Economy & Market
Budget 2011: A mixed bag
Published
16 years agoon
By
admin
Given the favourable economic conditions and government’s endeavour to stimulate inclusive growth by increased spending, the cement industry will see a quick resurgence from the demand pangs. In 2011-12 demand is likely to revert to its high growth path increasing by more than 11 per cent from the five per cent in the current fiscal year, predicts Nitin Madkaikar, Economist, FirstInfo Centre.
The cement sector which has been reeling under the severe margin pressure amidst demand crunch and rising raw material costs, has not received the any immediate relief from the Union Budget 2011-12. Overall, the Budget would sustain the buoyant economic growth rate through increased spending on infrastructure creating demand for cement in the long term, while the tax proposals are likely to create implementation issues in the interim period. The Budget, within its perimeters called to resolved tax anomaly, has consolidated the specified and ad-valorem rates, the move likely to push up effective prices. As a token, it has also announced cuts in customs duty on petroleum coke and gypsum from 5 per cent to 2.5 per cent. While there are not many manufacturers using pet coke, gypsum is used in small quantities, and hence, the benefit of the cut in duty will be limited.
Further, the Budget has imposed one per cent excise duty on coal, a new introduction. It will add to the cost of coal and increased coal price will have a huge negative impact on the cement industry. Prices of A and B grade non-coking coal have already up by over 100 per cent in recent times while price rise in rest of the coal categories is about 30 per cent. Coal India, the major supplier of coal in India, has decided to revise coal prices upwards. This move would be detrimental for cement makers. Coal India, although did not devolve the quantum, the hikes are likely to be steep when they come. The imported coal contract costs continue to be firm, reeling above $228 a tonne. These hikes will increase input costs for cement majors, exerting pressure on their margins. Looking at the sluggish demand, it will not be easy for the manufacturers to pass on the hike in input costs.
During the first 10 months of 2010-11, cement production inched up four per cent while dispatches were shade higher at 4.2 per cent. The same period of 2009-10 had recorded production growth of more than 11 per cent, and dispatches were up 11.5 per cent.
In his Budget Speech on 28 February 2011, the Finance Minister said, "As a measure of relief to cement industry, I propose to replace the existing excise duty rates with composite rates having an ad-valorem and specific component with some rationalisation. The basic customs duty on two critical raw materials of this industry viz. pet coke and gypsum is proposed to be reduced to 2.5 per cent".
The new tax duty, many opine, is likely to raise the per bag price of cement and would lead to additional burden on cement makers negating their margins. A day after the Union Budget was presented, prices in the Mumbai market, the largest domestic one, were raised by Rs 10 for a 50-kg bag. Analysts and dealers believe that other regions would soon follow suit, especially northern and eastern markets. The average all-India price of a bag has surpassed Rs 265, the highest since the industry entered its downturn. Interestingly, in November the prices were around Rs 220-225 a bag. In Mumbai alone, prices have touched Rs 280 a bag of late and they may soon reach Rs 300 a bag as the peak season set in.
The Cement Manufacturers’ Association estimates the restructuring of duties would lead to an extra burden of Rs 3-4 a bag. Looking at the sluggish demand, it will not be easy for the manufacturers to pass on the hike in input costs.
Infra spending push
Historically, government spending on infrastructure, particularly in road sector had a positive impact on cement demand. The Budget proposes to increase the spending by 13 per cent to Rs 1257,729 crore in 2011-12 from the budget estimates for 2010-11. For 2011-12, an allocation of over Rs 214,000 crore is being made for the development of infrastructure sector. This implies a 23.3 per cent increase over the allocations in 2010-11. It also accounts for 48.5 per cent of the gross budgetary support to plan expenditure. Further, in order to boost infrastructure development in railways, ports, housing and
highways development, the Budget proposed to allow tax-free bonds of Rs 30,000 crore to be issued by various government undertakings in 2011-12. This includes Indian Railway Finance Corporation Rs 10,000 crore, National Highway Authority of India (NHAI) Rs 10,000 crore, HUDCO Rs 5,000 crore and Ports Rs 5,000 crore.
