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Packaging of Cement Issues and Options

Published

8 years ago

May 31, 2017

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In the mature market of industrial packaging, cement manufacturers have made the switch to sustainable bags in a bid to enhance protection and improve handleability, increasing all-weather shelf life and curbing messy seepages.

In the world of industrial packaging it isn’t commonplace to see any significant shift in packaging material, never mind a clear departure from the status quo. As new packs have reached the market and the status quo has been challenged, customers have wholeheartedly embraced the change and a new expectation has been firmly established. But all of this isn’t just about water proofing, reducing retail mess and enhancing shelf life – bags that includes polypropylene, ADStar, HDPE and UFlex offers a superior marketing vehicle, creating an unexpected opportunity for premiumisation in cement and has transformed the shelf-appeal of an otherwise commoditised product. Admittedly, the momentum behind the shift towards use of these bags certainly wasn’t a eurekaism. The cement industry has long admired and sought the benefits of packing in polypropylene earlier, but had reached a significant stumbling block until recently.

A natural side effect of packing cementitious material into these type of bags is trapped air – exacerbated by intentional aeration of product, in the production and bagging process needed to create flow. In order to make polypropylene packaging a viable option for cement this air needed to be managed back out of the process to achieve a uniform and stable pack which is a crucial ingredient for efficient palletisation.

Ultimately, for instance a polypropylene sack in this application needs to be vented. Achieving this whilst maintaining the intended waterproof credentials of polypropylene is no easy feat, and a technologically advanced approach to venting is essential. It is exactly this requirement which can also decrease line speeds – something which has not fazed the cement industry whatsoever.

Cost Matters
Explaining the cost structure, Rahul Akkara, Vice President (Strategy & Brand), JSW Cement, confirmed that a reasonable amount of cost is incurred towards packaging. Akkara appraised ICR while comparing an average cost per tonne. "Average costing for HDPE will be around Rs 220 per tonne, for UFlex it will be Rs 380, and paper will be little costlier at Rs 400 per tonne," he said. (For more insightful on packaging by JSW Cement, turn to page no 38)

Meanwhile, packaging plays an important role in the cement sector, because, it has to sustain the handling process. Since India do not have much of mechanised handling process, the quality of cement packaging has to be as per standards set by Indian authorities. However, there is a catch! Most of the handling of cement bag is manual, and in many cases, labourers apply hooks to the cement bags, which is not a correct method. This is why, Ashwin Moghe, Vice President – Technical Services, UltraTech Cement says, "most of the manufacturers prefer PP bags over paper bags, HDPE or UFlex bags as it is more cost effective way considering transportation, pilferage and importantly, handling." (Turn page no 40 for UltraTech’s view on packaging)

Robots On The Move
Many of the sci-fi genre Hollywood movies have extensively used robots to draw crowd in theatres. However, that was just reel experience! In real life, especially in packaging, robots are a far-fetched idea to even think about. However, with science and technology going handy together, a plant in Stormville, New York, which produces 30,000 to 35,000 bags daily of portland cement-type products uses a workforce of about 40 humans and two robots.

These pair of robots from Taylor Products, a division of Magnum Systems, was installed in 2007 fall in Package Pavement’s bag-filling operations. The two model TRV1000 robotic valve bag placers are mounted directly in front of dual-head valve-bag filler. The base system is a six-axis Model 6i robot from Fanuc Robotics (www.fanucrobotics.com). Taylor is a Fanuc integrator for packaging-related installations. Taylor also provides the custom-made end effectors, which were switched out for an improved version about a year after the install. Importantly, at a rate of 8 to 10 bags per minute/robot, the duo consistently packs 16 bags per minute, sharing the maximum load of their human peers.

The robots represent a strategic plan for continual, non-stop shifting, with no breaks required for ergonomic reasons, and they remove people from repetitive-motion tasks. That said, if the robots can play their part in streamlining complicated process of packaging, a simple intervention by replacing a package line will do wonders.

Calucem is a manufacturer of calcium aluminate cements used in the refractory industry. After the company replaced its previous packaging line with new filling, palletising and packaging systems, it simplified material movement and improved energy efficiency. The new filling machine uses an air principle popular in food and beverage applications as opposed to turbine technologies common in cement industries.

The technology simplifies changeover and reduces the need for manual labour. An ultrasound system ensures precise measurement of the bags before they are palletised at up to 600 bags per hour, resulting in optimal stack stability. A suction gripper and fork gripper work together to allow exact positioning as well as the flexibility to handle complex processes.

