Economy & Market

Union Budget 2020-21 | Remedy fails to match malady

Published

6 years ago

January 2, 2020

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As the Union Budget 2020-21 failed to enthuse different segments of investors and consumers, the question that remains is: How long to wait for economic revival?

The sum and substance of reactions to the Union Budget 2020-21 presented by the Finance Minister Nirmala Sitharaman was that it has belied the expectations that there will be some "big bang" measures to stimulate demand and investments in the sagging economy, and that this was a missed opportunity to push some major economic reforms.

This year’s budget has given thrust to agriculture, irrigation and rural development, infrastructure, skill development and the beleaguered financial sector. There were some measures to support MSME sector and affordable housing too. The idea was to touch upon every aspect that could help revive the economy, with an expectation that at least a few of them will click. However, those ideas were not backed by sufficient resources, ultimately due to existing funds crunch. Though the Finance minister claimed to have announced some personal tax concessions, they are unlikely to make big difference in their disposable incomes and overall consumer demand.

The budget has also proposed to tap global sovereign funds to finance infrastructure projects, mainly due to drying up of long term domestic sources and fiscal constraints. Taking a leaf from the US president Donald Trump, the budget has hiked customs duties to protect the domestic industry from external competition. "There is some support to growth, but nothing substantial in the short term. However, the government is still eyeing the long term and has, therefore, pushed capex (the government’s capital expenditure on infra etc.). The multiplier impact of this will be positive but lagged,"said leading rating firm Crisil, in its report on budget.

The economists and analysts argued for employing all means, including deviating from fiscal roadmap in the short term, to pump prime the economic activity, but that was not to be. Tough increasing the fiscal deficit target by 0.5 per cent to 3.5 per cent deviating from its roadmap, a recent study by former Economic Advisor to the Finance Ministry Dr Arvind Subramanian, estimates the fiscal deficit figure at 5.5 per cent, after including deals kept out of government accounting.

Recently, referring to such off-balance sheet expenses resorted to by the government, its auditor, Comptroller and Auditor General of India (CAG), advised the government to make thorough disclosure on such liabilities made by the government and public enterprises to the parliament, to impart more sanctity to its accounting practices.

The government had been in denial mode of economic slowdown for some time, the latest statistics baring the ominous state of the economy prove that it hs come to terms with the reality.

Infra push
Infrastructure push given by the budget is expected to provide support to Cement consumption, albeit not in a big way. "The demand for the commodity (cement) will pick up due to infrastructure, housing and rural development related announcements," said CARE Ratings in its report, while terming it a "Positive" impact of the budget.

Adding 100 more airports by 2024, Rs 1.7 lakh crore allocation for transport infrastructure in 2020-21, development of five new smart cities and continuation of incentives to affordable housing are some of the new proposals in the budget. In the previous budgets the government has already announced its grand infrastructure plans National Infrastructure Pipeline & Accelerated Development of Highways and increased focus on inland water ways.

However, Crisil has given "thumbs down"on the sector citing falling allocations for the sector in the coming fiscal and reduction in off-budget allocations. "For the first time in years, overall infrastructure capex has fallen to Rs 4.7 lakh crore for fiscal 2021 from Rs 5.1 lakh crore in fiscal 2020 RE (revised estimates). Moreover, a 16 per cent reduction in IEBR (Internal and Extra Budgetary Resources) implies a higher burden on budgetary support and strain on government finances. Lower spend on infrastructure would also lower chances of revival in allied sectors, particularly steel and cement."

The past implementation pace on the grand plans the government had announced in the past like National Infrastructure Pipeline and Accelerated Development of Highways, on the other hand, have nothing to boast about. The national infrastructure pipeline of Rs 103 lakh crore over fiscal 2020-25 includes investments in core and allied infrastructure sectors. Excluding allied sectors such as industrial, digital, and social infrastructure, the annual core infrastructure investment amounts to Rs 15 lakh crore, or Rs 90 lakh crore over the five-year period."Of this, Rs 4.7 lakh crore would come from the Centre and Rs 2.6 lakh crore from states, leaving ~52% to the private sector. However, considering the limited number of private players and low risk-appetite of banks, private participation is a key monitorable in achieving these targets,"Crisil added.

Allocation for railways has increased by a meagre three per cent to Rs 1.6 lakh crore. "But this falls way short of the Rs 3.8 lakh crore annual investment envisaged as part of Rs 50 lakh crore investment over fiscals 2018-30. A capex of Rs 6 lakh crore was incurred between fiscals 2016 and 2020, missing the Rs 8.5 lakh crore target set for this period," Crisil pointed out.

