Economy & Market

The demand was created by the economic reforms that started in early 1990s

Published

15 years ago

January 8, 2011

admin

Sumit Banerjee, Vice Chairman, Reliance Cementation, discusses the cement industry from its infancy to growth, prospects of value-added products, environmental issues and future in an interview with Indian Cement Review.What was the major impact of decontrol? The most favourable impact of decontrol was that it pushed the industry’s growth to a higher trajectory. The process began in 1982 with partial decontrol and by 1989 the industry was completely out of government control. Had the industry been under control, prices would have still remained administered and, it would have not grown enough.Post-delicensing what course did the cement industry take in terms of capacity and demand? The capacity build-up happened in the 1990s, which was necessary to meet the increasing demand generated by liberalisation of the Indian economy. The buoyant economic growth and step up in investments created enormous demand for cement, which attracted investment into the cement industry. Increasing number of players and market determined pricing resulted in greater competitiveness, higher efficiency and increased productivity. The economies of scale expanded. The industry started setting up of one million tonne capacity plants, which was a complete novelty at that time. On hindsight, one could say that the industry did not do much for promoting demand. One more interesting thing that has emerged from decontrol is that India today is the second largest cement producer in the world and also the most efficient producers in terms of blended cement and therefore, of fuel and energy consumption.What were the factors for attracting investments in cement? The first point is the demand. Post delicensing, the cement industry could generate surplus cash, which they reinvested in setting up new capacities. Money was spent on state-of-the-art plants, innovation, expansion, etc. However, the demand was created by the economic reforms that started in early 1990s. Cement is one of the industries that made most of this opportunity.What is the comparative cost of production viz-a-viz other countries like China, given the increase in mining lease, royalty, coal prices in recent years?To compare costs of cement production across geographies, one should consider the differences in cost of labour, power, interest, taxation inherited by different economies. Hence the comparison should really be done considering two parameters – one cement price and, the other profitability of the cement industry in those economies. Prima facie, going by the efficiency of large cement plants, India should be in the top quartile of cost planet globally. There would be very few countries where the cost could be lower. China is one of those countries, where the comparative cost would be lower. But of course there are few reasons to it. Firstly, the interest cost is much lower and second there is a lot of inland water transportation there. Nevertheless, profitability of many Chinese cement companies is much lower as compared to India. Indonesian cement companies are quite profitable and so are the companies in New Zealand which are even more profitable. But the highest cement prices are in New Zealand although the market there is quite small.In India, there are certain things that work against the industry. Here, tax incidence is very high and logistic efficiency is low. In China and USA, cement is hardly hauled by road over long distances. There cement is transported in bulk, by waterways and, only the last mile is by road. So logistics cost, which is one of the large components of the cost structure in India, is lower in these countries, on apple to apple basis.What about input costs?Regarding energy, the Indian cement companies have somehow managed to resolve the problems. For example, look at the captive power plants. Nowhere in the world, power plants of 30 MW or 60 MW are set up for captive use. Indian cement companies have time and again been able to justify captive power plants on the twin considerations of cost & reliability. To address the issue of high coal cost, high power cost, the industry has found solutions in other areas of the cost structure. For example, India has reduced cost through adoption of blended cement. India is the highest amongst the major cement producing countries in terms of blending ratio, and is the lowest in the clinker factor. Blended cement, both fly-ash and slag blends, have been very well accepted in many applications. Ash blending can go up to 35 per cent while in case of slag it can go up to 55 per cent.What about composite cement, are they cheaper than blended?Composite cement is a blend of both flyash and slag. The Bureau of Indian Standards as of now, has approved only blends of either flyash-based PPC or slag-based PSC cement. In Europe, America and in some of the Asian countries, composite cement has already been approved, with controls on the proportion of blending depending on the properties required for different applications.Bureau of Indian Standards is a body where all the stake holders come from different spheres comprising of users, manufacturers, technical experts, etc. So far, in BIS, there is no unanimity on introduction of composite cement. But I guess it will be only a matter of time when composite cement will also be introduced in India.What are the growth drivers for cement in coming years? I think the growth drivers would be infrastructure, industrial, commercial