Economy & Market

Continuing upward streak

Published

7 years ago

January 6, 2019

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Prices continuing to spike, steeply at times, for the last four months is highlighting the pricing power of the industry, but their sustainability at these levels is being doubted.

Cement prices are spiralling up continuing their rising streak in May 2019, that had a nascent beginning in February 2019, though some pressure points are visible in certain regions later in May 2019.

The ET Cement Index that tracks cement price movements across the country was up by 5.83 per cent to 2431.1 points in end- May 2019 from 2297.2 at the beginning of May 2019, close on the heels of supernormal rise of 13.07 per cent seen in April. The price momentum upwards continued to firm up since February 2019, setting a clear tone for the prices.

Sharp pricing recovery since February 2019 has already aided cement companies to report healthier operational performance in the quarter ended March 2019, as well as in ensuing quarters, say analysts.

After the underperformance in 2018, cement stocks are up 10-30 per cent year to date (YTD/May 29, 2019) (vs +10 per cent for Nifty) led by cement pricing rebound; factors such as strong demand, stable government and lower inputs are also helping. 4QFY19 (January-March quarter of 2018-19) was the sixth consecutive quarter of double-digit volume growth. While realisations missed forecasts, lower costs helped,’ says Vivek Maheshwari, Investment Analyst of the leading broking firm CLSA. The readings are limited to the group of stocks that CLSA is tracking in its portfolio.

"With exit prices higher, 1QFY20 seems like a blockbuster, but our checks suggest higher discounts in the last two weeks due to weak construction activity. With elections behind, a clear picture should now emerge," Maheshwari added.

Volume growth momentum stayed strong and for the sixth-quarter in a row remained in double digits at 11 per cent in 4QFY19, while for the full-year volume growth too was in double digits. Despite a high volume base, industry feedback on volume growth stayed positive led by government’s focus on infrastructure along with affordable housing, says CLSA.

Sabyasachi Majumdar, Senior Vice President, ICRA has predicted that the domestic cement demand is likely to grow by eight per cent during the current fiscal. The demand push will result in the capacity utilisation rising to 71 per cent from 65 per cent in FY18 (2017-18), ICRA said in a report. It also predicted that the growth in demand will be driven by a likely 18-20 million tonnes per annum (MTPA) of additional production capacity during the fiscal.

Though the cement prices have made a big leap matching the decadal levels achieved before 2010, it may not match in terms of capacity utilisation which was in the range of 85-90 per cent a decade ago, mainly because of huge supplies available at the current juncture.

The cement demand has been improving across the country and as a result cement prices have been heading north. Cement production was higher by around 13 per cent year-on-year (YoY) in FY19, up from 6 per cent YoY growth in FY18. "The double-digit growth rate is likely to get moderated in FY20 to 7-8 per cent," ICRA said.

The recent elections have disrupted construction activity on the ground due to factors like lack of workers and tight liquidity, resulting in higher discounts and rebates offered by channels and players in a bid to clear inventory. "Now that the election is over, we believe a clear trend will emerge on demand as well as pricing as the activity starts to pick-up again," says CLSA.

Markets-wise, Delhi and Bengaluru saw muted demand in May 2019, resulting in easing of wholesale prices by Rs 4-5/bag of 50kg, while on the other hand, demand in Mumbai was good and as such there has been no recent decline in wholesale prices of the building material, according to cement dealers.

Cement prices were hiked twice in Delhi in April, resulting in a huge hike of Rs 60/bag. However, the prices have been on the rise since the beginning of April in Mumbai, with overall hike of Rs 30 in the month. The industry has also witnessed another benefit coming its way in Q4 for stocks in the coverage of CLSA ? Unit costs have declined 4 per cent quarter-on-quarter (QoQ) and stayed flat year-on-year (YoY) at aggregate level, showering benefits even in energy costs. The Q4 exit cement prices were higher than quarter average, signalling a strong 1QFY20, CLSA added.

