Economy & Market

The Strategic Link!

Published

8 years ago

January 3, 2019

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The cement industry is at a turning point. As the cement industry is changing, companies are generating value by concentrating on their micromarkets.

India is now the world’s second-largest market for cement after China, both in terms of production and distribution. This has made India an attractive location for investment by incumbents as well as entry by new players. As a result of this investment activity, the sector has seen substantial gains in manufacturing technology, improved product quality, and falling production costs.

Going forward, the Indian cement industry is primed for further growth due to the country’s low cement intensity and strong demand drivers. India’s per capita consumption of cement (at 225 kg) is still far below the global average of over 580kg. It is also significantly lower than other large developing economies like China.This leaves substantial headroom for industry growth in the coming years.

Over the last few years, the cement industry has already pocketed most of the potential benefits from implementing operational best practices at their respective plants. Therefore, the clear challenge for Indian cement companies today is to identify new source of margin improvement. Based on our limited interaction with the industry players, INDIAN CEMENT REVIEW identified three key areas of performance excellence-sales and marketing, next-gen supply chain management and going digital-that can deliver sustained margins for cement players in shifting industry scenario.

The first area of focus for cement players is to achieve excellence in sales and marketing. By taking action on this front, companies can both stimulate demand and improve price realisation to drive margin improvement. A recent report by Kanvic identifies four key elements of sales and marketing where companies currently lag and which can be provide a winning advantage. These elements are improving visibility beyond factory gate, engaging micro-marketing, discounting, and bringing key account management to non-trade customers.

Improving visibility
Often companies are unaware of the actual price at which their products is sold by the trade, or the price at which their competitor sells. As a result of this limited visibility, cement companies bargain power with their channel partners is weakened and they (cement manufacturers) protect their prices. Given the already slim margins in this commodity segment, these blind spots can have a major impact on profitability. Meanwhile, for the individual home buyers, according to Nilesh Narwekar, CEO, JSW Cement, ‘it becomes critical for a cement manufacturer to reach primary and secondary layer as it has a direct logistics bearing, a cost per tonne.’That said, he further added: ‘it is also necessary how a cement manufacturer attracts enough primary and secondary layers to be a part of wanting to sell a particular brand.’

In order to improve visibility, cement companies need to implement an effective system for gathering information from the market on a continuous basis and apply it in a decision making. For example, one of the leading cement manufacturers has created a dedicated team whose sole purpose is to gather pricing information on the company and competitor products.

Since the point of sale is the moment of truth, where the products and solutions meet their customers and end-users, for LafargeHolcim, being a business partner to all players in the distribution chain is the key. According to an official, who did not wish to be quoted, ‘We make our products and solutions available at all times, generating additional business for customers as distributors, retailers, and DIY stores.’ He added, ‘We also offer in-store animations, product knowledge, digital platforms, mobile apps, and financing schemes for customers and end-users, including individuals and professionals.’

Incentivising dealers
The dealer networks are extremely important for companies, contributing 70-80 per cent of their sales. So, borrowing a trick or two from credit card loyalty programmes, many companies now have personalised rewards and recognition schemes for their dealers, affiliates and key influencers. These days, companies are wooing dealers with gold, offering scholarship to kids like never before – with some help from data and algorithms. Cement firm Nuvoco (formerly Lafarge India) conducts a national-level singing competition for the family members of its dealers. A high-engagement activity, it gets participation from nearly 42 per cent of its membership base. Nuvoco, besides organising singing competitions, also has accident and health insurance for dealers and their family members. Another, large cement major awards its dealers’ children who have obtained high marks. This is a big hit in the southern and eastern regions, especially.

Discounting factor
With improved price information, cement companies are better placed to bring greater discipline in discounting. Today, as per the report by Kanvic, cement companies lack strategic approach to discounting, often succumbing to the pressure from their channel partners to increase discount to stimulated demand. To counter these profit-eroding practices, companies need to implement the policies and processes that target discount at where they generate the most value for the business.

For example, by shifting from a uniform discounting policy to one that rewards loyalty and achievement of sales goals, cement companies can differentiate between their most profitable channel partners. The implementation of discount policies should also be accompanied by effective checks and balances that prevent abuse of discount.

Micro-marketing
To maximise the effect of their micro marketing and achieve optimal demand fulfillment, cement companies need to move to a micro marketing approach. This involves getting a picture of demand that is much more granular than the regional or state-level focus that prevails today. Instead, Kanvic believes that Indian cement companies need to zoom in to the district level to measure an area’s sales potential and allocate the necessary resource accordingly.

