Concrete

The Curious Business of Concrete

Published

6 years ago

January 2, 2019

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If cement was not a global business but a regional business at best, then concrete (or ready mixed concrete, RMC, as one may call the concrete business in some parlances) business can at best be called local, in terms of geographical spread. Some have attempted to use glorified jargons such as "glocal" etc., in respect of cement, to signify its globalisation in the areas of technology and sustainability, but in case of RMC, even such coined adjectives are not applied. Even so, there is sense in looking at the global scenario of ready mixed concrete business, simply because the global trends, and the global learnings, particularly those from Europe and North America provide a window into what may happen in emerging markets like ours, as our construction markets mature, and as our construction practices advance.

But, before we do that, a small introduction of "concrete" itself will be in order. We have always tried to remind our readers that the value chain is cement – concrete- construction, and that if cement is a construction material, then concrete is a construction intermediate. To introduce concrete to the lay person, one may say that the grey powder-like product that we know as cement is but one ingredient, albeit an important one, for making concrete mix. To quote volubly from the report entitled ‘Global Concrete Report 2018, published by Global Cement Magazine:

‘Cement is the main ‘active’ ingredient in a concrete mix, which, when combined with water recrystallises into a hard matrix which solidifies around the other constituents, binding them together. Cement makes up around 15-20 per cent of the weight of the ingredients, which also include water, sand and aggregate. Other ingredients may include special chemicals that delay or accelerate setting, that impart higher early strength or reduced heat of hydration, or which increase the flowability of the unset concrete. Other ingredients may include inert fillers such as ground limestone, or cementitiously-active alternative materials such as ground-granulated blast furnace slag, silica fume, rice husk ash or flyash. Each cubic metre of concrete weighs around 2,400 kg, and includes 350 kg of cement (140 kg/t), 700 kg of sand (280 kg/t), 1,200 kg of aggregate (480 kg/t) and 150 kg of water (60 kg/t).’ This gives us an idea that, clearly, concrete is not just cement, but many other things indeed!

Here are a few conclusions that one can draw from the same report:
Top 25 RMC companies in the world produced 388 million cubic metres of concrete in 2017, which was a mere 10 per cent of the global output. This tells us that the business is local in nature, and is fragmented, if we analyse market-by-market.

There are only two Indian Concrete Businesses figuring in this top 25, namely UltraTech Concrete at seventh, and ACC Concrete at 21st positions. This is an apparent anomaly, given that India is by far the second largest cement producing nation in the world, and this reflects the situation of the Indian construction market – the fact that it is unorganised, non-automated, retail and fragmented.

The list of top 25 has just a few concrete companies, which are not backed by cement manufacturing ventures, and the few that make the grade are in USA, and have aggregate supplies integrated into them. In fact, the top 10 concrete companies are all subsidiaries of bigger cement set-ups. This tells us some things about downstream integration strategies and evolution of cement delivery channels as markets mature.

In India, while the ready-mix concrete market has still a long way to go, we already find instances of cement companies integrating downstream into concrete delivery businesses, as also construction companies finding it useful to integrated upstream into RMC outfits. I am sure that many of these enterprises are discovering the truism that even if the overall value chain is profitable, individual components of that chain may be value- destroying.

Sumit Banerjee Chairman, Editorial Advisory Board

Concrete

Jefferies’ Optimism Fuels Cement Stock Rally

The industry is aiming price hikes of Rs 10-15 per bag in December.

Published

2 weeks ago

December 4, 2024

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Cement stocks surged over 5% on Monday, driven by Jefferies’ positive outlook on demand recovery, supported by increased government capital expenditure and favourable price trends.

JK Cement led the rally with a 5.3% jump, while UltraTech Cement rose 3.82%, making it the top performer on the Nifty 50. Dalmia Bharat and Grasim Industries gained over 3% each, with Shree Cement and Ambuja Cement adding 2.77% and 1.32%, respectively.