Housing push
Besides the infrastructure sector, the Budget has provided ample stimulant to the housing sector. It has liberalised the existing scheme of interest subvention of one per cent on housing loans by extending it to housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh from the present limit of Rs 10 lakh and Rs 20 lakh respectively. On account of increase in prices of residential properties in urban areas, the Budget has enhanced the existing housing loan limit from Rs 20 lakh to Rs 25 lakh for dwelling units under priority sector lending. To provide housing finance to targeted groups in rural areas at competitive rates, the provision under Rural Housing Fund is enhanced from Rs 2,000 crore to Rs 3,000 crore. To enable credit flow to Economically Weaker Sections (EWS) and LIG households a Mortgage Risk Guarantee Fund is proposed to be created under Rajiv Awas Yojana. This would guarantee housing loans taken by EWS and LIG households and enhance their credit worthiness.
Buoyant future
Demand for cement is expected to enter new growth trajectory as infrastructure spending has been stepped up, besides a growing demand for housing. Except the aberration of 2010-11, cement demand has been growing at an average rate of close to 10 per cent since 2004-05. The year 2010-11 saw production up by just five per cent while demand increased 5.1 per cent. In 2011-12, cement demand would revert back to the inflection point as growth trajectory is estimated to shift upwards from its historical average of 10 per cent to 10-12 per cent over next 5-10 years. According to industry reports, all the ingredients are in place for the cement industry to move from a cyclical to a secular growth story.
A higher GDP growth rate of nine per cent, coupled with lower population growth will accelerate per capita GDP growth. Fiscal 2011-12 will add Rs 11 trillion to the GDP, which is expected to have a higher intensity of cement consumption driven by:
- A significant increase in infrastructure investment, and
- Significant impetus to housing, especially rural/mass housing
Intensity of cement consumption will jump from 1.25 times of real GDP to 1.5 times in coming years.
Road to cement
Road projects having a significant potential to drive cement demand, has not lived up to expectations in India. India’s track record on road development has been dismal over the period between 2004-05 and 2010-11, when road projects awarded totalled just over 12,000 km. Some of the major reasons for the delay in project awards were the restructuring of NHAI, the formation of the PPP models and the introduction of the Model concession agreement. Besides, factors such as land acquisition, shifting of utilities and execution challenges impacted the projects.
According to the Economic Survey in 2010-11, the achievement under various phases of the NHDP up to November 2010 has been about 1,007 km and projects have been awarded for a total length of about 3,780 km. Steps have been taken to expedite the progress of the NHDP including regular monitoring of contracts and progress reviews, appointment of senior officials by state governments as nodal officers for resolving problems associated with implementation of the NHDP, setting up of a Committee of Secretaries under the Cabinet Secretary to address inter-ministerial and Centre-State issues such as land acquisition, utility shifting, environment approvals and clearances of railway over-bridges (ROBs), simplification of the procedure of issue of land acquisition (LA) notifications, and posting of a Railways officer to the NHAI to coordinate with the Ministry of Railways in expediting the construction of ROBs.
The NHAI formulated Work Plans (Work Plans I and II) for awarding of about 12,000 km each during the years 2009-10 and 2010-11. These plans lay down a specific time frame for various activities and are being monitored very closely at various levels. Under Work Plan I so far 73 projects of 6,426 km length have been awarded and bids for a further nine are at various stages. Under Work Plan II, one project of 170 km length was awarded and bids for five more projects are under various stages of process. Given that a large part of the administrative issues have been sorted, it is expected that the pace of project awards will accelerate.
Rural/mass housing
According to a working group of the Eleventh Five Year Plan, the housing shortage was estimated at 47.4 million at the start of the Eleventh Plan in 2007 and will touch 74 million at the end of the Plan in 2012. More than 90 per cent of the housing shortage is for the people in the EWS and LIG. Rural housing is expected to be a key beneficiary of higher farm income and alternative avenues of income generation due to higher government spending through the National Rural Employment Guarantee Scheme (NREGS).
While urban housing will continue to provide the much needed base for demand for the cement industry, a strong demand pull is expected from infrastructure and rural/individual housing. Due to a slowdown in real estate during the global crisis period, cement demand from this vertical had declined significantly. Despite this, the cement industry’s volumes grew close to 10 per cent during that period. Recovery in the real estate sector is critical to sustain 10-12 per cent growth over the long term, as it provides base demand for the cement industry. The real estate sector is recovering. Pick-up in demand is coupled with significant increase in the number of new project launches in the housing segment while the retail and commercial segments are expected to follow suit. This would translate into cement demand from these new projects with a lag of 6-9 months from the launch.
Slum rehabilitation: Can open up opportunity
With over 20 per cent of India’s urban population living in slums, slum rehabilitation has assumed major significance for the government to ensure inclusive growth. The Jawaharlal Nehru Urban Renewal Mission has been playing a vital role in slum improvement and in-situ slum rehabilitation. It aims to provide shelter to the urban poor at their present location or near their place of work.
