Economy & Market
Reversal in hikes, discounts queer the pitch
Published
6 years agoon
By
admin
Southern region, which had taken a lead in price hike actions recently, has been ahead of others in reversing their earlier actions too. This has affected the near term pricing sentiment of the overall market.
Following a strong hike in cement prices in February 2019, the prices have eased a bit in March with sales momentum coming under pressure from high prices and some companies resorting to heavy discounts in order to meet the year-end sales targets. The price pressures were more starkly visible in south and north regions. Typically, given the upcoming busy construction season, the first half of the calendar year being seasonally stronger period for cement consumption, cement producers have tried to fulfil their dream of hiking prices in February, despite housing sector has been facing a slowdown for a few quarters now.
The ET Cement Index that tracks cement price movements across the country was up by 1.02 per cent to 2031.7 in March 2019, after peaking to 2044.9 earlier during the month. Though prices have firmed up recently, they have eased a bit during March unable to sustain high levels.
"Average cement prices in south have moved up by 3-5 per cent month-on-month (MoM) in key cities like Bangalore (+5 per cent), Chennai (+3 per cent) and Hyderabad (+3 per cent). The hike is despite the rollback of the last price hikes which was almost instantly reversed in the same month," says Vivek Maheshwari, Investment Analyst, CLSA. However, CLSA’s report said in its latest report that exit March prices were almost flat MoM in the region as discounts increased amid lower offtakes.
On the other hand, in north, east and Maharashtra (west) prices moved up 1-3 per cent MoM, while central prices were flat. Gujarat (west) prices were, however, marginally lower due to weak rural demand as well as higher inflows from Rajasthan (north), according to CLSA’s March month-end report based on channel checks. Motilal Oswal Securities (MOS) report prepared based on channel checks and released in mid-March, found that on an average the cement prices across the country fell by Rs 2/bag of 50 kg each. "Region-wise, South India experienced the maximum cut of around Rs 15/bag to Rs 314. In Hyderabad, Kerala and Bengaluru, the survey showed cement prices declined by as much as Rs 20/bag against the backdrop of price hikes of Rs 30-50/bag in the previous month being led by cement makers in the south. Prices marginally declined in the east and were mostly flat in other regions."
Several factors seem to have worked in influencing this rollback in cement prices in February and March 2019, according to different analysts. Besides pressure from year-end targets leading to volume push by some manufacturers, demand is not catching up to the extent the industry players have expected it to play out, tight liquidity conditions are affecting the ability of infrastructure contractors in keeping their projects on the move, pre-election infrastructure push seems to be petering out, upcoming harvest season in several parts of the country, and in near term, labour availability is expected to be constrained by upcoming agriculture harvesting and general elections, impacting construction activity to an extent.
Dealers have indicated that the price gap between trade and non-trade continues to be quite high in several markets and there are instances of bulk supplies being diverted to the retail market.
While all-India prices increased 3 per cent sequentially in the March quarter, the recent fall notwithstanding, there’s little room for cement price hikes, according to MOS. The reason: Though the demand outlook is brighter, growth may not suffice to absorb existing supply and support cement prices.
Industry players, however, are expecting that demand is likely to stay strong even in FY20 (2019-20) and the industry expects a 7-8 per cent year-on-year (YoY) demand growth or even higher if there is political stability and the current government returns to power, says CLSA report.
The consumption patterns that will emerge in the current season in the next couple of months, particularly in pre-poll season, are expected to throw some hints into the long term price trends. However, there are no supply side concerns that are expected in future, given there is excess capacity in the industry and many new capacity additions are already on the anvil.
Price-profit Relation
A one per cent change in cement price impacts (CLSA) coverage earnings per share (EPS) of cement companies by 5-8 per cent in calendar 2020. Thus, cement pricing is the most critical profitability driver, according to the sensitivity analysis done by CLSA. It has identified volume growth, cement pricing, power and fuel costs and freight costs as the key variables for cement companies and the key margin differentiators across companies.
