Economy & Market

Reversal in hikes, discounts queer the pitch

Published

7 years ago

January 4, 2019

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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

Economy & Market

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

Published

3 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.