Economy & Market

Prices remain unchanged despite demand upswing

Published

8 years ago

January 12, 2018

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With cement industry growing over 13 per cent in H1FY19, capacity utilisation is picking up pace. But price hikes are still in wait.

After an upward spiral for two months – September and October – by 6.01 per cent and hitting the lifetime peak of 2054.7 points, ET Cement Index, that tracks cement price movements in the country, has hit a pause in November. Though rising cost of inputs have continued to put pressure on the industry bottom lines, cement majors are said to have preferred to boost volumes instead of hiking prices in November, even as strong demand streak continued.

The industry players last hiked prices in the last week of October, boosting the index by 3.18 per cent for that month. In October, the total cement production had hit 28.37 MT posting a growth of 18.4 per cent, which was highest in six months, according to the latest Core Sector Data Analysis by CARE Ratings. ‘The favourable base effect (-1.3 per cent growth in October 2017) along with election-led infra push, buoyant rural markets, which led to rural housing construction, boosted the demand for cement,’ CARE Ratings said. The Core Sector (including sectors like coal, electricity, fertilisers, mining and steel) posted a growth of 4.8 per cent during the month, with an impetus coming from power, mining and cement – all growing by more than 10 per cent.

‘Cement industry (production) witnessed robust growth of 14.4 per cent during first half of 2018-19 (H1FY19) after having witnessed revival during FY18 backed by Government spending on infrastructure,’ Madan Sabnavis of CARE Ratings said in an industry update on H1FY19.

During the H1FY19, stable construction activity in residential real estate, increased demand from affordable housing and robust demand from infrastructure segment have ensured cement capacity utilisation improves to 70 per cent,? CARE Ratings added in the report. Though there was an expectation that the prices would rise after Diwali festivities, it was not to be.

Q2 indicators
The recently released July-September results by cement companies have thrown up certain trends – though the prices have seen some rise in September and October months input costs were running ahead of realisations of cement companies highlighting the challenge of the necessity of prices catching up in the near future.

Sharp rise in pet coke and fuel costs, a depreciating rupee and muted pricing power in a competitive market are the factors that lead to the challenge. These factors also continue to keep profitability of most of the industry players under check.

Pet coke used to be cheaper than coal, and that was the reason why cement companies were using more of pet coke than coal in order to bring down the cost of production. However, the situation has reversed now forcing the cement manufacturers to change their product mix frequently. While the landed cost of pet coke is at Rs 12,000 per tonne, coal is costing Rs 5,600/tonne, making a lot of difference in the cost of manufacture of cement.

However, the only solace is that volumes are rising across the regions, which is expected to give cement players the much needed pricing power in the coming months so that they can cover their costs more comfortably. The demand strength was reflected in the near double digit growth rates posted by most of the cement companies in H1FY19.

To cite an example, Shree Cement reported 21 per cent rise in revenue to Rs 2,587 crore backed by strong market demand in the eastern region, and higher prices in the northern markets. While it has witnessed 16 per cent growth in volumes in the east, higher prices in the northern region have aided its realisations by 4 per cent quarter-on-quarter and 2 per cent on a year-on-year basis.

Heidelberg Cement achieved 14 per cent revenue growth with only 6 per cent rise in volumes, mostly based on higher realisations from the central region where the company sells about 90-95 per cent of its cement.

Industry majors predict that the momentum will continue in H2 as well and expects a volume growth of 8-10 per cent in FY19. The major threat for volume growth is the liquidity squeeze that may affect the progress of projects in infrastructure and housing segments.

Double-digit growth
‘We are expecting a high double-digit growth this year,’ said Shailendra Chouksey, President, Cement Manufacturers Association (CMA) at a conference in November. That is the industry will see double-digit growth after eight years, primarily led by the government’s increased spending on big infrastructure projects. These expectations are also based on 13 per cent growth witnessed by the industry in the H1FY19.

The industry with around 60 players has an installed capacity of around 470 Million Tonnes of which 70 per cent of the capacity is being utilised. Thus, capacity utilisation, which was a big challenge for the manufacturers till recently is being tamed to a great extent with major companies, which have acquired existing capacities in the last couple of years, are focusing on improving capacity utilisation rather than resorting to price hikes. Industry leaders like UltraTech Cement, Ambuja Cements and Dalmia Bharat are continuing to operate at 70-75 per cent capacity utilisation, above of the industry average.

The recent state level elections in the northern and central regions have driven implementation of a lot of infrastructure projects, thus raising demend. With general elections in the country a few months away government-funded infrastructure projects will remain the main consumers of cement, besides affordable housing which has gained momentum over the last two years. Given the above scenario, will the industry traversing through a challenging landscape can see an upward cycle coming its way in the near future? Various factors that could influence positive outcomes in the sector seem to be falling in place.

– B.S. SRINIVASALU REDDY

Economy & Market

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

Published

1 week 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

3 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

3 weeks ago

April 13, 2026

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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.