Raj Pradhan, Global Delivery Head – Building & Construction Materials Vertical, BirlaSoft, speaks about the scope of digital technologies for cement companies for a gamut of solutions from cost optimisation and yield improvement to energy profiling and carbon footprint.
What is the need for automation in the cement industry?
Cement industry is typically a work force and raw material driven industry for decades. Person dependency in this industry is huge and automation can bring independent processes and scope for improvement. In the current competitive market where increase in price is not helping much, the only option left to improvise the margins is through market share and optimisation of cost, which can be achieved through automation.
With the rising demand of cement, how can digitisation of processes help optimise productivity and production?
Digitisation brings a complete near real time visibility of end to end processes which helps in taking timely decisions to avoid any down time and allows best possible utilisation of resources. As an example, cyclone jam due to SO2 layering in preheating/pyro equipment, which leads to process inconsistency and clinker quality degrades can be avoided with the help of digitisation. There are multiple possible issues, which can be analysed early and corrective actions can be taken before occurrence with the conversion of factories into smart factories.
How can an Information and Technology (IT) driven strategy for a cement business help in getting financial gains?
There are multiple areas where IT can help in getting financial gains to a cement business.
a. Growth in sales (top line) by utilisation sales team towards getting additional network rather serving existing dealer network
b. Cost optimisation by identifying probable dynamic set of parameters responsible for deviation in critical process performance indicators and generate role based actionable insights which can help taking corrective action during the process rather though a quality check post completion of process
c. Optimisation of supply chain by making complete process paper less
Give details about the challenges in business identified in the cement sector and solutions developed by your firm for them.
The challenges in a cement plant are divided into three groups. We have intelligent assets as solutions that cover the journey of smart manufacturing to overcome these challenges.
• Predictive Maintenance – Bearing failures, gearbox and bearing failure of grinding equipment, shaft wear, tear and shearing for crusher equipment, seal failure for hydraulic pumps, supporting roller shaft failure of kiln
• Predictive Process Quality – Cyclone jam due to SO2 layering in preheating-pyro equipment, degree of calcination, C3S quality parameter consistency from mines to kiln
• Proactive Process Monitoring – Actionable insights for Smart Processing / Real time energy report monitoring
Challenges in the sales department are because of time spent by sales to serve the existing dealer network rather than getting additional dealers to the network. We have channel partner connect as
a solution which covers the order to cash process for dealers without involving sales teams to serve existing dealers.
Challenges in the supply chain are getting addressed through our solution, which involves on-board transporters and drivers as part of the process to improvise the delivery experience.
At Birlasoft, we focus on industry domain and with that focus we have building and construction material as sub-vertical. This gives us an edge to understand and solve the problem of our customers in this industry.
Tell us about the impact of digitisation on the supply chain and logistics of cement. What solution would you recommend for the same?
Digitisation is helping to improvise TLC as well as opening the doors for small transporters in the local market. A company should think to utilise the competitive market of transporter as well rather only depending on contracted transporters. This will help in agility in delivery specially during secondary distribution which are shorter in distance. Also, digitisation gives visibility to demand and supply balance, which helps in reducing warehouse and handling cost.
What is the scope of Internet of Things (IoT) in the cement business?
Scope of IoT is huge in the cement business. Connected equipment in a smart plant gives multiple data parameters which enables the cement makers to derive productivity and process improvement through analytics.
Share your thoughts on the future of digitisation and automation in the cement industry.
Companies will invest to utilise digital technologies for cost optimisation, yield improvement, market capturing and also for achieving the target of energy profiling (consumption and CO2 emission) and
As the marketing scenario rapidly shifts to accommodate trends and customer preferences, cement companies need to reinvent their branding strategies. With the onslaught of digital marketing, especially social media, the branding exercise has taken on a new avatar. We unravel the nuances of branding, advertising and marketing communications for cement companies as each one vies for their share of the customer’s attention, and get experts to share their winning strategies with us.
