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Journey of cement as a sustainable construction material

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The global cement industry space is as big as $300 billion, almost half of that is in China, but the real distinctive way of looking at the space is to see how much of this is ??ustainably??organised, as most of it is not.

The two most dominant regions that are organising themselves sustainably is EU and China, the former is doing it through legislations and cement companies have to buy carbon credits, the price of which has moved to the stratosphere, so the financial incentives are driving it as less emissions can only reduce this impact. The latter is cracking down on all polluting industries and emission norms remain stringent for all industries, including cement.

The rest of the world do not have a concerted way of incentivising the sustainability journey in cement, although every government wants to limit the impact of emissions and there are norms set in this regard. These norms however are far short of making the journey for a net zero kind of impact, which essentially means that cement as a construction material will not add any net emission of CO2 to the atmosphere either during production or in sourcing of inputs or during transportation and use. This is a very tall task for three reasons.

The first reason is that the conversion of limestone to clinker itself is the fundamental driver of the bulk of the CO2 emissions as the molecular structure changes. The second most dominant factor for emissions is in the use of energy for heating of the limestone mix and the emissions that stem from the logistics sector on the inbound and outbound to move materials. The third is the entire supply chain of cement including all sources of direct and indirect materials add to the woes of emissions generated by the partners in the process. Thus making and distribution of cement becomes the text book case for emissions and sustainability.

The cement to CO2 mix is simple to understand that for every ton of cement produced 0.6 tons end up as CO2 in the atmosphere. So if the world produces 4.3 billion tonnes of cement, 2.6 billion tonnes of CO2 is emitted by the industry globally, out of which 1.82 billion tonne is only in the conversion of limestone to clinker.

This natural process of production of cement is where all attention is currently devoted as the rest has solutions like using solar or wind as energy source, waste heat recovery systems or electrification in transportation and improvement of efficiencies of all kind in the entire supply chain. But the basic production process of cement needs a breakthrough look if net zero targets are to be met.

This journey of reducing the emissions for producing cement started in the early part of 2000, when Polish cement manufacturers started using more fly ash as raw material inputs while grinding clinker to cement, this reduced the clinker in cement. The percentage use of fly ash moved to plus 30 per cent when it drew the world?? attention as it meant that overall emission reduction could touch 30 per cent of 70 per cent or 21 per cent.

The same started to happen with use of slag in slag based cement where the percentage use touched more than 50 per cent, which meant that 50 per cent of 70 per cent, or 35 per cent reduction in emission for the overall cement industry.

Thus alternate use of raw materials in the grinding, slag and fly ash helped to reduce CO2 emissions from close to 600 kg per ton of cement to 550 kg per tonne of cement now. The question now is to look at the balance, which is the very production of clinker through the natural process of conversion of limestone through application of heat, which releases CO2 to the atmosphere.

The current technologies where the attention has been drawn is towards carbon capture processes that will disallow release of carbon dioxide (CO2) to the atmosphere. The first one of its kind is the strategy of using CO2 for permanent storage during the production of concrete, where CO2 molecules are injected when cement is mixed with water to create concrete and it permanently stores CO2 to harden the concrete forever.

Today the world over pre-cast or pre-fabricated concrete blocks are the new norms of the day and this technology can be used to absorb the CO2 molecules to harden the concrete and this would prevent the release of CO2 to the atmosphere. This is the future use of CO2 not only from the emissions coming from the Cement industry but also from any industry that releases CO2 and it helps in the carbon credit offset for all industries as well.

Thus carbon capture, sequestration and its use in existing or future products is where the world?? attention is devoted; the efficiency improvement programs, use of waste heat recovery from the process by extracting from the cooler, use of alternate materials during grinding, etc. all comes on top.

If the world?? incentive systems are well coordinated, the pace at which these programs are run will only move to the next gear, as the investments can only pay back to offset the carbon credits.

The cement-concrete industry on the other hand by providing a useful carbon capture solution in its product would have the right for a premium that customers would be willing to pay as responsibility for the environment becomes mandatory for all.

Footnote:

ABOUT THE AUTHOR:

Procyon Mukherjee is an ex-Chief Procurement Officer at LafargeHolcim India.

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Concrete

Cement Makers’ Margins To Fall Rs 50-75 Per Tonne Amid West Asia Conflict

Crisil Sees Margins Easing Despite Steady Demand

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Crisil said operating margins of Indian cement manufacturers are expected to decline by Rs 50-75 per tonne (t) this fiscal to Rs 925-950 per t due to higher input costs triggered by the West Asia conflict. The analysis covered 18 cement companies accounting for nearly 90 per cent of India’s domestic cement capacity and noted margins had improved sharply to around Rs 1,000 per t in fiscal 2026.