and housing. Urban housing will not show magical growth while industrial and commercial growth will be tardy. Our big hope is pinned on infrastructure and rural housing. A good monsoon this year and year on year, will also generate demand growth for rural housing.What is the proportion of branded and unbranded cement?Cement is a branded commodity in India because 80-85 per cent is still sold in bags. Cement is sold in retail, thus it has to be branded. Even bulk buyers prefer branded cement. The buyers trust a given brand for quality and are therefore ready to pay premium price for top brands. There are some national brands which are lesser known in some regions while there are localised brands which perform well since they are regional leaders. There is brand hierarchy in every market, but in the retail segment there is no cement without a brand name.What about value-added products? Are they catching up?Apart from ready-mix concrete (RMC) the demand for value-added products are very low in India. Prefab which includes concrete pavements, concrete hume pipes, railway sleepers, etc are termed as concrete products. Currently, the market size of these concrete products is very small but has tremendous potential to grow. There are countries like Netherlands, that are leaders in concrete products, where the houses are completely built using prefab concrete whereas, in India most constructions are still made using on-site concrete.Are cement companies foraying into prefab business, especially RMC? Cement companies are not that keen on investing in the prefab business because of its small current market size. Ultimately, the concrete product will become a value-added product and will have to be made nearer to the consumption point. Therefore, smaller players will develop this segment, like in case of RMC. RMC industry has grown faster than cement consumption. If cement consumption is growing at 5-9 per cent, RMC is growing at 25-30 per cent, particularly in larger cities. Other value-added segments are insignificant today.RMC is a low capital industry but profit margins are absolute wafer thin. An RMC plant can be set up by investing Rs 1.5 crore to Rs 5 crore. There is no entry barrier at this cost. In terms of the growth, the future is bright. Today the RMC penetration has just touched 10-15 per cent. The returns will maximize when this grows beyond 50 per cent, and also industry consolidation happens.What are the environmental issues facing the cement industry? Cement industry, globally has got a bad name in the climate change debate, because it generates 4-5 per cent of the CO2 globally. This apart, the most important environmental benefit of cement manufacturing is the possibility of incineration of hazardous materials. In Europe, the debate is intense and companies are keenly looking at alternative sources of disposal of these hazardous materials. So, with the pressure of CO2 and the urgent need for safe disposal of hazardous material, European companies have recognised that cement kiln is a better way to dispose hazardous wastes instead of an incinerator and this has been technically verified. In Europe, rules on hazardous waste disposal are very stringent. In India, the rules are inadequate, but they will become tough over time, opening up this as a great opportunity for the cement industry.What about use of green energy in cement industry? To begin with ‘Green Energy’ is a debatable subject because of its unclear definition. For example, I would state that bio-fuel is not green. Green energy will rather include all those sources that can substitute fossil fuel or non-renewable sources, like wind, solar and, hydel power. They are green because they serve two purposes. Firstly, they are non depleting natural resources, and secondly they do not generate CO2. In case of cement industry, green energy will be used only when there is permitting and regulatory environment which will incentivise its use. The beginning has been made but in a small way. We have few examples of companies like ACC and Madras Cement, which have set up wind farms.In Europe, there are cement companies completely running on non-conventional fuels and many plants have substituted conventional fuels to the extent of 25-30 per cent. In India, the substitution rate has just reached 1-2 per cent.Many of the upcoming projects have captive power plant? Will there be cases where wind/solar power plants will come up meet all the energy needs? Unless the permitting and regulatory environment nudges investment in that direction, nothing magical will happen. There will only be stray cases of green energy usage in cement plants. In a smaller move, a legal requirement is being introduced wherein any power generator using conventional sources will have to generate a certain percentage of power from green sources or, will have to buy credit from other green generators. To make this smoother, there has to be a market for credits of green power generation. There is huge investment potential in solar power and when these plants come up, the credit market for green power could open up.About Reliance Cement Reliance Cement is setting-up its first two cement plants – one each in Madhya Pradesh and Maharashtra with a combined capacity of 10 million tonnes a year with satellite grinding plants. Financial closure for one has been achieved. Land has already been acquired and, letters of intent for the major & critical equipment issued. The construction work will begin in the current financial year and will be completed by 2013.