How does one create loyalty for the product they have on offer? How do they communicate about what their product is all about? How do they stand apart from the clutter in the market? The answer to all these questions is branding.
A branding strategy by definition is a long-term plan to achieve a series of long-term plans to achieve a series of goals that ultimately result in the identification and preference of the brand by consumers. This strategy encompasses the brand’s mission, its promises to its customers, and how these are communicated to send the right message to the right audience.
Any product or commodity needs a branding strategy because branding promotes recognition. A good branding strategy helps build a loyal customer base, sets your product offering apart from competition and allows you to build a standard communication across all channels with a vision and mission in mind and connect emotionally with your customers.
“Although going against the tide of producing easily marketable cement, JSW Cement has chosen the less travelled path by producing cement, which is least harmful to the environment, hence, this makes us the leading producer of green /sustainable cement in India. This feat is achieved by using raw materials like slag and having efficient processes, which reduces carbon emissions by one-third of world industry average,” says Gurminder Singh, Head – Branding, JSW Cement.
“Promoting sustainable living coupled with the unmatched physical strengths of slag cement forms the basis of our branding strategy. We promote this through – TVC, giving sustainable gifts, using eco-friendly raw materials etc.,” he adds.
Changing the marketing game
Cement is a commodity widely used across the globe and there are many cement players in India as well. Branding allows them to stand apart from the competition and get a hold on the market share with its various efforts, like production, distribution, marketing etc. According to Statista reports in FY2020, Ultratech Cement held the highest market share in India with 31 per cent of the total market. Followed by Ambuja Cement with 21 per cent market share, ACC Limited with 12 per cent market share and so on.
Agnes Rozario, Manager – Brand and Customer Excellence, AKB Group says, “Building a brand in the cement industry is multidimensional but not bewildering. The Indian subcontinent has seen some very well-known brands crafting remarkable campaigns to make a mark in customers’ minds and all of them indulged in the product, service innovation and customer excellence. As we focus on the current scenario, householders account for almost a larger part of cement consumers, very evidently pointing out that this industry in India has become a brand-conscious segment with a constant need to brand the cement. Brands like JK Cement, UltraTech Cement and ACC deployed 360-degree consumer benefit-based positioning strategies for but not limited to OOH, print media, electronic ads, etc. We witnessed brands using humour (The Great Khali ad of Ambuja Cement), onboard celebrities like Amitabh Bachchan and Sourav Ganguly to amplify their personal brand in building awareness for the company’s USPs.”
“With a plethora of multi-channel brand activities taking place, we feel that players in the Indian Cement industry are breaking the ceiling of traditional brand marketing and adapting new viewpoints. To cement brand value in the market, consistency and the ability to vary has been the key for any successful player today,” she adds.
A November 2021 report by EPRA International Journal of Research and Development (IJRD), states that the cement industry is required to operate in a social and environment that needs to handle a market of continuous changing customers’ product preferences. The production and marketing development becomes a major activity for the cement industry of these companies. The marketing environment in the industry is competitive and dynamic and slowly all the companies are adopting new age, digital based and unique marketing strategies to be in competition in the Indian cement market not only for survival
but also for growth and development in the cement industry.
A study conducted by Dr Pawan Kumar Dubey, Dr Umesh Kumar and Dr Arivend concludes that cement companies are well aware of the importance of focusing customers. Cement companies are willing to cater new customer segments. It shows the level of competition among the existing cement companies in the market. Any company offers a product or service in the market immediately introduced by its competitors in the market. It can be inferred that the cement industry is highly competitive.
The results also show that technology plays an important role in the growth of the cement industry. Companies have to be ready for the change in the technology to utilise this opportunity. It is required for cement companies to keep the same pace in the change in the technology within the company to contribute to the industry as a whole. They must also check about the benefits they are getting from this contribution and act accordingly.
