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Continuing upward streak

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Prices continuing to spike, steeply at times, for the last four months is highlighting the pricing power of the industry, but their sustainability at these levels is being doubted.

Cement prices are spiralling up continuing their rising streak in May 2019, that had a nascent beginning in February 2019, though some pressure points are visible in certain regions later in May 2019.

The ET Cement Index that tracks cement price movements across the country was up by 5.83 per cent to 2431.1 points in end- May 2019 from 2297.2 at the beginning of May 2019, close on the heels of supernormal rise of 13.07 per cent seen in April. The price momentum upwards continued to firm up since February 2019, setting a clear tone for the prices.

Sharp pricing recovery since February 2019 has already aided cement companies to report healthier operational performance in the quarter ended March 2019, as well as in ensuing quarters, say analysts.

After the underperformance in 2018, cement stocks are up 10-30 per cent year to date (YTD/May 29, 2019) (vs +10 per cent for Nifty) led by cement pricing rebound; factors such as strong demand, stable government and lower inputs are also helping. 4QFY19 (January-March quarter of 2018-19) was the sixth consecutive quarter of double-digit volume growth. While realisations missed forecasts, lower costs helped,’ says Vivek Maheshwari, Investment Analyst of the leading broking firm CLSA. The readings are limited to the group of stocks that CLSA is tracking in its portfolio.

"With exit prices higher, 1QFY20 seems like a blockbuster, but our checks suggest higher discounts in the last two weeks due to weak construction activity. With elections behind, a clear picture should now emerge," Maheshwari added.

Volume growth momentum stayed strong and for the sixth-quarter in a row remained in double digits at 11 per cent in 4QFY19, while for the full-year volume growth too was in double digits. Despite a high volume base, industry feedback on volume growth stayed positive led by government’s focus on infrastructure along with affordable housing, says CLSA.

Sabyasachi Majumdar, Senior Vice President, ICRA has predicted that the domestic cement demand is likely to grow by eight per cent during the current fiscal. The demand push will result in the capacity utilisation rising to 71 per cent from 65 per cent in FY18 (2017-18), ICRA said in a report. It also predicted that the growth in demand will be driven by a likely 18-20 million tonnes per annum (MTPA) of additional production capacity during the fiscal.

Though the cement prices have made a big leap matching the decadal levels achieved before 2010, it may not match in terms of capacity utilisation which was in the range of 85-90 per cent a decade ago, mainly because of huge supplies available at the current juncture.

The cement demand has been improving across the country and as a result cement prices have been heading north. Cement production was higher by around 13 per cent year-on-year (YoY) in FY19, up from 6 per cent YoY growth in FY18. "The double-digit growth rate is likely to get moderated in FY20 to 7-8 per cent," ICRA said.

The recent elections have disrupted construction activity on the ground due to factors like lack of workers and tight liquidity, resulting in higher discounts and rebates offered by channels and players in a bid to clear inventory. "Now that the election is over, we believe a clear trend will emerge on demand as well as pricing as the activity starts to pick-up again," says CLSA.

Markets-wise, Delhi and Bengaluru saw muted demand in May 2019, resulting in easing of wholesale prices by Rs 4-5/bag of 50kg, while on the other hand, demand in Mumbai was good and as such there has been no recent decline in wholesale prices of the building material, according to cement dealers.

Cement prices were hiked twice in Delhi in April, resulting in a huge hike of Rs 60/bag. However, the prices have been on the rise since the beginning of April in Mumbai, with overall hike of Rs 30 in the month. The industry has also witnessed another benefit coming its way in Q4 for stocks in the coverage of CLSA ? Unit costs have declined 4 per cent quarter-on-quarter (QoQ) and stayed flat year-on-year (YoY) at aggregate level, showering benefits even in energy costs. The Q4 exit cement prices were higher than quarter average, signalling a strong 1QFY20, CLSA added.

– Markets-wise, Delhi and Bengaluru saw muted demand in May 2019, resulting in easing of wholesale prices by Rs 4-5/bag of 50kg, while on the other hand, demand in Mumbai was good.

– ICRA said that the industry will also benefit from easing of freight expenses, owing to the increase in the truck axle load norms from Q2, which will result in relatively higher operating profitability for cement companies in the near-term.

Many analysts are predicting that incremental demand will come from the proposed "housing for all" scheme and construction activities of Metro/irrigation projects, besides other infrastructure projects.