To attract private investment in slum rehabilitation, there will be consideration of transferable development rights (TDR) and additional floor space index (FSI) ratio in provision of shelter to the poor. Rehabilitation of slum dwellers can provide a significant demand pull, as providing permanent housing to 62 million people would consume 75 to 80 million tonne of cement. Besides, construction of related infrastructure would enhance cement consumption.
Poised for healthy growth
Given the favourable economic conditions and government’s endeavour for inclusive growth and increased spending, the cement industry will see a quick resurgence from the pangs of demand crunch. In 2011-12 production is likely to increase by over 11 per cent from the current five per cent expected this year. Though cost would continue to dog the industry, higher demand would negate this impact.
Reactions
ML Pachisia, Managing Director, Orient Paper & Industries Ltd.
The biggest impact on cement industry is on account of the recent abnormal increase in prices of coal announced by Coal India in an off-Budget announcement. The price increase has been anywhere between 30 per cent to 100 per cent. This has indeed come as a major shock to the industry and will have an impact on cost of coal used both in the process as well in the captive power plants.
The reduction in import duties on pet coke and gypsum will have minimal impact, although the move is most welcome.
Increased spending on infrastructure is the need of the hour for India and the higher allocation is a step in the right direction. This will certainly help the cement industry through higher demand for cement from this sector, subject to swift implementation of the planned projects.
The revised excise duty structure will apparently result in increased excise outlay.
Bijay Kumar Garodia, Chairman, Barak Valley Cements Ltd
The reduction in customs duty on input materials is the only relief for the cement industry in the Budget 2011. In the Budget, Finance Minister has proposed to reduce basic customs duty on pet coke and gypsum to 2.5 per cent from the existing 5 per cent. Only gypsum is used for manufacturing of cement in our company but since it does not have a significant use in the production, the change of import duty will not have material effect on our production cost. Further, the Budget also came out with restructured excise duty. In our case, if we sell the cement on FOR basis then due to the change in excise duty there will not be any significant effect on our company. In context of reduced surcharge limit on corporate tax and increase in percentage of MAT, the said increase will be nullified by the reduced surcharge limit. Thus in conclusion, the Budget 2011 has not brought anything significant to us.
Indian Cement Review (ICR) and Fuller Technologies brought industry, policy and technology leaders together to discuss how cement innovation can drive green construction at scale, writes Rakesh Rao.
India is building at a pace few countries can match. Highways, airports, housing, logistics parks, industrial corridors and urban infrastructure are reshaping the country’s economic geography. But beneath this growth story lies a difficult question: can India continue to build at scale without locking itself into a high-carbon future?
That question formed the core of an online panel discussion titled “Driving Green Construction Through Cement Innovation”, organised by Indian Cement Review (ICR) in association with Fuller Technologies as the Presenting Partner on June 25, 2026. The webinar brought together experts from cement technology, R&D, global industry platforms, building performance policy and international development cooperation to examine how low-carbon cement and material innovation can accelerate India’s green construction transition.
The discussion came at a crucial time. India has committed to achieving net-zero emissions by 2070 and reducing the carbon intensity of its economy by 45 per cent by 2030. At the same time, the country’s construction sector is expanding rapidly, driven by urbanisation, infrastructure development, housing demand and industrial growth. Cement, as one of the most widely used construction materials, sits at the heart of this transition. It is indispensable to development, but also central to the challenge of reducing embodied carbon in buildings and infrastructure.
Moderated by Nitika Krishan, Senior Urban Infrastructure and Sustainable Policy Consultant, the panel featured:
- Kiranmai Sanagavarapu, Director, Low Carbon Solutions, Fuller Technologies;
- Dr Hemantkumar Aiyer, VP and Head R&D, Nuvoco Vistas Corp Ltd;
- Devika Wattal, Innovation Lead, Global Cement and Concrete Association (GCCA);
- Dr Sunita Purushottam, MD, GBPN India (Global Buildings Performance Network); and
- Vaibhav Rathi, Senior Technical Advisor, GIZ (the German Agency for International Cooperation)
Setting the tone for the discussion, Nitika Krishan underlined the scale of the challenge before the sector. “The question before us is no longer whether we build, but how we build sustainably,” she said. She pointed out that construction accounts for nearly 40 per cent of global energy-related carbon emissions when both operational and embodied carbon are considered. Cement production, she added, remains one of the hardest industrial processes to decarbonise.