To this, Narwekar suggests a limited geography for cement players to focus on. He adds, ‘With limited geography, cement players can move its product from source with the best and cheapest route along with efficient transport management.’ This will entail cement players selling X million tonnes in pan-India, instead to a designated geography. From sales perspective, it will be difficult but, if a cement company has a strong network with assured demand from the region, its market share and volumes will increase in the region. ‘However, it’s a double-edged sword,’ cautioned Narwekar.

Today, new digital tools can make this quicker and dynamic. For example, last year Kanvic was assigned with a building material company. Kanvic helped its client to implement a tool where is sales force could record construction activity at the ward level in a major city to indicate where upcoming demand would come from. Through this process, the company was able to uncover untapped areas of demand to focus on.

Hence, by building a granular picture of demand in this way, cement companies can deploy their sales force, allocate marketing spend and plan fulfillment most effectively. Furthermore, with a clear understanding of an area’s sales potential, they can set more accurate targets for their sales team and more closely monitor changes in the market share.

Connecting the dots
Although representing a smaller share of sales today, non-trade cement customers will account for an increasing share of business in the years ahead considering a shift in the market towards non-trade. These larger customers will place very different demands on cement companies’ sales volume and marketing due to their more exacting expectations on price, quality and customer service. In order to profitably serve this growing segment, cement companies will need to implement effective system of key account management.

For Rajnish Kapur, Business Head-Grey Cement, JK Cement, the non-trade cement consumers contributes a significant amount to the company’s coffer. He adds: ‘Cement companies needs to ensure that large customers receive a level of service that is in line with the value they bring to the business.’

However, Kanvic believes that the largest customer base are not always the profitable. Key account practices, which only focus on the size of the customer, will often result in leakage of margins. Instead, cement companies need to make the effort to estimate their customer’s lifetime values to predict the profit their account could generate. On this basis, they can segment their key accounts and provide a level of service that is justified by their profitability.

Strategic approach
The second area where cement players can improve profitability is their supply chain management. Traditionally, Indian cement companies have focused on achieving efficiency in manufacturing, however, they have realised significant success by making good progress on key performance indicators (KPIs), relating to plant and people productivity, and cost reduction.

Yet, when it comes to supply chain, which on an average accounts for 20-25 per cent of a cement company’s costs, there has not been the same level of focus. Whenever Indian cement companies have looked at their supply chain, they’ve tended to take a more operational view that focuses on improving dispatch or route planning. However, to make supply chain a driver of profit improvement, cement companies need to take an end-to-end view that connects supply chain with their business strategy.

On the other hand, the faster growing non-trade segment, which comprises of large customers who buy direct, has different needs. Their expectations are for on-time delivery to meet critical project timeline along with lower price per tonne due to their high volume requirements. These expectations demand an efficient supply chain that delivers cement at the lowest cost. But shifting from an asset utilisation mindset to focussing on improving responsiveness or efficiency, cement companies can design a supply chain that improves the business’ bottom-line. Once the design of the supply chain has been aligned with the customer segments, achieving improvements in responsiveness and efficiency will require actions on three fronts: re-evaluating the geographic footprint, implementing data-driven decision making, and bringing supply chain partners on-board.

Geographic footprint
In India’s rapidly-developing market, the demand patterns for cement are constantly shifting. With infrastructure projects and housing developments springing up in new areas, there is a need to regularly re-evaluate the geographic footprint of cement manufacturers’ supply chains to ensure they can fulfil emerging demand responsively and efficiently. This re-evaluation should include mapping the location of warehouses and godowns against demand hotspots. Furthermore, following the implementation of GST, there is further scope to rationalise the supply chain based on actual market needs rather than the earlier focus on State-wise operations.

To this, Rajnish Kapur puts it in a right way. He opines, ‘If a cement manufacturer is able to supply its cement product at the right place at the right time and in the right cost to the customer, then you have an edge over your competitor.’

Data-driven decision making
Achieving substantial gains in supply chain responsiveness and efficiency require cement players to move to data-driven decisionmaking. Only by measuring performance at each and every step it is possible to identify and act on the incremental opportunities for improvement that contribute to supply chain excellence. The first step towards data-driven decision making is to create better visibility of inventory, vehicles and product movement across the supply chain. Some cement weighing trucks at the loading bay installs GPS to track their movements, but a few have taken the integrated approach that is necessary to realise its substantial gains. Instead, there is a need to identify all the points where valuable data can be collected and install sensor technology. Once installed, these sensors need to be interconnected which is now possible at low-cost, thanks to the falling prices and rise of cloud computing. With the data flowing from all sections of the supply chain, one is required to intelligently interpret this information to make correct decisions.

