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Slag Cement for Wide Range of Applications

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The use of slag cement is very popular in the eastern parts of the country due to easy availability of slag from steel plants.

Portland Slag Cement (PSC) is manufactured by inter-grinding Portland cement clinker, gypsum and granulated slag obtained from steel and ferro alloys industries. Alternatively, it is also manufactured by blending OPC with granulated blast furnace slag (GGBS) through mechanical blenders. The latter of the two is more common. As per the IS:455-1989 (as amended) standards, the slag constituent in PSC should not be less than 25 per cent and not more than 70 per cent.

The production of PSC dates back to 1892 in Germany. Its manufacturing in India, however, started only in the second half of the 1960s. With a widespread usage across Europe and in Asia, particularly in Japan and Singapore, today more than 15 countries in the world produce PSC in large tonnage. Production of slag cement in India is 18-25 mtpa. The compressive strength of PSC is generally lower than Ordinary Portland Cement (OPC), however, slag cements of strength equivalent to "43" and "54" grade OPC are available in the market.

The use of slag cement is very popular in the eastern parts of the country due to easy availability of slag from steel plants. Since major brands like UltraTech Cement, Dalmia Cement, Star Cement and others manufacture the product in this region, it has been well promoted and manages to get a premium as compared to its counterpart blended cement, i.e., Portland Pozzolana Cement (PPC). On the other hand, in western and southern India (longest coastline), due to lower availability of slag and greater availability of fly ash, the situation is exactly the opposite. Despite the fact that use of PSC is more suitable for coastal areas, companies find it difficult to position the product on par with PPC. JSW Cement, Vadraj Cement, ACC Cement are amongst the few manufacturers in this part of the country.

PSC can be used for all plain and reinforced concrete general construction as well as wherever OPC or PPC is used. Concrete is essentially a composite construction material composed of fine and coarse aggregate bonded together with a fluid cement (paste). Few of the chemical reactions between the aggregates containing reactive constituents and the alkalis and hydroxyl ions released during the hydration of cement, can have a disastrous effect on concrete. The reactions being expansion and cracking thereby leading to loss of strength, elasticity and durability. The key USP of PSC is its superiority in concrete durability, in turn extending the life span of buildings from 50 to 100 years. Additionally, use of PSC in concrete reduces pore volume and improves its microstructure. Simply put, PSC usage makes the concrete dense, which has the following advantages:

Improved resistance to sulphate attack by sea water due to low permeability
Improved water tightness preventing entry of moisture
Improved corrosion resistance resulting in increased life of reinforcement in concrete
PSC has a positive effect on compressive and flexural strength of concrete after 28 days, until then, it lags OPC. Curing period for slag cement is longer compared to OPC, a minimum of 14 days as recommended by IS 456:2000.

The use of slag cement in concrete production reduces the rate of heat generation and improves workability. The reduction is directly proportional to that of slag content in the cement used. These properties make slag cement concrete most suitable for concrete pavements, airport runways, concrete bridges, as well as water retaining and storage structures.

Slag cement can be used to build mass concrete works like large foundations, dams, floating structures, sewerage and underground structures, pipelines and mines, port-and-harbor structures such as jetties, break-waters, wharfs. It is also suitable for shore protection works such as blocks, tetrapods, machine foundations, piling, caissons, piers, wells, effluent and sewerage treatment plants, buildings, industrial structures, cooling towers, silos and storage structures.

Some of the key projects in India where PSC has been used is Kolkata Metro, Thane Creek Bridge in Maharashtra, Power Station at Trombay, Tata Centre in Kolkata, Karjan Dam in Gujarat and Hindustan Zinc Ltd. Currently it is being extensively used in Mumbai Underground Metro, HPCL Barmer Refinery & Petrochemical Complex in Rajasthan, Naval Dockyard at Bombay Port amongst a few major projects.

Jharkhand, Chattisgarh, Karnataka, Andhra Pradesh, West Bengal and Odisha have a number of cement plants that have absorbed the slag potential within these states. Nevertheless, signs of revival in the Indian steel industry reflect the increase in potential of PSC production owing to future availability of slag.

The sale of blended cement, however, is plagued by the following challenges:

1)Distant location of steel plant (iron ore deposits) which is the source of slag from the market resulting in increased input logistics cost. Supply chain costs, both inward and outward, have become one of the keys parameters governing the viability of a cement plant in today’s time.

2)Mindset of OPC being a superior product, which has led to the use of OPC against blended cement even at small sites (site mix concrete). This is due to the belief that faster setting time implies better cement.