For India, this is not merely an environmental issue. It is a development issue, a competitiveness issue and increasingly, a market issue. As one of the world’s largest cement producers and among the fastest-growing construction markets, India’s material choices will influence the carbon trajectory of its built environment for decades. As Krishan observed, sustainability solutions in economies such as India must not remain limited to laboratory success. They must be scalable, commercially viable and practical at national level.
The innovation gap: From technology to market
Experts believe that there is a need to bridge the innovation gaps for making decarbonisation in cement and concrete scalable. Devika Wattal of GCCA, explained, “The starting point must be the core cement manufacturing process itself. The first and foremost is the heart of our process, the heart of cement manufacturing. How do we reduce clinker? That is always a topic where industry is working very intrinsically.”
Clinker reduction remains one of the most important pathways for lowering emissions in cement. Since clinker production is energy-intensive and chemically emits carbon dioxide, reducing the clinker factor through supplementary cementitious materials (SCMs), blended cements and new chemistries can have a significant impact. Wattal also noted that carbon capture, utilisation and storage (CCUS) will have a role, though it may not be the first lever for all markets.
However, she stressed that innovation cannot stop at technology development. A solution that works in the lab must also be adaptable to industry, scalable in production and acceptable in construction practice. “It is important for that innovation to be adaptable, to be scalable, and so that it can be executed in real time,” she said.
Wattal also called for stronger enabling systems around innovation. These include performance-based standards, product-level embodied carbon databases and clearer frameworks for evaluating green materials. Without these, low-carbon cement products may struggle to compete with conventional materials in procurement and design.
R&D must balance carbon, cost and performance
Bringing in the R&D perspective into the discussion, Dr Hemantkumar Aiyer of Nuvoco Vistas emphasised that low-carbon cement development cannot be treated as a single-variable exercise. Cement must perform in real construction conditions. It must deliver strength, durability, consistency and cost competitiveness, while also reducing carbon.
“The root of understanding and balancing all these aspects lies in materials, and knowing the materials,” he said.
According to Dr Aiyer, R&D teams must understand the variability of raw materials such as fly ash, slag and clinker. Different sources produce different material behaviours. This makes mix optimisation, material characterisation and processing-property relationships critical. When performance is affected, cement manufacturers must understand how strength enhancers, admixtures and other performance chemicals interact with the material system.
He also linked material science with process efficiency. Clinkerisation takes place at extremely high temperatures, around 1,400 to 1,450 degrees Celsius. Any improvement in raw mix design, process control or energy optimisation can, therefore, help reduce emissions and cost. Dr Aiyer pointed to artificial intelligence-based optimisation, Cement 4.0 tools and advanced software as important enablers for real-time process and material control.
“The more you understand the materials, the more you can control it,” he said.
LC3: The promise is proven, the sequencing is not
Limestone calcined clay cement, commonly referred to as LC3, has attracted global attention because it can reduce clinker content significantly by using calcined clay and limestone while maintaining performance in many applications. Kiranmai Sanagavarapu of Fuller Technologies said the technology itself has already moved beyond proof of concept. Fuller Technologies has worked with calcined clay technology for nearly two decades and has seen plants running in France and Ghana. These plants, she said, are meeting local and national specifications, while the economics are beginning to make sense.
“The calciner is performing, the economics is stacking up, it is making business sense to produce,” she said.
But if the technology is viable, why has adoption not scaled faster? For Sanagavarapu, the answer lies in project sequencing. Too often, clay characterisation happens after equipment is specified. This, she warned, is a backward approach because calciner design depends on clay mineralogy, kaolinite content, iron levels, reactivity, moisture and other variables.
“If you don’t know what your deposit looks like before you commit for the equipment, you are, in a way, going blind into designing,” she said.
She also identified permitting and plant integration as major bottlenecks. Environmental clearances, mining permissions and local regulatory approvals must begin early. Similarly, calcined clay must be integrated into existing grinding, blending and logistics systems from the design stage, not treated as an afterthought during commissioning.
India already has IS 18189:2023 standard for LC3, but Sanagavarapu pointed out that the standard is not yet visible enough in procurement documents. “The gap between what is technically being permitted and what the procurement is asking is the single biggest bottleneck,” she said.
In her view, successful scale-up depends on getting the sequence right: clay characterisation first, permitting in parallel, standards aligned with construction, and integration built into plant design.
