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“Industry is saving considerably on storage & transportation cost”

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Ashish K Nainan, Research Analyst – Industry Research, CARE Ratings

GST has come into existence nearly a year back. How do you review GST and changes made in GST on Cement and downstream products over the last one year?
The sector has benefited from the way GST has infused efficiency in terms of logistics and warehousing which has helped the industry save both time and costs.

The changes are yet to take place for the larger cement industry in terms of the tax-slab and incidence of GST on cement (at 28 per cent vs expectation of 18 per cent). But the industry has been buoyed by the demand from infrastructure and affordable housing. The renewed demand has seemed to ward of some of the challenges of GST. Interestingly, the Government has been instrumental in creating the renewed demand because of their focus on infrastructure and real-estate development.

What has been the impact of GST on cement and its other downstream products on the industry and users at present? Do you think GST process has stabilised by now?
Cement (Portland, slag, aluminous, etc.) falls under the highest tax bracket, i.e, 28 per cent. Other cement products used in industry like refractory cement, cement-based particle boards, etc. are taxed at 18 per cent. Cement is a majorly demand driven product coming from real estate and infrastructure segments and these two segments constitute for over 90 per cent of the total demand. Bringing all cement and its by-products under the same tax slab (at 18 per cent) would be favourable for the industry and would augur well for growth, thereby also helping in creating employment.

Real estate and infrastructure are significant in supporting growth of the economy, and are major employment generators in our economy. The present NDA government too has been focused on providing stimulus to infrastructure and real estate. Tax slab rejig would be considered a positive and enabling step from the government.

What are the benefits that have accrued to the industry – particularly intangibles like doing away with paperwork, transparency, speeding up logistics, etc.
One of the major benefits has been ease in movement or transportation of cement across States. There have been considerable cost savings w.r.t. the number of warehouses these companies have to maintain. Now, a cement manufacturer could maintain one large warehouse in one of the States, which would serve as a hub, and continue to supply the surrounding region from this hub which would include markets in the neighbouring States. Given the significance of transportation and storage costs which at times is as high as 25 per cent in the overall cost for cement manufacturers, the industry has been able to save considerably on storage and transportation cost due to GST. Paperwork too has eased and there are expectations of it easing further once the E-way bill processes get stabilised over the next six to nine months for the industry.
How GST has impacted the building materials industry, most of which has been in the unorganised sector as far as tax compliance was concerned?
It would be difficult to comment on building materials industry as a whole. Cement, steel are highly organised given the nature of the industry. On the other hand, ceramics, granite, marbles, etc. continue to have a sizable proportion of unorganised players. Paints is another industry which has a sizable number of unorganised players (approximately 35 per cent).

Tax compliance is not a choice anymore. They will have to be compliant if they want to cater to institutions like EPC companies, real-estate developers and government agency since these companies need to avail input tax credit. Interestingly, GST has brought awareness among retail consumers too. It is hence a matter of time, before majority of these industries become organised and become tax compliant.

What percentage of building material suppliers ecosystem has come under tax net after GST and its impact on prices generally?
Difficult to comment. Cement and steel like I mentioned is completely organised. Paints and glass used in construction too are majorly organised. Ceramics was about 45-50 per cent organised. This segment would witness a larger number of companies becoming formal, due to the segment they cater to. Their consumers will have to procure from GST-compliant companies in order to avail input tax credit.

Marble and granite industry too would follow trends in ceramic industry. Products with granite and marble industry are taxed at two separate tax slabs (18 per cent and 28 per cent). Bringing them under same tax slab would increase compliance and would also improve the ease-of-filing for these companies.

To what extent construction industry – building and infrastructure – is able to avail the input credit benefits and set-off their tax commitments? Is there any general estimate on the percentage of benefit claimed by them?
The modalities and incidence of inverted duty structure in some of the infrastructure segments especially in EPC contracts is still being discussed and resolved. Thus, specific data on input credits is awaited.

