Process

Satellite grinding units are cost-effective proposition

Published

6 years ago

January 3, 2019

admin

Pratap Kumar Ghosh, Group Managing Director, Ercom Engineers, is of the opinion that we have to study the consumption centres as well as the availability of other additives, cementitious products, which can improve the quality of cement and also meet local quality of the market.

Which are the most efficient methods of cement grinding that are used now?
The most efficient way of handling grinding is with VRM technology and ball mill with roll press. The main criteria of selecting these are dependent on the raw materials availability, mainly slag and fly ash, and these are done to see the capex control as well as the opex control. So basically, the technology is based (today) on the selection of the high efficiency level and how it can sustain the capex investment for the next 10 to 15 year so that the investors andpromoters can make some money and also produce a sustainable quality of cement through this grinding process.

Any new technologies that have emerged in the field or process?
There are around two to three technologies.VRM technology is predominantly used by most cement plants today, followed by roll press and ball mill technology, and also the roll press for finished grinding technology. Other than that, two other grinding systems-horomill and beta mill-have the the latest technologies but are yet to be proven. The beta mill is installed in Dubai in National Cement. This technology has an advantage over VRM as well as ball mill vs roll press. It was invented and the technology was established by a German company. Similarly, horomill technology was also invented and the technology was being supplied from France. But these two technologies are yet to come to India in a big way and prove its worth for the use and better particle size distribution and better quality of cement.

How does the quality of cement get affected by the method of grinding?
The quality is governed by particle size distribution in cement, and that alone, the ball mill with a classifier or with a VRM with a high efficiency classifier or roll press with a classifier can generate the 32 and 45 microns, which contribute to the quality and strength of the cement. These are the factors that improves the quality and sustainability in terms of its longevity.

The present trend is to install grinding plants at many places. However, earlier that was not the case. How is this likely to boost the size of market servicing levels? A good idea is to take the satellite grinding units based on the mother plants. What is happening is that cement business is a logistics-oriented business and you have to transport cement bags or loose bulk cement. Instead you can take clinker and go towards fly ash-based or slag-based cement, which can be mixed or blended with clinker grinding, and the capacity can be increased to local market to the tune of 2:1. That means you take one tonne of clinker and you produce almost close to 2 or 2.1 tonne of cement with that clinker, if not more. So that is basically the cost saving on the logistics part, and these can be achieved through road network as well as the sea route or river route process.

Also, the secondary freight slightly changes. To reduce secondary freight, satellite grinding units are being promoted very near to the market so that the distributors can give it to the consumers locally within a 35-40 km radius instead of travelling from mother plant covering distance of 250-300 km. So cost effectiveness comes mainly by achieving these satellite grinding units, located in the consumption centres. Only thing is that we have to study the consumption centres as well as the availability of other additives and cementitious products, which can improve the quality of cement and also meet the local quality of the market.

…those factors have to be studied in advance?
Yes, those factors need to be studied in depth, and then only the decision can be taken on what basis the cement product can be designed for the local market and cater to the various requirements.

Today, the government is giving thrust to blended cement and composite cement – wherein apart from clinker you are adding substantial amount of these additives and these are available at different locations. Instead of bringing these additives all the way to the mother plant and producing the cement and transporting all the way to the consumption centres, it is much better that you bring in clinker component and where additives are available and you do grinding at the location and take it to the nearest market or consumption centre. So it gives you a lot of addition in terms of profitability and reduction of the freight.

The mini consumption centres, which are in the rural areas where the cement quality requirement can be met through the cementitious products like green cement or composite cement, are required only for plastering or for the flooring purposes, while the walls and other things can be achieved with low clinker consumption. Some of the plants in India and abroad have gone to a level of 32 per cent of clinker consumption and rest are all additives and cementitious products. So this way it becomes environment friendly as well as the carbon emission level also goes down quite a lot.

How far has India progressed in domestic design and manufacturer of grinding machinery?
Today, India is self-sufficient in cement machinery manufacturing, especially grinding units except for very few castings, which are imported from Europe or Germany. Nevertheless, about 99 per cent of all the plant and machinery are being manufactured in India under the "Make in India" programme. So India is self-sufficient as far as cement industry is concerned, and is one of the world’s most efficient industry. India will continue to be the leader in the future.

How does grinding of slag differ from grinding of fly ash in terms of energy consumption?
Slag is a difficult material to grind, whereas fly ash can be grounded easily. There are technologies that fly ash can be taken into cement grinding not through the inlet of the mill but it can be added at the discharge of cement mill and it gets mixed in the bucket elevator and air slide and then it gets separated. The fine particles get mixed up with cement OPC and go into the final product. Whereas the coarse fly ash that comes back to the re-circulation method through cement mill inlet and again it is grounded to a level of 3,600 to 4,000 to achieve the real quality and strength of the cement. Whereas with slag, it consumes almost additional 30 per cent extra power to grind vis-a-vis PPC. So that is the difference but since the cementitious slag has a better property, it can be mixed almost to the tune of 60 per cent to a clinker that is OPC ground to a level of 3,500 to 3,600 with a fine ground slag to 4,000+, and that can give you an excellent quality of slag cement,i.e., PSC cement, which can be much better than any other PPC or OPC cement and it is more durable than OPC.

– BS SRINIVASALU REDDY

Process

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

Published

3 years ago

October 21, 2021

admin

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

Process

Wonder Cement shows journey of cement with new campaign

Published

3 years ago

October 21, 2021

admin

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

ETBrandEquity

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.

Process

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

Published

3 years ago

October 21, 2021

admin

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.