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The Future of Cement Movement

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Logistics, from the factory exit point to the last mile connectivity, is a key driver of efficiency and cost optimisation in the cement industry. With digitalisation, multi-modal integration and sustainability, logistics is the differentiator that will give the manufacturer a competitive advantage. Let us explore how logistics has today become a deciding factor that players cannot afford to ignore.

India, the second-largest cement producer globally, has an installed capacity exceeding 600 million tonnes per annum, with demand driven by infrastructure, housing, and urbanisation (IBEF, 2024). However, logistics remains one of the most significant cost components, accounting for nearly 20 to 30 per cent of the total cement cost, primarily due to the bulk nature and low value-to-weight ratio of the product (Cement Manufacturers’ Association, 2023; McKinsey, 2022).
With over 70 per cent of cement transported via road, inefficiencies in logistics directly impact profitability, delivery timelines, and customer satisfaction (NITI Aayog, 2021). As supply chains grow more complex, end-to-end logistics is emerging as a critical lever for cost optimisation, operational efficiency, and competitive advantage.

Logistics: The game changer
Logistics plays a central role in the cement industry, where timely delivery and cost efficiency are key determinants of market competitiveness. Unlike many other industries, cement has a low shelf value relative to its transportation cost, making logistics optimisation critical. According to McKinsey (2022), logistics costs in cement can reach up to 30 per cent of total production costs, significantly higher than global manufacturing averages. This underscores the importance of efficient distribution networks in maintaining margins and ensuring consistent supply.
Moreover, logistics directly influences market reach and dealer satisfaction. Cement companies with optimised logistics networks can ensure faster delivery cycles, improved availability, and better service levels. A report by Deloitte (2023) highlights that companies focusing on logistics optimisation have seen improvements of up to 15 per cent to 20 per cent in delivery efficiency, reinforcing the role of logistics as a strategic differentiator rather than just an operational function.

Mapping the cement supply chain
The cement supply chain is complex and involves multiple stages, including raw material transportation, clinker movement, cement production, warehousing, and final distribution to dealers and project sites. Each stage requires careful coordination to minimise delays and costs. According to World Cement Association (2023), inefficiencies in supply chain coordination can lead to 5 per cent to 8 per cent losses in overall operational efficiency, highlighting the need for integrated logistics planning.
From plant despatch to last-mile delivery, the movement of cement involves various stakeholders such as transporters, distributors, and retailers. In India, the fragmented nature of the logistics ecosystem further complicates coordination. A study by PriceWater Cooper (PwC 2022) indicates that lack of integration across supply chain nodes can increase transit times by 10 per cent to 15 per cent, affecting project timelines and customer satisfaction.

Key challenges in end-to-end logistics
One of the biggest challenges in cement logistics is infrastructure limitation, particularly in rural and semi-urban areas where demand is rapidly growing. Despite improvements, India’s logistics infrastructure still faces bottlenecks such as poor road conditions, congestion, and limited rail connectivity. According to NITI Aayog (2021), logistics inefficiencies contribute to India’s overall logistics costs being around 13 per cent to 14 per cent of GDP, significantly higher than the global benchmark of 8 per cent to 9 per cent. For the cement industry, this translates into higher transportation costs and reduced competitiveness.
Professor Procyon Mukherjee says, “For decades, cement companies designed their networks around limestone availability. Plants were built near quarries, and finished cement was transported long distances to markets. This model, while logical from a production standpoint, created massive outbound logistics costs. Indian cement companies have begun to challenge this logic. The shift: decoupling clinker production from cement grinding.”
He adds, “Clinker plants remain near limestone reserves, but grinding units are increasingly located close to consumption centres. In many markets, logistics accounts for up to 30 per cent of total cost. The implication is stark: companies that redesign their end-to-end logistics, from inbound flows to last-mile delivery, can fundamentally alter their competitive position.”
Another critical challenge is demanding variability and lack of real-time visibility across the supply chain. Cement demand is highly seasonal and project-driven, making demand forecasting complex. Additionally, limited adoption of digital tools leads to poor tracking and coordination. According to McKinsey (2023), companies lacking digital logistics systems experience up to 20 per cent higher inefficiencies in fleet utilisation and delivery planning. These challenges highlight the need for greater integration, digitalisation, and infrastructure development to achieve efficient end-to-end logistics.

