Product development
JSW strengthens its position in the East
Published
6 years agoon
By
adminWhen cement industry is reeling with excess capacity, Parth Jindal, Managing Director of JSW Cement sees an opportunity to expand.
JSW Cement plans to invest Rs 2,875 crore to nearly double its manufacturing capacity to 25 million tonnes per annum (MTPA) by the year 2023 through organic expansion. The country’s ninth-largest cement maker has an installed capacity of 14 MTPA across west, south and east India.
The funds of about Rs 1,400 crore will be raised through debt while the rest will be realised through internal accruals, Parth Jindal, Managing Director of JSW Cement, informed in the recently-held press conference in Mumbai. The cement maker had earlier set a target of 20 MTPA manufacturing capacity by the year 2020, which it is likely to miss due to the ongoing demand slowdown.
"Earlier, the biggest risk for the business was not having our own clinker and being dependant on imports, for which prices can go up anytime. The company will be adding capacity at a cost of $35 per tonne against the industry average of $80 per tonne", Jindal said.
To have a de-risked raw material strategy, the company will set up a one MTPA clinker plant at Shiva Cement’s premise in Odisha since it has a captive limestone mine. In fact, the company’s limestone reserves were the primary reason for JSW Cement to acquire 54.4 per cent stake in it in 2017 to ensure stable clinker supply for its plants in eastern India, Jindal said.
Last month, Shiva Cement was declared as the preferred bidder for the Khatkurbahal mine blocks adjacent to its existing mine, shoring up total of limestone reserve to about 100 million tonne (MT). JSW Cement will invest Rs 800 crore in the first phase to develop a one MTPA clinker plant and a one MTPA grinding plant at Shiva Cement starting April 2020.
The delay in realising the earlier target also means that the company’s plans of getting listed on the bourses have been pushed behind by 12 months, Jindal said, adding that the company now hopes to get listed by December 2021 with a valuation of about Rs 25,000 crore.
"We want to first get to 20 MTPA before we do an IPO (initial public offering), because that is the critical level at which we will have enough scale and a de-risked strategy in terms of raw material, and also we will have (sufficient) market share penetration in all the regions that we are present in," Jindal said.
Focusing on North market
"All the cement companies in the north are flying high and making EBIDTA margin of above 28 per cent. Every company is running at 80 per cent capacity utilisation. If somebody is selling their business in the North then they will obviously demand a huge premium like Binani Cement did. We cannot afford it. We have acquired limestone mines in Rajasthan, Gujarat and Chhattisgarh. We will do the IPO of over Rs 4,000 crore for setting up five MTPA capacity each in North and Central markets to take the overall capacity to 35 MTPAfrom 25 MTPA. We will then become a pan-India player then."
On buying Emami assets, he said that they are a mirror image of JSW in cement and exist in the same location where JSW operates. It will not be sensible for JSW to acquire those assets.
IPO of JSW Cement
"We firmly believe to be relevant in any market a company should have at least 10 per cent market share in that business. Today, JSW Cement’s market share is hovering between 3.5 per cent in South and 5 per cent in the east and west. We need to have enough volumes to achieve the 10 per cent market share target. On an average are de-risked geographically and also well placed on raw material side." "Mid-cap companies are located at certain pockets and small cap guys are there in one or two States. If infrastructure projects are cancelled?like it happened in Andhra Pradesh-mid-cap cement companies will be finished. But if you are big like UltraTech, Ambuja, Dalmia or Shree Cement you are well placed. If south is going through tough times, other regions will compensate. Stock market also rewards companies which are de-risked geographically. A small player will be finished if a larger company drops prices suddenly. Moreover, for a company that is part of JSW Group to be part of mid-cap does not speak well. After listing, we would logically merge Shiva Cement with JSW Cement."
Goal of achieving 20 MTPA capacity by 2020
"The main concern was: cash availability and EBITDA also dropped. So, the free cash flow available for fresh investment was not available. This forced us to delay the stated target by a year. Last six months was almost a wash out for cement companies and EBITDA was also low compared to our target. Now since there is a revival in demand, we will be accumulating the cash and deploy it from April onwards. We are seeing revival in sales since November not only in terms of sales but also on inquires. This is true across sectors including steel and power. It looks like all lead indicators are pointing towards a revival. Both Government tenders have private sector companies are also re-looking at investment. Though it is true that there are more government projects those private sectors."