However, CARE Ratings billed the budget impact on railways as "positive", stating, "Stable Budget for Railways with similar capital expenditure allocation and opening up of private investment for railway infrastructure creation."Setting up large solar power capacity alongside rail track to optimise electrification cost and railway electrification of 27000 km track are also positives for the sector.

The government, in August 2014, had opened up few activities (comprising suburban corridor, high speed train project, railway electrification, passenger terminals etc.) of Indian Railway for FDI and the budget re-emphasises Government focus on same. The capital outlay allocated towards the Roads and Highway sector is Rs 0.77 lakh crore. "The allocation is not in lines with the NIP where the centre is involved in providing 25 per cent of the investment,"says CARE Ratings. The budget also proposed to monetise at least 12 lots of highway bundles of over 6,000 Km before 2024, but CARE Ratings says the timely fructification of this proposal holds the key for the sector.

Though Bullet Train project figured again in the budget, it has been a laggard in implementation. While it is envisaged to operate 15 passenger trains and re-development of four stations on PPP basis, the low rate of success in the past does not inspire confidence.

In line with the budget thrust to rural infrastructure, Prime Minister Gram Sadak Yojana (PMGSY) allocations were up 39 per cent to 19,000 crore, even as achievement ratio has fallen by 74 per cent in 2019-20 from 94 per cent in 2016-17, making the budgeted target for fiscal 2021 aggressive. Moreover, rural road construction targets over the next five years under PMGSY III are lower at 125,000 km, compared with 218,000 km constructed over the past five years.

Vimal Kejriwal, MD & CEO of KEC International says, "The budget’s infra focus is expected to provide a significant fillip to KEC. Allocation towards power and renewable energy, and transport infrastructure, upgradation of stations and developing solar in railways, setting up of 100 new airports, 5 new Smart cities and linking one lakh gram panchayats with BharatNet augurs well for our businesses."

CRISIL Research’s analysis of 106 airports already awarded under UDAN reveals that 62 of these remain non-operational due to lack of basic airport infrastructure. An estimated capex of Rs 4,500-5,000 crore is needed for their revival. Thus, plan for 100 more airports would be achieved only with a lag.

Overall, tax exemptions for sovereign funds to increase foreign investor participation across infrastructure sectors is a positive with investments already visible in roads, power and airports.

Power sector too has got some nudge in the budget. Sabyasachi Majumdar, Senior Vice President & Group Head, Corporate Ratings, ICRA Ltd., says, "Shutting down of old thermal power plants will shift generation to newer generation thermal projects and thus provide a moderate boost to their plant load factors (PLF). Abolition of dividend distribution tax and lower tax rates will encourage fresh investments in the power sector, especially renewable energy and transmission sectors."

Housing
Budgetary allocation for Pradhan Mantri Awas Yojana (PMAY) at Rs 27,500 crore is up by 9 per cent over the last fiscal’s RE. PMAY-Urban has an overall target of constructing 1.12 crore houses by 2022. Of these, 1.03 crore houses have been sanctioned as of January 2020. PMAY-Rural has an overall target of 2.95 crore, of which about 0.9 crore units stand completed as of December 2019.

From the affordable housing buyer’s point of view, the additional deduction of up to Rs 1.5 lakh for interest paid on loans taken has now been extended till March 31, 2021.

Hardik Agrawal, CEO of Radha Madhav Developers says, "This budget stimulates the supply of affordable houses a tax holiday is provided on the profits earned by developers of affordable housing project approved by 31st March, 2020. Even in order to minimize suffering in real-estate transactions and provide relief to the sector, FM proposed to increase the limit of transaction from 5% to 10% (of deviation from circle price for tax scrutiny). Overall this was a consoling budget."

Malady & remedy
What is it that made this budget special? It has come in the backdrop of growth deceleration for six consecutive quarters driven by low growth in consumption and investment. The burden of two failed budgets presented in 2019 – before and after the general elections – were also weighing on the Finance Minister. Pre-poll sops were targeted towards the poor and farmers, while the post-poll budget targeted at the companies and businesses.

A drop in private consumption growth played a big role in bringing down GDP growth to an 11-year low. Private consumption growth slowed to 5.8 per cent in fiscal 2020, from 7.2 per cent in fiscal 2019. A dent to incomes, declining household savings ratio and higher household leverage have kept the consumer’s risk aversion high.