Roller conveyors transport the palletised bags to the stretch hood packaging system. To simplify maintenance, the system enables servicing at floor level. The operator panel offers graphical navigation, access to training content and an ergonomic work flow. Overall, the new system is compact and uses less energy to automatically fill, palletise and depalletise bags.

ADStar vs PP Bags
Cement packaging is a significant factor for cement producers and sellers regarding product protection, shelf appearance, cost margins, and sustainability targets. Recently, Markus Grabenweger, Sigrid Eder, Starlinger & Co. Ges.m.b.H conducted an independent study compared the environmental impact of paper cement sacks, sewn cement sacks made of recycled polypropylene tape fabric, and hot-air welded ADStar cement sacks made of coated polypropylene tape fabric.

In the course of the study the entire life cycle of the cement sacks, i.e. from sack production and transport to the cement plant, the use phase of the sacks, to their end of-life phase, was reviewed. All analysed sacks had a filling capacity of 50 kg cement.

In China, sewn woven sacks made of polypropylene tape fabric are the most widely used packaging for cement. The sacks are manufactured including varying shares of recycled polypropylene as input material, sometimes up to 100 per cent. The polypropylene-coated tubular fabric is cut and sewn mostly by hand in sack factories.

The recycled material used to produce the sacks is in most cases severely degenerated – it has been re-used various times, and often contains high quantities of mineral fillers from previous applications.

This means the sack fabric is rather brittle and breaks easier. To increase the sack strength, the fabric weight must be increased. In addition, the sewing process further weakens the material by up to 50 per cent. Two and three-layered kraft paper sacks in block bottom shape are the predominant cement packaging on the market in Saudi Arabia. Although the sacks are mostly produced in the country, the raw materials for the sacks – i.e. paper and glue – have to be imported from Europe. To achieve the necessary strength, the sack weight is comparatively high.

Still, sack rupture occurs frequently after dropping, sliding on uneven surfaces, or due to humidity. ADStar sacks are block bottom valve sacks made of woven and coated polypropylene tape fabric. The sack bottom and top are closed in a special conversion process by means of hot air welding. The use of high-grade virgin polypropylene for fabric production and the tight sealing of the sack bottom and top ensure low breakage even during rough handling, dropping, or after contact with water. ADStar sacks are produced and used all over the world and are wide-spread cement packaging in many African and South East Asian countries.

The study concluded that changing over to ADStar sacks would not only reduce CO2 emissions caused during production and thus relieve the environment; but would also contribute to automating the entire cement filling and transporting chain.

Currently, the manufacture and handling of the sewn woven PP sacks involves a lot of manual activities – starting with the sewing of the sacks in the production phase and the resulting size differences that cause problems on automatic filling lines, from putting them onto the spout during the cement filling process, to stacking, storing and transporting. Considering the current investments in modernising the Indian cement sector, the use of ADStar sacks which are produced automatically on sack conversion lines and allow fully automated handling of the packaged cement would seem a prudent step.

Sustainable Packaging
Sustainable packaging is the underlying principle that Uflex Ltd follow and this is replicated through their Flex-Safe-Pack, moisture-proof cement bags. Today, more than three per cent of the cement produced is lost in the supply chain and this loss is largely attributed to the cement bags being stored in open environments across the supply chain, making them vulnerable to damages caused due to exposure of cement bags to rain, unpredictable outdoor conditions and extreme climate. The micro perforation and absence of anti-counterfeit further leads to oozing and duplication of the bags causes adulteration resulting in a consolidated loss.

The company’s Flex-Safe-Pack which has won the prestigious Dupont Award for global packaging innovation at Delaware, USA, has impressive use of nano technology, and addresses multiple industry challenges such as preventing waste, enhancing brand equity, and increasing worker safety. Another added feature of holographic metallic top and bottom patch saves from duplication.

As an environmentally conscientious organi-sation, says Ashwani Kumar Sharma, President & CEO – New Business Initiatives, Uflex Ltd, "we are mindful of our responsibility towards sustainable packaging. Our packaging is safe for individuals and communities throughout its life cycle." (To know more about Flex Safe Pack, turn to page no 42)

According to R Sankaran Unni, Sr General Manager – Marketing & Business Development, India Cements Ltd, "Flex SafePack designed by Uflex has not just provided a barrier to moisture from entering into the bag but has helped in reducing the loss of cement that occurs in supply chain – which is one of the most crucial for this industry. With this, we have also a freedom of choice in terms of getting visibility/branding as Safe Pack allows printing of high-quality graphics over the pack."

