The cement industry is gasping for higher revenues. The industry, which has already been reeling under price pressures with most of the major players focusing on volume growth, is facing the challenge of rising costs, thus making a case for hiking prices. But many analysts are of the view that the industry has to wait till the unseason – rainy season – is over, even if they want to do so.
Cement prices have remained range bound in the past four years. They are mainly driven by regional capacity, utilization levels and demand within the region. Pricing scenario in FY18 was soft as all-India average realisation did not witness any improvement. Meanwhile, CARE Ratings in its annual review pegged the cement price hover in the range of 5 per cent either way from Rs 317/50 kg bag post GST over FY19 (2018-19), indicating that the price is unlikely to spike from the present standpoint.
"Prices are expected to remain range bound and may fall further with addition of new capacity especially in the Southern region. We expect the all-India prices to remain in the range of Rs. 317 (+/- 5% per bag post GST) during the year," said Madan Sabnavis, Chief Economist, CARE Ratings, in his long term forecast in the report released early May 2018.
On the other hand, input prices rose, particularly petcoke and diesel prices, besides logistics costs. A persistent spike in petcoke and diesel prices remains a major headwind for the industry. "Having surged by ~22-25 per cent in FY18, petcoke prices continued to move northwards till date in FY19. Industry’s power and fuel cost and freight cost together surged by ~Rs200-300/tonne in last one year. We believe cement industry is unlikely to witness any meaningful reduction in fuel prices in FY19E. Hence, realisation improvement is the prime way to support profitability," says Binod Kumar Modi – Senior Analyst – Reliance Securities, in response to a query.
Region-wise, CARE Ratings sees, Western and Eastern regions with favourable demand continue to record higher price for cement. These regions are driven by demand from infrastructure, housing and commercial real estate.
However, Sabnavis says, "Southern region with the highest installed cement capacity in the country (approx. 158MnMT) continued to witness lowest cement prices." Overall capacity utilization in the Southern region has been in the range of 55-57% post-2014. The same could be attributed to lower than expected growth in demand from housing and infrastructure development in the region. Additionally, eastern region witnessed considerable capacity addition, making it self-sufficient, which was previously met by supply from the southern region. The prices in Southern region are expected to remain subdued over the next 12-18 months. The prices would strengthen once capacity utilization moves above 60%.
Coming to the short-term trends, Vivek Maheshwari, Investment Analyst from the leading investment house CLSA, says, "Channel checks indicate that market share remains a focus for players and has impacted cement prices in most regions, with the exception of a few states. As a result, the price hikes of April and May have largely been reversed, with prices back to March levels in several markets."
In April 2018, rising demand resulted in an increase in cement prices in the Ahmedabad and Hyderabad markets by Rs 20/bag and Rs 10/bag respectively in April 2018 on an M-o-M basis. However, rising supplies resulted in prices remaining range-bound in the Kolkata market.
"There are pockets where the industry is trying to raise prices but dealer feedback is that a ‘real’ hike may only be visible post-monsoon," Maheshwari adds. Thus, margin-accretive cement pricing is still eluding this core industry.
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.
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