Crisil in its analysis of demand side impact of the budget, projected that some support to rural demand was expected from higher allocation to schemes like PMGSY and PMAY, which will augment incomes. "PM Kisan spending for fiscal 2021 has been maintained at the previous fiscal’s budgetary level, but the focus should be on ensuring that part of the amount does not remain unspent," Crisil suggested. Investment growth dropped to one per cent in fiscal 2020 from 9.8 per cent in fiscal 2019. While private investments have been weak, the government’s ability to fund capex also remains constrained. The budget focus on infrastructure spending will support investment to an extent as central PSU investments are projected to decline, says Crisil. However, the rating agency did not exude the same kind of confidence in growth of private investments during in the next fiscal.

Government consumption spending, mostly on the social sector schemes, supported growth in fiscal 2020. "The government has continued to focus on social sector schemes (including those that augment rural incomes, such as PMGSY, PMAY, NREGA and PM Kisan)," Crisil added.

The budget’s support to MSMEs is a "mild positive" for exports going ahead, says Crisil. Decelerating global growth, falling trade intensity, and uncertainties from the US-China trade war are hurting India’s exports. India’s exports is estimated to fall 2 per cent in fiscal 2020, compared with a growth of 12 per cent in fiscal 2019.

However, the budget is a mixed bag for the current problem in the financial sector. While bringing some relief to the beleaguered non-banking finance companies (NBFCs) by expanding scope for recovery of their bad loans is positive, seeking to remove exemptions in personal income-tax is expected to reduce savings and insurance premiums. However, increasing the bank deposit insurance coverage from Rs one lakh to Rs 5 lakh is expected to increase the confidence of bank depositors, which touched its ebb with the recent failure of co-operative banks.

Worst is not closer than it appears
For cement industry to thrive the overall economy has to be robust. The budget has pulled some levers feebly, that may not be enough to spur the economic growth pace. When private sector is not forthcoming to make investment, it is incumbent on the government and the Reserve Bank of India (RBI) to take steps to revive the economy. Even as RBI had cut the repo rate cumulatively by 135 basis points (bps) through calendar 2019, banks have cut lending rates only by just 40-50 bps.

Crisil says, "In the absence of growth kickers, growth pick-up in fiscal 2021 is expected to be largely led by the base effect and supported by somewhat better farm income (led by a good rabi crop) and the delayed impact of monetary easing. Critical to this forecast is the assumption of a normal monsoon in calendar 2020 and benign global crude oil prices."

Kapil Gupta of Edelweiss Research says, "Overall, from a business cycle standpoint, aggregate fiscal push is missing. We think, given weak demand, consolidation could have waited. Thus, the economy, at best, will see a modest bounce aided by liquidity easing, normalisation in farm cash flows amid rising food inflation, and stabilisation in exports. But the virtuous economic cycle may still be distant."

This kind of consensus among analysts leave us with the question: How long we have to wait to see economic revival?

Infrastructure in Budget

100 more airports to be developed by 2024 to support UDAAN Scheme

Rs 1.7 lakh crore allocated towards transport infrastructure

Development of 5 new smart cities

Further incentivising and boosting affordable housing

Increased focus on inland water ways

Allowing sovereign funds to invest in infrastructure 15 new passenger trains through PPP route

Past announcements continued:

Grand plans announced in the past: National Infrastructure Pipeline (NIP) & Accelerated Development of Highways

Provision of Rs. 22,000 cr already provided to support the NIP, to cater to equity support to infra finance companies like IIFCL and a subsidiary of NIIF

Bullet train project between Mumbai and Ahmedabad

Taxation Measures
For corporates/ cooperative societies

Concessional tax rate for cooperative societies proposed (from 30% to 22%)

Concessional tax rate of 15% to new domestic companies extended to electricity generation companies

Dividend distribution tax removed; dividend will now be taxed in the hands of individuals

Tax concession for sovereign wealth funds of foreign governments

– BS SRINIVASALU REDDY

Economy & Market

SEW-EURODRIVE India Opens Drive Technology Centre in Chennai

Published

11 hours ago

March 25, 2026

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The new facility strengthens SEW-EURODRIVE India’s manufacturing, assembly and service capabilities

SEW-EURODRIVE India has inaugurated a new Drive Technology Centre (DTC) in Chennai, marking a significant expansion of its manufacturing and service infrastructure in South India. The facility is positioned to enhance the company’s responsiveness and long-term support capabilities for customers across southern and eastern regions of the country.

Built across 12.27 acres, the facility includes a 21,350-square-metre assembly and service setup designed to support future industrial growth, evolving application requirements and capacity expansion. The centre reflects the company’s long-term strategy in India, combining global engineering practices with local manufacturing and service capabilities.