Cement organisations are moving digital, especially in the post pandemic era. They are launching campaigns to connect with consumers of the younger age group too. Companies are touching upon issues that matter to the environment and other important issues through their digital campaigns. In January 2022, Ambuja Cement and ACC limited launched their first corporate campaign #ChangeTheStory that highlights the plastic removal efforts of the cement majors in the country. The #ChangeTheStory campaign expects to elevate the narrative around sustainability challenges with a sense of urgency by showcasing technology-backed solutions that offer effective and measurable outcomes. This campaign aims to rewrite the problems of the present and create solutions that will benefit the future of society.
Another top cement brand JK Cement launched its digital-first campaign, WallMax, to reiterate its position as the No.1 Wall Putty brand in India. The brand has adopted a 360-degree route to amplify the message, commencing with a series of quirky and intent-driven films on social media. The campaign conveys the message that attaining the No.1 position gives a proud feeling but it comes with the responsibility to create a difference in the lives of the customers.
“Social media and digital marketing have picked up a lot in recent times. We are a young brand and right from the beginning we have been active on social media platforms and digital channels. We are working hard on these mediums and have been doing a lot of campaigns like People of Wonder, Stories of Wonder etc. where we engage our network, architects, contractors, masons and everyone involved with the brand,” says Siddharth Singhvi, Associate Vice President – Business Excellence, Wonder Cement.
“One of the biggest activation campaigns we did was in 2015. We thought of doing a customer activation through cricket and named it ‘Saath Saath Cricket Mahotsav’. At that time, we involved more than two lakh people on the ground directly and they played with us. Multiply that with their family members coming to see the matches, so all in all we touched about 2.5 to 3 crore people across Rajasthan, Gujarat and Madhya Pradesh. This was a path breaking campaign, one of a kind campaign done by a cement player,” he added.
Branding has always been a vital part of business, but it may be more important now than ever before. With social media, consumers get exposed to new brands every day. This can be great for consumers who have plenty of options and are able to do research to find the best one, but it makes it harder for businesses.
Branding helps the company build trust with its customers by communicating its mission and creating a promise of delivery quality. It helps create advertising for your product and build a connection with your customers and gain their loyalty. Branding is giving your product and organisation a personality, a voice, identity and positioning in the market.
We can help the global cement industry to decarbonise
With the net zero deadline looming above us, the cement industry is racing against time. Maarten van Roon, Chief Commercial Officer, Carbon8, puts forth his ideas on how Carbon Capture, Utilisation and Storage (CCUS) can help the cement industry decarbonise, and help make it a more circular sector.
Tell us more about the Accelerated Carbonation Technology (ACT).
Carbon8’s Accelerated Carbonation Technology (ACT) is based on one of nature’s ways of sequestering carbon. Carbonation occurs naturally but it is an extremely slow process. ACT controls, manages, and accelerates this reaction so that it takes between 15-30 minutes.
Essentially, we help enable circularity for hard-to-abate industrial sectors by combining captured carbon from their operations with industrial residues, from the very same operations, to manufacture new materials for the construction industry.
In cement production specifically, cement bypass dust (CBD) and cement kiln dust (CKD) are produced as a by-product. CBD and CKD are reactive to CO2 because of the compounds they contain, making them a potential carbon sink. Our technology solution captures CO2 directly from the cement plant and permanently stores it in products, by valorising
those residues. The product that ACT currently manufactures is CircaBuild, a carbon-negative alternative to natural aggregate.
CircaBuild has various applications in the construction industry, including concrete blocks, ready-mix concrete, road fill and green roofing substrate. Regardless of which application CircaBuild materials are used in, they reduce the carbon footprint of any construction project by replacing the need for virgin materials while themselves containing captured carbon.
What happens to the carbon that is captured permanently through ACT?
ACT enables the captured carbon to be permanently locked in the products and it will not be re-released. The calcium and magnesium oxides, hydroxides and silicates within the residues react with the CO2, changing it into carbonates. Through this, the carbon is permanently sequestered into carbon-negative aggregate – CircaBuild. For example, if CircaBuild is used in concrete blocks for buildings, the
carbon will not be re-emitted if the building is demolished. It is truly permanent sequestration; it is Carbon Capture, Utilisation AND Storage – ‘CCU’ with the ‘S’.