Broadly, the incidence of GST on infrastructure sector has been higher at 18 per cent than the previous tax regime (approximately 12-16 per cent). But input tax credit offers the much needed respite bringing down the overall tax incidence. Issues related to inverted tax structure in EPC contracts and ease in refunds need to be streamlined. These are some of the major hurdles or issues. Yet to come across any insight on input tax credits and overall tax incidence.

What is the general impact of GST on cement and building materials on their product prices and their end-products – building and infrastructure costs?
Prices of cement are driven by regional capacity utilisation and demand-supply scenario. The demand-supply has improved but are far lower from their historic highs in terms of capacity utilisation which has kept the prices subdued. GST has not had a major impact on the prices of cement. Th e prices have remained range bound post GST even though there were expectations of increase in prices.

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Concrete

FORNNAX Appoints Dieter Jerschl as Sales Partner for Central Europe

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FORNNAX TECHNOLOGY has appointed industry veteran Dieter Jerschl as its new sales partner in Germany to strengthen its presence across Central Europe. The partnership aims to accelerate the adoption of FORNNAX’s high-capacity, sustainable recycling solutions while building long-term regional capabilities.

FORNNAX TECHNOLOGY, one of the leading advanced recycling equipment manufacturers, has announced the appointment of a new sales partner in Germany as part of its strategic expansion into Central Europe. The company has entered into a collaborative agreement with Mr. Dieter Jerschl, a seasoned industry professional with over 20 years of experience in the shredding and recycling sector, to represent and promote FORNNAX’s solutions across key European markets.

Mr. Jerschl brings extensive expertise from his work with renowned companies such as BHS, Eldan, Vecoplan, and others. Over the course of his career, he has successfully led the deployment of both single machines and complete turnkey installations for a wide range of applications, including tyre recycling, cable recycling, municipal solid waste, e-waste, and industrial waste processing.

Speaking about the partnership, Mr. Jerschl said,
“I’ve known FORNNAX for over a decade and have followed their growth closely. What attracted me to this collaboration is their state-of-the-art & high-capacity technology, it is powerful, sustainable, and economically viable. There is great potential to introduce FORNNAX’s innovative systems to more markets across Europe, and I am excited to be part of that journey.”

The partnership will primarily focus on Central Europe, including Germany, Austria, and neighbouring countries, with the flexibility to extend the geographical scope based on project requirements and mutual agreement. The collaboration is structured to evolve over time, with performance-driven expansion and ongoing strategic discussions with FORNNAX’s management. The immediate priority is to build a strong project pipeline and enhance FORNNAX’s brand presence across the region.

FORNNAX’s portfolio of high-performance shredding and pre-processing solutions is well aligned with Europe’s growing demand for sustainable and efficient waste treatment technologies. By partnering with Mr. Jerschl—who brings deep market insight and established industry relationships—FORNNAX aims to accelerate adoption of its solutions and participate in upcoming recycling projects across the region.

As part of the partnership, Mr. Jerschl will also deliver value-added services, including equipment installation, maintenance, and spare parts support through a dedicated technical team. This local service capability is expected to ensure faster project execution, minimise downtime, and enhance overall customer experience.

Commenting on the long-term vision, Mr. Jerschl added,
“We are committed to increasing market awareness and establishing new reference projects across the region. My goal is not only to generate business but to lay the foundation for long-term growth. Ideally, we aim to establish a dedicated FORNNAX legal entity or operational site in Germany over the next five to ten years.”

For FORNNAX, this partnership aligns closely with its global strategy of expanding into key markets through strong regional representation. The company believes that local partnerships are critical for navigating complex market dynamics and delivering solutions tailored to region-specific waste management challenges.

“We see tremendous potential in the Central European market,” said Mr. Jignesh Kundaria, Director and CEO of FORNNAX.
“Partnering with someone as experienced and well-established as Mr. Jerschl gives us a strong foothold and allows us to better serve our customers. This marks a major milestone in our efforts to promote reliable, efficient and future-ready recycling solutions globally,” he added.