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Price hikes, drop in input costs help cement industry to post positive margins: Care Ratings

Published

4 years ago

October 21, 2021

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Region-wise,the southern region comprises 35% of the total cement capacity, followed by thenorthern, eastern, western and central region comprising 20%, 18%, 14% and 13%of the capacity, respectively.

The cement industry is expected to post positive margins on decent price hikes over the months, falling raw material prices and marked drop in overall production costs, said an analysis of Care Ratings.

Wholesale and retail prices of cement have increased 11.9% and 12.4%, respectively, in the current financial year. As whole prices have remained elevated in most of the markets in the months of FY20, against the corresponding period of the previous year.

Similarly, electricity and fuel cost have declined 11.9% during 9M FY20 due to drop in crude oil prices. Logistics costs, the biggest cost for cement industry, has also dropped 7.7% (selling and distribution) as the Railways extended the benefit of exemption from busy season surcharge. Moreover, the cost of raw materials, too, declined 5.1% given the price of limestone had fallen 11.3% in the same aforementioned period, the analysis said.

According to Care Ratings, though the overall sales revenue has increased only 1.3%, against 16% growth in the year-ago period, the overall expenditure has declined 3.2% which has benefited the industry largely given the moderation in sales.

Even though FY20 has been subdued in terms of production and demand, the fall in cost of production has still supported the cement industry by clocking in positive margins, the rating agency said.

Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. The cement sector will be seeing a sharp growth in volumes mainly due to increasing demand from affordable housing and other government infrastructure projects like roads, metros, airports, irrigation.

The government’s newly introduced National Infrastructure Pipeline (NIP), with its target of becoming a $5-trillion economy by 2025, is a detailed road map focused on economic revival through infrastructure development.

The NIP covers a gamut of sectors; rural and urban infrastructure and entails investments of Rs.102 lakh crore to be undertaken by the central government, state governments and the private sector. Of the total projects of the NIP, 42% are under implementation while 19% are under development, 31% are at the conceptual stage and 8% are yet to be classified.

The sectors that will be of focus will be roads, railways, power (renewable and conventional), irrigation and urban infrastructure. These sectors together account for 79% of the proposed investments in six years to 2025. Given the government’s thrust on infrastructure creation, it is likely to benefit the cement industry going forward.

Similarly, the Pradhan Mantri Awaas Yojana, aimed at providing affordable housing, will be a strong driver to lift cement demand. Prices have started correcting Q4 FY20 onwards due to revival in demand of the commodity, the agency said in its analysis.

Industry’s sales revenue has grown at a CAGR of 7.3% during FY15-19 but has grown only 1.3% in the current financial year. Tepid demand throughout the country in the first half of the year has led to the contraction of sales revenue. Fall in the total expenditure of cement firms had aided in improving the operating profit and net profit margins of the industry (OPM was 15.2 during 9M FY19 and NPM was 3.1 during 9M FY19). Interest coverage ratio, too, has improved on an overall basis (ICR was 3.3 during 9M FY19).

According to Cement Manufacturers Association, India accounts for over 8% of the overall global installed capacity. Region-wise, the southern region comprises 35% of the total cement capacity, followed by the northern, eastern, western and central region comprising 20%, 18%, 14% and 13% of the capacity, respectively.

Installed capacity of domestic cement makers has increased at a CAGR of 4.9% during FY16-20. Manufacturers have been able to maintain a capacity utilisation rate above 65% in the past quinquennium. In the current financial year due to the prolonged rains in many parts of the country, the capacity utilisation rate has fallen from 70% during FY19 to 66% currently (YTD).

Source:moneycontrol.com

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Wonder Cement shows journey of cement with new campaign

Published

4 years ago

October 21, 2021

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The campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV…

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Cement manufacturing company Wonder Cement, has announced the launch of a digital campaign ‘Har Raah Mein Wonder Hai’. The campaign has been designed specifically to run on platforms such as Instagram, Facebook and YouTube.

#HarRaahMeinWonderHai is a one-minute video, designed and conceptualised by its digital media partner Triature Digital Marketing and Technologies Pvt Ltd. The entire journey of the cement brand from leaving the factory, going through various weather conditions and witnessing the beauty of nature and wonders through the way until it reaches the destination i.e., to the consumer is very intriguing and the brand has tried to showcase the same with the film.