This requires the applications of advanced analytics and machine learning algorithms as well as training people to utilise the generated insights they generate in their day-to-day decisions. As supply chain is a cross-functional aspect of the business, there is a need to integrate personnel from different departments in the decision-making process.

‘By taking this instrumented, interconnected and intelligent approach, cement companies can bring more consistency and a higher level of predictability to their supply chain operations,’ believes Kapur.

Bringing partners on board
Achieving supply chain excellence in the cement industry cannot be done alone. Companies will need to collaborate closely with supply chain partners to realise the potential benefits. This includes working closely with logistics partners to implement technology in their fleet to ensure continuous visibility of product and vehicle movements. Even more importantly, there is a need to establish a joint review and problem-solving mechanism that can quickly flag up and resolve issues and develop creative new solutions to drive further gains. This partnership model requires a mindset shift from the traditionally adversarial relationship, focused on constant price negotiation, to a collaborative approach that rewards performance improvement. Not only with logistics partners, cement companies will also need to work closely with technology providers and analytics experts to design and implement new systems and train people in their use. Companies should bear in mind that technology in this space is evolving rapidly so flexibility and adaptability are the key.

Go digital!
The third area that can contribute to long-term profit improvement in the Indian cement industry is the application of digital at scale. Today, companies are adopting new hardware and software solutions on a piecemeal basis to address specific problems, but a few players are viewing digital as a driver of overall business performance and all are struggling to adopt a truly digital culture.

To realise the potential of digital for their bottom-line, cement companies should make four major changes. Firstly, they need to make digital a priority for the C-suite. Secondly, they need to replace the technology lens with a business outlook. And thirdly, they must invest in digital talent.

Breaking the silo mindset
Finally, to realise the full benefits of digital, there is a need to take an integrated approach across the business. This requires cement companies to break-down the traditional silo mindset that separates functions like production, marketing, and sales. Successful digital transformation ensures all departments have a common understanding of digital and its importance to their function.

C-suite
ICR’s conversation with cement companies has revealed that digital is not yet a priority for C-level executives. In most cases, digital initiatives are usually left to lower levels of the organisation or the IT department, who are tasked with implementing new solutions like CRM. As a consequence, digital fails to become a strategic priority for the business.

To drive digital in a concerted way across the organisation leaders need to place it firmly on the C-suite agenda by discussing it alongside other strategic decisions. Furthermore, it is essential that a digital champion is appointed at a senior level who has the authority to lead the process across functions and with direct accountability to the board. They also have the responsibility of creating firm-level awareness of digital and its importance to the organisation’s future.

To kick-start this process, one large manufacturing organisation conducted a C-level workshop facilitated by external experts who brought an outside perspective on the opportunities and threats digital presented to their business. This helped foster a sense of urgency around digital and successfully brought it onto the board’s agenda.

Thinking beyond technologies
Even in cement companies that have adopted progressive digital initiatives, there is a tendency to see them through the technology lens which limits the field of vision to specific solutions, rather than looking at all encompassing impact of digital across business spectrum.

With digital technologies advancing at a fast pace and customers, even in more conservative B2B organisations – rapidly adopting new buying behaviour, a narrow view of digital will leave cement players exposed to the threat of digital disruption. For example, one leading company successfully deployed drone technology to achieve lower pricing from Indian Railways by ensuring wagons were not overloaded, and thus avoided heavy fines. In another case, the same company implemented an automated fuel management system at its mines through RFID tagging, which ensured fuel was only dispensed to authorised vehicles. However, the real long-term benefits from digital will come when individual initiatives such as these are taken in line with a strategic roadmap to digitalise the business. This approach will help prioritise the areas to digitalise first for maximum business impact and provide a common infrastructure to realise synergies across the business.

Invest in talent
In order to digitalise their business, cement companies will need to attract and retain a different a very different talent profile. Today’s digital talent typically prefer to go to analytics and Internet firms where they can learn and apply cutting-edge techniques. In order to attract this critical talent, cement companies will need to create a compelling value proposition for digital professionals to consider the industry and redefine their role and responsibilities beyond the traditional remit of information technology.

Shifting gears
The Indian cement industry is gradually shifting away from the traditionally dominant trade channel that retails cement bags to large numbers of small customers, and towards non-trade customers like large construction and ready-made concrete (RMC) companies. This trend will accelerate further as sectors like infrastructure and low-cost housing increase their share of cement demand. For example, infrastructure share of demand is projected to rise from around 20 per cent to 25 per cent by 2020. These segments will put greater pressure on price realisation through their desire to keep costs low and the high level of bargaining power that comes with a large scale of projects.

