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Cementing a Sustainable Future

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Anuj Khandelwal, Business Head, JK Cement, discusses his company’s technological odyssey in environmental stewardship, and how it changed the thought process of India’s cement sector.

In the realm of global construction, the cement industry stands as a vital pillar, albeit one burdened with a significant environmental footprint, contributing to 5-8 per cent of global emissions. JK Cement recognises the imperative role it must play in fostering sustainability, understanding that our long-term growth is intricately linked to advancing the sustainability agenda.

Commitment to Sustainability
JK Cement has undertaken a proactive stance by signing up for Science-Based Targets Initiative (SBTi)-based goals, committing to a robust 21.7 per cent reduction in specific gross CO2 emissions by 2030 compared to the 2020 baseline. These ambitious targets, already validated and approved by SBTi, signify a substantial stride toward a greener future. Remarkably, we have exceeded expectations, achieving a 16.3 per cent reduction in H1FY24 and poised to surpass our FY25 commitments of a 7.2 per cent reduction.

Challenges in the Industry
Understanding the unique challenges of the cement and lime industry is pivotal. Unlike many other industries, the majority of greenhouse gas emissions in cement production emanate not from energy use but from the raw materials themselves. Approximately 60 per cent of CO2 emissions result from limestone processing, necessitating a nuanced approach to sustainability across four dimensions:

  1. Reduce the need for energy-intensive materials
  2. Improve energy intensity
  3. Greenify sources
  4. Prevent release at the source

A Catalyst for Sustainability
Embracing the philosophy that technology is pivotal in the road to sustainability, JK Cement has strategically invested in technological advancements. Our sustainability journey revolves around three key technological pillars:

  1. Technological upgrades for lower energy intensity
    Upgrading manufacturing technologies and equipment has been instrumental in achieving lower energy intensity. Notable examples include the upgrade of older plants and kilns, such as Nimbahera L3 and Mangrol L2, with ongoing projects in Mangrol L1 and deployment of state-of-the-art Waste Heat Recovery Systems (WHRS) ensures maximal green power output across all our integrated units.
  2. Technological innovations for enabling usage of greener sources
    The substitution of traditional fuels and raw materials with green sources demands technological innovations. JK Cement has taken the lead in deploying a chlorine bypass system at our Muddapur plant to achieve over 35 per cent Thermal Substitution Rate (TSR). Upgrades in feeding systems across kilns facilitate higher TSR levels.
    These innovations are integral to our circularity agenda. By harnessing cutting-edge technology, we are redefining our processes, ensuring a more sustainable and environmentally friendly approach to cement production.
  3. Unlocking scale and navigating challenges with technology
    Scaling sustainability initiatives requires automation and digital solutions. This is a critical part of our capability build as we move towards the new clean-tech solutions offered.
    For instance, real-time power balancing solutions address the variability in green power generation profiles. Digital load and demand balancing solutions have increased the usage of green power, helping us achieve a remarkable 48 per cent+ green power mix for JK Cement in H1FY24.
    Similarly addressing challenges associated with quality variance in alternate fuels and impact on stable kiln operations required innovative solutions. NIR sensors for online quality testing enable precise control over the alternative fuel blend. In parallel, automated feedback loops helped ensure stable kiln operations even at higher TSR levels.
    Investments in digital quality control systems enable the incorporation of higher alternate raw materials, crucial for maintaining product quality amid the variability of alternate materials.
    Our investment in digital solutions not only underscores our commitment to sustainability
    but also positions us as industry leaders. By leveraging automation, we not only achieve environmental goals but also enhance operational efficiency and competitiveness. These technological interventions also showcase our dedication to overcoming challenges.
  4. The Road Ahead
  5. Technological innovation remains central to JK Cement’s future sustainability initiatives.
    After evaluating the underlying physical and technical limits of available technologies, our
    findings are that the three technologies available today can have a material impact on driving
    down carbon emissions from cement production by 2030. Therefore, our short-term focus is on the three groups of cost-saving technologies to drive the focus further:
    • Substitute Cementitious Materials (SCM), including LC3 Cement
    • Biomass and waste alternative fuels
    • AI for energy efficiency, predictive maintenance, quality improvement and cement logistic and fleet optimisation
    Similarly exploring avenues such as hydrogen (H2) utilisation and electrification, Carbon Capture, Utilisation and Storage (CCUS), carbon-neutral transport, CO2 capture in the built environment, and efficient concrete use will be pivotal in achieving our long-term goals and the basis of technological evolution in these.
    As we look to the future, the role of technology in sustainability cannot be overstated. Our commitment to exploring innovative solutions aligns with the ever-evolving landscape of sustainable practices, positioning JK Cement as a beacon of environmental responsibility in the cement industry.