"Variable costs dominate the cement business, and hence, operating leverage is of limited significance. Freight, power and fuel are the key variable costs that form >60 per cent of total costs. However, the key is cement prices,as one per cent change impacts EPS by 5-8 per cent. Intuitively, one would expect a high correlation between cement prices with demand growth, input cost inflation and industry utilisation, but our analysis of past trends suggests otherwise," CLSA said in a report. Based on this premise CLSA has concluded that industry behaviour and discipline ‘were’the key pricing drivers, which unfortunately’were’not exactly predictable and "hence, pricing volatility is here to stay."
– BS SRINIVASALU REDDY
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Walplast Products, a leading manufacturer of building and construction materials, has unveiled the expansion of its esteemed HomeSure MasterTouch portfolio with the launch of the new HomeSure MasterTouch Lush (Interior & Exterior Emulsion) and HomeSure MasterTouch Prime (Interior & Exterior Primer). These new offerings are strategically positioned as high-quality, yet affordable, high-performance solutions designed to enable individuals to achieve their dream of beautiful homes and “Elevating Lifestyles” (Raho Shaan Se).
The HomeSure MasterTouch Lush Interior Emulsion is a high-quality yet affordable wall paint that delivers best-in-class coverage and an aesthetically appealing, durable finish. Formulated with premium pigments and acrylic binders, it ensures excellent coverage, colour retention, and resistance to fungus, making it an ideal choice for homeowners seeking durability and value. Meanwhile, the HomeSure MasterTouch Lush Exterior Emulsion is specifically engineered to withstand varying weather conditions, particularly in regions with frequent rain and moderate humidity. With strong adhesion and UV-resistant properties, it protects exterior walls against algae growth and black spots while maintaining an elegant matte appearance.
Adding to its comprehensive range, Walplast introduces the HomeSure MasterTouch Prime Interior and Exterior Primers, offering superior adhesion, excellent whiteness, and long-lasting durability. These primers enhance the topcoat application, ensuring a flawless, smooth finish for both interior and exterior surfaces. Engineered with excellent workability and eco-friendly attributes, the primers are free from heavy metals, low VOC (Volatile Organic Compounds), and protect against algae and fungus, making them a reliable base for any painting project.
“At Walplast, we are committed to providing innovative and accessible solutions that enhance the beauty and longevity of homes. The HomeSure MasterTouch range is designed with the modern homeowner in mind—delivering affordability without compromising on quality. Our focus is to empower individuals to bring their dream homes to life with reliable and superior products,” said Kaushal Mehta, Managing Director of Walplast.
Aniruddha Sinha, Senior Vice President Marketing, CSR, and Business Head – P2P Division, Walplast added, “The HomeSure MasterTouch Lush and Prime range align with our vision of offering peace of mind to customers with durable, aesthetic, and affordable solutions for every home. The “Elevate your lifestyle” reflects our belief that everyone deserves to live in a home they take pride in. With this launch, we continue our mission of enabling dreams of beautiful homes for all.”
The newly launched products will be available across key markets, including Maharashtra, Rajasthan, Gujarat, Uttar Pradesh, Madhya Pradesh, Jharkhand, and Chhattisgarh. The HomeSure MasterTouch portfolio also includes premium emulsions such as Bloom and Vivid, as well as a premium primer, catering to diverse customer needs in the construction and home improvement sectors.
Walplast’s HomeSure portfolio encompasses a comprehensive range of construction solutions, including Wall Putty, Tile Adhesives, Gypsum-based products, Construction Chemicals, AAC blocks, and more. With a robust network of over 800 active distributors, 6000 dealers, and more than 65,000 influencers, the HomeSure division continues to be the preferred choice in the construction ecosystem, reinforcing Walplast’s position as an industry leader.