Dipping cement price
Cement prices are currently at rock bottom. It went down during monsoon and has not picked up since. If anyone wants to buy cement now is the time. Prices vary between Rs 240-320 per 50 kg bag. It dropped down to Rs 220 while the healthy pricing of Rs 280 was last seen in March quarter in Hyderabad, which is a good indicator of prices in the southern market. It dipped from Rs 280 to Rs 220 in the last six months due to the monsoon.
Cancellation of projects in AP
Delay in infrastructure projects in Andhra Pradesh has caused huge price depression in entire Southern market as companies there switch their sales. "We have five MTPA capacity in Andhra Pradesh, and we are pushing material in Telangana, Tamil Nadu, Kerala and Karnataka. This may affect prices in those regions. It is a desperate sale as everyone in Andhra Pradesh wants to keep their factory running. My interaction with the Andhra Government states that demand will start picking up from second half of January probably from Pongal, a key festival in south. We believe prices in south will pick up by Rs 15 to 20 a bag from then."
Raw material prices
The benefit of the fall in prices of raw materialcomes with a lag as every company is sitting on high cost inventory. We will see the benefit of fall in raw material in March quarter. It was a double whammy during the monsoon when cement prices fell and every other company was holding high cost raw material inventory. If prices firm up in March quarter, the lower raw material cost will boost margins.
Setting up a unit in UAE
"Currently, the clinker to tap the Mumbai cement market comes from Gujarat but we are bringing it from Fujairah. Ambuja and UltraTech are bringing clinker through sea route and grind it near Mumbai. The freight from Gujarat and Fujairah to Mumbai is same because they are bringing it in small vessels and we bring it in big barges. We have decided to do a bigger operations overseas with an investment of Rs 800 crore and the project will be completed by January end. Currently, we are importing clinker from different countries and we grind it at our 2.2 MTPA at Dolvi unit but from February we will source clinker from our own overseas factory. Allotment of limestone and clearances in UAE is much faster. Interestingly, 70 per cent of the limestone allotted to JSW Cement there is of steel grade. So we sell that limestone to JSW Steel and after being processed for making steel we use the same limestone for producing cement."
Match steel production
"In terms of revenue, I do not think they will, but in market cap we will definitely be there since these are consumer focused business. Steel (in equity market) trades at seven to eight times price to earnings while paint companies trade at 60 times while cement companies trade at 35 to 40 times. I have to make just one-sixth of profit dad makes to match their market cap. Traditionally, steel is a supply driven and India has been a net importer. In cement and paint it is consumer driven and rides on brand value. Building Asian Paints or UltraTech capacity is not that difficult, but selling these products is difficult. That is why the businesses I focus on are consumer driven. I believe there is a good brand equity JSW has built in the system; we are trying to leverage it in new businesses. Dad will not stop expanding steel capacity but I always tell him why deploy money in a business that gives seven to eight times multiples against a business that can gives 60 times."
photo caption
From L-R: Narinder Singh Kahlon, Chief Financial Officer; Parth Jindal, Managing Director; Nilesh Narwekar, Chief Executive Officer; K Swaminathan, Chief Marketing Officer.
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Advertising or branding is never about driving sales. It’s about creating brand awareness and recall. It’s about conveying the core values of your brand to your consumers. In this context, why is branding important for cement companies? As far as the customers are concerned cement is simply cement. It is precisely for this reason that branding, marketing and advertising of cement becomes crucial. Since the customer is unable to differentiate between the shades of grey, the onus of creating this awareness is carried by the brands. That explains the heavy marketing budgets, celebrity-centric commercials, emotion-invoking taglines and campaigns enunciating the many benefits of their offerings.