Here both Narwekar from JSW Cement and Kapur from JK Lakshmi believe that the demand for RMC as a channel will grow only if there is a economy of scale. RMC would be more useful for programmes like Bharatmala, and Sagarmala.

– RAHUL KAMAT

Concrete

Protect Your Margins

Published

5 days ago

August 28, 2026

admin

In a research-backed article, Dr SB Hegde examines why carbon-adjusted profitability and LC3 will decide the next set of winners in cement manufacturing.

The Indian cement industry has achieved world-class operational efficiency through lower specific energy consumption, high plant utilisation and a reduced average clinker factor of approximately 67.5 per cent. These traditional measures of operational excellence remain essential. However, they are no longer sufficient. Carbon now carries a measurable financial cost under India’s Carbon Credit Trading Scheme (CCTS) and under European carbon markets. Future leadership will be defined by carbon-adjusted profitability, the ability to generate strong returns while systematically lowering the carbon intensity of every ton sold.
Limestone calcined clay cement (LC3) offers a practical, scalable pathway to achieve this dual objective. By replacing up to 50 per cent of clinker with calcined clay and limestone, LC3 can reduce CO2 emissions by 30–40 per cent while delivering comparable or superior durability performance.
This article examines the technical foundations of LC3, European industrial practices, the emerging Indian carbon market and a concrete roadmap for Indian companies to embed carbon-adjusted metrics and LC3 into daily operations, incentives and commercial strategy.

Limits of traditional operational excellence
For many years, plant performance has been judged primarily by five indicators: specific heat consumption, specific power consumption, kiln and mill utilisation, clinker factor and overall equipment effectiveness. These metrics drove continuous improvement and helped the industry reduce energy use and increase the share of blended cement. Three structural changes have rendered them incomplete as sole measures of success.
First, carbon now carries a real or opportunity cost. Plants that improve volume or lower cash cost while raising or stagnating emissions intensity create a hidden liability that will surface as CCTS trading matures and as green procurement expands.
Second, lower-carbon products such as LC3 and high-performance blended cements are creating differentiated market segments. Customers in infrastructure, real estate and export-oriented construction are beginning to specify embodied-carbon limits.
Third, investors and lenders increasingly treat carbon intensity as a financial risk factor. Traditional KPIs can mask the divergence between short-term cash profit and long-term carbon-adjusted value.

What is carbon-adjusted profitability?
Carbon-adjusted profitability evaluates normal profit after explicit adjustment for carbon performance. A practical expression is:
Carbon-Adjusted EBITDA = Conventional EBITDA – Carbon Cost + Green Premium Income
Carbon cost may be an internal carbon price, the actual cost of purchasing Carbon Credit Certificates under CCTS, or the opportunity cost of high emissions relative to peers. Green premium income arises when customers pay more for verified lower-carbon cement or when the company sells surplus credits. Tracking both conventional and carbon-adjusted profit side-by-side gives management a clearer picture of value creation under evolving market rules.

Table 1. Traditional KPIs versus Carbon-Adjusted Leadership Metrics
Traditional Focus New Leadership Metric Why It Matters
Specific energy consumption Emissions intensity (kg CO2/t cement) Directly linked to future CCTS and CBAM costs
Kiln utilisation Carbon-adjusted contribution margin Reveals true value of incremental volume
Clinker factor Share of lower-carbon products sold (incl. LC3) Measures commercial success of the transition
Power cost per tonne Effective carbon cost per tonne sold Expose hidden liabilities
Absolute EBITDA Carbon-adjusted EBITDA + green premium Aligning profit with future market reality

LC3: Technical foundations and performance advantages
LC3 is a ternary blended cement that typically combines approximately 50 per cent clinker, 30 per cent calcined clay, 15 per cent limestone and 5 per cent gypsum (the classic LC3-50 formulation). The decisive technical advantage is that clay is calcined at 700–850 °C, far below the 1,450 °C required for clinker production. This lower temperature, together with the substantial reduction in clinker content, delivers CO2 reductions of 30–40 per cent relative to ordinary Portland cement (OPC).
Chemistry is synergistic. Calcined kaolinitic clay (metakaolin) reacts with calcium hydroxide from clinker hydration and with limestone to form additional C-A-S-H gel and carboaluminate phases. These phases densify the microstructure, reduce porosity and improve durability.
Field experience shows superior resistance to chloride ingress, sulphate attack and alkali–silica reaction. Early-age strength can match OPC with high-reactivity clays; later-age strengths routinely meet 42.5 and 52.5 grade requirements.
Importantly, LC3 does not require high-purity kaolin. Clays with 40 per cent or even lower kaolinite content can be activated successfully, expanding raw-material availability across India. Calcination can use adapted rotary kilns or dedicated flash calciners, making the technology compatible with existing plant infrastructure and far less capital-intensive than carbon capture.
Economic analyses show that LC3 can be produced at equal or lower cost than OPC in many locations because of reduced energy demand and cheaper clay. Life-cycle assessments consistently report 30–40 per cent lower embodied CO2 per tonne of cement.
Table 2. Comparative profile: OPC versus LC3-50
Parameter OPC LC3-50
Typical clinker content ~95 per cent ~50 per cent
CO2 emissions (relative) Baseline (≈0.85 t CO2/t cement process + fuel) 30–40 per cent lower
Clay calcination temperature Not applicable 700–850 °C
Key hydration products C-S-H, portlandite, ettringite C-A-S-H + carboaluminates
Chloride & sulphate resistance Good Superior
Production cost potential Baseline Equal or lower in most locations
Infrastructure compatibility Existing High (minor adaptations)

