Concrete
Structural Shift in the Cost Curve
Published
3 years agoon
By
admin
The cost curve in the Indian cement industry has been on an upward trajectory. ICR delves into the causes behind it and its impact while endeavouring to answer the important question – how much of this is permanent?
If the financial year 2022 was the year of shipping costs soaring to the highest level, the financial year 2023 started with the coal and pet coke prices moving to the stratosphere in tandem, largely buoyed by the geo-political headwinds with the war in Ukraine, forcing a sanction of a large part of the oil, gas and coal from the Russian sources to the Western world. The fallout of this was a steep hardening of the coal futures, both New Castle and API4 Indexes shot up to the extreme levels it has never seen in the past. While these
were FOB prices, the shipping freight, albeit softening from the stratospheric levels, were still high by any standard.
The Indian cement industry was hugely impacted by the rise in power and fuel prices as this contributes to 30 per cent of the industry cost of producing and distributing cement, the logistics cost still remaining high at 40 per cent of the total costs. The first quarter of FY2023 saw an across the industry rise of above 60 per cent in the power and fuel cost as attached in the graph below (compiled from the quarterly reports of the key industry players).
Market Dynamics
This rise has however cooled down in the recent quarter, but a large part of the rise seems to be permanent and the total shift in the industry cost curve is expected to be 20 per cent higher on power and fuel cost together with the impact of logistics cost. How do we explain this structural shift in cost?
While most of the analysis is based on the spot prices of coal, both in the international and domestic market, which in turn influences the prices of pet coke as well, the private buyers of coal and pet coke do not trade on spot basis for the bulk of their portfolio, which is built on an optimised model for buying a mix of domestic coal (linkage auction, e-auction and market coal), imported coal (RB1,2,3, Indonesian, other sources, etc), domestic pet coke (Nyara, Reliance, IOCL, etc), imported pet coke (U.S. East Coast, Oman, LATAM, etc), such that the landed cost could be minimised on the basis of rupee per kcal (heat value) as the portfolio must be normalised over the range of GCV options.
Private sellers and buyers have experienced in their own way through tenured contracts that inter-dependence in a highly volatile market did demonstrate better results over the long run, but in the short term both sides have engaged in short term opportunism. This has put additional strains in the system and these postures have influenced the spot prices. While the FOB prices started to show distinct ‘out of bound’ movement, the shipping costs remained high throughout this period and only recently have shown a definitive downward trend.
The individual cement players within the industry have very different portfolio of their own, built through the years on an optimisation programme that takes into account the kiln characteristics as well, in accepting a mix of coal or/and pet coke from a myriad of sources, where logistics cost becomes a very dominant factor; with shipping costs soaring, the negative results have been more pronounced for those who have an over-exposure to importation.
One of the important points to be noted is that the Indian coal prices have also gone up by 75 per cent on an average across a range of grades, those who have long term auction linkages still alive, are the outliers benefitting the most. The future direction of the domestic coal prices does not seem to portray a large change as most of the mines have a rising cost to contend with, as stripping ratios continue to rise every year, followed by logistics cost.
Taking on Challenges
The question of power and fuel cost rise should be seen in the long term rather than in the short term, although finding the most optimised mix in terms of cost has remained the area of focus all along. Two of the biggest challenges that urgently require solutions from the industry are as follows:

- Cement industry cannot continue to increase the use of fossil fuel in the mix of inputs: Apart from the emission issue that weighs on the situation (potential abatement costs included), the economics of higher fuel usage weighs far more menacingly on the cost curve. As every linkage auction quantity allocated to the cement industry has been steadily going down, it is expected that the prices will be moving up. The overall allocation still remains highly skewed to the power sector (where cement CPPs also become strong contenders), the overall situation after factoring in logistics issues still show that the domestic coal cost per MW of output has been rising steadily.
- Captive coal mines have remained a challenge in terms of overall cost: The only solution for the long term is to look for captive coal mines that have logistics advantages and where the costs over the long term can be found as a viable option when compared with other sources of coal or pet coke. But the actual progress on the ground is low due to the challenges of stripping ratios for the mines that are on offer.