"The continued focus on the housing sector and rural economy in the Union Budget for 2019-20 is likely to have a positive impact on the cement industry. On the infrastructure side, the continued thrust on the roads and railways is likely to push cement demand. While the healthy demand is likely to support the recent price increase, the supply side pressure on prices in some regions cannot be ruled out completely," Majumdar of ICRA said.

Though there is every reason to believe that demand would be outpacing supply in the months to come, some stakeholders are keeping their fingers crossed over the sustainability of prices at such high levels, particularly citing a price hike of Rs 30-50/bag in a single month – in April 2019, which they claim is unusual.

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Concrete

Lubricants: A Strategic Lever in Manufacturing

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Professor Procyon Mukherjee discusses why Indian cement plants need to rethink lubrication as a technology and a long-term investment.

In most cement companies, discussions on competitiveness begin with market share, capacity expansion, fuel cost or logistics efficiency. Lubricants rarely receive the same strategic attention. They are typically classified as maintenance consumables-important, but operationally routine. Yet across the cement industry, that perception is changing rapidly. In plants where reliability and energy efficiency increasingly define profitability, lubrication is becoming a strategic lever.
The shift is happening because cement manufacturing today operates under greater pressure than ever before. Plants are expected to run continuously with tighter maintenance windows. Energy intensity remains under scrutiny. Alternative fuels and waste heat recovery are altering operating conditions. Digital automation has increased responsiveness-but also introduced more dynamic equipment behaviour. Under these conditions, the lubricant inside a gearbox or motor is no longer passive. It becomes part of how the machine performs.
The strongest cement companies have already recognised this.
At UltraTech Cement, one of the largest cement producers in the world, operational discipline around plant reliability increasingly emphasises standardised maintenance systems across a geographically dispersed network. That matters because a lubricant decision made in one plant affects maintenance reliability, inventory consistency and performance benchmarking across dozens of operating units. Standardisation of lubrication practices-particularly around critical equipment such as kiln drives, mill gearboxes and large fan motors-creates not only maintenance stability but also procurement leverage and data consistency. In a large network, lubrication becomes part of enterprise operating discipline.
The lesson is broader than one company. Scale changes lubrication economics. As cement groups expand across multiple plants, lubrication strategy becomes inseparable from operational governance.

Why lubrication has become central to reliability
The most expensive equipment failures in cement rarely begin dramatically. They begin with small deviations: rising gearbox temperature, lubricant contamination, bearing vibration or a motor drawing slightly more current than normal. The equipment continues to run, production remains stable and the early signs are often easy to overlook. Then weeks later a bearing fails, a reducer overheats or a kiln gearbox requires an emergency shutdown.
That pattern has pushed leading companies toward more disciplined reliability strategies.
Shree Cement has long been recognised in the Indian industry for operational efficiency and disciplined cost management. One reason is that highly efficient cement operations typically treat rotating equipment reliability as a plant-level performance variable, not simply a maintenance issue. In high-utilisation plants, kiln and grinding assets are pushed hard. Lubrication therefore directly influences uptime and energy efficiency. Even marginal reductions in friction or wear can improve equipment life while lowering electrical load.
That insight is increasingly important with vertical roller mills and digitally controlled drives. Unlike older systems with relatively steady operating patterns, newer equipment experiences dynamic torque changes and variable load profiles. Lubricants must respond consistently under fluctuating thermal and mechanical conditions. The technical requirement is higher than it used to be.
The lubricant is not simply reducing friction. It is stabilising performance under variability.

Procurement: The technicality of lubricant sourcing
The procurement implications are becoming equally important.
Traditionally, lubricant purchasing often followed a conventional sourcing model: negotiate annual contracts, standardise product grades and optimise price. That logic is still relevant but no longer sufficient. In a cement plant, a lower-cost lubricant that reduces purchase spend may increase oil replacement frequency, raise wear rates or contribute to avoidable downtime.
That trade-off is forcing procurement teams to think differently.
At Holcim, one of the clearest operational themes over the last decade has been lifecycle asset productivity combined with sustainability. In that model, lubricants are increasingly evaluated through the lens of total equipment effectiveness rather than only purchase cost. A lubricant that improves equipment reliability, extends service intervals and lowers energy draw may create more value than a lower-cost alternative.
The same logic is becoming relevant in India.
Procurement leaders are beginning to ask different questions: Which lubricants reduce lifecycle maintenance cost? Which suppliers can support oil analytics and technical advisory? Which lubricant platforms create plant-wide standardisation? Which products improve reliability in harsh dust-heavy operating environments?
The answer increasingly depends on technical capability rather than price alone. That marks
a significant shift from commodity sourcing to
strategic sourcing.