The captured carbon becomes a direct ingredient in our process. What this means for the carbon capture, is that the system taps directly into the flue stack of the cement plant and removes a portion of the carbon directly. This does not need to be treated or purified but can directly be used within the process. The captured carbon is diverted into the CO2ntainer where, under specifically engineered conditions, it is exposed to the CBD or CKD.
Tell us about the process of setting up the containers that capture carbon at the sites of cement manufacturing and how can the units implement that?
The CO2ntainer is our modular and mobile CCUS solution. It is the realisation of ACT as a compact, easily deployable CCUS innovation. The Plug ‘n Play system allows for frictionless transportation and implementation while using CO2 captured at point source to carbonate industrial residues destined for landfill. This is something that we will be delivering to the cement industry with the help of our commercial partners FLSmidth.
Our system can be integrated and retrofitted directly to a client’s cement plant with minimal downtime. Through this, the client is able to decarbonise its operation, while avoiding the cost associated with the landfill of the CBD and CKD by valourising it, and producing it into a product directly. This makes it economical and sustainable – demonstrating how the circular economy can exist within heavy industry.
Tell us more about how your company has scaled-up and your deployment at Vicat.
Carbon8’s solution dates back to over 20 years of research by our two-founding scientists, Dr Paula Carey and Professor Colin Hills. They founded the company as a spin-out from the University of Greenwich, England where our technology was originally developed.
Since then, we proved the technology at full-scale, using pure CO2 and APCr from Energy from Waste plants in the UK. A key milestone in the company’s development was the invention of the CO2ntainer in 2018. This was the realisation of the technology in its modular and mobile form, which led to successful pilots and demonstrations at a CRH cement plant in Ontario, Canada and at Hanson, part of the Heidelberg Group, in the UK.
Our first commercial deployment was at Vicat Group’s cement plant in Montalieu, France in 2020. Vicat has set ambitions to be climate neutral by 2050 and we are proud to be one of its solutions to achieve this. Like other cement plants around the world, Vicat produces cement bypass dust – which we expect will increase as Vicat, and the wider industry, move towards Alternative Fuels. These require Bypass Systems and so needed a solution to address
this. Our CO2ntainer fits into this roadmap as we can help Vicat decarbonise while giving their
CBD a new life in the form of carbon-negative CircaBuild aggregates, that they are using in concrete block production.
What other efforts can be taken by the cement industry to manage carbon emissions?
Every cement plant will have slight differences in their operations and geographic location that will determine the best ways they can manage their carbon emissions. For example, CCS may be challenging to cement works in remote locations, distant from planned CCS industrial clusters.
To adequately answer these questions, we do need to consider it in relation to what can be done today and what will be done in the future. This was also represented in the Global Cement and Concrete Association’s (GCCA) road map, which clearly showed that there are multiple levers necessary to achieve net zero ambitions, across different time horizons.
For some solutions, like full-scale CCS, there will be a time lag for the necessary infrastructure to be in place. However, we are seeing the appetite and drive necessary to implement changes today. ACT is just one of a number of different technologies that are ready today. Industrial players can be early adopters and should be, too, if net zero is to be achieved. This isn’t something where we can wait for 30 years of proof of concept. There needs to be trust in delivery and a leap of faith to get there.
What are the various benefits of carbon capture and how does it support the environment?
The need to stop the temperature of the planet at 1.5oC has been clear for some time now, and this was reemphasised again at COP26, held last year in Glasgow, UK. Specifically, in the cement industry, it is widely acknowledged and accepted that carbon capture is necessary for the industry to reach its net zero ambitions. In the GGCA’s net zero roadmap, 36 per cent of carbon reductions can be achieved from carbon capture, utilisation and storage (CCUS).