– Markets-wise, Delhi and Bengaluru saw muted demand in May 2019, resulting in easing of wholesale prices by Rs 4-5/bag of 50kg, while on the other hand, demand in Mumbai was good.

– ICRA said that the industry will also benefit from easing of freight expenses, owing to the increase in the truck axle load norms from Q2, which will result in relatively higher operating profitability for cement companies in the near-term.

Many analysts are predicting that incremental demand will come from the proposed "housing for all" scheme and construction activities of Metro/irrigation projects, besides other infrastructure projects.

"The continued focus on the housing sector and rural economy in the Union Budget for 2019-20 is likely to have a positive impact on the cement industry. On the infrastructure side, the continued thrust on the roads and railways is likely to push cement demand. While the healthy demand is likely to support the recent price increase, the supply side pressure on prices in some regions cannot be ruled out completely," Majumdar of ICRA said.

Though there is every reason to believe that demand would be outpacing supply in the months to come, some stakeholders are keeping their fingers crossed over the sustainability of prices at such high levels, particularly citing a price hike of Rs 30-50/bag in a single month – in April 2019, which they claim is unusual.

Economy & Market

TSR Will Define Which Cement Companies Win India’s Net-Zero Race

Published

2 weeks ago

April 27, 2026

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Jignesh Kundaria, Director and CEO, Fornnax Technology

India is simultaneously grappling with two crises: a mounting waste emergency and an urgent need to decarbonise its most carbon-intensive industries. The cement sector, the second-largest in the world and the backbone of the nation’s infrastructure ambitions, sits at the centre of both. It consumes enormous quantities of fossil fuel, and it has the technical capacity to consume something else entirely: the waste our cities cannot get rid of.

According to CPCB and NITI Aayog projections, India generates approximately 62.4 million tonnes of municipal solid waste annually, with that figure expected to reach 165 million tonnes by 2030. Much of this waste is energy-rich and non-recyclable. At the same time, cement kilns operate at material temperatures of approximately 1,450 degrees Celsius, with gas temperatures reaching 2,000 degrees. This high-temperature environment is ideal for co-processing, ensuring the complete thermal destruction of organic compounds without generating toxic residues. The physics are in our favour. The infrastructure is not.

Pre-processing is not the support act for co-processing. It is the main event. Get the particle size wrong, get the moisture wrong, get the calorific value wrong and your kiln thermal stability will suffer the consequences.

The Regulatory Push Is Real

The Solid Waste Management (SWM) Rules 2026 mandate that cement plants progressively replace solid fossil fuels with Refuse-Derived Fuel (RDF), starting at a 5 per cent baseline and scaling to 15 per cent within six years. NITI Aayog’s 2026 Roadmap for Cement Sector Decarbonisation targets 20 to 25 per cent Thermal Substitution Rate (TSR) by 2030. Beyond compliance, every tonne of coal replaced by RDF generates measurable carbon reductions which is monetisable under India’s emerging Carbon Credit Trading Scheme (CCTS). TSR is no longer a sustainability metric. It is a financial lever.

Yet our own field assessments across multiple Indian cement plants reveal a sobering reality: the primary barrier to scaling AFR adoption is not waste availability. It is the fragmented and under-engineered pre-processing ecosystem that sits between the waste and the kiln.

Why Indian Waste Is a Different Engineering Problem

Indian municipal solid waste is not the material that imported shredding equipment was designed for. Our waste streams frequently exceed 40 per cent to 50 per cent moisture content, particularly during monsoon cycles, saturated with abrasive inerts including sand, glass, and stone. Plants relying on imported OEM equipment face months of downtime awaiting proprietary spare parts. Machines built for segregated, low-moisture waste fail quickly and disrupt the entire pre-processing operation in Indian conditions.

The two most common failures we observe are what I call the biting teeth problem and the chewing teeth problem. Plants relying solely on a primary shredder reduce bulk waste to large fractions, but the output remains too coarse for stable kiln combustion. Others attempt to use a secondary shredder as a standalone unit without a primary stage to pre-size the feed, leading to catastrophic mechanical failure. When both stages are present but mismatched in throughput capacity, the system becomes a bottleneck. Achieving the 40 to 70 tonnes per hour required for meaningful coal displacement demands a precisely coordinated two-stage process.