Innovation in lubrication
The lubricant market itself is changing.
Synthetic oils designed for high-load industrial gearboxes are delivering longer drain intervals and better thermal stability. Greases engineered for extreme temperature applications are improving motor reliability. Centralised lubrication systems are reducing dependence on manual greasing. Digital dispensing systems are improving consistency.
Some of the most advanced cement groups are pairing these technologies with automation.
Heidelberg Materials has consistently emphasised digital asset management and operational efficiency across heavy industrial assets. In that environment, lubrication increasingly works alongside equipment monitoring systems rather than as a standalone maintenance practice. Oil condition and equipment performance are treated as connected data streams.
That combination is becoming increasingly relevant in India as cement plants modernise. A lubrication programme that is disconnected from maintenance analytics is becoming less effective than one integrated with condition monitoring.
In other words, lubrication technology is becoming digital.

Predictive maintenance may be the biggest shift of all
For decades, lubrication in heavy industry followed a calendar. Oil was changed at fixed intervals. Bearings were greased according to schedule. Equipment was serviced periodically.
Predictive maintenance changes that model. Instead of relying only on time-based intervals, leading plants increasingly monitor condition continuously. They combine vibration signals, thermography, lubricant analysis and machine history to identify abnormal patterns early.
A particularly instructive example comes from CEMEX, which has invested heavily in digital operations and predictive maintenance across industrial assets globally. The operational principle is powerful: identify machine deterioration early enough that intervention becomes planned rather than reactive.

Lubricants become central to that approach.
Oil analysis can reveal microscopic wear particles before mechanical damage becomes visible. Contamination patterns can identify seal failure. Grease degradation can signal overheating. Combined with vibration monitoring, the lubricant becomes an operating-data source.
That fundamentally changes the economics.Instead of lubrication being an expense after procurement, it becomes part of operational intelligence. And for cement, operational intelligence matters. A kiln stoppage affects production, fuel planning, dispatch scheduling and customer commitments simultaneously. Preventing one major failure often creates more value than months of conventional cost optimisation.

Sustainability strategy begins with equipment reliability
Cement companies are also under growing pressure to improve sustainability. The conversation often focuses on emissions, fuel mix or clinker substitution. But lubrication plays an indirect-and meaningful-role. Longer lubricant life reduces waste disposal. Better friction control improves energy efficiency. Better contamination control extends equipment life and lowers replacement frequency. Predictive maintenance reduces emergency shutdowns and material waste.
Many global leaders are integrating reliability and sustainability into a single operational framework. That matters because energy efficiency and reliability are increasingly linked. A well-lubricated motor or gearbox typically operates more efficiently than one under stress. Small gains multiplied across grinding systems, fans and conveyors become economically significant.
The result is a quieter but important transformation: lubrication contributing to both profitability
and sustainability.

Improving the systems
A useful pattern emerges from leading cement companies globally and in India. They are not treating lubricants as background maintenance inventory. They are treating lubrication as part of a broader operating system-linked to reliability engineering, sourcing discipline, digital monitoring and sustainability performance.
The companies doing this well tend to share several characteristics. They standardise critical lubricant platforms across plants. They align procurement and maintenance decisions. They use oil and grease condition as part of predictive maintenance. They partner with suppliers not just for product delivery but for technical expertise. They measure lubricant decisions against uptime and lifecycle cost rather than price alone. This approach is becoming increasingly relevant in India’s cement industry, where operational competitiveness depends on extracting more performance from every asset.

Strategic implications
The future of cement manufacturing will undoubtedly involve automation, digital operations and more sophisticated process control. But the productivity of those investments still depends on physical equipment running reliably every day, which brings the focus back to gears, drives and motors, and increasingly, back to lubricants.
What was once viewed as a maintenance consumable is becoming a technical capability.
It influences reliability. It affects energy efficiency. It strengthens predictive maintenance. It supports sustainability. It shapes sourcing strategy.
The lubricant may remain physically invisible inside the gearbox or motor. Its business impact, however, is becoming increasingly visible in the competitiveness of the cement plant. Companies recognising this early are quietly building a stronger operational advantage.

About the author
Professor Procyon Mukherjee, ex-CPO Lafarge-Holcim India, ex-President Hindalco, ex-VP Supply Chain Novelis Europe, has been an industry leader in logistics, procurement, operations and supply chain management. His career spans 38 years starting from Philips, Alcan Inc (Indian Aluminum Company), Hindalco, Novelis and Holcim. He authored the book, ‘The Search for Value in Supply Chains’. He serves now as Visiting Professor in SP Jain Global, SIOM and as the Adjunct Professor at SBUP.

