Product development
There is a tussle between capex and opex
Published
5 years agoon
By
adminAshok Dembla, President and Managing Director of KHD Humboldt Wedag India
Ashok Dembla is President and Managing Director of KHD Humboldt Wedag India, a German multinational engineering conglomerate and a leading supplier of cement machinery and plants. Dembla has a long stint in the cement industry, with in-depth knowledge in cement manufacturing. In a conversation with Sumit Banerjee, Chairman, Editorial Advisory Board, ASAPP Info Global Services, Ex. Vice Chairman, Reliance Cement, and Ex. CEO and MD of ACC Ltd.
How do you look at the cement demand situation considering the lockdown period and economic disruption caused?
Considering the first quarter of 2020, the cement demand for housing and infra projects had started picking up. Unfortunately by March 20, there was a disruption and the demand for cement vanished within no time. The silos in the cement factories are full but there is zero demand. The plants have no place to store it. It will take some time to see uptake in demand. Infra projects that requires capital may take some more time as monsoon is approaching. Therefore in July and August there will be no construction activity.
What has been the situation after April 20, 2020 (partial lockdown was relaxed)? Were you able to start the work at your client’s site where the construction activity has started. What about your own set up?
At the start of the year, we had a backlog of Rs 400 crore. Till March 20, the progress was normal but then all of a sudden everything came to a grinding halt. Talking about the ongoing jobs of existing order book, it will be delayed by three to four considering the force majeure. We have restarted those jobs wherein we had the permission to start. For the projects that are in the pipeline, the owners are differing the projects because of the cash flow problems. We see there is a tussle going on between capex and opex, and the owners have delayed the projects by another eight to nine months. However there are a few projects where the owners have money, they have decided to go ahead and will take advantage of pricing.
One of our sites"Sadguru Industries near Indore"started activity after April 20, 2020. Around 500 people are working there after following the required guidelines. We have contacted other clients like UltraTech and JSW where once they start the construction activity, they will receive our equipment and machinery.
In case of our unit at Faridabad, close to Delhi, we were permitted to start by April 20 but the actual operations stared only on April 25 with 50 per cent of manpower. There have been a lot many conditions imposed before the operations begun. Health and safety are the topmost priority on our list, followed by social distancing. Before start up, we had to sanitise everything. Provide mask and check the temperature of workmen when they enter factory.
In short, there are about 13 SPOs we have to follow. From this unit, we shall be supplying parts and spares to cement plants in India as well as abroad in countries like Nepal, Bangladesh, USA and Philippines. With some difficulties, we are able to start the production and are able to fulfil our obligations. As a result, the cost of production has gone up. The situation like this is likely to continue for another a year or so till we are able to get a vaccine for Coronavirus.
Taking into account all the procedural part to start operations, the cost of production must have gone up. Can you give a ballpark number how much the cost is going up?
It is difficult to give even an approximate number. The additional cost is incurred on health and safety. Working with lower number of manpower and improving on automation. But automation takes its own time to give full benefits. It is a learning stage for us also because we modifying the procedures. Rough estimate on cost increase can be around 5 per cent. The cost will increase at start but may get optimised over a period of time.
You mentioned about operating with lower number of hands, does it mean that you will be rotating your workforce so that everybody gets a chance to work?
The main issue will be salary because we are going to employ only 50 per cent of the workforce. The employer will have to take the burden of 50 per cent salary without taking any work from them. Similarly cement plants will have to operate with 50 per cent of manpower reliability studies so that the plants are approaching us to increase the automation so that they are able to get full output with less manpower. It involves carrying out reliability studies. One would like to continue for one full year operation without any difficulties.
In order to improve on automation in a cement dispatch section, there will be enquires for automated loaders, weighing and counting of bags, etc. for full scale operations. What is your take?
Some clients have approached us to have reliability studies before going for improvement in automation. One has to understand how much one can rely on automation. It involves capex but consequently it will hit the number of jobs.