As the question suggests, there are various ways that carbon capture can benefit the planet and it will depend on the solution we are speaking about. However, if we focus on CCUS, rather than just CCS, there is a clear benefit in the ‘utilisation’ element. This goes beyond just carbon capture and storage but uses the carbon for another purpose. This is what we, at Carbon8, focus on.
Our technology captures, utilises, and permanently stores carbon in solid form. This not only helps the cement industry decarbonise, but also become a more circular sector.
Tell us more about your contribution towards achieving the net zero mission.
Carbon8 is a Circular Impact company; we can help the global cement industry decarbonise, as well as transition to more circular operations.
Our technology can be deployed as a standalone plant using bottled CO2 or in the containerised form directly to the site. The CO2ntainer can treat up to 12,000 tonnes of CBD annually, diverting this from landfill and avoiding the associated cost. CBD can have reactivity to CO2 of up to 33 per cent by weight, making it a carbon sink for the CO2 captured onsite. The preliminary Life Cycle Assessment (LCA) using the aggregate manufactured at the Vicat site showed a 30 per cent overall improvement of the LCA compared to the disposal of the residue and the manufacture of a concrete block with or without the carbon-negative aggregate. Depending on the reactivity of the residue, a singular CO2ntainer can permanently capture and store between 1,500 tonnes – 4,000 tonnes of CO2. In summary, we address two core sustainability issues faced by the cement industry today; decarbonisation and the sustainable management of the residues produced in its operations.
With the Indian cement industry being the second-largest producer of cement in the world, only second to China, with about 8 per cent of global installed capacity, we believe that there is considerable scope for our ACT solution to be deployed in India over the coming years.
The Economics of Bulk
While analysing the rising costs of cement and its impact on infrastructure and real estate development, one cannot ignore the major driving factor – bulk distribution. In spite of being a desirable solution, bulk distribution comes with its own set of challenges. ICR looks at the various ways in which the industry is facing off these issues.
The manufacturing process of cement is energy intensive, labour intensive and cumbersome. Once the process of sourcing raw materials, taking it through pyroprocessing, clinker production, cooling and grinding is done, the end product is stored in silos before it is packed in bulk carriers or bags to be transported to its destination.
The growing infrastructure of India is directly impacting the demand and consumption of cement in the country. With the government launching multiple campaigns, programmes and goals for the development of the nation, the cement industry becomes a key contributor towards realising those goals. According to a study conducted by market research giants, Research and Markets in 2021, the housing sector is the key contributor to the cement industry growth. It is estimated that about 60 per cent of cement is consumed by the sector. Demand will be further fueled by the non-trade segment, which is gaining momentum with the resumption of construction work of public infrastructure projects such as roadways and metros, after the lockdown. Amongst the five zones that India is divided into, the South will be the highest producer of cement with 33 per cent production amongst the total produced volume.
The bulk transportation of cement in India takes place through three modes, i.e., ship, rail and road transports. India transports cement majorly through rail and only 3 to 4 per cent of the total production is transported through water routes.
Railways are used not only for the transportation of finished products, but also for transporting coal and raw materials from one place to another. Indian Railway provides a rake of 40 covered wagons that can carry approximately 2600 MT of cement. Each wagon has the capacity of carrying 64MT to 66MT of cement. Railways provide wagons as per their availability and allow specific timings for rake loading. Once the sidings are loaded, a memo needs to be submitted informing the railways that the task has been completed in time. However, in case of delays, demurrage is charged on hourly basis for the extra time utilised for loading.
The railway deputes commercial staff round the clock on the loading sites for collecting freight, charging demurrage and freight. They also verify the loading of wagons and keep the record for respective authorities involved. These officials are known as Goods Clerk.
Anand Kumar Sharma, Logistics Head, JK Cement says, “Railways is the most suitable mode of transport for carrying large quantities of cement on longer lead destinations. Railways have lower freight costs compared to road transport, especially when shipping high volumes. With the continuous increase of diesel rates in India, road freights consist of almost 40 per cent of fuel cost which makes it costlier than rail freights Railways have standardised transit schedules, which aren’t hindered by traffic and weather.”