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Concrete

Synthetic lubricants have become a strategic choice

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Dr SB Hegde, Professor, Jain College of Engineering, India, and Visiting Professor, Pennsylvania State University, USA, makes a compelling case that lubrication is the most undervalued lever for energy efficiency and profitability.

In a sector where one hour of unplanned kiln stoppage can cost up to `22 lakhs and bearing failures in vertical roller mills run into crores, the conversation around plant performance rarely begins with lubrication. Industry expert Dr SB Hegde brings an academic rigour to a subject that most plant managers treat as routine maintenance and not as a strategic investment. He outlines how synthetic lubricants, predictive maintenance and OEM collaboration can together deliver returns.

How critical is lubrication strategy in ensuring reliability and productivity in modern cement plants?
Lubrication strategy is the backbone of reliability and productivity in modern cement plants. While lubricants account for only two to three per cent of total operating costs, poor lubrication is responsible for up to 70 per cent of maintenance problems, equipment failures and unplanned downtime.
Leading global cement plants achieve 85 per cent + Overall Equipment Effectiveness (OEE) largely due to disciplined lubrication management. High performance synthetic lubricants deliver proven 2 to 6.5 per cent energy savings (typically three to four per cent) in critical equipment such as kiln rollers, vertical roller mills (VRM), ball mill gearboxes and crushers. In India, this translates to 8-15 crore annual savings per 1 MTPA plant, or80-150 per tonnes of cement, with payback in 6-12 months.
With 160-170 million tonnes of new capacity expected by FY28 and many plants still operating at 65 per cent to 68 per cent OEE, a strong lubrication strategy has become a strategic necessity. It is not a routine maintenance activity, it is a high return investment that directly improves reliability, productivity
and sustainability.

What is the biggest lubrication related challenges faced by the Indian cement industry today?
The Indian cement industry operates under some of the harshest lubrication conditions in the
world, extreme dust, high temperatures (100-140°C), heavy shock loads, and continuous 24/7 operation. The most serious challenge is severe dust contamination, responsible for nearly 36 per cent of bearing failures. A major bearing failure in a VRM or kiln can cost 2-3.5 crore. Other key issues include incorrect lubricant selection, inconsistent greasing practices and cost perception of specialty lubricants. One hour of unplanned kiln stoppage due to lubrication failure can cost8-22 lakhs.
These challenges push maintenance costs to 15 to 25 per cent of total production cost and can cause annual losses of `8-15 crore or more for a one MTPA plant. Addressing them through proper lubricant selection, contamination control and condition monitoring is now critical.

How can advanced lubricants contribute to energy efficiency and sustainability in cement manufacturing?
Advanced synthetic and high-performance lubricants are among the most practical and effective tools for improving energy efficiency and sustainability in cement manufacturing. They reduce friction and operating temperatures, delivering 2-6.5 per cent energy savings (typically three to four per cent).
In India, this results in 8-15 crore annual savings per 1 MTPA plant (80-150 per ton), with payback in 6-12 months. A three to four per cent energy reduction also lowers CO2 emissions by 2-4 kg per tonne of cement. For a one MTPA plant, this equals
2,000-4,000 tonnes of CO2 reduction annually,
generating carbon credit revenue of `0.16-1 crore under India’s CCTS.
Additionally, they extend drain intervals 3-5 times and reduce lubricant consumption by 15 per cent to 30 per cent. With new capacity additions and stricter emission norms, advanced lubricants offer an excellent combination of profitability and environmental performance.

What role does predictive maintenance and oil condition monitoring play in reducing plant downtime?
Predictive maintenance (PdM) and oil condition monitoring are game changers for reducing unplanned downtime. They shift maintenance from reactive to proactive by detecting issues early through oil analysis, vibration and temperature data.
These technologies can reduce unplanned downtime by up to 50 per cent and improve uptime by 10 to 20 per cent. In one documented case, a cement plant achieved 57× ROI within six months, generating savings of over 8.4 crore and preventing a major failure that would have caused more than 160 hours of downtime. For Indian plants, where one hour of kiln stoppage costs8-22 lakhs, PdM typically delivers 25 per cent lower maintenance costs, 20 to 40 per cent longer equipment life, and payback in three-six months. It has become essential for achieving high reliability in the rapidly expanding cement industry.