Crisil noted that the reduction would be driven mainly by higher power and fuel costs, which account for about 30 per cent of total costs, as petcoke and imported coal prices have surged amid geopolitical uncertainties. Freight costs, which account for about a quarter of total costs, are also expected to remain elevated because of higher diesel prices. The impact on profitability is likely to be more pronounced in the first half of the fiscal year before easing commodity prices moderate cost pressures later.

The rating agency said steady domestic demand and strong balance sheets should keep credit profiles stable despite the moderation in margins. Green energy currently accounts for 35-40 per cent of the sector’s total electricity consumption and is expected to partly cushion higher energy costs. Operating cash flows are likely to remain resilient, supported by projected 6-7 per cent growth in cement demand this fiscal.

Crisil highlighted that demand growth will be driven primarily by infrastructure spending, which meets about one-third of sector consumption, and by a nearly 18 per cent higher budgetary allocation for core ministries that should support project execution. Weaker rural housing demand amid pressure on agricultural incomes from a possible below-average monsoon may be offset by improved urban housing demand supported by favourable home-loan rates and a strong pipeline of Pradhan Mantri Awas Yojana-Urban projects. Ongoing capacity additions will keep capital expenditure elevated and may lift net debt to EBITDA to between 1.2 and 1.4 times from around 1.0 time last fiscal, though ratios are expected to remain healthy.

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Concrete

UltraTech Board Approves Rs 50 bn Fundraise Via NCDs

Company to issue half a million debentures for expansion plan

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UltraTech Cement’s board of directors has approved raising Rs 5,000 crore (Rs 50 bn) through non?convertible debentures issued in rupees.

The finance committee cleared a proposal to issue up to 500,000 fully paid, unsecured, listed, rated, redeemable, rupee?denominated, non?convertible, non?cumulative debentures of Rs 1 lakh each (Rs 0.1 mn each), aggregating to the Rs 5,000 crore programme.

As of June 2026 the firm reported net debt of Rs 15,875 crore (Rs 158.75 bn) and said its capacity expansion projects under execution are backed by capital expenditure of about Rs 17,000 crore (Rs 170 bn) over the next two to two?and?a?half years.

UltraTech spent Rs 9,500 crore (Rs 95 bn) on capital expenditure in financial year 2026 and in April the group crossed 200.1 mn tonnes per annum of domestic grey cement capacity and 205.5 mn tonnes per annum of global capacity.

The chief financial officer indicated the company would take consolidated capacity beyond 242 mn tonnes per annum, with grey cement capacity reaching 212.7 mn tonnes per annum by the end of financial year 2027. He noted the net debt?to?earnings before interest, taxes, depreciation and amortisation ratio stood at 0.87 times as of June 2026 and the company was confident of ending financial year 2027 with the ratio below one time.

In the first quarter of financial year 2026?27 UltraTech’s net profit attributable to owners rose 16.8 per cent year?on?year to Rs 2,599.3 crore (Rs 25.993 bn) and revenue from operations increased 15.9 per cent to Rs 24,648.20 crore (Rs 246.482 bn). The board approval is expected to complement internal cash flows as the company advances its expansion programme.

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Concrete

Lokesh Lays Stone For Rs 31 Billion Cement Unit In Kadapa

Line-2 expansion to make Kadapa a major cement hub

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Andhra Pradesh Education and IT Minister Nara Lokesh on Wednesday laid the foundation stone for the Line-2 expansion of Dalmia Bharat Cement at Chinnakomerla village in Mylavaram Mandal in Kadapa district. The project carries an investment of Rs 31 billion (bn) and is slated for completion by the third quarter of the financial year 2028. The expansion is intended to boost industrial growth and employment generation across the Rayalaseema region.

Once commissioned, the Kadapa facility will become Dalmia Bharat’s largest integrated cement manufacturing ecosystem in southern India, creating over 1,000 direct and indirect jobs and opening new business avenues for regional micro, small and medium enterprises and transport operators. Lokesh said the expansion signalled growing corporate confidence in the state and reflected the practical ease of doing business that secured repeat investment.

He placed the project within the government’s wider economic targets and recalled the Yuvagalam padayatra commitment to generate two million (mn) jobs within five years, noting that the state would cultivate talent while industry created opportunities. Lokesh highlighted Andhra Pradesh’s competitive pursuit of major manufacturing accounts, mentioning past successes and a personal initiative to engage global investors when persuading them to anchor expansion in the state.

The plant will leverage Kadapa’s abundant limestone reserves to scale production and sustainability. Clinker capacity is planned to rise from two point five million tonnes per annum (mn tpa) to six point one mn tpa, while overall cement output will increase from three point six mn tpa to nine point six mn tpa. The unit is designed to operate on over eighty per cent renewable energy and deploy waste heat recovery, zero liquid discharge, water recycling and advanced AI systems to optimise efficiency. Industries Minister TG Bharat, BC Welfare Minister S. Savitha and Jammalamadugu MLA C. Adinarayana Reddy attended the ceremony.

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