Multi-modal logistics
The integration of multiple transportation modes—road, rail, and coastal shipping—is becoming increasingly important for optimising cement logistics. While road transport dominates with over 70 per cent share, rail and coastal shipping offer cost-effective and environmentally sustainable alternatives for long-distance movement (NITI Aayog, 2021).
According to the Ministry of Ports, Shipping and Waterways (2023), coastal shipping can reduce logistics costs by up to 20 per cent to 25 per cent compared to road transport, while also lowering carbon emissions. The adoption of multi-modal logistics can help cement companies achieve better cost efficiency, reduce transit times, and improve supply chain resilience.
Anuradha Parakala, Co-founder, Chief Strategy and Product Officer, Fleetronix Systems, says, “Real-time visibility in logistics is no longer a competitive advantage. It has become a baseline requirement. The cost of not knowing what’s happening across the supply chain has simply become too high. Customers expect consistent and reliable deliveries, finance teams demand tighter cost control, and regulators require greater compliance and transparency. None of these expectations can be met without real-time insight into fleet movement and operations. What was once considered a differentiator is now essential, and companies that still operate without visibility are already falling behind in an increasingly performance-driven environment.
“At the same time, data-driven logistics is redefining how cement supply chains operate, shifting them from reactive systems to predictive, planning-led ecosystems. Fuel remains the single biggest cost lever in fleet logistics, and within that, driver behaviour offers the fastest and most impactful gains. It often delivers 12 per cent to 18 per cent fuel savings through better driving practices such as smoother acceleration, controlled speeds, and reduced idling. Beyond cost savings, data enables companies to move from guesswork to precision—anticipating disruptions, optimising routes, and planning with real numbers instead of buffers. The result is not just improved efficiency, but a stronger foundation of trust with customers, giving early adopters a clear and lasting competitive edge,” she adds.

Digitalisation of cement logistics
Digitalisation is transforming cement logistics by enabling real-time visibility, improved coordination, and data-driven decision-making. Technologies such as GPS tracking, IoT sensors, and advanced analytics allow companies to monitor shipments, optimise routes, and reduce delays. According to Gartner (2023), organisations that implement digital supply chain solutions can achieve up to 50 per cent improvement in supply chain visibility and 20 per cent reduction in operational costs. In the cement industry, where timely delivery is critical, such improvements can significantly enhance efficiency and customer satisfaction.
Dijam Panigrahi, Co-Founder and COO, GridRaster, says, the cement supply chain is uniquely complex. A single integrated plant may manage limestone quarrying, kiln operations, grinding, packing, and dispatch simultaneously, with finished product flowing through rail, road, and waterway networks to reach hundreds of regional depots and distribution points. Coordinating this network using spreadsheets, siloed ERP data, and phone calls is not merely inefficient; it is a structural liability in a competitive market where delivery reliability is a key differentiator. Digital twin technology offers a way out. A cement logistics digital twin is a continuously updated, three-dimensional virtual replica of the entire supply chain, from the truck loading bays at the plant to the inventory levels at district depots.”

Optimising fleet efficiency and last-mile delivery
Fleet efficiency is a critical factor in cement logistics, given the heavy reliance on road transport. Optimising fleet utilisation, reducing idle time, and improving route planning can lead to substantial cost savings. According to McKinsey (2022), optimised fleet management can reduce transportation costs by 10 per cent to 15 per cent, while improving delivery timelines. Technologies such as telematics, fuel monitoring systems, and driver behaviour analytics are increasingly being adopted to enhance fleet performance.
Pushpank Kaushik, CEO, Jassper Shipping, says, “Handling cement both in bulk and bagged form presents several operational challenges across the logistics chain. These include inadequate road infrastructure, port congestion during peak demand periods, and weather-related disruptions. At ports, limited mechanisation during high-volume periods can slow down cargo movement, increasing the risk of moisture exposure and product degradation. Jassper mitigates these challenges through its extensive operational expertise and global network. Managing a significant volume of vessel movements annually and working closely with experienced mariners and operators, we ensure precise coordination, efficient cargo handling, and smooth transitions across all logistics stages.”
Last-mile delivery, however, remains one of the most challenging aspects of cement logistics. Delivering cement to construction sites often involves navigating congested urban areas or remote rural locations, leading to delays and increased costs. A report by Deloitte (2023) highlights that last-mile logistics can account for up to 40 per cent of total delivery costs in certain scenarios. Addressing these challenges requires better route planning, localised distribution hubs, and increased use of technology to ensure timely and efficient delivery.

Sustainability in cement logistics
Sustainability is becoming a key focus area in cement logistics, driven by environmental regulations and corporate sustainability goals. Transportation is a major contributor to carbon emissions in the cement value chain. According to the International Energy Agency (IEA, 2023), logistics-related emissions account for a significant portion of the industry’s overall carbon footprint. Shifting towards rail and coastal shipping, improving fuel efficiency, and adopting alternative fuels can help reduce emissions. Additionally, optimising logistics operations not only lowers environmental impact but also reduces costs, creating a win-win scenario for the industry.

The future of cement logistics
The future lies in the adoption of automation, advanced analytics, and smart supply chain technologies. Autonomous vehicles, AI-driven planning systems, and blockchain-based tracking solutions are expected to redefine logistics operations. According to McKinsey (2023), companies that adopt advanced supply chain technologies can achieve up to 30 per cent improvement in efficiency and significant cost reductions. As the cement industry continues to evolve, the integration of these technologies will be crucial for building resilient, efficient, and future-ready logistics networks.

Conclusion
End-to-end logistics is no longer just an operational necessity but a strategic imperative for the cement industry. With rising costs, increasing demand, and evolving customer expectations, companies must focus on optimising their logistics networks to remain competitive. From multi-modal integration to digitalisation and sustainability, the future of cement logistics will be defined by innovation and efficiency.

  • – 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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