3)Rapid conversion of the market from site mix to ready mix concrete (RMC) due to the scale of projects. This is being witnessed in infrastructure projects as well as building construction projects in metros, tier 1 and tier 2 cities. Mixing OPC directly with fly ash or GGBS in order to make concrete is much more cost effective than direct purchase of blended cement.

My organization has been marketing PSC for almost two decades for formerly Indorama – Heidelberg cement plant, which is now JSW cement in Dolvi (Maharashtra) as well as Vadraj Cement in Hazira (Gujarat). Recently, we have concluded the construction of a 75,000 sq ft industrial building in Vasai (outskirts of Mumbai) using PSC in majority.

In order to promote a sustainable future, cement companies should pass on cost benefits and the government must provide incentives along with compulsory use of blended cement in all government projects. Since blended cement uses factory waste, a by-product, as its raw material, it is important for environmental reasons that we maximise the use of PSC and move towards a greener path.

AUTHOR: Mohit Nawany, Director, ASL Sales & Services.

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Price hikes, drop in input costs help cement industry to post positive margins: Care Ratings

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Region-wise,the southern region comprises 35% of the total cement capacity, followed by thenorthern, eastern, western and central region comprising 20%, 18%, 14% and 13%of the capacity, respectively.

The cement industry is expected to post positive margins on decent price hikes over the months, falling raw material prices and marked drop in overall production costs, said an analysis of Care Ratings.

Wholesale and retail prices of cement have increased 11.9% and 12.4%, respectively, in the current financial year. As whole prices have remained elevated in most of the markets in the months of FY20, against the corresponding period of the previous year.

Similarly, electricity and fuel cost have declined 11.9% during 9M FY20 due to drop in crude oil prices. Logistics costs, the biggest cost for cement industry, has also dropped 7.7% (selling and distribution) as the Railways extended the benefit of exemption from busy season surcharge. Moreover, the cost of raw materials, too, declined 5.1% given the price of limestone had fallen 11.3% in the same aforementioned period, the analysis said.

According to Care Ratings, though the overall sales revenue has increased only 1.3%, against 16% growth in the year-ago period, the overall expenditure has declined 3.2% which has benefited the industry largely given the moderation in sales.

Even though FY20 has been subdued in terms of production and demand, the fall in cost of production has still supported the cement industry by clocking in positive margins, the rating agency said.

Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. The cement sector will be seeing a sharp growth in volumes mainly due to increasing demand from affordable housing and other government infrastructure projects like roads, metros, airports, irrigation.

The government’s newly introduced National Infrastructure Pipeline (NIP), with its target of becoming a $5-trillion economy by 2025, is a detailed road map focused on economic revival through infrastructure development.

The NIP covers a gamut of sectors; rural and urban infrastructure and entails investments of Rs.102 lakh crore to be undertaken by the central government, state governments and the private sector. Of the total projects of the NIP, 42% are under implementation while 19% are under development, 31% are at the conceptual stage and 8% are yet to be classified.

The sectors that will be of focus will be roads, railways, power (renewable and conventional), irrigation and urban infrastructure. These sectors together account for 79% of the proposed investments in six years to 2025. Given the government’s thrust on infrastructure creation, it is likely to benefit the cement industry going forward.

Similarly, the Pradhan Mantri Awaas Yojana, aimed at providing affordable housing, will be a strong driver to lift cement demand. Prices have started correcting Q4 FY20 onwards due to revival in demand of the commodity, the agency said in its analysis.

Industry’s sales revenue has grown at a CAGR of 7.3% during FY15-19 but has grown only 1.3% in the current financial year. Tepid demand throughout the country in the first half of the year has led to the contraction of sales revenue. Fall in the total expenditure of cement firms had aided in improving the operating profit and net profit margins of the industry (OPM was 15.2 during 9M FY19 and NPM was 3.1 during 9M FY19). Interest coverage ratio, too, has improved on an overall basis (ICR was 3.3 during 9M FY19).

According to Cement Manufacturers Association, India accounts for over 8% of the overall global installed capacity. Region-wise, the southern region comprises 35% of the total cement capacity, followed by the northern, eastern, western and central region comprising 20%, 18%, 14% and 13% of the capacity, respectively.

Installed capacity of domestic cement makers has increased at a CAGR of 4.9% during FY16-20. Manufacturers have been able to maintain a capacity utilisation rate above 65% in the past quinquennium. In the current financial year due to the prolonged rains in many parts of the country, the capacity utilisation rate has fallen from 70% during FY19 to 66% currently (YTD).

Source:moneycontrol.com

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Wonder Cement shows journey of cement with new campaign

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The campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV…

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Cement manufacturing company Wonder Cement, has announced the launch of a digital campaign ‘Har Raah Mein Wonder Hai’. The campaign has been designed specifically to run on platforms such as Instagram, Facebook and YouTube.