Concrete

The primary high-power applications are fans and mills

Published

2 weeks ago

October 10, 2025

admin

Alex Nazareth, Whole-time Director and CEO, Innomotics India, explains how plants can achieve both cost competitiveness and sustainability by lowering emissions, reducing downtime and planning for significant power savings.

As one of the most energy-intensive industries, cement manufacturing faces growing pressure to optimise power consumption, reduce emissions and improve operational reliability. Technology providers like Innomotics India are enabling this transformation by combining advanced motors, AI-driven digital solutions and intelligent monitoring systems that enhance process stability and reduce energy costs. From severe duty motors built for extreme kiln environments to DigiMine AI solutions that optimise pyro and mill operations, Alex Nazareth, Whole-time Director and CEO, Innomotics India, explains how the company is helping cement plants achieve measurable energy savings while moving closer to their sustainability goals.

How does your Energy Performance Contracting model typically reduce power consumption in cement plants—e.g., MWh saved?
Our artificial intelligence-based DigiMine AI Pyro and Mill solutions developed specifically for the cement industry, supports our customers in improving their process stability, productivity and process efficiency. In Pyro, this is achieved by optimising fuel consumption (Coal / AFR), reducing Specific Heat Consumption and reduction in emissions (CO2, SOx and NOx) through continuous monitoring of thermodynamics in pyro and recommending set-points of crucial parameters in advance for maintaining stable operations.
Within the mill, this is achieved by improving throughput, reduce energy / power consumption and maintaining stable operations on a continuous basis. Our ROI-based value proposition captures the project KPIs like reduction of coal usage, increase of AFR, reduction of specific heat consumption (Kcal / Kg), reduction of specific power consumption (KWH / tonne), reduction of emissions, etc., by a specific percentage. This gives clarity to our customers to understand the investment vis-à-vis savings and estimate the recovery time of their investment, which typically is achieved within one year of DigiMine AI Pyro and Mill solutions implementation.

What role do digitalisation and motor monitoring play in overall plant energy optimisation?
Motors are being used extensively in cement production, and their monitoring play crucial role in ensuring continuous operation of applications. The monitoring system can automatically generate alerts for any anomaly / abnormalities in motor parameters, which allows plant team to take corrective actions and avoid any major equipment damage and breakdown. The alerts help maintenance team to plan maintenance schedule and related activity efficiently. Centralised and organised data gives overview to the engineers for day-to-day activities. Cement is amongst the top energy intensive industries in comparison to other industries. Hence, it becomes critically important to optimise efficiency, productivity and up-time of plant equipment. Motor monitoring and digitalisation plays a vital role in it. Monitoring and control of multiple applications and areas
within the plant or multiple plants becomes possible with digitalisation.
Digitalisation adds a layer on top of OT systems, bringing machine and process data onto a single interface. This solves the challenges such as system silo, different communications protocol, databases and most importantly, creates a common definition and measurement to plant KPIs. Relevant stakeholders, such as engineers, head of departments and plant heads, can see accurate information, analyse it and make better decisions with appropriate timing. In doing so, plant teams can take proactive actions before machine breakdown, enable better coordination during maintenance activities while improving operational efficiency and productivity.
Further using latest technologies like Artificial Intelligence can even assist operators in running their plant with minimal requirement of human intervention, which allows operators to utilise their time in focusing on more critical topics like analysing data to identify further improvements in operation.

Which of your high-efficiency IEC low-voltage motors deliver the best energy savings for cement mills or fans?
Innomotics India offers a range of IEC-compliant low-voltage motors engineered to deliver superior performance and energy savings, particularly for applications such as cement mills, large fans, and blowers. Innomotics has the complete range of IE4 motors from 0.37kW to 1000kW to meet the demands of cement industry. The IE5 range is also available for specific requirements.

