Even as cement majors are dithering from hiking prices with a view to build volumes, their smaller counterparts are hiking prices in order to cover rising input costs.
Positive expectations on the industry prospects returned with some of the industry players breaching the price barrier to an extent riding on the continued demand growth which is to fuelling renewed hopes. Cement prices which have remained stagnant or down during most part of the year, except in May and July, rose about 6 per cent over the last two months – September and October 2018.
After a slide of 5.36 per cent in two months in July and August, ET Cement Index, tracking cement prices across regions in the country, has bounced back in the next two months by gaining 6.01 per cent, touching its peak this year, so far, at 2054.7 points. Rising cost of inputs seems to have pushed the industry to hike prices by 3.18 per cent in October alone. However, we may wait for a couple of months to see if the upward trend is sustainable or not.
Leading ratings firm, India Ratings and Research (Ind-Ra) is expecting that the overall demand conditions will remain stable for the Indian cement manufacturers, considering a gradual economic growth forecast across cement end-markets, with real estate and infrastructure helping sustain volumes. ‘With modest capacity additions of 4.2 mtpa (million tonne per annum) in ongoing fiscal, the utilisation is expected to improve,’ the rating agency added.
‘Tier-2 manufacturers taking price hikes without support from Tier 1 manufacturers suggests that the pricing power is slowly returning to the sector,’ says Vaibhav Agarwal of PhillipCapital India, citing the outcome of ground/channel checks in north India the firm has undertaken in October. Volumes continue to remain strong is what the channel has indicated. The worst on pricing front appears to be over, the question remains how fast can the cement prices improve driven by the fundamental pricing power.
‘Tier 2 manufacturers are making deliberate attempts to take price hikes in the range of Rs 2-3/bag every week and Rs 6-8/bag of price hikes have already happened in north India since 1st October 2018. Adjusting for GST this will mean a price hike of Rs4-6/bag,’ says Agarwal. With this, the price gap between Tier 1 and Tier 2 manufacturers has significantly reduced.
Citing historical experience, Agarwal feels that cement manufacturers have the fundamental ability to see a price CAGR of ~5% in similar scenarios like the current one.
In north India, the ground continues to believe the liquidity issues which has emerged over the last few days is very specific and they have yet not seen any significant reduction in orders. ‘Though they also believe it is early to pass a judgment, prima facie the ground remains confident that there is not yet a real crisis which may impact demand in medium term,’ PhillipCapital says in the report.
But the situation or low liquidity impact is not the same in an organized market like West India, according to the channel checks done by PhillipCapital. In the west, the impact of liquidity crunch is visible, especially with smaller builders who are dependent on NBFC funding. ‘As the NBFC’s have stopped extending credit to these builders the orders from such builders for concrete/ cement etc., have seen a slow down. However, the order book from larger builders continues to remain strong as they have yet not faced any liquidity crunch and are mainly bank funded,’ says the report released in the last week of October.
However, the impact of liquidity crunch is not expected to hit infrastructure projects and the ground sees no concern in the execution and pace of construction of such projects. Few notable projects which the ground believes have the potential of huge cement consumption are: 1) Statue of Shivaji Maharaj, 2) New Sea Links in Mumbai, 3) Coastal road build up, 4) Freight Corridor, 5) Metro Construction and 6) New Mumbai airport. ‘The ground believes these projects are bound to consume material quantities of cement in a couple of quarters from now and will lead and support the demand momentum,’ says Agarwal.
Organised markets such as west India will feel the heat of liquidity crunch more severe than relatively unorganized markets like north India. ‘However, this will remain limited to real estate market and that too to smaller builders. We were not told of any liquidity issues with regards to infrastructure projects, and the outlook of concrete manufacturers who are supplying to such huge ticket infrastructure projects remains fairly positive,’ PhillipCapital says.
In the west, the ground also believes that price hikes in cement is easily possible if the real intent of the cement manufacturers is actually for a price hike. Despite liquidity crunch and lower volume off-takes (then normal), none of the distributor, concrete manufacturers, channel partners believe that cement industry is lacking the pricing power. ‘We were told that some price hikes are already on cards effective 1st November 2018 in Mumbai markets. However, sustainability of these price hikes is the key,’ says Agarwal.
India Ratings said that with a minimum capacity addition in northern region and stable demand, the capacity utilisation will remain constant. Referring to western region, India Ratings believes that the utilisation in the western region is likely to be high on account of speeding up of the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) projects, Mumbai metro rail project, and road and irrigation projects due to the upcoming elections in Maharashtra in September 2019.
India Ratings expects capacity utilisation in the central region will increase over the medium term on account of receding impact of sand mining issues, election season in central region states and improving utilisation level of Jaypee’s assets.
In the east, it sees utilisation moving northward on account of boost in construction activity in Bihar due to sand availability, growth in individual home builders and infrastructure spends.
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.
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.
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.