#HarRaahMeinWonderHai is a one-minute video, designed and conceptualised by its digital media partner Triature Digital Marketing and Technologies Pvt Ltd. The entire journey of the cement brand from leaving the factory, going through various weather conditions and witnessing the beauty of nature and wonders through the way until it reaches the destination i.e., to the consumer is very intriguing and the brand has tried to showcase the same with the film.

Sanjay Joshi, executive director, Wonder Cement, said, "Cement as a product poses a unique marketing challenge. Most consumers will build their homes once and therefore buy cement once in a lifetime. It is critical for a cement company to connect with their consumers emotionally. As a part of our communication strategy, it is our endeavor to reach out to a large audience of this country through digital. Wonder Cement always a pioneer in digital, with the launch of our IGTV campaign #HarRahMeinWonderHai, is the first brand in the cement category to venture into this space. Through this campaign, we have captured the emotional journey of a cement bag through its own perspective and depicted what it takes to lay the foundation of one’s dreams and turn them into reality."

The story begins with a family performing the bhoomi poojan of their new plot. It is the place where they are investing their life-long earnings; and planning to build a dream house for the family and children. The family believes in the tradition of having a ‘perfect shuruaat’ (perfect beginning) for their future dream house. The video later highlights the process of construction and in sequence it is emphasising the value of ‘Perfect Shuruaat’ through the eyes of a cement bag.

Tarun Singh Chauhan, management advisor and brand consultant, Wonder Cement, said, "Our objective with this campaign was to show that the cement produced at the Wonder Cement plant speaks for itself, its quality, trust and most of all perfection. The only way this was possible was to take the perspective of a cement bag and showing its journey of perfection from beginning till the end."

According to the company, the campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV. No other brand in this category has created content specific to the platform.

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In spite of company’s optimism, demand weakness in cement is seen in the 4% y-o-y drop in sales volume. (Reuters)

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Cost cuts and better realizations save? the ?day ?for ?UltraTech Cement, Updated: 27 Jan 2020, Vatsala Kamat from Live Mint

Lower cost of energy and logistics helped Ebitda per tonne rise by about 29% in Q3
Premiumization of acquired brands, synergistic?operations hold promise for future profit growth Topics

UltraTech Cement
India’s largest cement producer UltraTech Cement Ltd turned out a bittersweet show in the December quarter. A sharp drop in fuel costs and higher realizations helped drive profit growth. But the inherent demand weakness was evident in the sales volumes drop during the quarter.

Better realizations during the December quarter, in spite of the 4% year-on-year volume decline, minimized the pain. Net stand-alone revenue fell by 2.6% to ?9,981.8 crore.

But as pointed out earlier, lower costs on most fronts helped profitability. The chart alongside shows the sharp drop in energy costs led by lower petcoke prices, lower fuel consumption and higher use of green power. Logistics costs, too, fell due to lower railway freight charges and synergies from the acquired assets. These savings helped offset the increase in raw material costs.

The upshot: Q3 Ebitda (earnings before interest, tax, depreciation and amortization) of about ?990 per tonne was 29% higher from a year ago. The jump in profit on a per tonne basis was more or less along expected lines, given the increase in realizations. "Besides, the reduction in net debt by about ?2,000 crore is a key positive," said Binod Modi, analyst at Reliance Securities Ltd.

Graphic by Santosh Sharma/Mint
What also impressed analysts is the nimble-footed integration of the recently merged cement assets of Nathdwara and Century, which was a concern on the Street.

Kunal Shah, analyst (institutional equities) at Yes Securities (India) Ltd, said: "The company has proved its ability of asset integration. Century’s cement assets were ramped up to 79% capacity utilization in December, even as they operated Nathdwara generating an Ebitda of ?1,500 per tonne."

Looks like the demand weakness mirrored in weak sales during the quarter was masked by the deft integration and synergies derived from these acquired assets. This drove UltraTech’s stock up by 2.6% to ?4,643 after the Q3 results were declared on Friday.

Brand transition from Century to UltraTech, which is 55% complete, is likely to touch 80% by September 2020. A report by Jefferies India Pvt. Ltd highlights that the Ebitda per tonne for premium brands is about ?5-10 higher per bag than the average (A cement bag weighs 50kg). Of course, with competition increasing in the arena, it remains to be seen how brand premiumization in the cement industry will pan out. UltraTech Cement scores well among peers here.

However, there are road bumps ahead for the cement sector and for UltraTech. Falling gross domestic product growth, fiscal slippages and lower budgetary allocation to infrastructure sector are making industry houses jittery on growth. Although UltraTech’s management is confident that cement demand is looking up, sustainability and pricing power remains a worry for the near term.

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