Can safe area motors operate safely and efficiently in cement kiln environments?
Yes, safe area motors are designed to operate reliably in these environments without the risk of overheating. These motors have ingress protection that prevents dust, moisture ingress and can withstand mechanical stress. These motors are available in IE3 / IE4 efficiency classes thereby ensuring lower energy consumption during continuous operation. These motors comply with relevant Indian as well as international standards.

How do your SD Severe Duty motors contribute to lower emissions and lower cost in heavy duty cement applications?
Severe duty motors enhances energy efficiency and durability in demanding cement applications, directly contributing to lower emissions and operational costs. With high-efficiency ratings (such as IE3 or better), they reduce power consumption, minimising CO2 output from energy use. Their robust design handles extreme heat, dust and vibration—common in cement environments—ensuring reliable performance and fewer energy losses.
These motors also lower the total cost of ownership by reducing downtime, maintenance and replacement frequency. Their extended service life and minimal performance degradation help cement plants meet sustainability targets, comply with emissions regulations and improve overall energy management—all while keeping production consistent and cost-effective.

What pump, fan or compressor drive upgrades have shown approximately 60 per cent energy savings in industrial settings and can be replicated in cement plants?
In the cement industry, the primary high-power applications are fans and mills. Among these, fans have the greatest potential for energy savings. Examples, the pre-heater fan, bag house fan, and cooler fans. When there are variations in airflow or the need to maintain a constant pressure in a process, using a variable speed drive (VSD) system is a more effective option for starting and controlling these fans. This adaptive approach can lead to significant energy savings. For instance, vanes and dampers can remain open while the variable frequency drive and motor system manage airflow regulation efficiently.

Concrete

We conduct regular internal energy audits

Published

2 weeks ago

October 10, 2025

admin

Shaping the future of low-carbon cement production involves integrating renewables, digitalisation and innovative technologies. Uma Suryam, SVP and Head Manufacturing – Northern Region, Nuvoco Vistas, gives us a detailed account of how.

In an industry where energy consumption can account for a significant portion of operating costs, cement manufacturers are under increasing pressure to adopt sustainable practices without compromising efficiency. Nuvoco Vistas has taken a decisive step in this direction, leveraging digitalisation, renewable energy and innovative technologies to drive energy efficiency across its operations. In this exclusive conversation, Uma Suryam, SVP and Head Manufacturing – Northern Region, Nuvoco Vistas, shares its approach to energy management, challenges of modernising brownfield plants and its long-term roadmap to align efficiency with India’s net-zero vision.

How has your company improved energy efficiency over the past five years?
Over the past five years, we have prioritised energy conservation by enhancing operational efficiency and scaling up renewable energy adoption. Through strategic fuel mix optimisation, deployment of cleaner technologies, and greater integration of renewables, we have steadily reduced our environmental footprint while meeting energy needs sustainably.
Technological upgrades across our plants have further strengthened efficiency. These include advanced process control systems, enhanced trend analysis, grinding media optimisation and the integration of solar-powered utilities. Importantly, grid integration at our key plants has delivered significant cost savings and streamlined energy management.
A notable milestone has been the expansion of our solar power capacity and Waste Heat Recovery Systems (WHRS). Our solar power capacity has grown from 1.5 MW in FY 2021–22 to 5.5 MW, while our WHRS capacity has increased from 44.7 MW to 49 MW, underscoring our commitment to sustainable energy solutions.

What technologies or practices have shown the highest energy-saving potential in cement production?
One of our most significant achievements in advancing energy efficiency has been the successful commissioning of a 132 KV Grid Integration Project, which unified three of our major manufacturing units under a single power network. This milestone, enabled by a dedicated transmission line and a state-of-the-art Line-In Line-Out (LILO) substation, has transformed our energy management and operational capabilities.
With this integration, we have substantially reduced our contract demand, eliminated power disruptions, and enhanced operational continuity. Supported by an optical fibre network for real-time communication and automation, this project stands as a testament to our innovation-led manufacturing excellence and underscores Nuvoco’s vision of building a safer, smarter, and sustainable world.