The new facility has been developed in line with green building standards and incorporates sustainable features such as natural daylight utilisation, solar power generation and rainwater harvesting systems. The company has also implemented energy-efficient construction and advanced climate control systems that help reduce shopfloor temperatures by up to 3°C, improving production stability, product quality and working conditions.

A key highlight of the centre is the 15,000-square-metre assembly shop, which features digitisation-ready assembly cells based on a single-piece flow manufacturing concept. The facility also houses SEW-EURODRIVE India’s first semi-automated painting booth, aimed at ensuring uniform surface finish and improving production throughput.

With the commissioning of the Chennai Drive Technology Centre, SEW-EURODRIVE India continues to strengthen its manufacturing footprint and reinforces its long-term commitment to supporting industrial growth and automation development in India.

Concrete

Material Flow Efficiency

Published

1 week ago

March 18, 2026

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We explore how material handling systems are becoming strategic assets in cement plants, enabling efficient movement of raw materials, clinker and finished cement. Advanced conveying, automation and digital technologies are improving plant productivity while supporting energy efficiency and sustainability goals.

Material handling systems form the operational backbone of cement plants, enabling the efficient movement of raw materials, clinker and finished cement across complex production networks. With India’s cement industry producing over 391 million tonnes of cement in FY2024 and possessing an installed capacity of around 668 mtpa, according to the CRISIL Research Industry Report, 2025, efficient material logistics have become critical to maintaining plant productivity and cost competitiveness. At the same time, cement production is highly energy intensive and contributes around 7 per cent to
8 per cent of global CO2 emissions, making efficient material flow and logistics optimisation essential for reducing operational inefficiencies and emissions states the International Energy Agency Cement Technology Roadmap, 2023. As plants scale capacity and integrate digital technologies, modern material handling systems, ranging from automated conveyors to intelligent stockyards, are increasingly recognised as strategic assets that influence plant stability, energy efficiency and environmental performance.

Strategic role of material handling
Material handling is no longer viewed as a secondary utility within cement plants; it is now recognised as a strategic system that directly influences production efficiency and process stability.
Cement manufacturing involves the continuous movement of large volumes of limestone, clay, additives, clinker and finished cement across multiple production stages. Even minor disruptions in conveying systems or storage infrastructure can lead to kiln feed fluctuations, production delays and significant financial losses. According to Indian Cement Industry Operational Benchmarking Study, 2024, unplanned downtime in large integrated cement plants can cost between Rs.15–20 lakh per hour, highlighting the economic importance of reliable material handling systems.
Modern cement plants are therefore investing in advanced mechanical handling systems designed for high throughput and operational reliability. Large integrated plants can process over 10,000 tonnes per day of clinker, requiring highly efficient conveying systems and automated stockyards to maintain continuous material flow, suggests the International Cement Review Industry Analysis, 2024. Efficient material handling also reduces spillage, minimises dust emissions and improves workplace safety. As cement plants become larger and more technologically advanced, the role of material handling is evolving from simple transport infrastructure to a critical operational system that supports both productivity and sustainability.

From quarry to plant
The transport of raw materials from quarry to processing plant represents one of the most energy-intensive stages of cement production. Traditionally, limestone and other raw materials were transported using diesel-powered trucks, which resulted in high fuel consumption, dust generation and increased operational costs. However, modern plants are increasingly adopting long-distance belt conveyors and pipe conveyors as a more efficient alternative. These systems allow continuous material transport over distances of 10–15 kilometres, significantly reducing fuel consumption and operating costs while improving environmental performance, states the FLSmidth Cement Industry Technology Report, 2024.
Milind Khangan, Marketing Manager, Vertex Market Research & Consulting, says, “Efficient and enclosed handling of fine materials such as cement, fly ash and slag requires modern pneumatic conveying systems. By optimising the air-to-material ratio, these systems can reduce energy consumption by 10 per cent to 15 per cent while ensuring smooth material flow. Closed-loop conveying further minimises dust loading and improves the performance of bag filters, supporting cleaner plant operations. In addition, flow-regulated conveying lines help prevent clogging and maintain reliable dispatch performance. Overall, automation in pneumatic conveying delivers immediate operational benefits, including improved equipment uptime, lower energy use, reduced material spillage and more stable kiln and mill performance.”
Pipe conveyor systems are particularly gaining traction because they provide a completely enclosed transport system that prevents material spillage and dust emissions. According to global cement engineering studies, conveyor-based transport can reduce energy consumption by up to 30 per cent compared to truck haulage, while also improving operational reliability. Several cement plants in India have already implemented such systems to stabilise quarry-to-plant logistics while reducing carbon emissions associated with diesel transport.