Engineering a Made-in-India Answer

At Fornnax, our response to these challenges is grounded in one principle: Indian waste demands Indian engineering. Our systems are built around feedstock homogeneity, the holy grail of kiln stability. Consistent particle size and predictable calorific value are the foundation of stable kiln combustion. Without them, no TSR target is achievable at scale.

Our SR-MAX2500 Dual Shaft Primary Shredder (Hydraulic Drive) processes raw, baled, or loosely mixed MSW, C&I waste, bulky waste, and plastics, reducing them to approximately 150 mm fractions at throughputs of up to 40 tonnes per hour. The R-MAX 3300 Single Shaft Secondary Shredder (Hydraulic Drive), introduced in 2025, takes that primary output and produces RDF fractions in the 30 to 80 mm range at up to 30 tonnes per hour, specifically optimised for consistent kiln feeding. We have also introduced electric drive configurations under the SR-100 HD series, with capacities between 5 and 40 tonnes per hour, already operational at a leading Indian waste-processing facility.

Looking ahead, Fornnax is expanding its portfolio with the upcoming SR-MAX3600 Hydraulic Drive primary shredder at up to 70 tonnes per hour and the R-MAX2100 Hydraulic drive secondary shredder at up to 20 tonnes per hour, designed specifically for the large-scale throughput that higher TSR ambitions require.

The Investment Case Is Now

The 2070 Net-Zero target is not a distant goal for India’s cement sector. It starts today, with decisions being made on the plant floor.

The SWM Rules 2026 are already in effect, requiring cement plants to replace coal with RDF. Carbon credit markets are opening up, and coal prices are not going to get cheaper. Every tonne of coal a cement plant replaces with waste-derived fuel saves money on one side and generates carbon credit revenue on the other. Pre-processing infrastructure is no longer just a compliance requirement. It is a business investment with a measurable return.

The good news is that nothing is missing. The technology works. The waste is available in every Indian city. The government has provided the policy direction. The only thing standing between where the industry is today and where it needs to be is the commitment to build the right infrastructure.

The cement companies that move now will not just meet the regulations. They will be ahead of every competitor that waits.

About The Author

Jignesh Kundaria is the Director and CEO of Fornnax Technology. Over an experience spanning more than two decades in the recycling industry, he has established himself as one of India’s foremost voices on waste-to-fuel technology and alternative fuel infrastructure.

Concrete

WCA Welcomes SiloConnect as associate corporate member

Published

4 weeks ago

April 13, 2026

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The World Cement Association (WCA) has announced SiloConnect as its newest associate corporate member, expanding its network of technology providers supporting digitalisation in the cement industry. SiloConnect offers smart sensor technology that provides real-time visibility of cement inventory levels at customer silos, enabling producers to monitor stock remotely and plan deliveries more efficiently. The solution helps companies move from reactive to proactive logistics, improving delivery planning, operational efficiency and safety by reducing manual inspections. The technology is already used by major cement producers such as Holcim, Cemex and Heidelberg Materials and is deployed across more than 30 countries worldwide.

Concrete

TotalEnergies and Holcim Launch Floating Solar Plant in Belgium

Published

4 weeks ago

April 13, 2026

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TotalEnergies and Holcim have commissioned a floating solar power plant in Obourg, Belgium, built on a rehabilitated former chalk quarry that has been converted into a lake. The project has a generation capacity of 31 MW and produces around 30 GWh of renewable electricity annually, which will be used to power Holcim’s nearby industrial operations. The project is currently the largest floating solar installation in Europe dedicated entirely to industrial self-consumption. To ensure minimal impact on the surrounding landscape, more than 700 metres of horizontal directional drilling were used to connect the solar installation to the electrical substation. The project reflects ongoing collaboration between the two companies to support industrial decarbonisation through renewable energy solutions and innovative infrastructure development.