What role does digitalisation play in achieving energy efficiency in your operations?
Digitalisation plays a transformative role in driving energy efficiency across our operations. At Nuvoco, we are leveraging cutting-edge technologies and advanced digital tools to enhance productivity, optimise energy consumption and strengthen our commitment to sustainability and employee safety.
We are developing AI-enabled dashboards to optimise WHRS and kiln operations, ensuring maximum efficiency. Additionally, our advanced AI models evaluate multiple operational parameters — including fuel pricing, moisture content and energy output — to identify the most cost-effective fuel combinations in real time. These initiatives are enabling data-driven decision-making, improving operational excellence and reducing our environmental footprint.

What is your long-term strategy for aligning energy efficiency with decarbonisation goals?
As part of India’s climate action agenda, the cement sector has laid out a clear decarbonisation roadmap to achieve net-zero CO2 emissions by 2070. At Nuvoco, we view this as both a responsibility and an opportunity to redefine the future of sustainable construction. Our long-term strategy focuses on aligning energy efficiency with decarbonisation goals by embracing innovative technologies, alternative raw materials and renewable energy solutions.
We are making strategic investments to scale up solar power installations and enhance our renewable energy mix significantly by 2028. These initiatives are a key part of our broader vision to reduce Scope 2 emissions and strengthen our contribution to India’s net-zero journey, while continuing to deliver innovative and sustainable solutions to our customers.

How do you measure and benchmark energy performance across different plants?
We adopt a comprehensive approach to measure and benchmark energy performance across our plants. Key metrics include Specific Heat Consumption (kCal/kg of clinker) and Specific Power Consumption (kWh/tonne of cement), which are continuously tracked against Best Available Technology (BAT) benchmarks, industry peers and global standards such as the WBCSD-CSI and CII benchmarks.
To ensure consistency and drive improvements, we conduct regular internal energy audits, leverage real-time dashboards and implement robust KPI tracking systems. These tools enable us to compare performance across plants effectively, identify optimisation opportunities and set actionable targets for energy efficiency and sustainability.

What are the key challenges in adopting energy-efficient equipment in brownfield cement plants?
Adopting energy-efficient technologies in brownfield cement plants presents a unique set of challenges due to the constraints of working within existing infrastructure. Firstly, the high capital expenditure and relatively long payback periods often require careful evaluation before investments are made. Additionally, integrating new technologies with legacy equipment can be complex, requiring significant customisation to ensure seamless compatibility and performance.
Another major challenge is minimising production disruptions during installation. Since brownfield plants are already operational, upgrades must be planned meticulously to avoid affecting output. In many cases, space constraints in older facilities add to the difficulty of accommodating advanced equipment without compromising existing layouts.
At Nuvoco, we address these challenges through a phased implementation approach, detailed project planning and by fostering a culture of innovation and collaboration across our plants. This helps us balance operational continuity with our commitment to driving energy efficiency and sustainability.

Concrete

Digitalisation is pivotal in driving energy efficiency

Published

2 weeks ago

October 10, 2025

admin

As energy costs continue to dominate the cement industry, efficiency and sustainability are proving to be vital components. MM Rathi, Joint President, Power Management, Shree Cement, explains the company’s long-term strategy is focused on cutting emissions while powering growth with renewable energy solutions.

Energy efficiency has always been a cost-saving lever for the cement industry. Today, it is the backbone of sustainability and competitiveness. Cement manufacturers are under growing pressure to optimise consumption, diversify power sources and align with decarbonisation targets. Shree Cement has been at the forefront of this transformation, significantly scaling up its green power capacity and embedding advanced technologies across operations. In this exclusive conversation, MM Rathi, Joint President – Power Management, Shree Cement, shares insights on the company’s approach to energy efficiency, challenges in brownfield modernisation and long-term strategies for achieving net zero alignment.

What percentage of your total operational cost is attributed to energy consumption?
At Shree Cement, energy is one of the most significant components of production cost, accounting for nearly 30 per cent to 40 per cent of total operational expenses. Within this, thermal energy typically contributes around 20 per cent to 25 per cent, while electrical energy forms about 10 per cent to 15 per cent. The exact share varies depending on factors such as the fuel mix (coal, pet coke or alternative fuels and raw materials), the power source (grid-based or captive like solar, wind or thermal), raw mix quality, and regional fuel and electricity price variations. This makes energy efficiency and the adoption of sustainable power sources a key focus area, both from a cost and sustainability perspective.