Marketing strategies of cement companies have undergone gradual transformation owing to the change in consumer behaviour. While TV commercials are high on humour and emotions to establish a fast connect with the customer, social media campaigns are focussed more on capturing the consumer’s attention in an over-crowded virtual world. Branding for cement companies has become a holistic growth strategy with quantifiable results. This has made brands opt for a mix package of traditional and new-age tools, such as social media. However, the hero of every marketing communication is the message, which encapsulates the unique selling points of the product. That after all is crux of the matter here.
While cement companies are effectively using marketing tools to reach out to the consumers, they need to strengthen the four Cs of the branding process – Consumer, Cost, Communication and Convenience. Putting up the right message, at the right time and at the right place for the right kind of customer demographic is of utmost importance in the long run. It is precisely for this reason that regional players are likely to have an upper hand as they rely on local language and cultural references to drive home the point. But modern marketing and branding domain is exponentially growing and it would be an interesting exercise to tabulate and analyse its impact on branding for cement.
Concrete
Indian cement industry is well known for its energy and natural resource efficiency
Published
2 years agoon
November 18, 2022By
adminDr Hitesh Sukhwal, Deputy General Manager – Environment, Udaipur Cement Works Limited (UCWL) takes us through the multifaceted efforts that the company has undertaken to keep emissions in check with the use of alternative sources of energy and carbon capture technology.
Tell us about the policies of your organisation for the betterment of the environment.
Caring for people is one of the core values of our JK Lakshmi Cement Limited. We strongly believe that we all together can make a difference. In all our units, we have taken measures to reduce carbon footprint, emissions and minimise the use of natural resources. Climate change and sustainable development are major global concerns. As a responsible corporate, we are committed with and doing consistent effort small or big to preserve and enrich the environment in and around our area of operations.
As far as environmental policies are concerned, we are committed to comply with all applicable laws, standards and regulations of regulatory bodies pertaining to the environment. We are consistently making efforts to integrate the environmental concerns into the mainstream of the operations. We are giving thrust upon natural resource conservation like limestone, gypsum, water and energy. We are utilising different kinds of alternative fuels and raw materials. Awareness among the employees and local people on environmental concerns is an integral part of our company. We are adopting best environmental practices aligned with sustainable development goals.
Udaipur Cement Works Limited is a subsidiary of the JK Lakshmi Cement Limited. Since its inception, the company is committed towards boosting sustainability through adopting the latest art of technology designs, resource efficient equipment and various in-house innovations. We are giving thrust upon renewable and clean energy sources for our cement manufacturing. Solar Power and Waste Heat Recovery based power are our key ingredients for total power mix.
What impact does cement production have on the environment? Elaborate the major areas affected.
The major environmental concern areas during cement production are air emissions through point and nonpoint sources due to plant operation and emissions from mining operation, from material transport, carbon emissions through process, transit, noise pollution, vibration during mining, natural resource depletion, loss of biodiversity and change in landscape.
India is the second largest cement producer in the world. The Indian cement industry is well known for its energy and natural resource efficiency worldwide. The Indian cement industry is a frontrunner for implementing significant technology measures to ensure a greener future.
The cement industry is an energy intensive and significant contributor to climate change. Cement production contributes greenhouse gases directly and indirectly into the atmosphere through calcination and use of fossil fuels in an energy form. The industry believes in a circular economy by utilising alternative fuels for making cement. Cement companies are focusing on major areas of energy efficiency by adoption of technology measures, clinker substitution by alternative raw material for cement making, alternative fuels and green and clean energy resources. These all efforts are being done towards environment protection and sustainable future.
Nowadays, almost all cement units have a dry manufacturing process for cement production, only a few exceptions where wet manufacturing processes are in operation. In the dry manufacturing process, water is used only for the purpose of machinery cooling, which is recirculated in a closed loop, thus, no polluted water is generated during the dry manufacturing process.
We should also accept the fact that modern life is impossible without cement. However, through state-of-the-art technology and innovations, it is possible to mitigate all kinds of pollution without harm to the environment and human beings.
Tell us about the impact blended cement creates on the environment and emission rate.
Our country started cement production in 1914. However, it was introduced in the year 1904 at a small scale, earlier. Initially, the manufacturing of cement was only for Ordinary Portland Cement (OPC). In the 1980s, the production of blended cement was introduced by replacing fly ash and blast furnace slag. The production of blended cement increased in the growth period and crossed the 50 per cent in the year 2004.
