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Project size is key to shift to bulk supplies

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Anand Kumar Sharma, Logistics Head, JK Cement, brings to light the advantages of bulk distribution of cement and also focuses on the key changes that the industry is likely to witness such as innovations in types of cement and increasing role of e-commerce.

What is the volume of production in your cement plants and how much of it goes in bulk distribution?
Volume of cement production in FY22 is close to 12 million tonnes out of which approximately 8 per cent was part of bulk distribution.

Which is the most suitable mode of transport for carrying large quantities of cement and why?

  • 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.
  • Poor road infrastructure, vehicle movement restrictions on routes passing through villages and towns, add to delays and underutilisation of logistics assets, adding to cost increases which is not in case of railways.

Sea transport is the optimal mode of transportation and carries huge volumes of load. The transportation is economical compared to rail as well as road transport routes, which are comparatively congested but have very limited sources.

What are the various advantages attached to bulk distribution of cement?
The advantages attached to the bulk distribution of cement are as follows:

  • The loss on account of multiple handling and occasional bursting of bags is totally avoided.
  • Pilferage during transit and at the site is avoided
  • Dust emissions at railway yards, cement handling godowns, transportation by trucks and construction sites are now a major concern in cities. The resultant Suspended Particulate Matter (SPM) levels lead to crores of rupees being spent by the government towards health related issues. The use of bulk cement through modern bulk terminals and related equipment would significantly contribute to the reduction in pollution levels.
  • Plastic bags, which are currently the preferred mode of packing used in India, are not ideal as they are not environment friendly. Since these bags are non-biodegradable, it’s not a viable option therefore, bulk transportation avoids such pollution.
  • Moreover, a major advantage of transporting bulk cement is the easy availability in large volumes and consistent quality.
  • Transportation of cement in bulk has been able to reduce the project implementation time and cost optimisation.

How does distribution or transportation of cement in bulk impact the end user cost of the product?
There are two aspects of cost impact on the end user in relation to transportation of cement in bulk:
Institutional sales: In the institutional segment, there are some benefits of bulk supplies to our customers. However, it requires storage infrastructure hence there’s a cost factor. This cost would be set off by discounts/price negotiations on bulk supplies. In the case of bagged cement, apart from bag cost there would be handling cost, first at the time of delivery and other at the time of usage. So, this cost can be avoided by setting up bulk silos. However, project size is key to shift to bulk supplies.
Trade/IHB sales: With the current infrastructure (load size) it would be difficult to shift bag supplies to bulk. The IHB sector contributes 55 to 60 per cent of total cement demand and the lot size is also small. Average consumption quantity in this space is around 700 to 800 bags/site in a span of 4 to 5 months which is effectively one bulker load but the customer buys this quantity of cement in small lots – of 50 bags or less. So, it would not be feasible to shift a very big chunk of supplies to bulk.
Apart from this, the transportation cost of bulk supplies is much higher than bagged supplies for one very common reason – i.e. return load.

What are the major challenges or gaps faced by your organisation in the bulk distribution domain?
Major challenges faced by our organisation in the bulk distribution domain are as follows:

  • There is always a storage infrastructure challenge at bulk sites due to which silos are needed at customer sites, which leads to some cost implications. Moreover, it is feasible only in the case of long term projects/sites of at least two years of duration. Therefore, there is a need to explore infrastructure of movable silos to overcome this challenge but again this will involve a major cost impact.
  • Though over the period bulk demand for cement has increased but not to the extent where timely unloading of the fleets and vehicle rotation can be optimised. In bulk distribution vehicles often get detained at customer sites for multiple days due unforeseen circumstances like a vehicle breakdown at the site or rain etc.

Explain your organisation’s distribution model.

How can a curated logistics system help in achieving the sustainability goals for the industry?

  • The curated logistics system would help in the following ways to achieve the sustainability goals for the cement industry.
  • Clean energy resources – Companies have to explore EVs and CNG/LNG vehicles more and more to reduce the carbon footprint.
  • Shift of mode of transport to rail/sea would help in achieving sustainability goal.
  • Government has to increase the carrying capacity of the fleet thereby resulting in lower fuel to carry higher volume.
  • Eco-driving education and tracking of drivers is another significant way to reduce fuel consumption. It also minimises the risk of possible damages to the driver.
  • Using tyre pressure sensors helps fuel consumption by up to 12 per cent at lower speeds, as well as extending the tyre’s life.

What are the key changes the industry is likely to witness in the near future?
Key changes the industry is likely to witness in the near future are:
Increase in demand: Based on Kanvic’s Cement Demand Projection Model developed specifically for Indian Cement Review Vision 2030 shows that cement demand in India will increase by 116 per cent by 2030 to 660 million metric tons (MMT) at a CAGR of 6.6 per cent.
Paper bags for cement: Cement manufacturers will switch to sustainable solutions and replacing conventional plastic bags with high shelf life paper bags. The use of paper bags for cement packaging enhances the aesthetic appeal and provides ease of printability. Paper bags for cement packaging will ensure product protection from moisture.
Increase of Ready Mix Concrete (RMC): RMC allows speedy construction through programmed delivery at the site and also reduces the labour cost. RMC comes with consistency in quality through accurate and computerised control of sand aggregates and water as per mix designs. Production of
RMC helps in minimising cement wastage due to bulk handling.
Shrinking IHB sector: With rapid urbanisation and infrastructure developments in urban areas, it is predicted that the IHB sector will shrink and large builder/commercial infrastructure will increase
Increase of new types of cements: Limestone Calcined Clay Cement (LC3) a new environment-friendly additive for concrete that makes it easier to produce high-performance concrete at a lower cost. This cement has shown that it can reduce as much as 30 per cent CO2 emissions and 20 per cent energy consumption in cement production. Still, the performance of the concrete produced using this cement exceeds those using cement commercially available today in most aspects.
Cement in e-commerce: India’s e-commerce industry is expected to grow by 84 per cent by 2024. E-commerce platforms offer customers an array of cement brands to choose from at the best competitive price by removing middle men cost. There are a few players who have already forayed into the online procurement of cement via e-commerce platforms in the last one or two years

-Kanika Mathur

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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