In India, commercial adoption has begun in earnest. JK Cement commenced the first commercial production of LC3 in the Indian subcontinent at its Mangrol plant in Rajasthan in 2025 under BIS standard IS 18189.
By early 2026, approximately 2,000 tonnes had been produced and sold, avoiding an estimated 500 tonnes of CO2. JK Lakshmi Cement followed with commercial launch of its Green PRO LC3 grade from the Jaykaypuram plant. As of mid-2026, two producers are supplying LC3 to the market. The first large-scale infrastructure application is the Noida International Airport (Jewar), where LC3 was used in the runway and a building complex, demonstrating full constructability and performance under demanding conditions. These early volumes are still small relative to national cement demand, but they mark the critical transition from pilot to commercial reality. Companies that scale capacity now will be positioned to capture both CCTS credits and emerging green-procurement demand.

Why the shift is accelerating
According to the World Bank’s State and Trends of Carbon Pricing 2026, direct carbon pricing now covers nearly 30 per cent of global greenhouse-gas emissions and generated more than US$107 billion in public revenue in 2025. The average global carbon price stands at approximately US$21 per tonne, although regional prices vary widely.
In Europe, the EU ETS price has traded near €80–85 per tonen in mid-2026. Free allocation for cement is being withdrawn in parallel with CBAM. European producers therefore face a clear signal: every tonne of avoided CO2 improves both compliance and competitiveness. Holcim has scaled calcined-clay production, including Europe’s first dedicated line at Saint-Pierre-la-Cour (France) and a second line in the Czech Republic (2026). Heidelberg Materials, Cementir (FUTURECEM) and others have commercialised low-clinker calcined-clay blends across multiple markets, showing that carbon-adjusted profitability is already reshaping capital allocation in the world’s most mature carbon market.India’s CCTS is now operational. Binding emission intensity targets apply to 186 cement facilities for FY 2025–26 and FY 2026–27. Average required reductions for integrated plants are modest (around 2.7 per cent by FY 2027), yet the direction is clear.
Trading of Carbon Credit Certificates is expected in the second half of 2026, with early prices likely in the `800–1,500 per tonne range. Plants that outperform targets can sell credits; those that underperform must buy them or face compensation. Cement is well positioned to be a net supplier of credits if clinker factor continues to fall through LC3 and other low-clinker systems.

Way forward for India
India starts from a strong baseline, world-class energy efficiency and a clinker factor already lower than the global average. The next competitive frontier is the deliberate reduction of process emissions through clinker substitution at scale. LC3 is uniquely suited to Indian conditions because suitable clays are widely distributed, the technology fits existing kiln and grinding infrastructure, and the resulting product can meet the performance demands of both infrastructure and building construction.
A practical national pathway contains five interlocking elements:

Standards and acceptance: Accelerated finalisation and promotion of BIS specifications for calcined-clay and limestone–calcined-clay cements will remove a key barrier to commercial uptake. Alignment with European practice (EN 197-5) can facilitate knowledge transfer and export readiness.
Supply-chain development: Investment in flash calcination capacity and systematic characterisation of regional clay deposits will secure reliable, low-cost feedstock. Existing rotary kilns can be adapted for initial volumes while dedicated calciners are built.
Incentive alignment: Part of variable compensation for plant managers, sales teams and senior leadership should be linked to emissions intensity reduction and to the volume of lower-carbon products (including LC3) sold. Without this link, traditional volume and cost targets will continue to dominate behaviour.
Product-level carbon accounting: Reliable measurement of emissions intensity at the individual cement grade level, supported by third-party verification where required, is essential for both CCTS compliance and credible green claims.
Demand-side pull: Green public procurement policies that specify maximum embodied-carbon thresholds for major infrastructure projects will create a predictable market for LC3 and other low-carbon cements, accelerating scale and cost reduction.
Companies that treat LC3 as a strategic product line rather than a niche offering will be better positioned to generate surplus Carbon Credit Certificates, capture any emerging green premium, and protect margins as carbon costs rise.