- Pet coke prices have reasons for moving up: The US refineries have stopped all further investments and the portfolio is also getting transformed as far as their waste outputs are concerned. In the hierarchy of waste outputs, the total cost including the future abatement costs are increasingly being considered. In this regard, pet coke costs are likely to almost double if these considerations are factored in.
The structural shift of power and fuel price hypothesis can be tested in the next two quarters when the India cement industry would showcase their alternate hypothesis (use of Russian coal, Venezuelan pet coke). But the rise would still be significant over the long-term power and fuel prices that the industry witnessed, which used to hover around Rs 1000/T. Today, this is around Rs 1700/T for the industry, a shift which has happened in just two years’ time.
The question then shifts to whether the industry could create a structural pass-through of these costs in prices. With the current trajectory of prices, it does not seem to be happening. However, the industry is moving through a spate of consolidations and the recent entry of Adani could change the picture further. Its strong network advantages stemming from logistics consolidation across the entire geography of India could be a strong contender to challenge the current hypothesis.
– Procyon Mukherjee
Concrete
Reimagining Logistics: Spatial AI and Digital Twins
Published
15 minutes agoon
April 13, 2026By
admin
Digital twins and spatial AI are transforming cement logistics by enabling real-time visibility, predictive decision-making, and smarter multi-modal operations across the supply chain. Dijam Panigrahi highlights how immersive AR/VR training is bridging workforce skill gaps, helping companies build faster, more efficient, and future-ready logistics systems.
As India accelerates infrastructure investment under flagship programs such as PM GatiShakti and the National Infrastructure Pipeline, the pressure on cement manufacturers to deliver reliably, efficiently, and cost-effectively has never been greater. Yet for all the modernisation that has taken place on the production side, the end-to-end logistics chain, from clinker dispatch to the last-mile delivery of bagged cement to construction sites, remains a domain riddled with inefficiencies, opacity and manual decision-making.
The good news is that a new generation of spatial computing technologies is now mature enough to transform this reality. Digital twins, spatial artificial intelligence (AI) and immersive augmented and virtual reality (AR/VR) training platforms are converging to offer cement producers something they have long sought: real-time visibility, autonomous decision-making at the operational edge, and a scalable solution to the persistent skills gap that hampers workforce performance.
Advancing logistics with digital twins
The cement supply chain is uniquely complex. A single integrated plant may manage limestone quarrying, kiln operations, grinding, packing and despatch simultaneously, with finished product flowing through rail, road, and waterway networks to reach hundreds of regional depots and distribution points. Coordinating this network using spreadsheets, siloed ERP data, and phone calls is not merely inefficient; it is a structural liability in a competitive market where delivery reliability is a key differentiator.
Digital twin technology offers a way out. A cement logistics digital twin is a continuously updated, three-dimensional virtual replica of the entire supply chain, from the truck loading bays at the plant to the inventory levels at district depots. By ingesting data from IoT sensors on conveyor belts and packing machines, GPS trackers on road and rail fleets, weighbridge records, and weather feeds, the digital twin provides planners with a single, authoritative picture of where every ton of cement is, in real time.
The value, however, goes well beyond visibility. Because the digital twin mirrors the physical system in dynamic detail, it can run scenario simulations before decisions are executed. If a primary rail corridor is disrupted, logistics managers can model alternative routing options, shifting volumes to road or coastal shipping, and assess the cost and time implications within minutes rather than days. If a packing line at the plant is running below capacity, the twin can automatically recalculate dispatch schedules downstream and alert depot managers to adjust receiving resources accordingly.
For cement companies operating multi-plant networks across geographies as varied as Rajasthan and the North-East, this kind of end-to-end situational awareness is transformative. It collapses information latency from hours to seconds, enables proactive rather than reactive logistics management, and creates the data foundation upon which AI-driven decision-making can be built. Companies that have deployed logistics digital twins in comparable heavy-industry contexts have reported reductions in transit time variability of up to 20 per cent and meaningful decreases in demurrage and detention costs, savings that flow directly to the bottom line.
Smart logistics operations
A digital twin is only as powerful as the intelligence layer that sits on top of it. This is where Spatial AI becomes the critical differentiator for cement logistics.
Traditional logistics management systems are reactive. They record what has happened and flag exceptions after the fact. Spatial AI systems, by contrast, are proactive. They continuously analyse the state of the logistics network as represented in the digital twin, identify emerging bottlenecks before they crystallise into delays, and recommend corrective actions.