This collaboration further strengthens FORNNAX’s commitment to environmental stewardship, innovation, and sustainable waste management, supporting the transition toward a greener and more circular future.

 

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Concrete

Budget 2026–27 infra thrust and CCUS outlay to lift cement sector outlook

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Higher capex, city-led growth and CCUS funding improve demand visibility and decarbonisation prospects for cement

Mumbai

Cement manufacturers have welcomed the Union Budget 2026–27’s strong infrastructure thrust, with public capital expenditure increased to Rs 12.2 trillion, saying it reinforces infrastructure as the central engine of economic growth and strengthens medium-term prospects for the cement sector. In a statement, the Cement Manufacturers’ Association (CMA) has welcomed the Union budget 2026-27 for reinforcing the ambitions for the nation’s growth balancing the aspirations of the people through inclusivity inspired by the vision of Narendra Modi, Prime Minister of India, for a Viksit Bharat by 2047 and Atmanirbharta.

The budget underscores India’s steady economic trajectory over the past 12 years, marked by fiscal discipline, sustained growth and moderate inflation, and offers strong demand visibility for infrastructure linked sectors such as cement.

The Budget’s strong infrastructure push, with public capital expenditure rising from Rs 11.2 trillion in fiscal year 2025–26 to Rs 12.2 trillion in fiscal year 2026–27, recognises infrastructure as the primary anchor for economic growth creating positive prospects for the Indian cement industry and improving long term visibility for the cement sector. The emphasis on Tier 2 and Tier 3 cities with populations above 5 lakh and the creation of City Economic Regions (CERs) with an allocation of Rs 50 billion per CER over five years, should accelerate construction activity across housing, transport and urban services, supporting broad based cement consumption.

Logistics and connectivity measures announced in the budget are particularly significant for the cement industry. The announcement of new dedicated freight corridors, the operationalisation of 20 additional National Waterways over the next five years, the launch of the Coastal Cargo Promotion Scheme to raise the modal share of waterways and coastal shipping from 6 per cent to 12 per cent by 2047, and the development of ship repair ecosystems should enhance multimodal freight efficiency, reduce logistics costs and improve the sector’s carbon footprint. The announcement of seven high speed rail corridors as growth corridors can be expected to further stimulate regional development and construction demand.

Commenting on the budget, Parth Jindal, President, Cement Manufacturers’ Association (CMA), said, “As India advances towards a Viksit Bharat, the three kartavya articulated in the Union Budget provide a clear context for the Nation’s growth and aspirations, combining economic momentum with capacity building and inclusive progress. The Cement Manufacturers’ Association (CMA) appreciates the Union Budget 2026-27 for the continued emphasis on manufacturing competitiveness, urban development and infrastructure modernisation, supported by over 350 reforms spanning GST simplification, labour codes, quality control rationalisation and coordinated deregulation with States. These reforms, alongside the Budget’s focus on Youth Power and domestic manufacturing capacity under Atmanirbharta, stand to strengthen the investment environment for capital intensive sectors such as Cement. The Union Budget 2026-27 reflects the Government’s focus on infrastructure led development emerging as a structural pillar of India’s growth strategy.”

He added, “The Rs 200 billion CCUS outlay for various sectors, including Cement, fundamentally alters the decarbonisation landscape for India’s emissions intensive industries. CCUS is a significant enabler for large scale decarbonisation of industries such as Cement and this intervention directly addresses the technology and cost requirements of the Cement sector in context. The Cement Industry, fully aligned with the Government of India’s Net Zero commitment by 2070, views this support as critical to enabling the adoption and scale up of CCUS technologies while continuing to meet the Country’s long term infrastructure needs.”