Conclusion
In conclusion, JK Cement views technology as a catalyst for not only meeting but exceeding sustainability targets. As we navigate the complexities of the cement industry, we remain dedicated to pioneering sustainable solutions that redefine the role of technology in our environmental stewardship. Our endeavours are not just about cement; they are about shaping a sustainable future for generations to come.

ABOUT THE AUTHOR:
Anuj Khandelwal, Business Head, JK Cement,
has about 15 years of experience across industry, consulting and strategy roles. He is an MBA from Indian Institute of Management, Lucknow and also has a Chartered Accountancy (CA) degree.

Concrete

Construction Costs Rise 11% in 2024, Driven by Labour Expenses

Cement Prices Decline 15%, But Labour Costs Surge by 25%

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The cost of construction in India increased by 11% over the past year, primarily driven by a 25% rise in labour expenses, according to Colliers India. While prices of key materials like cement dropped by 15% and steel saw a marginal 1% decrease, the surge in labour costs stretched construction budgets across sectors.

“Labour, which constitutes over a quarter of construction costs, has seen significant inflation due to the demand for skilled workers and associated training and compliance costs,” said Badal Yagnik, CEO of Colliers India.

The residential segment experienced the sharpest cost escalation due to a growing focus on quality construction and demand for gated communities. Meanwhile, commercial and industrial real estate remained resilient, with 37 million square feet of office space and 22 million square feet of warehousing space completed in the first nine months of 2024.

“Despite rising costs, investments in automation and training are helping developers address manpower challenges and streamline project timelines,” said Vimal Nadar, senior director at Colliers India.

With labour costs continuing to influence overall construction expenses, developers are exploring strategies to optimize operations and mitigate rising costs.

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Concrete

Swiss Steel to Cut 800 Jobs

Job cuts due to weak demand

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Swiss Steel has announced plans to cut 800 jobs as part of a restructuring effort, triggered by weak demand in the global steel market. The company, a major player in the European steel industry, cited an ongoing slowdown in demand as the primary reason behind the workforce reduction. These job cuts are expected to impact various departments across its operations, including production and administrative functions.

The steel industry has been facing significant challenges due to reduced demand from key sectors such as construction and automotive manufacturing. Additionally, the broader economic slowdown in Europe, coupled with rising energy costs, has further strained the profitability of steel producers like Swiss Steel. In response to these conditions, the company has decided to streamline its operations to ensure long-term sustainability.

Swiss Steel’s decision to cut jobs is part of a broader trend in the steel industry, where companies are adjusting to volatile market conditions. The move is aimed at reducing operational costs and improving efficiency, but it highlights the continuing pressures faced by the manufacturing sector amid uncertain global economic conditions.

The layoffs are expected to occur across Swiss Steel’s production facilities and corporate offices, as the company focuses on consolidating its workforce. Despite these cuts, Swiss Steel plans to continue its efforts to innovate and adapt to market demands, with an emphasis on high-value, specialty steel products.

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Concrete

UltraTech Cement to raise Rs 3,000 crore via NCDs to boost financial flexibility

UltraTech reported a 36% year-on-year (YoY) decline in net profit, dropping to Rs 825 crore

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UltraTech Cement, the Aditya Birla Group’s flagship company, has announced plans to raise up to Rs 3,000 crore through the private placement of non-convertible debentures (NCDs) in one or more tranches. The move aims to strengthen the company’s financial position amid increasing competition in the cement sector.

UltraTech’s finance committee has approved the issuance of rupee-denominated, unsecured, redeemable, and listed NCDs. The company has experienced strong stock performance, with its share price rising 22% over the past year, boosting its market capitalization to approximately Rs 3.1 lakh crore.

For Q2 FY2025, UltraTech reported a 36% year-on-year (YoY) decline in net profit, dropping to Rs 825 crore, below analyst expectations. Revenue for the quarter also fell 2% YoY to Rs 15,635 crore, and EBITDA margins contracted by 300 basis points. Despite this, the company saw a 3% increase in domestic sales volume, supported by lower energy costs.

In a strategic move, UltraTech invested Rs 3,954 crore for a 32.7% equity stake in India Cements, further solidifying its position in South India. UltraTech holds an 11% market share in the region, while competitor Adani holds 6%. UltraTech also secured $500 million through a sustainability-linked loan, underscoring its focus on sustainable growth driven by infrastructure and housing demand.

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