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Intervention is the Name of the Game

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Cement channels and solutions in logistics are evolving to relinquish traditional methods for more innovative and modern ones. The key driving factor in this transition is finance. ICR delves into the changes in logistics in the face of automation and data analytics.

The connection between logistics, channels of selling, the revenue line and the cost line were established over the last several decades with a mix of supply chain efficiency and cost optimisation. The recent best cases talk about innovation as the driver of change, which in some cases could be deemed as common sense but that seems to be in short supply.
Take the example of cost. Logistics cost (presumably the highest element of cost in the cement cost hierarchy) is not merely transportation cost that most of us make it out to be but the sum total of transportation, warehousing and distribution, inventory holding, ordering cost and documentation, which includes all the wastes that are associated with this. It also includes the trade-offs that are made, which is where most cement companies differ in their approaches to channels and logistics.
There are so many trade-offs that come in the way of cement manufacturing and distribution right up to reaching it to the customer. Some of these trade-offs include reach, penetration and growth versus the cost of each of these when you construct an end-to-end view of the cement outbound chain. Some trade-offs could be around service level and number of warehouses or direct shipsets versus moving through sticky stocking. There is no end to the number of warehouses that will enhance penetration and reach to the markets and service levels, while inventory holding would zoom.

Working with smarter solutions
Maister’s Square Root Law when applied to cement tends to point to as few stocking points as possible to make the optimisation work, but then Maister’s Rule of Inventory is one-dimensional around safety stocks for reduction of lead time variability and demand variability. It does not look at the trade-offs around inventory and the other objective functions. Thus, the network optimisation programme that most cement companies run is a cauldron where many objective functions go in, but only a few emerge as the winning combination of inter-dependencies on which Management Action is to be ordained. Building algorithms around these inter-dependencies start with rocking the entire boat with data requirements at every stage of the cement journey from the inbound to the outbound, right up to the point where customer exchange happens. Most companies are straddled with one part of the chain governed by the proximity to the resource, while the other outbound part needs a network to establish cost efficiency, together with service levels.
At the end, the optimiser should rule the roost as this could be very complex when constructed over micro markets, prices, availability, service, inventory and transportation cost that need data tables not as static interfaces but a more dynamic one. Most companies have ended with an oversimplification as when complexities rise to the hilt, the solutions tend to become just the opposite. Guided by data and observations, communication and sharing of information, a very complex interaction of all of these is vetted for management review almost on a daily basis. That is where the most successful sales and operations implementation rests in the best of cement companies in India. Most of them have planning algorithms to facilitate these processes. But not as a hands-free approach.
Some innovation in channel and logistics is predicated on the digitisation initiatives that separates data as it exists in the system, with the actual reality on the ground. Data is the source of everything, but it must be real, as we know that prices in spatially separated markets are governed by the equivalence of logistics cost. In simple terms, it means prices must cover logistics cost differences in spatially separated markets. Cement logistics cost being the most sensitive parameter, the actual knowledge of the associated cost of moving millions of parcels of cement over distances in spatially separated markets therefore becomes a huge area of focus. A price, which includes the associated logistics cost, must convey in the information the true cost by which two parcels could be separated, given that similar commodities do not have more significant differentiating factor to make a decision ‘play’. Samuelson’s treatise of 1958 still holds good and the question therefore is to digitise information on price as accurately as possible, where the true cost of logistics is part of the information. Best cases in this regard struggle to achieve a 100 per cent accuracy rate, understandably. But efforts are directed to achieve this with tracking and tracing and control towers and the rest.

Paradigm shifts
The next level of innovation will be to actually move from bagged to bulk entirely and from cement to concrete. That is where the world has moved. This changes the supply chain question and one of the major dimensions holding inventory and warehousing for a sales channel is hugely moderated or eliminated at the end, as selling becomes directly to the projects, no matter how small or large they may be.
The advanced nations have moved to this paradigm, which has changed the entire logistics, channel and innovation question to a different level, where the product cement is converted to a service of concreting at prescribed schedules. This, however, is no small switch, it would obviously mean the setting up of supply chains, that would be different from the current ones, with channel partners who are very different. The optimisation question for Ready Mix Concrete would also be different as there are more than one material source involved, aggregates, sand , gravel etc would step in. To be able to extend this step by step across the whole of India, starting with cities and towns and then the deeper areas would need several actors to step in to see how value can be created. At least the world has many examples where this has progressed with more sophistication of markets in construction. It would, however, need more planning and scheduling, use of digital tools and data driven decision support systems. This is where slowly and steadily some companies are progressing and they would obviously be the leaders in the next transition.