“Cement stocks have been consolidating without significant upward movement for over a year,” noted Vikas Jain, head of research at Reliance Securities. “The Jefferies report with positive price feedback prompted a revaluation of these stocks today.”

According to Jefferies, cement prices were stable in November, with earlier declines bottoming out. The industry is now targeting price hikes of Rs 10-15 per bag in December.

The brokerage highlighted moderate demand growth in October and November, with recovery expected to strengthen in the fourth quarter, supported by a revival in government infrastructure spending.
Analysts are optimistic about a stronger recovery in the latter half of FY25, driven by anticipated increases in government investments in infrastructure projects.
(ET)

Concrete

Steel Ministry Proposes 25% Safeguard Duty on Steel Imports

The duty aims to counter the impact of rising low-cost steel imports.

Published

2 weeks ago

December 4, 2024

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The Ministry of Steel has proposed a 25% safeguard duty on certain steel imports to address concerns raised by domestic producers. The proposal emerged during a meeting between Union Steel Minister H.D. Kumaraswamy and Commerce and Industry Minister Piyush Goyal in New Delhi, attended by senior officials and executives from leading steel companies like SAIL, Tata Steel, JSW Steel, and AMNS India.

Following the meeting, Goyal highlighted on X the importance of steel and metallurgical coke industries in India’s development, emphasising discussions on boosting production, improving quality, and enhancing global competitiveness. Kumaraswamy echoed the sentiment, pledging collaboration between ministries to create a business-friendly environment for domestic steelmakers.

The safeguard duty proposal aims to counter the impact of rising low-cost steel imports, particularly from free trade agreement (FTA) nations. Steel Secretary Sandeep Poundrik noted that 62% of steel imports currently enter at zero duty under FTAs, with imports rising to 5.51 million tonnes (MT) during April-September 2024-25, compared to 3.66 MT in the same period last year. Imports from China surged significantly, reaching 1.85 MT, up from 1.02 MT a year ago.

Industry experts, including think tank GTRI, have raised concerns about FTAs, highlighting cases where foreign producers partner with Indian firms to re-import steel at concessional rates. GTRI founder Ajay Srivastava also pointed to challenges like port delays and regulatory hurdles, which strain over 10,000 steel user units in India.

The government’s proposal reflects its commitment to supporting the domestic steel industry while addressing trade imbalances and promoting a self-reliant manufacturing sector.

(ET)

Concrete

India Imposes Anti-Dumping Duty on Solar Panel Aluminium Frames

Move boosts domestic aluminium industry, curbs low-cost imports

Published

2 weeks ago

December 4, 2024

admin

The Indian government has introduced anti-dumping duties on anodized aluminium frames for solar panels and modules imported from China, a move hailed by the Aluminium Association of India (AAI) as a significant step toward fostering a self-reliant aluminium sector.

The duties, effective for five years, aim to counter the influx of low-cost imports that have hindered domestic manufacturing. According to the Ministry of Finance, Chinese dumping has limited India’s ability to develop local production capabilities.

Ahead of Budget 2025, the aluminium industry has urged the government to introduce stronger trade protections. Key demands include raising import duties on primary and downstream aluminium products from 7.5% to 10% and imposing a uniform 7.5% duty on aluminium scrap to curb the influx of low-quality imports.

India’s heavy reliance on aluminium imports, which now account for 54% of the country’s demand, has resulted in an annual foreign exchange outflow of Rupees 562.91 billion. Scrap imports, doubling over the last decade, have surged to 1,825 KT in FY25, primarily sourced from China, the Middle East, the US, and the UK.

The AAI noted that while advanced economies like the US and China impose strict tariffs and restrictions to protect their aluminium industries, India has become the largest importer of aluminium scrap globally. This trend undermines local producers, who are urging robust measures to enhance the domestic aluminium ecosystem.

With India’s aluminium demand projected to reach 10 million tonnes by 2030, industry leaders emphasize the need for stronger policies to support local production and drive investments in capacity expansion. The anti-dumping duties on solar panel components, they say, are a vital first step in building a sustainable and competitive aluminium sector.