energy consumption and emissions. The theoretical thermal requirement for clinker production is around 1700–1800 MJ per tonne, yet real-world plants often operate far above this benchmark due to inefficiencies in combustion, heat recovery and material flow. Modernisation, therefore, must begin with the
kiln system, and not peripheral automation or
isolated upgrades. The shift from wet to dry process kilns, combined with multi-stage preheaters and precalciners, has already delivered step-change improvements, making dry kilns nearly 50 per cent more energy efficient.”
Recent investment programmes across the industry have included kiln cooler upgrades, advanced burners, and improved refractory materials designed to increase operational reliability and reduce specific heat consumption. Such upgrades are essential because cement production remains highly energy intensive, and continuous efficiency improvements are required to meet global decarbonisation targets. According to the International Energy Agency (IEA) Cement Tracking Report, 2023, the cement sector must achieve annual emissions intensity reductions of around 4 per cent through 2030 to align with global net-zero scenarios.

Energy efficiency and WHRS
Energy efficiency remains one of the most important areas of modernisation in cement manufacturing, given the sector’s heavy reliance on thermal and electrical energy. Modern plants deploy advanced process controls, efficient grinding systems, and improved combustion technologies to reduce specific energy consumption. The adoption of energy-efficient technologies is particularly important in India, where energy costs account for a large share of production expenses. As demand grows and plants expand capacity, improving energy performance becomes essential to maintain competitiveness.
Waste Heat Recovery Systems (WHRS) have emerged as a key solution for improving plant energy efficiency. During cement production, large volumes of high-temperature gases are released from kilns and coolers. WHRS technology captures this waste heat and converts it into electricity, thereby reducing reliance on external power sources. According to energy benchmarking studies for the Indian cement industry, installed waste heat recovery capacity in the sector has reached approximately 840 MW, with an additional potential of around 500 MW states the Green Business Centre, Energy Benchmarking Report, 2023. Several leading producers have already implemented large WHRS installations; for example, UltraTech Cement has deployed systems with around 121 MW of waste heat recovery capacity, reducing carbon emissions by nearly 0.5 million tonnes annually according to the Energy Alternatives India Case Study, 2024.

Integration of AFR
The integration of Alternative Fuels and Raw Materials (AFR) is another critical dimension of cement plant modernisation. AFR refers to the use of industrial waste, biomass, refuse-derived fuel (RDF), and other non-fossil materials as substitutes for conventional fuels such as coal and petcoke. Increasing the use of AFR helps reduce fossil fuel consumption while simultaneously addressing waste management challenges. According to the NITI Aayog Decarbonisation Roadmap, 2026, scaling the use of RDF and other alternative fuels could enable the sector to achieve thermal substitution rates of around 20 per cent in the coming decades.
However, integrating AFR requires significant plant modifications and operational adjustments. Waste-derived fuels often have inconsistent calorific values, higher moisture content, and heterogeneous physical properties compared to traditional fuels. As a result, modern plants invest in advanced fuel preparation systems, dedicated feeding equipment, and automated dosing technologies to ensure stable kiln operation. These upgrades allow plants to maintain consistent clinker quality while increasing the share of alternative fuels in their energy mix.

Digitalisation and smart plant operations
Digitalisation is rapidly transforming cement plant operations by enabling data-driven decision-making and predictive maintenance. Industry 4.0 technologies such as IoT sensors, artificial intelligence (AI), and advanced analytics are now used to monitor equipment performance, optimise process parameters, and anticipate maintenance requirements. These digital tools enable plant operators to detect early signs of equipment failure, minimise unplanned downtime, and improve operational efficiency. Predictive maintenance systems, for example, analyse vibration, temperature, and acoustic signals from rotating equipment to identify potential faults
before they escalate into major breakdowns. Digital twins and integrated control systems further allow operators to simulate plant performance under different scenarios and optimise production strategies. Such technologies are becoming increasingly important as cement plants operate at larger scales and higher levels of process complexity.
Maheshwari also adds, “Plant modernisation is also increasingly central to the global competitiveness of Indian cement manufacturers. As cost pressures rise across energy, logistics and regulatory compliance, modern plants offer the structural efficiency required to operate reliably and competitively over the long term. Technologies such as AI-driven Advanced Process Control (APC) integrated with real-time data systems are emerging as essential investments for the future. These platforms use predictive algorithms, machine learning and live process inputs to optimise kiln, mill and utility operations with greater precision than traditional control systems. By continuously analysing variations in feed chemistry, temperature profiles, energy demand and equipment behaviour, APC enables stable operations, lower specific energy consumption, reduced emissions and improved product consistency. As regulatory expectations tighten and plants pursue higher efficiency with lower carbon intensity, AI-enabled APC will play a crucial role in strengthening automation, enhancing decision-making and ensuring long-term operational resilience.”