Organisational changes required
Technical capability alone is insufficient. Three organisational shifts are required.
Daily management: Emissions intensity must appear on the same daily and monthly dashboards as heat consumption, power consumption and utilization. Plant reviews should examine both conventional and carbon-adjusted results.
Incentives: A meaningful portion of bonuses for plant heads, technical teams and sales leadership should be tied to lower emissions intensity and successful commercialisation of LC3 and other low-carbon grades.
Commercial approach: Sales teams need clear volume and pricing targets for lower-carbon products, supported by technical service that helps customers specify and place the material correctly. Without commercial pull, excellent technical performance remains under-utilised.

Table 3. Three-stage roadmap to carbon-adjusted profitability
Time Horizon Priority Actions Expected Outcome
Next 12 months Add emissions intensity to plant dashboards; establish internal carbon price; initiate LC3 pilot production and customer trials Visibility and early organisational learning
12–24 months Revise incentive systems; scale LC3 and other low-carbon grades to key accounts; secure third-party verification capability People and sales aligned with carbon goals
24–36 months Embed carbon-adjusted metrics in board reporting and capital allocation; expand calcined-clay capacity Full system integration and competitive advantage

Questions senior leaders should ask
Boards can accelerate the transition by insisting on answers to a short list of questions:
• Is our carbon-adjusted profit improving, stable or declining relative to conventional EBITDA?
• Did recent volume growth improve or worsen our emissions intensity?
• What share of sales already comes from lower-carbon products, including LC3, and what is the trajectory?
• How exposed is our capital expenditure plan to rising carbon costs under CCTS and potential CBAM-related requirements?
• Do our incentive systems still reward only volume and cost, or have they been updated to include carbon performance?
Treating carbon with the same seriousness as energy cost or kiln utilization does not diminish operational excellence; it expands the definition of excellence to match the new competitive reality.

Looking ahead
By 2030 the gap between leading and lagging cement companies will not be decided by who records the lowest specific heat consumption. It will be decided by who delivers the strongest carbon-adjusted profits.
Absolute emissions may still rise as national production grows. That is not the issue. Companies that reduce intensity year after year and successfully sell cleaner products will pull ahead in both domestic and export markets. Those that do not will fall behind, even if their traditional efficiency numbers look strong.
Operational excellence built the Indian cement industry. It remains the foundation. It is no longer the complete picture. Carbon-adjusted profitability is the clearer measure of success.
LC3 is not a distant technology. It is available now. It cuts CO3 by 30–40 per cent, works with existing plants, and is already in commercial production in India. Companies that treat it as a strategic product, not a pilot, will protect their margins and generate tradable credits.
Leaders who act now will place carbon metrics on daily dashboards, link incentives to intensity reduction and LC3 sales, invest in calcined-clay capacity, and build commercial capability to sell lower-carbon products. They will shape the next chapter of the industry.

References

World Bank. (2026). State and Trends of Carbon Pricing 2026. Washington, DC: World Bank Group.
International Carbon Action Partnership (ICAP). (2026). India Carbon Credit Trading Scheme – Status and Coverage. Berlin: ICAP.
Ministry of Environment, Forest and Climate Change / Bureau of Energy Efficiency. (2025). Greenhouse Gases Emission Intensity Target Rules, 2025. New Delhi: Government of India.
Scrivener, K., Martirena, F., Bishnoi, S., & Maity, S. (2018). Calcined clay limestone cements (LC3). Cement and Concrete Research, 114, 49–56.
RMI. (2024). The Business Case for LC3. Rocky Mountain Institute.
European Commission. (2026). EU Emissions Trading System – Allowance Price Data and Free Allocation Phase-out Schedule. Brussels.
Holcim. (2025–2026). Scaling Calcined Clay for Sustainable Building – Corporate Updates on European and Latin American Capacity. Zurich: Holcim Ltd.
LC3 Project / EPFL. (2026). LC3 – A Guide to Best Practices for Scalable, Affordable and Sustainable Low-Carbon Building. Lausanne: École Polytechnique Fédérale de Lausanne.
Business Today / Industry Reports. (2026). First Large-Scale LC3 Application at Noida International Airport, Jewar. New Delhi.
NITI Aayog / Industry Analyses. (2026). Roadmap and Baseline Performance Indicators for the Indian Cement Sector. New Delhi.
Springer / Innovative Infrastructure Solutions. (2026). LC3 Systems: A Review of Chemistry, Performance, Durability and Sustainability toward Market Adoption.
Cementir Holding / Industry Sources. (2025–2026). FUTURECEM and Related Low-Clinker Technologies in Europe.
Climate Risk Horizons & Independent Analyses. (2026). Assessment of Emission Intensity Targets under India’s CCTS for Cement and Other Hard-to-Abate Sectors.
GCCA / TERI. (Various years). Decarbonization Roadmaps for the Indian Cement Industry.
EN 197-5:2021. Cement – Part 5: Portland-composite cement CEM II/C-M and Composite cement CEM VI. European Committee for Standardization.