Carbon Capture, Utilisation, and Storage (CCUS) is crucial for reducing emissions in the cement industry. Kanika Mathur explores how despite the challenges such as high costs and infrastructure limitations, CCUS offers a promising pathway to achieve net-zero emissions and supports the industry’s sustainability goals.
The cement industry is one of the largest contributors to global CO2 emissions, accounting for approximately seven to eight per cent of total anthropogenic carbon dioxide released into the atmosphere. As the world moves towards stringent decarbonisation goals, the cement sector faces mounting pressure to adopt sustainable solutions that minimise its carbon footprint. Among the various strategies being explored, Carbon Capture, Utilisation, and Storage (CCUS) has emerged as one of the most promising approaches to mitigating emissions while maintaining production efficiency. This article delves into the challenges, opportunities, and strategic considerations surrounding CCUS
in the cement industry and its role in achieving net-zero emissions.
Understanding CCUS and Its Relevance to Cement Manufacturing
Carbon Capture, Utilisation, and Storage (CCUS) is an advanced technological process designed to capture carbon dioxide emissions from industrial sources before they are released into the atmosphere. The captured CO2 can then be either utilised in various applications or permanently stored underground to prevent its contribution to climate change.
Rajesh Kumar Nayma, Associate General Manager – Environment and Sustainability, Wonder Cement says, “CCUS is indispensable for achieving Net Zero emissions in the cement industry. Even with 100 per cent electrification of kilns and renewable energy utilisation, CO2 emissions from limestone calcination—a key raw material—remain unavoidable. The cement industry is a major contributor to
GHG emissions, making CCUS critical for sustainability. Integrating CCUS into plant operations ensures significant reductions in carbon emissions, supporting the industry’s Net Zero goals. This transformative technology will also play a vital role in combating climate change and aligning with global sustainability standards.”
The relevance of CCUS in cement manufacturing stems from the inherent emissions produced during the calcination of limestone, a process that accounts for nearly 60 per cent of total CO2 emissions in cement plants. Unlike other industries where CO2 emissions result primarily from fuel combustion, cement production generates a significant portion of its emissions as an unavoidable byproduct. This makes CCUS a particularly attractive solution for the sector, as it offers a pathway to drastically cut emissions without requiring a complete overhaul of existing production processes.
According to a Niti Ayog report from 2022, the adverse climatic effects of a rise in GHG emissions and global temperatures rises are well established and proven, and India too has not been spared from adverse climatic events. As a signatory of the Paris Agreement 2015, India has committed to reducing emissions by 50 per cent by the year 2050 and reaching net zero by 2070. Given the sectoral composition and sources of CO2 emissions in India, CCUS will have an important and integral role to play in ensuring India meets its stated climate goals, through the deep decarbonisation of energy and CO2 emission intensive industries such as thermal power generation, steel, cement, oil & gas refining, and petrochemicals. CCUS can enable the production of clean products while utilising our rich endowments of coal, reducing imports and thus leading to an Indian economy. CCUS also has an important role to play in enabling sunrise sectors such as coal gasification and the nascent hydrogen economy in India.
The report also states that India’s current cement production capacity is about 550 mtpa, implying capacity utilisation of about 50 per cent only. While India accounts for 8 per cent of global cement capacity, India’s per capita cement consumption is only 235 kg, and significantly low compared to the world average of 500 kg per capita, and China’s per capita consumption of around 1700 kg per capita. It is expected that domestic demand, capacity utilisation and per capita cement consumption will increase in the next decade, driven by robust demand from rapid industrialisation and urbanisation, as well as the Central Government’s continued focus on highway expansions, investment in smart cities, Pradhan Mantri Awas Yojana (PMAY), as well as several state-level schemes.
Key Challenges in Integrating CCUS in Cement Plants Spatial Constraints and Infrastructure Limitations
One of the biggest challenges in integrating CCUS into existing cement manufacturing facilities is space availability. Most cement plants were designed decades ago without any consideration for carbon capture systems, making retrofitting a complex and costly endeavour. Many facilities are already operating at full capacity with limited available space, and incorporating additional carbon capture equipment requires significant modifications.