At the plant gate, AI-powered visual inspection systems using spatial depth-sensing cameras can assess truck conditions, verify load integrity and confirm seal tamper status in seconds, replacing the manual checks that currently slow throughput. At the depot level, Spatial AI can monitor stock drawdown rates in real time, cross-reference them against pending customer orders and inbound shipment ETAs, and automatically trigger replenishment orders when safety thresholds are approached. In transit, AI systems processing GPS and telematics data can detect anomalous vehicle behaviour, including extended stops, route deviations, speed irregularities and alert fleet managers instantly.
Perhaps most significantly for Indian cement logistics, Spatial AI can optimise the complex multi-modal routing decisions that are central to competitive cost management. Given the variability in road quality, seasonal accessibility, rail rake availability, and regional demand patterns across India’s vast geography, the combinatorial complexity of routing optimisation is beyond human planners working with conventional tools. AI systems can process this complexity continuously and adapt routing recommendations as conditions change, reducing empty running, improving vehicle utilisation and cutting fuel costs.
The agentic dimension of modern AI is particularly relevant here. Agentic AI systems do not merely analyse and recommend; they act. In a cement logistics context, this means an AI system that can, within pre-authorised boundaries, directly communicate revised dispatch instructions to plant teams, update booking confirmations with freight forwarders and reallocate available rail rakes across plant locations, all without waiting for a human to process a recommendation and make a call. For logistics executives, this represents a genuine shift from managing a workforce to setting the rules of engagement and reviewing outcomes. The operational tempo achievable with agentic AI simply cannot be matched by human-in-the-loop systems working at the pace of emails and phone calls.
Bridging the skills gap
Technology investments in digital twins and spatial AI will deliver diminishing returns if the human workforce cannot operate effectively within the new systems they create. This is a challenge that India’s cement industry cannot afford to underestimate. The sector relies on a large, geographically dispersed workforce, including truck drivers, depot managers, despatch supervisors, fleet maintenance technicians, many of whom have been trained on paper-based processes and manual workflows. Retraining this workforce for a digitised, AI-augmented environment is a substantial undertaking, and conventional classroom or on-the-job training methods are poorly suited to the scale and pace required.
Immersive AR and VR training platforms offer a fundamentally different approach. By creating photorealistic, interactive simulations of logistics environments, such as a plant dispatch bay, a depot yard, the interior of a cement truck cab, allow workers to practice complex procedures and decision-making scenarios in a safe, consequence-free virtual environment. A depot manager can work through a simulated rail rake delay scenario, making decisions about customer allocation and communication
without the pressure of real orders being affected. A truck driver can practice the correct procedure for securing a load of bagged cement without the risk of a road incident.
The learning science case for immersive training is compelling. Studies consistently show that experiential, simulation-based learning produces faster skill acquisition and higher retention rates than didactic instruction, with some research indicating retention rates three to four times higher for VR-based training compared to classroom methods. For complex operational procedures where muscle memory and situational awareness matter as much as conceptual knowledge, the advantage of immersive simulation is even more pronounced.
Today’s leading cloud-based spatial computing platforms enable high-fidelity AR and VR training experiences to be delivered on standard mobile devices, removing the hardware barrier that has historically made immersive training impractical for large, distributed workforces. This is particularly relevant for cement companies with depots and logistics operations in tier-two and tier-three locations, where access to specialised training hardware cannot be assumed.
The integration of AR into live operations also creates ongoing learning opportunities beyond formal training programs. As an example, maintenance technicians equipped with AR overlays can receive step-by-step guidance for equipment procedures directly in their field of view, reducing error rates and service times for critical plant and fleet assets.
New strategy, new horizons
India’s cement industry is entering a period of intensifying competition, rising logistics costs, and demanding customers with shrinking tolerance for delivery variability. The companies that will lead over the next decade will be those that treat logistics not as a cost centre to be minimised, but as a strategic capability to be built.
Digital twins, spatial AI and immersive AR/VR training are not distant future technologies, they are deployable today on infrastructure that Indian cement companies already operate. The question is not whether to adopt them, but how quickly to do so and where to begin.