Concrete

More Oversight Makes Cement Plants Less Safe

Published

5 days ago

August 28, 2026

admin

Dijam Panigrahi makes a counterintuitive but data-backed argument that routing every sensor alert through human approval does not make cement plants safer.

India’s cement industry has spent the last two years wiring kilns, mills and coolers with sensors and automated control systems, and the safety case for doing so is strong on paper. Contract workers still make up the majority of the industry’s workforce, and fatal accidents remain a recurring problem. The Indian National Cement Workers Federation has noted that around 83 per cent of workers in the sector hold precarious positions, a fact that resurfaced after an oxygen cylinder explosion killed three contract workers at a plant in Chhattisgarh.
Industry tallies compiled by IndustriALL found cement plants recorded at least seventeen accidents in one year with 21 workers killed, and ten accidents the following year with nine killed, most of them contract staff. Automated monitoring, in theory, closes that gap. A sensor never gets complacent and never skips a check because a shift is short staffed.
However, plants that respond by routing every anomaly reading to a person for approval are quietly building a system that fails the same way understaffing does. When operators receive dozens of flagged deviations a shift, most of them minor, they learn a simple lesson: the fastest way through the queue is to approve without reading closely. The safety benefit disappears, not because the technology failed, but because the humans supervising it adapted to the volume.

Why alerts get ignored
A study cited by manufacturing technology publisher Applied SmartFactory found more than 95 per cent of alarms in a semiconductor fab were low priority, and only about 4 per cent ever triggered an action, with just 100 out of 5,000 alarms accounting for 70 per cent of all alarm activity. The mechanism is the same whether the trigger is a vibration sensor or an AI model flagging a kiln temperature swing. Once the ratio of noise to signal crosses a threshold, workers stop treating the system as a decision aid and start treating it as a formality to clear.
The scale of AI deployment underway makes this more than a theoretical risk. Stanford’s 2026 AI Index Report found organisational adoption of AI has reached 88 per cent, even as documented AI incidents rose to 362 in 2025, up sharply from 233 the year before, according to analysis of the report. The Index also found only about a third of organisations have adopted a formal governance framework, with NIST’s AI Risk Management Framework cited by 33 per cent and ISO/IEC 42001 cited by 36 per cent.
Most manufacturers are deploying monitoring systems faster than they are building the judgment for when a flagged event actually needs a person’s attention. In India, plants run by JK Cement have begun pairing CCTV feeds with AI to define safe zones around heavy machinery, a promising direction that still depends on operators trusting and reading the alerts the system generates.

A three-tier model for cement plant
The fix is not less monitoring or more monitoring. It is classifying decisions by risk and by novelty, rather than treating human oversight as a single switch that is either on or off. A workable model sorts factory floor events into three tiers.
The first tier, proceed, covers deviations the plant has seen before that fall within known safe bounds, such as a kiln feed rate adjustment within an established range. These should run without a stop for approval, because routing them to a person only trains that person to click through.
The second tier, pause, covers events that are unusual but not yet dangerous, such as a vibration reading trending toward a limit or a fuel blend shifting outside its typical mix. These warrant a brief human check before the system proceeds, giving an operator the chance to apply judgment the model does not yet have.
The third tier, escalate, covers events that are both high risk and unfamiliar, such as a pressure reading combined with a temperature spike that has no close precedent in the plant’s history. These should stop the process entirely and require a decision from someone with the authority to shut down a line.

Who should set the threshold
Where these tiers get drawn matters as much as the framework itself. Threshold setting is frequently handed to the vendor supplying the monitoring software or to a plant’s IT department, both of which understand the technology but not the specific tolerances of a given kiln, mill or line. Operations staff, who know that a particular grinding unit runs hotter under monsoon humidity or that a calciner behaves differently after a refractory reline, are better positioned to calibrate what counts as routine on their own equipment.
Handing threshold ownership to operations does not remove IT or vendors from the process, but it puts the calibration decision closest to the people who live with its consequences on the floor.

