Economy & Market

Late monsoon adds to manufacturers woes

Published

7 years ago

January 7, 2019

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Steep rise in prices over four months’ span have tapered off demand. Further price hikes face challenges like delayed monsoon and allegations of cartelisation of cement manufacturers.

The all India cement prices have eased in June 2019 in line with the expectations of the cement industry value chain last month based on some pressure points developing against the steep rise in prices seen since March 2019. Channel checks suggested that all-India cement prices have declined by 2 per cent month-on-month (m-o-m) to Rs 361/bag in June 2019 versus Rs 368/bag in May, in the first half of the month, though the fall has moderated by month-end.

The fall in prices was predicted by analysts taking cue from falling demand due to higher prices and dealers offering discounts to push their products. With sharp 8 per cent Month-on-Month (MoM or compared to the previous month) hike pan-India in April, average trade prices in April-June were up by 11 per cent Quarter-on-Quarter (QoQ).

The ET Cement Index that tracks cement price movements across the country was down by 1.39 per cent to 2397.3 points by end-June 2019 from 2431.1 points in end-May 2019, ending the four months of rising streak. With the government announcing that it will probe into builders’ allegations of cartelisation of cement manufacturers resulting price rise, the scope price hikes by cement manufacturers has been capped in the months to come. Irregular monsoon is also threatening to affect cement demand, particularly in rural areas where incomes of people are linked to agriculture production.

After six strong quarters of growth in demand for cement, a proxy for construction activity in the economy, it is set to see a sharp drop of 500 basis points (bps) to 3-5 per cent in the first quarter of this financial year, against a 9-10 per cent rise in the January-March quarter of 2018-19, according to rating agency Crisil, based on a survey of 250 dealers and others stakeholders across cement value chain.

The sentiment score at the pan-India level for the next two quarters fell to 5.5 from the previous quarter’s 6.0, Crisil said. The survey measures the outlook on construction growth over the next two rolling quarters on a scale of 1 to 10, where 1 indicates a major decline and 10 indicates a robust rise (on a year-on-year or YoY basis).

Demand downturn
Crisil attributed the sudden downturn in demand to a slowdown in construction activity ahead of the general elections, labour shortage and delayed release of funds by the government. The report also found that a Rs 50-60 per bag increase in the price of cement in the January-March quarter weighed on housing demand as well. "There is a ray of hope as experts expect an upturn in demand from the third quarter, that is, post monsoon," rating agency ICRA said in a report. In April 2019, cement production at 28.7 million MT is lower by 13.3 per cent on an MoM basis. "ICRA expects cement demand growth to taper in FY2020 to around 7 per cent from a double digit growth of 13 per cent in the previous year. The demand has been tepid in Q1 FY2020 (April-June 2019 quarter) due to slowing of project execution on account of general elections (usually resulting in labour unavailability). In Q2 FY2020, the consumption is expected to be on lower side owing to the monsoon season. Hence, ICRA expects the demand to pick up in Q3 FY2020 (October-December 2019 quarter)," said Sabyasachi Majumdar, Senior Vice President & Group Head, Corporate Ratings, ICRA.

Industry volumes increased by one per cent YoY to 28.7 MT in April 2019 after registering 12 per cent YoY growth in 4QFY19 and 13 per cent YoY growth in FY2019, according to the data released by the Department of Industrial Policy and Promotion (DIPP) of the Centre. The strong growth in FY2019 was led by the government’s housing schemes and infrastructure demand, it added.

Cartelisation allegations
Recently, the government has stated in parliament that the Competition Commission of India (CCI) is examining complaints regarding hike in cement prices and cartelisation by companies. This initiative was taken up based on complaints from property and infrastructure builders and contractors, particularly those involved in building roads and highways.

The housing and real estate sector is the largest consumer of cement, accounting for about 65 per cent of the total consumption, followed by public infrastructure at 20 per cent and industrial development at 15 per cent.

Delay in monsoon
The progress of south-west monsoon in June 2019 (from 1 June 2019 to 26 June’19) has been slow with 31 meteorological sub-divisions out of 36 recording deficient or scanty rainfall, which has been the highest in the previous six years. During this period, there has been a significant deviation of 36 per cent from the normal rainfall. The rainfall so far has been scanty over central and western regions, according to Indian Meteorological Department data.

The live storage level in the 91 reservoirs across the country as on June 27, 2019 was 26 BCM, recording a contraction of (-) 11.7 per cent than the corresponding period previous year. The current live storage level of the reservoirs at 16.2 per cent of the full storage level, is lower than the 10-year average live storage, which is 19 per cent.

"A slow progress in monsoon, along with storage levels of reservoirs remaining below the 10 year average during June 2019, could affect the sowing patterns and in turn the crop production in the country.

The monsoon patterns need to be closely monitored going ahead as it has an important bearing on food price inflation and the contribution of agriculture to the overall economy," said CARE Ratings in its recent report. Rural economy’s prospects are linked to monsoon, which is the main source of increasing agricultural production. When rural incomes rise it will impact cement demand positively, along with demand for other commodities. As the monsoon season extends till September every year, one has to wait for the temporal and spatial spread of monsoon to arrive at a conclusion on agriculture productivity during the fiscal.

– BS SRINIVASALU REDDY

Economy & Market

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

Published

4 days 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

3 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

3 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.