This means plants that have automated line for dispatch will be at an advantage. Do you feel it will lead to more of bulk cement transportation in the industry?
I can see that happening if the situation continues like this for a year or so. To extend it further even in the kiln operation or mill operation, you will have to operate with reduced manpower. Therefore plants will go for reliability studies so as to ensure continuous operation. About the bagging of cement there is lot of scope for automation, even in bulk loading. Many plants have already done, the remaining will do it now. The bulk cement will primarily go to large construction projects and that percentage will increase. But bag cement that goes to individual house building and will continue to be dispatched in bags.
Speaking on the mindset of the decision makers of cement companies, are we price conscious or technology driven?
Indian situation is very unique. Everybody wants the best of the technology at the lowest price. Therefore we have to work on very thin margins. They also want minimum time to be spent on projects so that their money is not blocked for a long time. For setting up pyro processing, the time has come down from 18 months to 15 months, and for grinding facility, the time has come to 10 months from 12 months. This is putting a lot of pressure on machinery suppliers.
People are open for technologies e.g. the target set for alternate fuels is 25 per cent TSR by 2025. We are ready to supply the required technology. We are offering pyro rotor with no constraint on the size of feed. Our earlier pro rotor had some limitations on the size of feed. The first installation has been in Austria and then in South Korea. We are sure this is suitable for India also. The problem here is consistent availability of waste at the plants.
Let us know about KHD India’s presence outside India in terms of engineering services.
We are allowed to serve the clients in Nepal, Bangladesh, Sri Lanka, China etc. We are also working for some far eastern countries, and Africa and Gulf countries. We have projects in China and we have been offering supervision services for commissioning wherein we have done some expansion work. We were to commission these plants from mid-January but because of Covid-19 situation, we had to resort to use digital medium for the job through our office based in China. From March-April 2020, we successfully commissioned all those eight plants. Today around 40 to 50 per cent of our business comes from outside India. The business from India supports us during difficult time.
Many of the companies who have setup in China are likely to shift outside China. How much share of it India is likely to get?
In the last 40 days, we are hearing news that companies are trying to shift out of China. Japan and US have already decided to shift. It is certainly not one day’s job to shift when you have created facilities over a period of time. The kind of concessions and facilities that China provides at such a low cost is very difficult to resist. Some part of business will come to India depending on the support from the Government and from small and medium enterprises.
Everyone is trying to conserve the cash flow. Do you think that the problem is much bigger than what we see from outside?
This is absolutely right and it is a unique situation due to a lot of uncertainties. Cement companies have already reduced their opex budget for 2020. They are working on same level of production with use of automation, differing capex by another six to eight months. At the same time, companies are working on increasing the demand for cement. Looking at our cash collection for April 2020, we could collect only 10 per cent of cash that we were supposed to receive. Every client here or outside is trying to drag the payment schedule.
Do you need to add anything else?
We have started webinars for our clients on the latest technologies. This is to impart knowledge on our products and services. It is open to cement industry employees with prior communication to us.
Quote from Nuvoco for World Environment Day
Jayakumar Krishnaswamy, MD, Nuvoco Vistas, says, "Building a sustainable world is an integral part of Nuvoco’s vision. This year’s theme for WED "Celebrating Biodiversity", which emphasizes the need for nurturing plant and animal life in order to ensure natural sustainability of all life forms.
Conserving and replenishing natural resources is an important step towards this goal, and Nuvoco has been steadily making progress through various responsible practices. Our sustainability goal is to reduce waste generation, and overall water and energy consumption by 5 per cent over the previous year’s baseline. Our product portfolio, too, reflects this development; for example, our "Concreto Green" product launched last year is a result of one such effort. It consumes 25 per cent less water but increases the strength of concrete up to 70 per cent; making it one of the best performing products in the areas where water scarcity is a perpetual issue. We are ensuring that we make a net positive contribution to nature by minimising our environmental footprint while maximising the value for all our stakeholders."
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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
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