How are synthetic and specialty lubricants transforming the performance of heavy cement equipment?
Synthetic and specialty lubricants are significantly transforming the performance of heavy cement
equipment by providing superior protection under extreme conditions of high temperature, shock loads, dust and continuous operation.
They deliver three-seven times longer component life, 2 to 6.5 per cent energy savings, and 15-25°C lower operating temperatures. Modern solutions such as PAO based synthetic gear oils (ISO VG 320-460), high-temperature synthetic greases, and advanced open gear compounds also provide three-five times longer drain intervals and 15 to 30 per cent lower lubricant consumption. In the Indian context, these improvements translate into `8-15 crore annual savings per one MTPA plant. As the industry adds large new capacity, synthetic and specialty lubricants have become a strategic choice for higher reliability and lower total cost of ownership.

How important is lubrication management in extending the lifecycle of critical plant machinery?
Lubrication management is extremely important and one of the most effective ways to extend the lifecycle of critical cement plant machinery. Properly implemented, it can increase equipment life by 20 to 50 per cent or more.
Since nearly 70 per cent of failures in bearings, gearboxes and rollers are lubrication related, disciplined practices such as right lubricant, correct quantity, contamination control and monitoring, can help deliver substantial benefits. For a typical one
MTPA plant, good lubrication management can save 6-12 crore annually through reduced replacements and downtime. In my view, lubrication management is not a routine maintenance task but a strategic practice that directly determines long term asset performance, reliability and profitability. How can collaboration between lubricant companies, OEMs and cement manufacturers drive operational excellence? Collaboration between lubricant companies, OEMs and cement manufacturers is a powerful driver of operational excellence. It combines equipment design knowledge, lubricant technology and practical plant experience to deliver superior results. Such partnerships help develop tailor-made solutions, integrate automatic lubrication systems with predictive monitoring, and accelerate innovation in energy efficient products. One such collaboration delivered 57x ROI in six months with savings exceeding8.4 crore.
With 160-170 million tonnes of new capacity expected by FY28, these collaborations are essential for achieving world class reliability, lower operating costs, and stronger sustainability performance. Cement manufacturers who actively engage in such partnerships will gain a clear competitive advantage.

  • Kanika Mathur

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Concrete

Cement Makers Reaffirm Commitment to Sustainable Growth

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World Environment Day spotlight on innovation and circularity

On World Environment Day, the Indian cement industry reiterated its commitment to supporting India’s climate ambitions through sustainable manufacturing, resource efficiency and the adoption of cleaner technologies.

The Cement Manufacturers’ Association (CMA) said the sector remains aligned with the Government of India’s Net Zero commitments and is accelerating efforts to reduce its environmental footprint while supporting the country’s infrastructure and development agenda.

Parth Jindal, President, CMA and Managing Director, JSW Cement, said the industry is increasingly adopting cleaner technologies, improving energy efficiency and expanding the use of alternative fuels and raw materials. He also highlighted the growing importance of circular economy practices, where industrial by-products and waste streams from one sector are utilised as resources in another.

“The Indian Cement Industry is aligned to the Government’s commitments on carbon mitigation and is accelerating the adoption of cleaner technologies, resource efficiency and circular economy practices while actively exploring the potential of Carbon Capture, Utilisation and Storage (CCUS) as a critical pathway for deep decarbonisation,” said Jindal.

He added that coprocessing industrial waste and by-products helps conserve natural resources, reduce disposal requirements and lower the environmental footprint across multiple sectors.

According to Jindal, sustainability is no longer limited to manufacturing processes but is increasingly influencing investment decisions, innovation strategies and long-term growth plans within the industry.

Echoing similar views, Dr Raghavpat Singhania, Vice President, CMA and Managing Director, JK Cement, said sustainable development extends beyond emissions reduction and must also focus on responsible resource utilisation and waste minimisation.

“Sustainability in the built environment cannot be measured by emissions alone. It is equally about how efficiently we use resources, how effectively we minimise waste and how responsibly we create the infrastructure that will serve future generations,” said Singhania.

He noted that the cement industry is advancing its sustainability agenda through greater resource efficiency, increased circularity, technological innovation and continuous improvements in manufacturing practices. As a key contributor to India’s infrastructure development, the sector has a critical role to play in balancing economic growth with environmental responsibility.

On the occasion of World Environment Day, industry leaders reaffirmed their commitment to supporting India’s climate goals while delivering the materials required for resilient, durable and sustainable infrastructure.

 

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