The manufacturing of blended cement results in substantial savings in the thermal and electrical energy consumption as well as saving of natural resources. The overall consumption of raw materials, fossil fuel such as coal, efficient burning and state-of-the-art technology in cement plants have resulted in the gradual reduction of emission of carbon dioxide (CO2). Later, the production of blended cement was increased in manifolds.
If we think about the growth of blended cement in the past few decades, we can understand how much quantity of , (fly ash and slag) consumed and saved natural resources like limestone and fossil fuel, which were anyhow disposed of and harmed the environment. This is the reason it is called green cement. Reduction in the clinker to cement ratio has the second highest emission reduction potential i.e., 37 per cent. The low carbon roadmap for cement industries can be achieved from blended cement. Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC) and Composite Cement are already approved by the National Agency BIS.
As far as kilogram CO2 per ton of cement emission concerns, Portland Slag Cement (PSC) has a larger potential, other than PPC, Composite Cement etc. for carbon emission reduction. BIS approved 60 per cent slag and 35 per cent clinker in composition of PSC. Thus, clinker per centage is quite less in PSC composition compared to other blended cement. The manufacturing of blended cement directly reduces thermal and process emissions, which contribute high in overall emissions from the cement industry, and this cannot be addressed through adoption of energy efficiency measures.
In the coming times, the cement industry must relook for other blended cement options to achieve a low carbon emissions road map. In near future, availability of fly ash and slag in terms of quality and quantity will be reduced due to various government schemes for low carbon initiatives viz. enhance renewable energy sources, waste to energy plants etc.
Further, it is required to increase awareness among consumers, like individual home builders or large infrastructure projects, to adopt greener alternatives viz. PPC and PSC for more sustainable
resource utilisation.
What are the decarbonising efforts taken by your organisation?
India is the world’s second largest cement producer. Rapid growth of big infrastructure, low-cost housing (Pradhan Mantri Awas Yojna), smart cities project and urbanisation will create cement demand in future. Being an energy intensive industry, we are also focusing upon alternative and renewable energy sources for long-term sustainable business growth for cement production.
Presently, our focus is to improve efficiency of zero carbon electricity generation technology such as waste heat recovery power through process optimisation and by adopting technological innovations in WHR power systems. We are also increasing our capacity for WHR based power and solar power in the near future. Right now, we are sourcing about 50 per cent of our power requirement from clean and renewable energy sources i.e., zero carbon electricity generation technology. Usage of alternative fuel during co-processing in the cement manufacturing process is a viable and sustainable option. In our unit, we are utilising alternative raw material and fuel for reducing carbon emissions. We are also looking forward to green logistics for our product transport in nearby areas.
By reducing clinker – cement ratio, increasing production of PPC and PSC cement, utilisation of alternative raw materials like synthetic gypsum/chemical gypsum, Jarosite generated from other process industries, we can reduce carbon emissions from cement manufacturing process. Further, we are looking forward to generating onsite fossil free electricity generation facilities by increasing the capacity of WHR based power and ground mounted solar energy plants.
We can say energy is the prime requirement of the cement industry and renewable energy is one of the major sources, which provides an opportunity to make a clean, safe and infinite source of power which is affordable for the cement industry.
What are the current programmes run by your organisation for re-building the environment and reducing pollution?
We are working in different ways for environmental aspects. As I said, we strongly believe that we all together can make a difference. We focus on every environmental aspect directly / indirectly related to our operation and surroundings.
If we talk about air pollution in operation, every section of the operational unit is well equipped with state-of-the-art technology-based air pollution control equipment (BagHouse and ESP) to mitigate the dust pollution beyond the compliance standard. We use high class standard PTFE glass fibre filter bags in our bag houses. UCWL has installed the DeNOx system (SNCR) for abatement of NOx pollution within norms. The company has installed a 6 MW capacity Waste Heat Recovery based power plant that utilises waste heat of kiln i.e., green and clean energy source. Also, installed a 14.6 MW capacity solar power system in the form of a renewable energy source.