India’s LC3 journey: Progress, but demand remains thin
Providing details of India’s LC3 commercialisation experience, Vaibhav Rathi of GIZ noted that JK Cement carried out the first commercial production of LC3 at its Rajasthan plant, followed by JK Lakshmi Cement three months later. These initiatives were supported by the International Climate Initiative of the Government of Germany, with IIT Delhi contributing deep institutional knowledge on LC3 research and BIS certification.
Rathi said India’s early experience has produced clear lessons. One of the biggest was the need to build capacity among regulators. While BIS certification existed, State Pollution Control Boards were unfamiliar with the technology and unsure about the approval pathway.
“The capacity building is not just needed amongst the producer and the users of the cement, but also the regulators who are working with this technology for the first time,” he said.
He also highlighted the need for better information on China clay deposits. Since China clay is currently classified as a minor mineral, centralised data on availability, quality and location is limited. If cement manufacturers are to adopt LC3 at scale, stronger mineral intelligence will be important.
The third issue is demand. LC3 has already been used in projects such as Palava City in Mumbai and Noida International Airport, but these remain limited examples. “It is in a chicken and egg situation,” Rathi said. “Cement companies are saying we need more demand, and users are saying there is not enough cement available.”
Public procurement, he suggested, could help break this cycle. If agencies such as CPWD and other public bodies begin testing, accepting and specifying LC3, it could create the market confidence needed for cement companies to invest in production and storage.
Building codes must catch up with innovation
Dr Sunita Purushottam of GBPN India argued that material choices will determine built environment emissions over the long term, but India’s current policy signals remain fragmented. Although LC3 has received BIS recognition, she pointed out that building codes, municipal bylaws, schedules of rates and sustainability codes do not yet provide uniform guidance on low-carbon cement.
“The current cement regulations are largely prescriptive and favouring traditional materials,” she said. This limits the ability of alternative materials to compete on performance, durability and emissions.
Dr Purushottam also raised the issue of taxation. Cement, including LC3, currently falls under the same GST bracket as conventional cement. A differentiated tax structure, she argued, could help accelerate market adoption. “In order for the market to demand LC3, that differentiation in the GST could go a long way,” she said.
She noted that green building certifications such as IGBC and GRIHA are already creating demand for low-carbon materials by assigning points for embodied carbon and sustainable material use. However, she said large-scale adoption will require regulatory mandates, particularly through building codes and state-level notifications.
She also cautioned that low-carbon cement alone does not solve the entire building performance problem. A material may reduce embodied carbon, but the operational carbon of a building depends on thermal performance, design, insulation and energy use. “The energy part has two elements,” she said. “One is the embodied carbon of the material itself, and the other is the operational carbon.”
Collaboration is the bridge between invention and impact
Wattal said GCCA sees innovation as a strategic priority and works through platforms that connect industry with academia and start-ups. “There is no way we will decarbonise our sector without innovation,” she said.
However, she stressed that research must be connected to actual industry challenges. Innovations developed in isolation may fail when they encounter real-world barriers such as raw material variability, plant integration, cost, standards and finance. Start-ups, too, need industry mentorship and scale-up pathways.
Wattal also flagged the importance of finance. Even strong technologies may struggle to attract investment if there is no common understanding of bankability. “We have always put projects into, is this a bankable project? But the definition of a bankable project has never been defined,” she said.
For India, she saw strong potential in its academic and start-up ecosystem, but said the challenge lies in alignment and prioritisation. The country has the research base, industrial capacity and market size. What it now needs is a coordinated route from innovation to deployment.
There is a practical concern for cement manufacturers: how can existing plants be adapted for lower emissions without compromising reliability or commercial viability?
Kiranmai Sanagavarapu addressed, “The reliability risk in calcined clay retrofit is definitely real, but it is almost always self-inflicted. The risk arises when a new process is added to an existing circuit without properly redesigning grinding and blending configurations.”
Existing cement plants, she explained, can take two broad routes. The first is external sourcing of calcined clay combined with mill optimisation. This requires lower capital investment and can potentially move in 12 to 18 months if other conditions are in place. It may reduce emissions by around 20 to 30 per cent. The second route is integrated calcination on site, which requires higher capital expenditure and longer lead times, but provides greater control over quality, supply and emissions reduction potential.
For Sanagavarapu, the principle is simple: low-carbon retrofits must be designed with intent. “Design it with an intent properly from the start. Start in the market conditions where the economics are already working,” she said.
Circularity: The overlooked advantage
According to Vaibhav Rathi, fly ash and slag are already well established in cement and construction (C&D), but construction and demolition waste remains underutilised. “C&D waste is a growing business opportunity which not many have taken up,” he said. India’s continuous construction and demolition activity creates huge volumes of waste, much of which contributes to air pollution, land degradation and material inefficiency. With the right processing and standards, this waste can be converted into useful construction products.
