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Core sector output expand at 11 month high

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The eight core industries comprise of 40.27 per cent of the weights included in the index of industrial production (IIP) basket. The growth during mid-February 2020 has been aided by increased output in the 5 out of 8 industries namely coal, refineries, fertilisers, cement and electricity.

In the month of February 2020, the output of eight core industries grew at a fastest pace in FY20 so far. Core sector output expanded at 11 month high of 5.5 per cent, 3.3 per cent higher than the 2.2 per cent growth seen in the same month a year ago. It was 4.1 per cent higher than a month ago level. For January 2020, the growth in core sector output has been revised downwards from estimated 2.2 per cent to 1.4 per cent as per revised estimates.

The eight core industries comprise of 40.27 per cent of the weights included in the index of industrial production (IIP) basket. The growth during the month has been aided by increased output in the 5 out of 8 industries namely coal, refineries, fertilisers, cement and electricity.

During the first 11 months of FY20 i.e., April 2019 – February 2020, the production in the eight core industries expanded at lacklustre 1 per cent, as against the 4.2 per cent growth seen in the corresponding period a year ago.

Industry-wise growth
Coal production grew at fastest pace in nearly one and half year having grown at 10.3 per cent, 2.9 per cent higher than the 7.4 per cent growth a year ago and 3.4 per cent higher than the 6.9 per cent growth seen in January 2020. The resumption of extraction activities post delayed monsoons this year has resulted in the increase in the production by the industry along with scaled up production by one of the major market player.

In February 2020, Crude oil production contracted successively for more than 2 years (27 months). The production declined by 6.5 per cent, higher contraction compared with de-growth of 6.1 per cent in February 2020 and lower than contraction by -5.3 per cent seen a month ago. Sustained decline in the crude oil prices globally and high inventories are seen to weigh on the production during the month.

The production of the natural gas too has contracted for 11 months in a row by 9.6 per cent as against 3.8 per cent growth seen in February 2019 mainly on account of subdued prices and inventory pile up.

Refinery products, which have highest weight in eight core industries, grew by substantial 7.4 per cent in February 2020, which was the highest growth in production in the past 19 months. In February 2019, the production had contracted by 0.8 per cent. Compared with a month ago level the growth rate in February 2020 was 5.5 per cent higher (1.9 per cent in January 2020). It can partly be ascribed to the increased production of BS VI fuel by the refiners to meet the upcoming demand ahead of the implementation of BS VI norms along with favourable base effect.

Fertilizers production grew by 2.9 per cent in February 2020, 40 bps higher than the 2.5 per cent growth in the corresponding month a year ago. The production had contracted by 0.1 per cent in the previous month. Robust sowing activities seen during rabi season have aided in the overall production.

Steel production has contracted for second successive month in February 2020. It fell by -0.4 per cent during the month compared with 4.9 per cent growth in February 2020. In January 2020, the growth in steel production has been revised downwards to -1.4 per cent as against 2.2 per cent as per earlier estimates. Subdued demand from the automobile sector and low exports has weighed on the steel demand.

The production of cement grew at a 11 month high by 8.6 per cent in January 2020, 60 bps higher than the 8 per cent growth in February 2019. It was also higher than 5.1 per cent growth a month ago. Pick-up in construction activities aided the production of cement. Electricity production was at a near 4 year high having grown at 11 per cent in February 2020. In February 2019, the growth was 1.2 per cent while in January 2020 it was at 3.2 per cent. The production has increased to meet the pickup in demand at the onset of summer.

CARE Ratings’ view
Core sector production for March 2020 will be lower owing to lockdown and substantial reduction in the operations by most of the companies amidst the outbreak of COVID-19 in the country. For the full year FY20, core sector production may go down below 1 per cent. As a result, we are expecting IIP to grow by 1-2 per cent for FY20.

Courtesy: Core Sector Update -February 2020

Contacts:
Madan Sabnavis, Chief Economist
Email: madan.sabnavis@careratings.com |
Tel: 91-22-68374433

Dr Rucha Ranadive, Economist
Email: rucha.ranadive@careratings.com |
Tel: 91-22-68374406

Mradul Mishra, Media Contact
Email: mradul.mishra@careratings.com |
Tel: 91-22-68374424

Disclaimer: This report is prepared by CARE Ratings. CARE Ratings has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Ratings is not responsible for any errors or omissions in analysis/inferences/views or for results obtained from the use of information contained in this report and especially states that CARE Ratings has no financial liability whatsoever to the user of this report.

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Economy & Market

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

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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.

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Concrete

WCA Welcomes SiloConnect as associate corporate member

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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.

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Concrete

TotalEnergies and Holcim Launch Floating Solar Plant in Belgium

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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.

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