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Cement demand is growing but is still beyond the reach of many

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What are the main AFR materials you are using in your plants in India?
Cement is a necessary commodity to build a resilient infrastructure. It is a necessary product and our efforts shall continue to reduce its negative environmental impacts. Conservation of resources though use of alternative raw materials is our key focus. We use fly ash (waste from thermal power plants) and BF slag (waste from steel industry) in our blended cements which is nearly 80 per cent of our product portfolio. Our alternative raw material consumption rate has more than doubled from 14.5 per cent in 2013-14 to 30 per cent in FY 2017-18. Portland Slag Cement (PSC) and Portland Composite Cement (PCC) collectively contribute to nearly 50 per cent of our product portfolio. Our clinker factor has come down to 63 per cent at current levels from about 81 per cent in 2013.

Similarly, on group level we reached 4 per cent Thermal Substitution Rate (TSR) as compared to nearly 0.5 per cent five years back. We also developed pockets of excellence in some plants where nearly 18 per cent TSR was achieved. Presently we are suing various alternative fuels such as biomass, tyre nylon threads, carbon black, plastic wastes, footwear waste, spent wash, paint sludge, cotton waste, spent carbon, saw dust, etc. It adds to our profitability, and at the same time, reduces the GHG emissions from cement operations. Moving forward, we are strengthening our fuel feeding systems further with investments to make more use of both solid and liquid alternative fuels.

To what extent Indian cement companies are exploiting AFR compared to global benchmarks?
In recent years, Indian cement industry has made significant investments towards ensuring a greener future, as well as enhanced use of alternative fuel and raw materials (AFR). Although there is development on infrastructure and facilities for alternative fuels under our control, strengthening our teams and advocacy to make conducive environment for alternative fuel use will also depend on the progress of overall waste management sector in India.

The progress on the front of alternative raw materials has been very good in India. There has been a very good penetration of blended cements in the market. Earlier OPC used to be the market leader in India. However, today, it represents only about 20-25 per cent of the market share. In this context, it is encouraging to note that nearly 75 per cent of cement production in India at present is in the form of blended cement of various types, as against only 30 per cent in 1999-2000.

What is the level of energy efficiency you have achieved through AFR?
Alternative raw materials can be considered key contributors to the energy efficiency as they replace the virgin raw materials and avoids the process energy needs for the cement production to the extent of their use. Clinker, the most energy intensive intermediate product, when replaced with fly ash or blast furnace slag (wastes of thermal power and steel industry respectively), it helps in avoidance of primary and secondary energy consumption of clinker manufacturing. Therefore, the specific energy intensity of cement reduces with the use of alternative raw materials. Besides, technological advancements in cement sector from Indian industry, use of waste materials in process has helped us to become highly energy efficient. The best cement plants operating in India have a specific power consumption range from 62-70 kWh/tonnes of cement as compared to global average of above 100 kWh/tonnes of cement.

Alternative fuels, on the other hand, reduces the energy efficiency. There are energy losses due to high moisture content and inconsistent fuel quality. The production loss also takes place with use of alternative fuels in high quantities. However, on the positive side, the waste (hazardous or non-hazardous) gets eliminated in the high temperature zone of the kiln and avoids the fossil fuel burning.

What are the challenges companies face in sourcing AFR materials, and what are the strategies do you follow?
Indian cement industry has more potential to use both alternative fuels and alternative fuels than being used currently. In order to achieve this, a complete transformation is needed in the waste management sector in India from generation point to disposal methods. The circular economy principle shall be the backbone of the waste management practices in India.

There are some positive changes on policy development as well such as ?Swachh Bharat Mission? (i.e. Clean India Mission), Plastic Waste Management Rules 2018, relatively quick co-processing approvals and lot more needs to be done on policy framework. The key change would be landfill tax or similar polluter to pay mechanism to progress on circular economy concept.

New cement types, additives and technological advancement, more particularly in blending, would be needed to reach such high levels of clinker factor optimisation. Recently we launched the Portland Composite Cement (PCC) which is nearly comparable to Portland Slag Cement (PSC) in its low clinker factor. Considering production of PSC and PCC are limited by the availability of BF Slag, we have partnered with The +cole polytechnique fTdTrale de Lausanne (EPFL), Switzerland and IIT Delhi for development of LC3 cement. This will allow us to produce high blend cements even in locations where BF slag is not available.

There has been an overwhelming customer response towards adoption of environment friendly products. Similarly, many states have come forward and developed policies towards more utilisation of blended cements. On our part, we continue to do the policy advocacy and training of masons towards more use of blended cements by making them sensitive to the environmental challenges such as climate change. Use of industrial wastes in cement gives technical advantages of improved durability and reduced Carbon footprint.

The incorporation of supplementary materials like fly ash or slag in blended cements makes the concrete more impermeable and hence durable under aggressive exposure conditions. The various technical advantages of such concretes like, higher later-age-strength, lower heat of hydration, and, higher resistance to aggressive agents like chloride, sulphate and alkali, have been amply proven by many studies the world over. Rightly, the industrial wastes or by-products are no longer treated as wastes in the context of concrete technology. Due to value addition by their use, these have become friendly and in fact, necessary supplementary materials in cement.

In terms of cost and earnings, how beneficial is this for your company?
Being one of the highest profitable cement company in India, we also a market leader in alternative raw material consumption and progressed well in alternative fuel consumption as well. It proves there is a strong correlation between use of AFR and increasing the business profitability.

What are the factors to be studied while buying AFRM equipment?
It depends on the requirements. Sometimes a local solution can be the best fit and in other cases, sophisticated technology with high investment may be needed. The overall plant infrastructure, alternative raw material and fuel type, physical properties, quantities available, etc. are some key parameters which need careful consideration before buying the AFRM equipment.

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Concrete

Steel: Shielded or Strengthened?

CW explores the impact of pro-steel policies on construction and infrastructure and identifies gaps that need to be addressed.

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Going forward, domestic steel mills are targeting capacity expansion
of nearly 40 per cent through till FY31, adding 80-85 mt, translating
into an investment pipeline of $ 45-50 billion. So, Jhunjhunwala points
out that continuing the safeguard duty will be vital to prevent a surge
in imports and protect domestic prices from external shocks. While in
FY26, the industry operating profit per tonne is expected to hold at
around $ 108, similar to last year, the industry’s earnings must
meaningfully improve from hereon to sustain large-scale investments.
Else, domestic mills could experience a significant spike in industry
leverage levels over the medium term, increasing their vulnerability to
external macroeconomic shocks.(~$ 60/tonne) over the past one month,
compressing the import parity discount to ~$ 23-25/tonne from previous
highs of ~$ 70-90/tonne, adds Jhunjhunwala. With this, he says, “the
industry can expect high resistance to further steel price increases.”

Domestic HRC prices have increased by ~Rs 5,000/tonne
“Aggressive
capacity additions (~15 mt commissioned in FY25, with 5 mt more by
FY26) have created a supply overhang, temporarily outpacing demand
growth of ~11-12 mt,” he says…

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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…

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.

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