All material transfer points are equipped with a dust extraction system. Material is stored under a covered shed to avoid secondary fugitive dust emission sources. Finished product is stored in silos. Water spraying system are mounted with material handling point. Road vacuum sweeping machine deployed for housekeeping of paved area.
In mining, have deployed wet drill machine for drilling bore holes. Controlled blasting is carried out with optimum charge using Air Decking Technique with wooden spacers and non-electric detonator (NONEL) for control of noise, fly rock, vibration, and dust emission. No secondary blasting is being done. The boulders are broken by hydraulic rock breaker. Moreover, instead of road transport, we installed Overland Belt Conveying system for crushed limestone transport from mine lease area to cement plant. Thus omit an insignificant amount of greenhouse gas emissions due to material transport, which is otherwise emitted from combustion of fossil fuel in the transport system. All point emission sources (stacks) are well equipped with online continuous emission monitoring system (OCEMS) for measuring parameters like PM, SO2 and NOx for 24×7. OCEMS data are interfaced with SPCB and CPCB servers.
The company has done considerable work upon water conservation and certified at 2.76 times water positive. We installed a digital water flow metre for each abstraction point and digital ground water level recorder for measuring ground water level 24×7. All digital metres and level recorders are monitored by an in-house designed IoT based dashboard. Through this live dashboard, we can assess the impact of rainwater harvesting (RWH) and ground water monitoring.
All points of domestic sewage are well connected with Sewage Treatment Plant (STP) and treated water is being utilised in industrial cooling purposes, green belt development and in dust suppression. Effluent Treatment Plant (ETP) installed for mine’s workshop. Treated water is reused in washing activity. The unit maintains Zero Liquid Discharge (ZLD).
Our unit has done extensive plantations of native and pollution tolerant species in industrial premises and mine lease areas. Moreover, we are not confined to our industrial boundary for plantation. We organised seedling distribution camps in our surrounding areas. We involve our stakeholders, too, for our plantation drive. UCWL has also extended its services under Corporate Social Responsibility for betterment of the environment in its surrounding. We conduct awareness programs for employees and stakeholders. We have banned Single Use Plastic (SUP) in our premises. In our industrial township, we have implemented a solid waste management system for our all households, guest house and bachelor hostel. A complete process of segregated waste (dry and wet) door to door collection systems is well established.
Tell us about the efforts taken by your organisation to better the environment in and around the manufacturing unit.
UCWL has invested capital in various environmental management and protection projects like installed DeNOx (SNCR) system, strengthening green belt development in and out of industrial premises, installed high class pollution control equipment, ground-mounted solar power plant etc.
The company has taken up various energy conservation projects like, installed VFD to reduce power consumption, improve efficiency of WHR power generation by installing additional economiser tubes and AI-based process optimisation systems. Further, we are going to increase WHR power generation capacity under our upcoming expansion project. UCWL promotes rainwater harvesting for augmentation of the ground water resource. Various scientifically based WHR structures are installed in plant premises and mine lease areas. About 80 per cent of present water requirement is being fulfilled by harvested rainwater sourced from Mine’s Pit. We are also looking forward towards green transport (CNG/LNG based), which will drastically reduce carbon footprint.
We are proud to say that JK Lakshmi Cement Limited has a strong leadership and vision for developing an eco-conscious and sustainable role model of our cement business. The company was a pioneer among cement industries of India, which had installed the DeNOx (SNCR) system in its cement plant.
Concrete
NTPC selects Carbon Clean and Green Power for carbon capture facility
Published
2 years agoon
October 12, 2022By
adminCarbon Clean and Green Power International Pvt. Ltd has been chosen by NTPC Energy Technology Research Alliance (NETRA) to establish the carbon capture facility at NTPC Vindhyachal. This facility, which will use a modified tertiary amine to absorb CO2 from the power plant’s flue gas, is intended to capture 20 tonnes of CO2) per day. A catalytic hydrogenation method will eventually be used to mix the CO2 with hydrogen to create 10 tonnes of methanol each day. For NTPC, capturing CO2 from coal-fired power plant flue gas and turning it into methanol is a key area that has the potential to open up new business prospects and revenue streams.
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