Rathi also pointed out that LC3 has a circular economy dimension that is often overlooked. It can use low-grade kaolin-rich clay left behind after high-grade clay is extracted for other applications. “LC3 is not only a low-carbon solution, but also a circular economy solution,” he said.
At the same time, he cautioned that LC3 in India is not yet cheap because it has not reached scale. Site-specific techno-commercial feasibility studies, supported jointly by development agencies and industry, could help companies assess whether LC3 production makes technical and financial sense at a given location.
Dr Purushottam added that India must address both low-carbon cement and construction waste together. “Both low-carbon cement and C&D waste go hand in hand. India does not have an option but to work on both,” she said.
Dr Aiyer called for policy shifts from both government and industry, including preferential purchasing of sustainable materials, minimum supplementary cementitious material requirements in public and public-private projects, and faster regulatory implementation. “If we can fast-track the regulatory standards and their implementation on the ground, that is the way to go,” he said.
From green ambition to green construction
Cement innovation is no longer only about chemistry. It is about systems. Low-carbon cement will scale only when technology, standards, procurement, finance, regulation, education and construction practice move together.
LC3 and other low-carbon technologies have shown promise. India has early commercial examples, strong research capability and growing market interest. But mainstream adoption will depend on whether demand can be created, regulators can be capacitated, standards can be embedded in procurement, and manufacturers can see a clear business case.
For a country building at India’s scale, the opportunity is enormous. Cement will continue to be central to infrastructure and urban development. The challenge now is to ensure that the cement used in India’s growth story carries a lower carbon burden.
- Rakesh Rao
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Concrete
Indian Railways Plans Green Fly Ash Transport Network
Published
2 weeks agoon
June 27, 2026By
admin
Specialised rail logistics will move fly ash from power plants to infrastructure industries.
New Delhi
Indian Railways is planning a large-scale green logistics initiative to transport fly ash from thermal power plants to industries where it can be reused in infrastructure and construction activities.
The initiative was discussed during a review meeting chaired by Union Minister for Railways Ashwini Vaishnaw. Union Ministers of State for Railways V Somanna and Ravneet Singh Bittu were also present.
India generates nearly 340 million tonnes of fly ash every year from thermal power plants. The proposed initiative aims to create an efficient rail-based transport system using specialised containers and dedicated logistics arrangements to move fly ash safely from power plants to end-use industries.

Fly ash is widely used in road construction, cement manufacturing, brick production, concrete, blocks and boards. By improving its movement through the railway network, the initiative is expected to support better utilisation of this industrial by-product while reducing environmental concerns linked to storage and disposal.
The move also aligns with India’s circular economy goals by converting waste from thermal power generation into a useful raw material for the construction and infrastructure sectors. Wider availability of fly ash can help reduce material costs in areas such as bricks and cement, supporting more affordable infrastructure and housing development.
Through this initiative, Indian Railways aims to provide a cleaner, safer and more organised transport solution for fly ash, turning an environmental challenge into an infrastructure resource.
Gears, drives, and motors have evolved from essential mechanical components into strategic enablers of reliability, efficiency, and sustainability in modern cement plants. ICR explores how advanced motion technologies, predictive maintenance, digitalisation, and intelligent drive systems are helping cement manufacturers reduce downtime, optimise energy use, and build future-ready operations.
As the Indian cement industry prepares for another phase of capacity expansion, the focus is shifting from merely increasing production volumes to improving operational efficiency, reliability, and sustainability. According to industry estimates, India is expected to add nearly 160–170 million tonnes of cement capacity between FY26 and FY28, driven by infrastructure investments, urbanisation, and housing demand. In this environment, gears, drives, and motors have emerged as critical enablers of productivity, forming the backbone of every major process from raw material extraction and grinding to clinker production and cement dispatch.
Motors alone account for nearly 60 per cent to 70 per cent of industrial electricity consumption globally, according to the International Energy Agency (IEA), while rotating equipment failures remain among the leading causes of unplanned downtime across heavy industries. In cement plants, where equipment operates under high loads, extreme dust conditions, elevated temperatures, and continuous-duty cycles, the performance of gears, drives, and motors directly influences energy consumption, maintenance costs, plant availability, and overall profitability. As digitalisation and Industry
4.0 technologies gain momentum, these systems are evolving from passive mechanical components into intelligent assets capable of delivering real-time operational insights.