“The biggest challenge we come across repeatedly is that most cement manufacturing facilities were built decades ago without any consideration for carbon capture systems. Consequently, one of the primary hurdles is the spatial constraints at these sites. Cement plants often have limited space, and retrofitting them to integrate carbon capture systems can be very challenging. Beyond spatial issues, there are additional considerations such as access and infrastructure modifications, which further complicate the integration process. Spatial constraints, however, remain at the forefront of the challenges we encounter” says Nathan Ashcroft, Carbon Director, Stantec.
High Capital and Operational Costs CCUS technologies are still in the early stages of large-scale deployment, and the costs associated with implementation remain a significant barrier. Capturing, transporting, and storing CO2 requires substantial capital investment and increases operational expenses. Many cement manufacturers, especially in developing economies, struggle to justify these costs without clear financial incentives or government support.
Regulatory and Policy Hurdles The regulatory landscape for CCUS varies from region to region, and in many cases, clear guidelines and incentives for deployment are lacking. Establishing a robust framework for CO2 storage and transport infrastructure is crucial for widespread CCUS adoption, but many countries are still in the process of developing these policies.
Waste Heat Recovery and Energy Optimisation in CCUS Implementation
CCUS technologies require significant energy inputs, primarily for CO2 capture and compression. One way to offset these energy demands is through the integration of waste heat recovery (WHR) systems. Cement plants operate at high temperatures, and excess heat can be captured and converted into usable energy, thereby reducing the additional power required for CCUS. By effectively utilizing waste heat, cement manufacturers can lower the overall cost of carbon capture and improve the economic feasibility of CCUS projects.
Another critical factor in optimising CCUS efficiency is pre-treatment of flue gases. Before CO2 can be captured, flue gas streams must be purified and cleaned to remove particulates and impurities. This additional processing can lead to better capture efficiency and lower operational costs, ensuring that cement plants can maximise the benefits of CCUS.
Opportunities for Utilising Captured CO2 in the Cement Sector
While storage remains the most common method of handling captured CO2, the utilising aspect presents an exciting opportunity for the cement industry. Some of the most promising applications include:
Carbonation in Concrete Production
CO2 can be injected into fresh concrete during mixing, where it reacts with calcium compounds to form solid carbonates. This process not only locks away CO2 permanently but also enhances the compressive strength of concrete, reducing the need for additional cement.
Enhanced Oil Recovery (EOR) and Industrial Applications
Captured CO2 can be used in enhanced oil recovery (EOR), where it is injected into underground oil reservoirs to improve extraction efficiency. Additionally, certain industrial processes, such as urea production and synthetic fuel manufacturing, can use CO2 as a raw material, creating economic opportunities for cement producers.
Developing Industrial Hubs for CO2 Utilisation
By co-locating cement plants with other industrial facilities that require CO2, manufacturers can create synergies that make CCUS more economically viable. Industrial hubs that facilitate CO2 trading and re-use across multiple sectors can help cement producers monetise their captured carbon, improving the financial feasibility of CCUS projects.
Strategic Considerations for Large-Scale CCUS Adoption Early-Stage Planning and Feasibility Assessments
Cement manufacturers looking to integrate CCUS should begin with comprehensive feasibility studies to assess site-specific constraints, potential CO2 storage locations, and infrastructure requirements. A phased implementation strategy, starting with pilot projects before full-scale deployment, can help mitigate risks and optimise
system performance.
Neelam Pandey Pathak, Founder and CEO, Social Bay Consulting and Rozgar Dhaba says, “Carbon Capture, Utilisation and Storage (CCUS) has emerged as a transformative technology that holds the potential to revolutionise cement manufacturing by addressing its carbon footprint while supporting global sustainability goals. CCUS has the potential to be a game-changer for the cement industry, which accounts for about seven to eight per cent of global CO2 emissions. It addresses one of the sector’s most significant challenges—emissions from clinker production. By capturing CO2 at the source and either storing it or repurposing it into value-added products, CCUS not only reduces
the carbon footprint but also creates new economic opportunities.”