Modern material handling and logistics
Material handling systems play a critical role in ensuring smooth plant operations and efficient logistics. Modern cement plants rely on advanced conveying systems, automated stockyards, and digital dispatch platforms to manage the movement of raw materials, clinker, and finished cement. Long-distance belt conveyors and pipe conveyors are increasingly replacing truck-based transport between quarries and plants, reducing fuel consumption, dust emissions, and operational costs. Automated stacker-reclaimers ensure consistent blending of raw materials,
which improves kiln stability and clinker quality. Meanwhile, advanced packing and dispatch systems equipped with high-speed rotary packers and robotic palletisers enhance throughput and reduce manual labour. These technologies allow cement plants to optimise logistics efficiency while supporting higher production capacities.

Emission control and environmental compliance
Environmental compliance has become a central focus of cement plant modernisation as regulators and investors place greater emphasis on sustainability performance. Modern plants deploy advanced emission control technologies such as high-efficiency bag filters, electrostatic precipitators, and selective non-catalytic reduction systems to reduce particulate matter and nitrogen oxide emissions.
Sine Bogh Skaarup, Vice President, Head of Green Innovation and R&D, Fuller Technologies says, “One of our key focus areas is decarbonisation. We help cement producers reduce CO2 and overall carbon emissions. We offer alternative fuel solutions and calcined clay technologies to enable the production of LC3 cement, which play a significant role in decarbonising the cement industry. By combining alternative fuels and calcined clay solutions, CO2 emissions can be reduced by up to 50 per cent, making this a highly impactful approach for sustainable cement production.”
Continuous emission monitoring systems are increasingly used to track environmental performance in real time and ensure compliance with regulatory standards. In addition to air pollution control, cement companies are also investing in water recycling systems, renewable energy integration, and carbon reduction initiatives. These measures are essential for aligning the sector with national climate goals and improving the environmental footprint of
cement manufacturing.

Economic benefits and future outlook
Beyond environmental and operational advantages, cement plant modernisation also delivers significant economic benefits. Energy efficiency improvements, digital process optimisation, and advanced material handling systems reduce operating costs and improve asset utilisation. Waste heat recovery and alternative fuels help lower fuel expenditure and reduce exposure to volatile fossil fuel markets. As the industry expands capacity to meet growing demand, modernised plants are better positioned to achieve higher productivity and maintain profitability. The long-term outlook for the sector remains positive, with India expected to continue large-scale infrastructure investments in roads, housing, railways, and urban development.
Milan R Trivedi, Vice President – Projects, Prod & QC, MR, Shree Digvijay Cement, says, “The main focus in case of modernisation projects drives through the investment decision, which is mainly based on IRR and impact on overall efficiency improvement, cost optimisation and improvement in reliability. However, there are certain modernisation, which has high impact on environmental impact, statutory requirements, etc. has higher priority irrespective of ROI or payback period.”
“The energy efficiency and reliability investment projects generally provide fast return on investment whereas strategic, digitalisation and environmental investment projects provide long term and compounded benefits. Typical modernisation investment projects are decided with IRR of about > 20 per cent, payback period of typically 2-3 years for fast-track projects,” he adds.
In this context, modernisation will remain a key strategic priority for cement manufacturers seeking to maintain competitiveness in an increasingly sustainability-focused market.

Conclusion
The modernisation of cement plants is no longer a purely technical upgrade but a strategic transformation that reshapes how the industry operates. As India’s cement sector expands capacity toward the next growth cycle, improvements in energy efficiency, digitalisation, alternative fuels and advanced logistics will determine the competitiveness of individual plants. Modern technologies allow producers to operate at higher productivity levels while simultaneously reducing energy consumption and emissions intensity.
Looking ahead, the pace of technological adoption will play a decisive role in shaping the future of
the cement industry. Companies that successfully integrate modern equipment, digital systems, and sustainable production practices will be better positioned to meet rising infrastructure demand while aligning with global climate commitments. In this evolving landscape, plant modernisation stands as the cornerstone of both operational excellence and environmental responsibility.

  • Kanika Mathur

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