How has your company improved energy efficiency over the past five years?
Over the past five years, Shree Cement has consistently invested in enhancing energy efficiency across operations. Our green power capacity, covering wind, solar and Waste Heat Recovery (WHR), has more than doubled from 245 MW in 2020 to 592 MW in 2025. All grinding units are now equipped with biomass firing facilities, reducing dependence on conventional fuels. From the project stage itself, we prioritise efficiency by selecting advanced technologies such as six-stage kilns with integrated WHR, CFD-designed plants, and equipment fitted with VFDs, centrifugal compressors and high-efficiency fans. We also review and upgrade equipment systematically, replacing fans, compressors, blowers, pumps, boilers and turbines with more efficient options. This continuous approach has reduced costs while significantly advancing our sustainability journey.
What technologies or practices have shown the highest energy-saving potential in cement production?
WHR stands out as one of the most effective solutions, offsetting a significant portion of electricity required for clinker production. Hot air recirculation has also proven highly beneficial in reducing heat losses. Additionally, regular energy audits help us identify opportunities for improvement and implement corrective measures in daily operations. Together, these practices play a critical role in optimising energy efficiency and driving sustainable operations.

What are the key challenges in adopting energy-efficient equipment in brownfield cement plants?
The biggest challenge is the significant upfront investment required for upgradation. Retrofitting existing facilities often involves complex civil and structural modifications, which add costs and extend downtime. Integration is another hurdle, as new high-efficiency equipment may not align seamlessly with older kiln systems, fans, mills or automation setups. These factors make the transition in brownfield plants more resource-intensive and time-consuming compared to greenfield projects.

How do you measure and benchmark energy performance across different plants?
We track key performance indicators such as specific heat consumption and specific power consumption for each unit, benchmarking them against internal and external standards. Thermal Substitution Rate (TSR percentage) is another critical metric, measuring the share of alternative fuels in the thermal energy mix. Internally, we benchmark performance across plants to encourage best practice sharing. Externally, we compare against national averages and align with the Bureau of Energy Efficiency’s PAT (Perform, Achieve, Trade) scheme, which sets Specific Energy Consumption (SEC) baselines and targets for cement plants. This multi-layered approach ensures continuous monitoring, improvement, and industry leadership in energy efficiency.

What role does digitalisation play in achieving energy efficiency in your operations?
Digitalisation is pivotal in driving energy efficiency at Shree Cement. IoT sensors integrated with SCADA and DCS systems allow real-time monitoring of parameters like heat consumption and energy use, moving beyond periodic reports. Our digital platforms consolidate plant data, enabling management to compare metrics such as SPC, SHC, kWh per tonne and kcal per kg across units in real time. This visibility supports data-driven decisions, faster corrective actions, and higher operational efficiency.

How do government policies and incentives influence your energy-saving decisions?
Government policies and incentives strongly shape our energy-saving decisions. The Perform, Achieve, Trade (PAT) scheme sets plant-specific SEC targets. Non-compliance incurs penalties, while compliance earns tradable energy-saving certificates. This ensures energy efficiency is both cost-driven and regulatory. Additionally, subsidies and viability gap funding for renewable energy projects in wind, solar and AFR co-processing help reduce payback periods and make energy-saving investments more viable.

What is your long-term strategy for aligning energy efficiency with decarbonisation goals?
Our long-term strategy aligns energy efficiency with India’s net zero 2070 goals. Key levers include improving efficiency, expanding green electricity, producing more blended cement, and increasing alternative fuel use. Today, more than 60 per cent of our electricity comes from green sources such as solar, wind, and WHR, the highest in India’s cement industry. Our blended cement products, which reduce limestone and fuel consumption, further lower emissions. These products are certified under the GreenPro ecolabel by CII, validating our sustainability practices and environmental standards.