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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 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. 

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 rise in road transportation share has picked up from 36 per cent of total dispatches 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. 

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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Concrete

Star Cement launches ‘Star Smart Building Solutions’

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Star Cement has launched ‘Star Smart Building Solutions,’ a new initiative aimed at promoting sustainable construction practices, as per a recent news report. This venture introduces a range of eco-friendly products, including tile adhesives, tile cleaners and grouts, designed to enhance durability and reduce environmental impact. The company plans to expand this portfolio with additional value-added products in the near future. By focusing on sustainable materials and innovative building solutions, Star Cement aims to contribute to environmentally responsible construction and meet the evolving needs of modern infrastructure development.

Image source:https://www.starcement.co.in/

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Nuvoco Vistas reports record quarterly EBITDA

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Nuvoco Vistas reported its highest-ever quarterly consolidated EBITDA of Rs.556 crore in Q4 FY25, with annual EBITDA at Rs.1,391 crore. Cement sales reached 19.4 MMT in FY25, with Q4 contributing 5.7 MMT. Revenue rose 4 per cent YoY to Rs.3,042 crore in Q4. Net debt reduced by Rs.390 crore to Rs.3,640 crore. The company received NCLT approval for acquiring Vadraj Cement, targeting 31 MMTPA capacity by FY27. Key marketing initiatives, expanding RMX and MBM businesses, and a focus on sustainability (457 kg CO2/tonne) drove performance. Nuvoco remains focused on premiumisation, operational efficiency, and market expansion.

Image source:nuvoco.com

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UltraTech Cement increases capacity by 1.4Mt/yr

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UltraTech Cement has expanded its production capacity by 1.4 million tonnes per annum (Mt/yr) through a combination of debottlenecking efforts and operational efficiency upgrades across several of its plants. The enhancements include an addition of 0.6Mt/yr in grinding capacity at the Nagpur facility in Maharashtra and a combined 0.8Mt/yr at the Panipat and Jhajjar units in Haryana. With these upgrades, the company’s total domestic grey cement capacity has risen to 184.8Mt/yr, while its global capacity now stands at 190.2Mt/yr.

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