Sanjay Joshi, executive director, Wonder Cement, said, "Cement as a product poses a unique marketing challenge. Most consumers will build their homes once and therefore buy cement once in a lifetime. It is critical for a cement company to connect with their consumers emotionally. As a part of our communication strategy, it is our endeavor to reach out to a large audience of this country through digital. Wonder Cement always a pioneer in digital, with the launch of our IGTV campaign #HarRahMeinWonderHai, is the first brand in the cement category to venture into this space. Through this campaign, we have captured the emotional journey of a cement bag through its own perspective and depicted what it takes to lay the foundation of one’s dreams and turn them into reality."

The story begins with a family performing the bhoomi poojan of their new plot. It is the place where they are investing their life-long earnings; and planning to build a dream house for the family and children. The family believes in the tradition of having a ‘perfect shuruaat’ (perfect beginning) for their future dream house. The video later highlights the process of construction and in sequence it is emphasising the value of ‘Perfect Shuruaat’ through the eyes of a cement bag.

Tarun Singh Chauhan, management advisor and brand consultant, Wonder Cement, said, "Our objective with this campaign was to show that the cement produced at the Wonder Cement plant speaks for itself, its quality, trust and most of all perfection. The only way this was possible was to take the perspective of a cement bag and showing its journey of perfection from beginning till the end."

According to the company, the campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV. No other brand in this category has created content specific to the platform.

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In spite of company’s optimism, demand weakness in cement is seen in the 4% y-o-y drop in sales volume. (Reuters)

Published

4 years ago

October 21, 2021

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Cost cuts and better realizations save? the ?day ?for ?UltraTech Cement, Updated: 27 Jan 2020, Vatsala Kamat from Live Mint

Lower cost of energy and logistics helped Ebitda per tonne rise by about 29% in Q3
Premiumization of acquired brands, synergistic?operations hold promise for future profit growth Topics

UltraTech Cement
India’s largest cement producer UltraTech Cement Ltd turned out a bittersweet show in the December quarter. A sharp drop in fuel costs and higher realizations helped drive profit growth. But the inherent demand weakness was evident in the sales volumes drop during the quarter.

Better realizations during the December quarter, in spite of the 4% year-on-year volume decline, minimized the pain. Net stand-alone revenue fell by 2.6% to ?9,981.8 crore.

But as pointed out earlier, lower costs on most fronts helped profitability. The chart alongside shows the sharp drop in energy costs led by lower petcoke prices, lower fuel consumption and higher use of green power. Logistics costs, too, fell due to lower railway freight charges and synergies from the acquired assets. These savings helped offset the increase in raw material costs.

The upshot: Q3 Ebitda (earnings before interest, tax, depreciation and amortization) of about ?990 per tonne was 29% higher from a year ago. The jump in profit on a per tonne basis was more or less along expected lines, given the increase in realizations. "Besides, the reduction in net debt by about ?2,000 crore is a key positive," said Binod Modi, analyst at Reliance Securities Ltd.

Graphic by Santosh Sharma/Mint
What also impressed analysts is the nimble-footed integration of the recently merged cement assets of Nathdwara and Century, which was a concern on the Street.

Kunal Shah, analyst (institutional equities) at Yes Securities (India) Ltd, said: "The company has proved its ability of asset integration. Century’s cement assets were ramped up to 79% capacity utilization in December, even as they operated Nathdwara generating an Ebitda of ?1,500 per tonne."

Looks like the demand weakness mirrored in weak sales during the quarter was masked by the deft integration and synergies derived from these acquired assets. This drove UltraTech’s stock up by 2.6% to ?4,643 after the Q3 results were declared on Friday.

Brand transition from Century to UltraTech, which is 55% complete, is likely to touch 80% by September 2020. A report by Jefferies India Pvt. Ltd highlights that the Ebitda per tonne for premium brands is about ?5-10 higher per bag than the average (A cement bag weighs 50kg). Of course, with competition increasing in the arena, it remains to be seen how brand premiumization in the cement industry will pan out. UltraTech Cement scores well among peers here.

However, there are road bumps ahead for the cement sector and for UltraTech. Falling gross domestic product growth, fiscal slippages and lower budgetary allocation to infrastructure sector are making industry houses jittery on growth. Although UltraTech’s management is confident that cement demand is looking up, sustainability and pricing power remains a worry for the near term.