Why gears, drives, and motors are the backbone of cement plant operations
Every major process in a cement plant depends on the seamless operation of gears, drives, and motors. Raw mills, vertical roller mills, crushers, kiln drives, conveyor systems, fans, and clinker coolers all rely on rotating equipment to maintain continuous production. A failure in any one of these systems can disrupt entire process chains, highlighting their strategic importance.
Modern cement plants process thousands of tonnes of material daily, requiring equipment capable of transmitting enormous torque while maintaining precision and reliability. Kiln drives and grinding systems, in particular, operate under some of the highest mechanical loads found in industrial manufacturing. The ability of gears and motors to withstand these conditions directly impacts plant throughput and production stability.
Satish Maheshwari, Chief Manufacturing Officer, Shree Cement says, “Effective lubrication management remains one of the most critical factors in extending the lifespan of cement plant drive systems. Proper lubrication, supported by regular oil analysis, vibration diagnostics, and condition monitoring, helps minimise wear, prevent unexpected failures, and maintain the integrity of critical components such as gearboxes, motors, and drive assemblies. By identifying potential issues at an early stage, plants can move from reactive maintenance to a more proactive and reliability-focused approach.”
“Smart motors, intelligent drives, and next-generation gearboxes are set to redefine cement plant maintenance and performance. Equipped with embedded sensors, IoT connectivity, digital twins, and AI-driven diagnostics, these technologies enable real-time condition monitoring, predictive maintenance, and seamless digital integration. As the industry embraces Industry 4.0, smart drive systems will play a pivotal role in improving energy efficiency, reducing downtime, and optimising asset performance across the cement manufacturing value chain” he adds.
Industry studies suggest that rotating equipment accounts for a significant proportion of maintenance expenditure in process industries. Effective design, selection, and maintenance of gears, drives, and motors therefore have a direct influence on asset utilisation, operational efficiency, and total cost of ownership.
The cost of downtime: reliability challenges in rotating equipment
Unplanned downtime remains one of the most expensive challenges facing cement manufacturers. Industry estimates indicate that a major failure involving a critical gearbox, kiln drive, or grinding mill can result in production losses running into lakhs of rupees per hour, depending on plant capacity and operating conditions.
Sanjeev Arora, President – Motion Business & IEC LV Motors Division, ABB India says, “One of the most significant shifts taking place in industrial decision-making today is moving away from evaluating equipment based solely on upfront capital cost toward understanding total cost of ownership (TCO). In a typical motor system, the purchase price often represents only a small fraction of the total lifecycle cost however energy consumption, maintenance requirements, downtime and operating efficiency account for the vast majority of long-term operational expenses. For cement manufacturers operating in highly competitive markets, this distinction is critical.”
“A high efficiency motor paired with an appropriately configured variable speed drive may require a higher initial investment, but the long-term benefits are substantial. Reduced electricity consumption, lower maintenance needs, longer service intervals and improved process stability can deliver faster payback and stronger profitability over time” he adds.
Cement plants present a particularly challenging environment for rotating equipment. Dust ingress, thermal fluctuations, shock loads, vibration, shaft misalignment, and lubrication contamination contribute significantly to equipment degradation. Studies by SKF indicate that nearly 50 per cent of bearing failures are linked to lubrication issues and contamination, while improper alignment and vibration-related problems remain leading causes of gearbox and motor failures.
Energy-efficient motors and drives: unlocking operational savings
Energy is one of the largest operating expenses for cement manufacturers, often accounting for 25 per cent to 35 per cent of total production costs. Grinding operations alone can consume nearly 60 per cent to 70 per cent of a plant’s electrical energy, making energy-efficient motors and drives a strategic investment.
According to the International Energy Agency, high-efficiency motors combined with Variable Frequency Drives (VFDs) can reduce energy consumption by 20 per cent to 30 per cent in suitable applications. By matching motor speed and torque to actual process requirements, VFDs minimise unnecessary power consumption while reducing mechanical stress on equipment, improving both efficiency and reliability.
Advances in gearbox design and power transmission technologies
Modern gearbox technology has evolved significantly in response to the increasing demands of cement manufacturing. Advanced materials, case-hardened gears, optimised tooth profiles, improved surface finishing, and enhanced lubrication systems are helping reduce friction, wear, and thermal loading.