According to the India Brand Equity Forum, India’s overall cement production accounted for 294.4 million tonnes (MT) in FY21 and 329 million tonnes (MT) in FY20. In February 2021, the cement production increased by 7.8 per cent compared to February 2020. India’s overall cement production accounted for 262 million tonnes (MT) in FY21 (till February 2021). The cement production is expected to increase by 10 per cent to 12 per cent and the utilisation is expected around 65 per cent in FY22.
As per Statista reports, the volume of cement transported using railways has increased to 120.4 MT in FY 2021 which is the highest volume in the past decade. This increase is accredited public and private investment in infrastructure and housing, and commercial and industrial construction, which will also impact the production of cement and transportation positively.
Road transport in the cement industry amounts to a bulk of cement being transported through roadways using trucks, trailers and tankers/bulkers that makes cement reach its distributors or customers at the final destination. This type of transportation is conducted directly from the packing plant and there is lesser loading and unloading of the material as compared to railway transport.
The tally checker at the plant is responsible for the loading of cement in the trucks or tankers and once the loading is completed they ensure that the sealing arrangement of all manholes or outlets, so the product does not leak from any of the manholes or outlets to avoid theft or adulteration in product through manholes. Once all checks are complete, authorised drivers carry this bulk load of cement through defined routes to the end user or distributor of cement.
The rise in road transportation share has picked up from 36 per cent of total despatches in the ’80s to over 65 per cent now. A majority of cement plants now have their own fleet of trucks and could benefit from the government’s enhancement of road infrastructure. Also, the cement industry is keen on promoting bulk loading of cement for more efficient handling leading to faster loading as well as evacuation, thus improving turnaround time. It offers advantages such as reduction in loss of cement, no seepage due to multiple handling or bag bursts. Besides, bulk wagons carry 40 to 50 per cent more cement, says a study conducted by Ernst & Young.
“By road, the end product directly reaches the customer. The bag quality remains good with the least amount of deterioration to the bag. But in case of rail, the material goes through material handlings like from factory to railway platform, platform to cargo containers. It is then loaded into smaller trucks at the destination and then reaches the customer. In some cases, it goes to the warehouse, then railways, then customers. This amount of bag handling hampers the bag quality. When the distance to be covered is beyond 300km, then we consider rail transport as it also presents a large cost advantage,” says Vimal Choudhary, President and Logistics Head – Heidelberg Cement India.
Cost impact of transportation
In his article published on LinkedIn, Saurabh Tripathi, DGM – Supply Chain Management, Titagarh, mentioned, “The cost of transportation is a key factor in competitively supplying customers with cement. The distribution of cement to the end user from the manufacturer is a major cost factor in the landed cost of cement at the user end. Approximately 30 to 35 per cent of the cost of cement can be attributed to the cost of distribution, which begins at the gates of the cement facility. Cement, being a bulk commodity, transporting is a costly affair. The selling and distribution costs account for around 18 per cent of sales revenues”.
This makes a thought out distribution network key to optimising efficient operation of the whole supply chain. Besides optimising the supply chain, the cement manufacturers will also have to look for strategic locations for warehousing and distribution which can substantially help reduce the logistics cost of cement. In an interview to Business Line in (insert date), A V Dharmakrishnan, CEO, Ramco Cements had said that logistics cost may either equal or exceed manufacturing cost, as 5 to 10 years down the line, for many companies the distribution cost will be more than the manufacturing cost.
Further, the Cement Manufacturers Association of India states that cement transportation results in various losses due to bag burst, seepage, and loss of cement while multiple handling. To minimise such losses cement manufacturing organisations have started promoting bulk cement suppliers. The bulk cement suppliers deliver cement in bulk at construction sites in specially designed vehicles. This supply proves beneficial and convenient over procuring cement bags. This is very economical for the project developer also to procure cement in bulk without traces of moisture as the bulk cement is always untouched and directly transported to the construction sites.