Economy & Market

“Industry is saving considerably on storage & transportation cost”

Published

8 years ago

June 30, 2018

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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.

Economy & Market

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

Published

3 days 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.