Girish Hanchate, Director – Industrial Market, India SKF India (Industrial) says, “Smart diagnostics are significantly improving the lifecycle of gears, motors, and other rotating equipment by enabling a shift from reactive maintenance to condition-based asset management. Hidden issues such as vibration anomalies, bearing defects, misalignment, and temperature fluctuations can quietly reduce plant throughput by 10 per cent to 20 per cent while increasing energy consumption long before a breakdown occurs. By leveraging advanced sensors, predictive analytics, machine learning, and real-time monitoring of vibration, temperature, and motor current, cement manufacturers can detect developing faults early, optimise maintenance schedules, and prevent costly secondary damage. This not only improves reliability but also supports energy efficiency and sustainability objectives.”
“The next major evolution in drive and bearing technology lies in the development of fully integrated smart mechanical ecosystems that combine high-performance bearings, advanced lubrication management, and digital intelligence. Sensor-enabled condition monitoring embedded directly within bearings and drive systems allows operators to capture critical operational data at the source, enabling predictive maintenance and real-time performance optimisation. Innovations such as SKF’s VA9A1 Spherical Roller Bearing series, engineered specifically for demanding cement applications such as crushers and kilns, demonstrate this trend. By increasing internal bearing space and optimising lubricant flow, these designs improve grease retention, reduce wear, minimise downtime, and create more resilient, energy-efficient rotating equipment systems for the future of cement manufacturing” he adds.
Manufacturers are increasingly focusing on compact, high-torque gearbox designs capable of delivering higher power density while maintaining service life. Innovations such as condition-monitored gear systems, improved sealing technologies, and modular gearbox architectures are simplifying maintenance while enhancing operational reliability.
Predictive maintenance, condition monitoring, and asset health management
The shift from reactive to predictive maintenance is transforming asset management across the cement industry. Technologies such as vibration monitoring, thermography, oil analysis, ultrasound testing, and motor current signature analysis are enabling operators to identify potential failures before they occur.
Research by Deloitte suggests that predictive maintenance can reduce breakdowns by up to 70 per cent and lower maintenance costs by 25 per cent. In cement plants, where shutdown windows are limited and equipment operates continuously, predictive maintenance offers a powerful tool for improving reliability and extending asset life.
Digitalisation, industry 4.0, and the rise of intelligent drive systems
Industry 4.0 technologies are redefining the role of gears, drives, and motors. Smart sensors embedded within motors, bearings, and gear systems can continuously monitor temperature, vibration, load, lubrication condition, and energy consumption.
Girish Hanchate says, “As the industry embraces automation, sustainability, and digital transformation, the importance of intelligent motion technologies will continue to grow. The convergence of advanced engineering, predictive maintenance, and Industry 4.0 solutions is creating a new generation of cement plants where reliability, efficiency, and sustainability work together to deliver long-term value. For cement manufacturers navigating increasing production demands and environmental expectations, investing in smarter gears, drives, and motors is no longer optional—it is a business imperative.”
Cloud-based monitoring platforms and Industrial Internet of Things (IIoT) architectures enable maintenance teams to access equipment health data remotely, improving visibility across geographically dispersed operations. Advanced analytics and
artificial intelligence are further enhancing fault detection capabilities, enabling more accurate maintenance planning.
The emergence of digital twins represents another significant development. By creating virtual replicas of physical assets, operators can simulate operating conditions, predict failures, optimise maintenance schedules, and improve lifecycle management decisions. These technologies are helping transform rotating equipment into intelligent assets that actively contribute to operational decision-making.
Building future-ready cement plants through smart motion technologies
The future of cement manufacturing will depend heavily on the ability to integrate mechanical reliability with digital intelligence. Smart motion technologies combine high-efficiency motors,
intelligent drives, condition monitoring systems, and automation platforms to create more responsive and efficient operations.
Sustainability goals are also accelerating investment in advanced motion technologies. Reduced energy consumption, improved equipment efficiency, and extended asset life contribute directly to lower carbon emissions and reduced resource consumption.
These benefits align closely with the industry’s decarbonisation objectives.
As capacity expansions continue across India, future-ready cement plants will increasingly prioritise reliability, flexibility, and data-driven decision-making. Organisations that successfully integrate smart motion technologies into their operations will be better positioned to reduce costs, improve productivity, and maintain a competitive advantage in a rapidly evolving market.
Conclusion
Gears, drives, and motors are no longer viewed solely as mechanical components; they have become strategic assets that influence every aspect of cement plant performance. Their reliability affects production continuity, their efficiency impacts operating costs, and their digital capabilities increasingly shape maintenance and operational strategies.
- –Kanika Mathur
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