About the author:
Dijam Panigrahi is Co-Founder and COO of GridRaster Inc., a provider of cloud-based spatial computing platforms that power high-quality digital twin and immersive AR/VR experiences on mobile devices for enterprises. GridRaster’s technology is deployed across manufacturing, logistics and infrastructure sectors globally.
Concrete
Seamless Packaging Means Elevated Branding
Published
19 minutes agoon
April 13, 2026By
admin
The right packaging does more than protect a product; it protects reputation, efficiency and brand value. Marta Bortolotti, Division Manager Consumables, Haver & Boecker, discusses smart packaging solutions that are becoming a strategic priority for manufacturers.
When it comes to product packaging, every element, from design and materials to compatibility with machinery, product and closure type, plays a vital role in achieving both efficient function and a positive brand image. To maintain a competitive edge, producers must carefully evaluate their packaging choices.
Partner with an expert
Unlike providers who specialise solely in packaging, full-service manufacturers can combine their expertise in packing equipment and product analysis. They can provide bag recommendations that integrate seamlessly with machinery. This approach enhances efficiency, expedites the filling process and ensures operational flow — all while saving resources, preserving product and strengthening brand perception.
A full-service approach tackles common issues like bag leaks, poor sealing or inefficiencies in bag performance. By leveraging detailed testing processes, such as bag volume checks and valve inspections, some manufacturers ensure the bag material and design are tailored to each packing line and product. This precision minimises production disruptions, optimises workflow and delivers packaging that enhances brand visibility and market impact.
Analyse your operational needs
Some manufacturers conceptualise the full-service philosophy as a practical framework that ensures bags, equipment and products work as a cohesive system. By aligning all three pillars, they can create solutions that reduce waste, save resources, improve operational efficiency and maximise output to achieve the perfect flow.
To begin, an expert will analyse the product to define the ideal machine technology and design a packaging solution that fits seamlessly into the operation’s preexisting process. This holistic approach ensures each packing facility can tackle even the most challenging requirements with precision and efficiency. Whether an operation is making a switch from open-mouth to valve-bag equipment and wants to ensure it goes smoothly or is simply looking for inefficiencies with their current packing line, analysing your bags should be a part of the equation.
Test and fine-tune your production line
The process begins with consultations and testing to gain a full understanding of the facility’s products and systems. The manufacturer’s engineers then create a custom bag report and fine-tune designs after thorough testing with the machinery. Finally, look for a manufacturer that can manage the entire supply chain, from bag testing to supply, ensuring a smooth and hassle-free experience. Some manufacturers also provide bag optimisation plans focused solely on the performance of existing bags to ensure they align with the demands of the production line. Through analysis, these manufacturers identify areas for improvement, offering specific recommendations to enhance bag materials, structure and compatibility. This method not only increases productivity and efficiency but also ensures cost-effectiveness and reliability by minimising downtime, reducing waste, optimising resource use and delivering consistent results across all operations.
A bag that reflects your brand
More than just a functional component, a bag serves as a powerful branding tool and a visual business card for each company. While some companies work with multiple providers for packaging, partnering with a single OEM expert, who understands the product, equipment, and production goals, provides unbeatable efficiency and peace of mind. With an integrated approach, every bag becomes a powerful asset for the brand and business.
About the author:
Marta Bortolotti, Division Manager , Consumables, Haver & Boeckers a driven packaging solutions leader focused on consumables, helping businesses achieve efficient operations, consistent quality, and long-term competitiveness through continuous learning and innovation.
Concrete
Beyond Despatch: Building a Strategic Supply Chain Process
Published
22 minutes agoon
April 13, 2026By
admin
Dr SB Hegde, Global Cement Industry Leader discusses the imperative need for modern cement plants to recognise packaging and bag traceability as critical components of quality assurance and supply chain management.
In cement manufacturing, considerable attention is given to clinker quality, kiln operation, grinding efficiency and laboratory control. Yet the final stage of the process, cement packaging and despatch, often receives less strategic focus. The cement bag leaving the plant gate represents the final interface between the manufacturer and the customer. Even if clinker chemistry, fineness and strength development are well controlled, weaknesses in packaging, handling, or distribution can affect product quality before it reaches the construction site.