-Procyon Mukherjee

Concrete

India Sets Up First Carbon Capture Testbeds for Cement Industry

Five CCU testbeds launched to decarbonise cement production

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The Department of Science and Technology (DST) recently unveiled a pioneering national initiative: five Carbon Capture and Utilisation (CCU) testbeds in the cement sector, forming a first-of-its-kind research and innovation cluster to combat industrial carbon emissions.
This is a significant step towards India’s Climate Action for fostering National Determined Contributions (NDCs) targets and to achieve net zero decarbonisation pathways for Industry Transition., towards the Government’s goal to achieve a carbon-neutral economy by 2070.
Carbon Capture Utilisation (CCU) holds significant importance in hard-to-abate sectors like Cement, Steel, Power, Oil &Natural Gas, Chemicals & Fertilizers in reducing emissions by capturing carbon dioxide from industrial processes and converting it to value add products such as synthetic fuels, Urea, Soda, Ash, chemicals, food grade CO2 or concrete aggregates. CCU provides a feasible pathway for these tough to decarbonise industries to lower their carbon footprint and move towards achieving Net Zero Goals while continuing their operations efficiently. DST has taken major strides in fostering R&D in the CCUS domain.
Concrete is vital for India’s economy and the Cement industry being one of the main hard-to-abate sectors, is committed to align with the national decarbonisation commitments. New technologies to decarbonise emission intensity of the cement sector would play a key role in achieving of national net zero targets.
Recognizing the critical need for decarbonising the Cement sector, the Energy and Sustainable Technology (CEST) Division of Department launched a unique call for mobilising Academia-Industry Consortia proposals for deployment of Carbon Capture Utilisation (CCU) in Cement Sector. This Special call envisaged to develop and deploy innovative CCU Test bed in Cement Sector with thrust on Developing CO2 capture + CO2 Utilisation integrated unit in an Industrial set up through an innovative Public Private Partnership (PPP) funding model.
As a unique initiative and one of its first kind in India, DST has approved setting up of five CCU testbeds for translational R&D, to be set up in Academia-Industry collaboration under this significant initiative of DST in PPP mode, engaging with premier research laboratories as knowledge partners and top Cement companies as the industry partner.
On the occasion of National Technology Day celebrations, on May 11, 2025 the 5 CCU Cement Test beds were announced and grants had been handed over to the Test bed teams by the Chief Guest, Union Minister of State (Independent Charge) for Science and Technology; Earth Sciences and Minister of State for PMO, Department of Atomic Energy, Department of Space, Personnel, Public Grievances and Pensions, Dr Jitendra Singh in the presence of Secretary DST Prof. Abhay Karandikar.
The five testbeds are not just academic experiments — they are collaborative industrial pilot projects bringing together India’s top research institutions and leading cement manufacturers under a unique Public-Private Partnership (PPP) model. Each testbed addresses a different facet of CCU, from cutting-edge catalysis to vacuum-based gas separation.
The outcomes of this innovative initiative will not only showcase the pathways of decarbonisation towards Net zero goals through CCU route in cement sector, but should also be a critical confidence building measure for potential stakeholders to uptake the deployed CCU technology for further scale up and commercialisation.
It is envisioned that through continuous research and innovation under these test beds in developing innovative catalysts, materials, electrolyser technology, reactors, and electronics, the cost of Green Cement via the deployed CCU technology in Cement Sector may considerably be made more sustainable.
Secretary DBT Dr Rajesh Gokhale, Dr Ajai Choudhary, Co-Founder HCL, Dr. Rajesh Pathak, Secretary, TDB, Dr Anita Gupta Head CEST, DST and Dr Neelima Alam, Associate Head, DST were also present at the programme organized at Dr Ambedkar International Centre, New Delhi.

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Concrete

JK Lakshmi Adopts EVs to Cut Emissions in Logistics

Electric vehicles deployed between JK Puram and Kalol units

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JK Lakshmi Cement, a key player in the Indian cement industry, has announced the deployment of electric vehicles (EVs) in its logistics operations. This move, made in partnership with SwitchLabs Automobiles, will see EVs transporting goods between the JK Puram Plant in Sirohi, Rajasthan, and the Kalol Grinding Unit in Gujarat.
The announcement follows a successful pilot project that showcased measurable reductions in carbon emissions while maintaining efficiency. Building on this, the company is scaling up EV integration to enhance sustainability across its supply chain.
“Sustainability is integral to our vision at JK Lakshmi Cement. Our collaboration with SwitchLabs Automobiles reflects our continued focus on driving innovation in our logistics operations while taking responsibility for our environmental footprint. This initiative positions us as a leader in transforming the cement sector’s logistics landscape,” said Arun Shukla, President & Director, JK Lakshmi Cement.
This deployment marks a significant step in aligning with India’s push for greener transport infrastructure. By embracing clean mobility, JK Lakshmi Cement is setting an example for the industry, demonstrating that environmental responsibility can go hand in hand with operational efficiency.
The company continues to embed sustainability into its operations as part of a broader goal to reduce its carbon footprint. This initiative adds to its vision of building a more sustainable and eco-friendly future.
JK Lakshmi Cement, part of the 135-year-old JK Organisation, began operations in 1982 and has grown to become a recognised name in Indian cement. With a presence across Northern, Western, and Eastern India, the company has a cement capacity of 16.5 MTPA, with a target to reach 30 MT by 2030. Its product range includes ready-mix concrete, gypsum plaster, wall putty, and autoclaved aerated fly ash blocks.

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Holcim UK drives sustainable construction

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Holcim UK has released a report titled ‘Making Sustainable Construction a Reality,’ outlining its five-fold commitment to a greener future. The company aims to focus on decarbonisation, circular economy principles, smarter building methods, community engagement, and integrating nature. Based on a survey of 2,000 people, only 41 per cent felt urban spaces in the UK are sustainably built. A significant majority (82 per cent) advocated for more green spaces, 69 per cent called for government leadership in sustainability, and 54 per cent saw businesses as key players. Additionally, 80 per cent of respondents stressed the need for greater transparency from companies regarding their environmental practices.

Image source:holcim

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