Dr Raghavpat Singhania, Vice President, CMA, said, “The government’s sustained infrastructure push supports employment, regional development and stronger local supply chains. Cement manufacturing clusters act as economic anchors across regions, generating livelihoods in construction, logistics and allied sectors. The budget’s focus on inclusive growth, execution and system level enablers creates a supportive environment for responsible and efficient expansion offering opportunities for economic growth and lending momentum to the cement sector. The increase in public capex to Rs 12.2 trillion, the focus on Tier 2 and Tier 3 cities, and the creation of City Economic Regions stand to strengthen the growth of the cement sector. We welcome the budget’s emphasis on tourism, cultural and social infrastructure, which should broaden construction activity across regions. Investments in tourism facilities, heritage and Buddhist circuits, regional connectivity in Purvodaya and North Eastern States, and the strengthening of emergency and trauma care infrastructure in district hospitals reinforce the cement sector’s role in enabling inclusive growth.”

CMA also noted the Government’s continued commitment to fiscal discipline, with the fiscal deficit estimated at 4.3 per cent of GDP in FY27, reinforcing macroeconomic stability and investor confidence.

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Concrete

JK Cement Crosses 31 MTPA Capacity with Commissioning of Buxar Plant in Bihar

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JK Cement has commissioned a 3 MTPA Grey Cement plant in Buxar, Bihar, taking its total capacity to 31.26 MTPA and placing it among India’s top five grey cement producers. The ₹500 crore investment strengthens the company’s national footprint while supporting Bihar’s infrastructure growth and local economic development.

JK Cement Ltd., one of India’s leading cement manufacturers, has announced the commissioning of its new state-of-the-art Grey Cement plant in Buxar, Bihar, marking a significant milestone in the company’s growth trajectory. With the commissioning of this facility, JK Cement’s total production capacity has increased to 31.26 million tonnes per annum (MTPA), enabling the company to cross the 30 MTPA threshold.

This expansion positions JK Cement among the top five Grey Cement manufacturers in India, strengthening its national footprint and reinforcing its long-term growth strategy.

Commenting on the strategic achievement, Dr Raghavpat Singhania, Managing Director, JK Cement, said, “Crossing 31 MTPA is a significant turning point in JK Cement’s expansion and demonstrates the scale, resilience, and aspirations of our company. In addition to making a significant contribution to Bihar’s development vision, the commissioning of our Buxar plant represents a strategic step towards expanding our national footprint. We are committed to developing top-notch manufacturing capabilities that boost India’s infrastructure development and generate long-term benefits for local communities.”

The Buxar plant has a capacity of 3 MTPA and is spread across 100 acres. Strategically located on the Patna–Buxar highway, the facility enables faster and more efficient distribution across Bihar and adjoining regions. While JK Cement entered the Bihar market last year through supplies from its Prayagraj plant, the Buxar facility will now allow the company to serve the state locally, with deliveries possible within 24 hours across Bihar.

Sharing his views on the expansion, Madhavkrishna Singhania, Joint Managing Director & CEO, JK Cement, said, “JK Cement is now among India’s top five producers of grey cement after the Buxar plant commissioning. Our capacity to serve Bihar locally, more effectively, and on a larger scale is strengthened by this facility. Although we had already entered the Bihar market last year using Prayagraj supplies, local manufacturing now enables us to be nearer to our clients and significantly raise service standards throughout the state. Buxar places us at the center of this chance to promote sustainable growth for both the company and the region in Bihar, a high-growth market with strong infrastructure momentum.”

The new facility represents a strategic step in supporting Bihar’s development vision by ensuring faster access to superior quality cement for infrastructure, housing, and commercial projects. JK Cement has invested approximately ₹500 crore in the project. Construction began in March 2025, and commercial production commenced on January 29, 2026.

In addition to strengthening JK Cement’s regional presence, the Buxar plant is expected to generate significant direct and indirect employment opportunities and attract ancillary industries, thereby contributing to the local economy and the broader industrial ecosystem.

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