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Economy & Market

Oil Monitoring and Maintenance

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The progressive approach that industries are adopting to move towards condition-based oil change and maintenance can prove to be a game changer.

Lubrication oil in thousands of litres is changed in the industrial world, based on the periodic oil change intervals or schedules, which is part of a preventive maintenance programme. Most of the oil is prematurely changed in the equipment resulting in disposal of oil still having a remaining useful life. This results in loss of revenue due to cost of new oil and disposal of the used oil. The flip side of the preventive oil change schedules is that the lubricant can exceed its useful life before oil change interval, which can result in equipment breakdown resulting in loss of revenue again.
A better way, which progressive companies are adopting, involves periodic oil analysis and scheduling oil changes based on the oil condition, which not only maximises the lubricant life based on condition but also acts as a tool for a proactive approach to prevent equipment breakdown because of oil quality.
The oil analysis programme is a useful tool to monitor the condition of the oil and the equipment where it is being used. It consists of predetermined oil sampling plans from the equipment, testing the oils for major tests and determining the condition of oil and equipment. There are industry accepted precautionary and critical limits for the major tests, which are well established. The interpretation of these major tests help determine the oil and condition equipment and is the backbone of the condition-based oil changes. Almost 50 per cent of equipment damages are caused by oils and about 70 per cent of equipment defects are visible in the lubrication oil.

Lubricant contamination or degradation
Lubricant consists of either mineral or synthetic base stock fortified with performance chemicals called additives. These impart the specific properties required by lubricant based on its application. Over its usage, we all know that lube oil gets polluted due to internal contaminants like wear particles or degradation products or external contaminants like dirt, dust, water etc. Oil contamination is the major reason why oil is condemned. More and more companies are getting into oil regeneration programmes to extend the oil’s life.

Drawing oil samples at periodic intervals for analysis, trends are monitored of the oil condition, The oil is retested if any significant changes occur in the test results of the sample in comparison to the previous. The test results are compared to the standard Industry limits which are used as guidelines. These limits are based on oil and equipment types. The oil analysis results can be used to make intelligent decisions on maximising oil life without compromising the equipment.


Periodic oil analysis has resulted in significant savings in oil life extension and also savings from proactively detecting potential failures caused by poor oil quality and degrading components. Condition monitoring provides gradual information and warnings according to the significance of the abnormality in the oil analysis.
Many of the industrial plants condemn their lubricating oils based on water and particulate contamination or sometimes on the recommended oil change interval. These oils can be regenerated by using high quality efficient filtration systems and sometimes by topping up with additives to restore their performance to original. Oil never dies, just
gets contaminated and depleted. It is possible to restore many such lubricants to their original performance levels.
Total Lubrication Management (TLM) is a very productive practice followed by many companies, its key features being:
TLM is now augmented with vibration sensors, thermal imaging and ultrasound analysis integrated with software driven by AI, making the equipment more reliable and predictive to operate and manage.
Condition-based oil monitoring in modern industries has progressed to a broader perspective of condition-based maintenance, which is to implement maintenance schedules that can be considered as actual condition of the equipment. Shorter response time with more targeted and corrective actions are resulting in improved productivity.

(Communication by the management of the company)

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Concrete

The Economics of Bulk

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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.

Distribution channels
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.

-Kanika Mathur

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Economy & Market

 Taking the Technology Highway

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Digitisation is no longer an option, it is the need of the hour for cement companies. More than the fear of losing out to competition, it is factors such as efficiency, returns and sustainability that are fueling IT initiatives in the industry. ICR takes a closer look at the IT approach that manufacturers need to take to remain ahead of the curve.

The cement industry has witnessed numerous changes since the industrial revolution, and the most important one of them – technology – is here to stay. In modern times, with increasing competition, it is imperative for cement manufacturing companies to keep evolving and matching the speed at which the industry and its technology is growing. It is time for cement makers to go digital in their approach. 

Digital transformation for cement manufacturers

The process of cement manufacturing starts from locating and obtaining its raw materials to making it reach the end consumer. The whole process is labour intensive and can be made more effective and streamlined by the use of technology. Digitisation has a lot to offer to a cement organisation. Here’s how:

Control over quality and process: It is essential to measure the quality of raw material, which is fundamental for a good quality product, monitoring equipment health while chemical processes are on-going and a lot of other factors are involved in the cement making process. With the use of smart systems and technology, operators at each stage can get quick data of the process and make real-time decisions, which shall optimise the production and lead to quality results. 

Equipment monitoring and health predictions: Any equipment or machinery at a cement plant undergoes wear and tear with large loads of material, continuous running and due to environmental conditions. With systems that can predict the health of these equipment and machinery, monitoring their health and downtime becomes more effective. 

Automation and IoT: Functioning as the brain and nervous system of the cement plant is automation. From collecting data to automating processes, the sole motive to implement this technology is to achieve effective load management and efficiency in all verticals of the cement manufacturing process. Internet of Things (IoT) is the buzz word in the world of technology and adapting to that has been known to show results for better management and predictive techniques for the business.

Connected logistics: Transportation of material from one floor to another for the next step in the process is a key component of the cement making process. It involves movement of conveyor belts, special carriers and trucks for taking the end product to its distribution sources. These operational activities can be maintained and optimised by using technological solutions that measure the vitals of the vehicles carrying load. There also are multiple software that help plan the movement of the organisation’s fleet. It contributes towards saving time and cost for the business with effective deliveries and on schedule arrivals. 

Cyber security: Cement plants are as likely to be hacked or subjected to system viruses. Technology and firewalls prevent such incidents from happening.  

Kanika Mathur

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Economy & Market

Adani Group in discussion to buy a huge share in Ambuja Cements Ltd

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Ambuja Cements Limited has a market value of $748.94 billion

Adani Group may sign an agreement to purchase a majority share in Ambuja Cements Ltd from Swiss firm Holcim. Now, Ambuja is owned by the world’s largest cement company, which has a 63.1% share.Ambuja Cements had a market value of $748.94 billion.According to media sources, JSW Group, an Indian metals-to-cement giant, is among the other bids for the assets.Holcim is attempting to diversify its business by focusing on building technologies rather than its main industry of cement and aggregates, as it places a greater emphasis on sustainability.As per media sources, no final decisions have not been made yet regarding this decision.Ambuja Cement was founded in 1983, with a cement capacity of 31 million metric tonnes, six integrated production plants and eight cement grinding units throughout India.Adani Enterprises Ltd., the main company of the Adani Group, has two cement companies.According to media sources, Adani Cementation Ltd. plans to establish an integrated factory in Gujarat.Adani Cement Ltd. was founded by the group in June 2021.

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