Government Incentives and Policy Support
For CCUS to achieve widespread adoption, governments must play a crucial role in providing financial incentives, tax credits, and regulatory frameworks that support carbon capture initiatives. Policies such as carbon pricing, emission reduction credits, and direct subsidies for CCUS infrastructure can make these projects more economically viable for cement manufacturers.
Neeti Mahajan, Consultant, E&Y India says, “With new regulatory requirements coming in, like SEBI’s Business Responsibility and Sustainability Reporting for the top 1000 listed companies, value chain disclosures for the top 250 listed companies, and global frameworks to reduce emissions from the cement industry – this can send stakeholders into a state of uncertainty and unnecessary panic leading to a semi-market disruption. To avoid this, communication on technologies like carbon capture utilisation and storage (CCUS), and other innovative tech technologies which will pave the way for the cement industry, is essential. Annual reports, sustainability reports, the BRSR disclosure, and other broad forms of communication in the public domain, apart from continuous stakeholder engagement internally to a company, can go a long way in redefining a rather traditional industry.”
The Role of Global Collaborations in Scaling CCUS
International collaborations will be essential in driving CCUS adoption at scale. Countries that have made significant progress in CCUS, such as Canada, Norway, and the U.S., offer valuable insights and technological expertise that can benefit emerging markets. Establishing partnerships between governments, industry players, and research institutions can help accelerate technological advancements and facilitate knowledge transfer.
Raj Bagri, CEO, Kapture, says “The cement industry can leverage CCUS to capture process and fuel emissions and by using byproducts to replace existing carbon intensive products like aggregate filler or Portland Cement.”
Organisations like the Carbon Capture Knowledge Centre in Saskatchewan provide training programs and workshops that can assist cement manufacturers in understanding CCUS implementation. Additionally, global symposiums and industry conferences provide platforms for stakeholders to exchange ideas and explore collaborative opportunities.
According to a Statista report from September 2024, Carbon capture and storage (CCS) is seen by many experts as a vital tool in combating climate change. CCS technologies are considered especially important for hard-to-abate industries that cannot be easily replaced by electrification, such as oil and gas, iron and steel, and cement and refining. However, CCS is still very much in its infancy, capturing just 0.1 per cent of global CO2 emissions per year. The industry now faces enormous challenges to reach the one billion metric tons needing to be captured and stored by 2030 and live up to the hype.
The capture capacity of operational CCS facilities worldwide increased from 28 MtCO2 per year in 2014 to around 50 MtCO2 in 2024. Meanwhile, the capacity of CCS facilities under development or in construction has risen to more than 300 MtCO2 per year. As of 2024, the United States had the largest number of CCS projects in the pipeline, by far, with 231 across various stages of development, 17 of which were operational. The recent expansion of CCS has been driven by developments in global policies and regulations – notably the U.S.’ Inflation Reduction Act (IRA) – that have made the technology more attractive to investors. This has seen global investment in CCS more than quadruple since 2020, to roughly $ 11 billion in 2023.
The Future of CCUS in the Cement Industry
As technology advances and costs continue to decline, CCUS is expected to play a crucial role in the cement industry’s decarbonisation efforts. Innovations such as cryogenic carbon capture and direct air capture (DAC) are emerging as promising alternatives to traditional amine-based systems. These advancements could further enhance the feasibility and efficiency of CCUS in cement manufacturing.
In conclusion, while challenges remain, the integration of CCUS in the cement industry is no longer a question of “if” but “when.” With the right mix of technological innovation, strategic planning, and policy support, CCUS can help the cement sector achieve net zero emissions while maintaining its role as a vital component of global infrastructure development.

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