Operational experience from cement plants across different regions shows that packaging efficiency and bag traceability have a significant influence on product reliability, logistics performance and brand credibility. In modern cement plants, packaging systems are no longer viewed merely as despatch equipment. They are increasingly recognised as an important part of quality assurance, supply chain management and customer confidence.
Operational importance of packaging
Cement packaging systems must operate with high speed, accuracy and reliability to support efficient despatch operations. Rotary packers equipped with electronic weighing systems have improved packing accuracy and productivity in many plants.
However, maintaining operational discipline remains essential. Regular calibration of weighing systems, maintenance of packer spouts and proper bag application are important for maintaining consistent bag weights and preventing cement loss.
Operational benchmarks observed in many cement plants are summarised in Table 1.
Plants that improved calibration discipline and equipment maintenance have reported packing loss reductions of about 1 per cent to 1.5 per cent, which represents significant annual savings.
Quality assurance beyond the plant gate
Quality control in cement plants traditionally focuses on laboratory parameters such as fineness, compressive strength and chemical composition. However, the condition of cement when it reaches the customer is equally important.
Cement bags may travel through several stages including plant storage, transport vehicles, dealer warehouses and retail outlets before reaching the construction site. During this journey, cement may be exposed to humidity, rough handling and improper storage conditions.
Table 2 shows common factors that may affect cement quality during distribution.
Studies indicate that cement stored under humid conditions for long periods may experience 10 per cent to 20 per cent reduction in early strength. Therefore, maintaining proper packaging integrity and traceability is essential.
Role of cement bag traceability systems
Traceability systems allow manufacturers to identify when and where cement was produced and despatched. These systems connect packaging operations with production records and logistics data.
When customer complaints occur, traceability enables manufacturers to identify:
- Production batch
- Packing date and time
- Plant location
- Laboratory test results
Several technologies are used to implement bag traceability, as shown in Table 3.
Among these technologies, QR code authentication systems are becoming popular because customers can verify product authenticity through smartphones.
Digital transformation
Digital technologies are transforming cement packaging operations. Modern packing lines now integrate:
- automated rotary packers
- electronic bag counting systems
- robotic palletising systems
- ERP-based despatch management
- digital supply chain monitoring
These technologies improve operational efficiency and transparency across the supply chain.
Such systems help manufacturers track cement movement across the distribution network and respond quickly to quality concerns.
Case Study: Digital Cement Bag Authentication
Several cement manufacturers in Asia and the Middle East have implemented QR code-based bag authentication systems to improve supply chain transparency.
In one integrated cement plant, QR codes were integrated into the rotary packing machine. Each cement bag received a unique digital identity linked to the production database.
The QR code contained information such as:
• plant location
• manufacturing date and time
• product type
• batch number
Customers and dealers could scan the code using a mobile application to verify product authenticity.
After implementation, the company reported:
• reduction in counterfeit bag circulation
• improved despatch data accuracy
• faster resolution of customer complaints
• better visibility of distribution networks
The system was also integrated with the company’s ERP platform, enabling real-time monitoring of production and despatch activities.
Future-Smart Packaging Systems
The future of cement packaging lies in the integration of Industry 4.0 technologies with logistics and supply chain management.
Packaging lines will increasingly become part of connected digital ecosystems linking production, quality control, despatch and market distribution.
Artificial intelligence and data analytics may also help detect abnormalities in bag weight variations, equipment performance and despatch patterns.
Global benchmark indicators
Global benchmarking of cement packaging operations highlights the increasing importance of efficiency, automation and digital traceability in modern cement supply chains. Leading cement plants are now focusing on key performance indicators such as packer availability, bag weight accuracy, packing losses, truck turnaround time and digital traceability coverage. Studies show that overall equipment effectiveness (OEE) in many industrial operations is still around 65 per cent to 70 per cent, whereas world-class plants aim for levels above 85 per cent, indicating significant scope for improvement in operational efficiency.
At the same time, the global cement packaging sector is expanding steadily, supported by growing infrastructure demand and increased emphasis on reliable and moisture-resistant packaging solutions. The cement packaging market is projected to grow steadily in the coming decade as companies adopt automation, smart packaging technologies and integrated logistics systems to improve despatch efficiency and supply chain transparency. In this context, benchmarking against global indicators helps cement plants identify performance gaps and adopt best practices such as automated bagging systems, QR-based traceability, ERP-linked despatch monitoring, and predictive maintenance of packing equipment.