Signals that oversight is actually working
A few concrete indicators reveal whether a monitoring setup is functioning as intended or simply providing the appearance of safety. The escalation rate over time is the first: a rate that stays flat or climbs slowly as operations mature is healthy, while one that spikes and then falls sharply often means operators have started overriding the system rather than engaging with it. Time to resolution is the second: escalations that take progressively longer to close suggest fatigue or confusion about ownership, not diligence. The third, and most telling, is how accurate the system’s own uncertainty estimates turn out to be, meaning whether events flagged as high risk actually correlated with real incidents, and whether events waved through stayed incident free. A system whose escalations do not track with actual outcomes trains operators toward the same complacency that unmonitored equipment produces.
None of this argues against automation in Indian cement manufacturing, where a labor structure built on contract work and a track record of serious accidents make better monitoring an urgent need. It argues for treating human oversight as a design problem with three distinct settings, rather than a single
dial turned up whenever a plant wants to look safer on paper.

About the author:
Dijam Panigrahi, Co-founder and COO, GridRaster, is a spatial computing platform for industrial enterprises and manufacturers.

Concrete

The biggest gap arises from inconsistent leadership

Published

5 days ago

August 28, 2026

admin

Anuj Kumar Mathur, Safety Consultant, stresses on the importance of closing the enduring gap between what safety systems say on paper and what actually happens on the plant floor.

Robust safety manuals, certified PPE and digital monitoring systems mean little if the culture on the plant floor does not enforce them. Safety Consultant Anuj Kumar Mathur has spent enough time in high-risk operations to know precisely where that gap opens and why it persists. In this exclusive interaction, he suggests feasible ways to strengthen the safety culture at a manufacturing unit.

Having led safety across high-risk fuel operations, what lessons can the cement industry adopt to strengthen its safety culture beyond regulatory compliance?
Beyond regulatory compliance, the cement industry should embed visible leadership commitment, proactive risk assessment, process safety management, strong contractor control, near-miss learning, and employee engagement to build a resilient safety culture that prioritises prevention, operational discipline and continuous improvement over mere compliance.

As cement plants become increasingly automated and digitally connected, how should organisations redefine their approach to process safety and operational risk?
As cement plants become increasingly automated, organisations should integrate process safety with digital risk management by strengthening cybersecurity, real-time monitoring, predictive maintenance, management of change and workforce competency to ensure safe, reliable and resilient operations.

What are the most common gaps between having robust safety systems on paper and achieving consistent safety performance on the ground?
The biggest gap arises from inconsistent leadership commitment on ground, weak safety culture, inadequate supervision, poor risk communication, insufficient workforce engagement specially, ineffective training and failure to translate procedures into disciplined execution, accountability and continuous monitoring at the operational level.

How can cement manufacturers better integrate contractor safety, leadership accountability and workforce behaviour to build a truly zero-harm workplace?
Manufacturers can achieve a zero-harm workplace by enforcing uniform safety standards for employees and contractors, strengthening leadership accountability, promoting proactive hazard reporting, enhancing competency through continuous training and fostering a culture where safe behaviour is recognised, expected and consistently practiced

What emerging technologies and safety practices do you believe will have the greatest impact on risk prevention in cement manufacturing over the next decade?
Artificial intelligence, IoT-enabled monitoring, predictive analytics, digital twins, wearable safety devices, drones, robotics and advanced process automation will significantly enhance hazard detection, predictive maintenance, real-time risk management, and worker protection, enabling safer and more resilient cement manufacturing.
IoT-enabled monitoring is the use of interconnected sensors and smart devices to continuously collect, transmit and analyse real-time data from equipment, processes and the work environment. This enables early detection of unsafe conditions, equipment failures, or abnormal operating parameters, allowing timely intervention before incidents occur.
In cement manufacturing, IoT-enabled monitoring can be used for:
• Monitoring kiln, crusher, and mill temperatures, pressures, and vibrations.
• Detecting overheating of bearings and motors to prevent failures.
• Monitoring dust concentration, gas leaks (CO, SO2, NOx), and oxygen levels.
• Tracking conveyor belt alignment and condition.
• Monitoring structural health of silos and
storage facilities.
• Tracking worker location and exposure to hazardous environments using wearable devices.
• Providing real-time alerts and predictive maintenance recommendations.

Benefits:
• Early hazard detection
• Reduced equipment downtime
• Improved process safety and reliability
• Lower maintenance costs
• Enhanced regulatory compliance
• Better decision-making through real-time data and analytics
In simple terms, IoT-enabled monitoring transforms periodic manual inspections into continuous, real-time surveillance of plant safety and equipment health.