Strategic Recommendations
To fully benefit from packaging and traceability systems, cement manufacturers should consider the following approaches.
• Packaging systems should be treated as an integral part of the manufacturing value chain rather than simply despatching equipment.
• Investments in modern packers, automated loading systems and digital traceability technologies should be encouraged.
• Industry associations may also promote standard traceability practices to reduce counterfeit products and improve transparency in the cement market.
Finally, continuous training of plant personnel in packaging operations and maintenance practices is essential for sustaining operational efficiency.
Conclusion
Cement packaging has evolved from a routine mechanical operation into a strategic component of modern cement manufacturing. Efficient packaging systems ensure that the quality achieved within the plant is preserved during transportation and distribution. Traceability technologies allow manufacturers to track cement movement, investigate complaints and prevent counterfeit products.
As the cement industry moves toward digitalisation and integrated supply chains, packaging and bag traceability will play an increasingly important role in quality assurance, operational efficiency and customer confidence. Ultimately, the cement bag leaving the plant carries not only cement but also the reputation and responsibility of the manufacturer.
References
- Hewlett, P.C., & Liska, M. (2019). Lea’s Chemistry of Cement and Concrete. Butterworth-Heinemann.
- Schneider, M., Romer, M., Tschudin, M., & Bolio, H. (2011). Sustainable cement production. Cement and Concrete Research, 41(7), 642–650.
- International Cement Review. (2023). Advances in cement packaging and logistics systems.
- World Business Council for Sustainable Development (2021). Cement Industry Supply Chain Innovation Report.
- Gartner, E., & Hirao, H. (2015). Reducing CO2 emissions in cement production. Cement and Concrete Research.
- ScienceDirect Industry Studies. (2024). Operational efficiency benchmarks and overall equipment effectiveness in industrial manufacturing systems.
- World Cement Association. (2022). Digital Transformation in Cement Manufacturing and Logistics. London.
- Towards Packaging Research. (2024). Global cement
packaging market trends and technology outlook. Industry Market Analysis Report. - Towards Packaging Research. (2024). Global cement
packaging market trends and technology outlook. Industry Market Analysis Report.
About the author:
Dr SB Hegde is a Professor at Jain College of Engineering, Karnataka, and Visiting Professor at Pennsylvania State University, USA. With 248 publications and 10 patents, he specialises in low-carbon cement, Industry 4.0, and sustainability, consulting with cement companies to support India’s net-zero goals.
Table 1. Key Operational Parameters for Cement Packaging Systems
Parameter Typical Industry Range Recommended Target Operational Significance
Rotary packer capacity 2400–3600 bags/hr 3000–4000 bags/hr Improves despatch efficiency
Bag weight tolerance ±0.5 kg ±0.25 kg Reduces customer complaints
Bag leakage rate 1 per cent to 2 per cent <0.5 per cent Minimises cement loss Packing accuracy 98 per cent to 99 per cent >99.5 per cent Ensure compliance with standards
Truck loading time 30–45 minutes 20–30 minutes Improves logistics efficiency
Table 2. Causes of Cement Quality Degradation During Distribution
Factor Typical Cause Impact on Cement
Moisture exposure Poor storage or rain exposure Lump formation
Long storage duration Slow inventory turnover Loss of early strength
Bag damage Rough handling Cement loss
Improper stacking Excessive loading Bag rupture
Counterfeit bag reuse Refilling of empty bags Brand damage
Table 3. Comparison of Cement Bag Traceability Technologies
Technology Advantages Limitations
Printed batch code Low cost and simple Limited traceability
Barcode Fast scanning Requires equipment
QR code Smartphone verification Requires digital platform
RFID tagging Automated tracking Higher cost
Blockchain systems High transparency Complex implementation
Reimagining Logistics: Spatial AI and Digital Twins
Seamless Packaging Means Elevated Branding
Beyond Despatch: Building a Strategic Supply Chain Process
Ultra Concrete Age
NCB Signs MoU With Cement Manufacturer To Boost Construction Skills
Reimagining Logistics: Spatial AI and Digital Twins
Seamless Packaging Means Elevated Branding
Beyond Despatch: Building a Strategic Supply Chain Process
Ultra Concrete Age