Stockyard management and homogenisation
Stockyards play a critical role in maintaining raw material consistency and stabilising kiln feed quality. Modern cement plants use advanced stacker and reclaimer systems to ensure efficient storage and blending of raw materials before they enter the grinding and pyroprocessing stages. Automated stacking methods such as chevron or windrow stacking enable uniform distribution of materials, while bridge-type or portal reclaimers ensure consistent extraction during kiln feed preparation. These systems are essential for maintaining stable chemical composition of raw meal, which directly influences kiln efficiency and clinker quality. The Cement Plant Operations Handbook, 2024 indicates that advanced homogenisation systems can reduce raw mix variability by up to 50 per cent, significantly improving kiln stability and energy efficiency. Integrated stockyard management systems also incorporate sensors for monitoring bulk density, moisture levels and stockpile volumes, enabling real-time control over material blending processes.

Clinker and cement conveying technologies
Once clinker is produced in the kiln, it must be efficiently transported to storage silos and subsequently to grinding and packing units. Modern cement plants rely on high-capacity belt conveyors, bucket elevators and pneumatic conveying systems to manage this stage of material flow. Steel-cord belt bucket elevators are now capable of lifting materials to heights exceeding 120 metres with capacities reaching 1,500 tonnes per hour, making them suitable for large-scale clinker production lines, states the European Cement Engineering Association Technical Paper, 2023.
For fine materials such as cement, fly ash and slag, pneumatic conveying systems provide a reliable and dust-free solution. These systems transport powdered materials using controlled airflow, ensuring enclosed and contamination-free movement between grinding units, silos and packing stations. Optimised pneumatic systems can reduce energy consumption by 10 per cent to 15 per cent compared to older conveying technologies, while also improving plant cleanliness and environmental compliance, according to the Global Cement Technology Review, 2024.

Automation and digitalisation
Digitalisation is transforming material handling systems by introducing real-time monitoring, predictive maintenance and automated control. Advanced sensors and Industrial Internet of Things (IIoT) platforms enable plant operators to track conveyor health, stockpile levels and equipment performance in real time. Predictive maintenance systems analyse vibration patterns, temperature fluctuations and equipment load data to detect potential failures before they occur. According to McKinsey’s Industry 4.0 Manufacturing Report, 2023, for heavy industries, digital monitoring and predictive maintenance technologies can reduce equipment downtime by up to 30 per cent and increase productivity by 10 per cent to 15 per cent. Digital control centres also integrate data from conveyors, stacker reclaimers and dispatch systems, enabling centralised management of material flows from quarry to dispatch.

Handling of AFR
The growing adoption of Alternative Fuels and Raw Materials (AFR) has introduced new challenges and opportunities for material handling systems in cement plants. AFR materials such as refuse-derived fuel (RDF), biomass and industrial waste often have irregular particle sizes, variable moisture content and lower bulk density compared to conventional fuels. As a result, specialised storage, dosing and feeding systems are required to ensure consistent kiln combustion. According to the Cement Sector Decarbonisation Roadmap published by NITI Aayog in 2026, increasing the use of AFR could enable India’s cement sector to achieve thermal substitution rates of around 20 per cent in the coming decades. To support this transition, plants are investing in automated receiving stations, shredding units, drying systems and precision dosing equipment to stabilise AFR supply and combustion performance.

Energy efficiency and dust control
Material handling systems also play a crucial role in improving plant energy efficiency and environmental performance. Modern conveyor systems equipped with variable speed drives and energy-efficient motors can significantly reduce electricity consumption. Permanent magnet motors used in conveyor drives can deliver 8 per cent to 12 per cent energy savings compared to conventional induction motors, improving overall plant energy efficiency according to the IEA Industrial Energy Efficiency Study, 2023. Dust control is another major concern in cement plants, particularly during material transfer and storage operations. Enclosed conveyors, dust extraction systems and advanced bag filters are widely used to minimise particulate emissions and improve workplace safety.

Future trends in material handling
The future of material handling in cement plants will be shaped by automation, digitalisation and sustainability considerations. Emerging technologies such as AI-driven logistics optimisation, autonomous mobile equipment and digital twins are expected to further improve plant efficiency and operational visibility. Digital twin models allow engineers to simulate material flow patterns, optimise stockyard operations and predict equipment performance under different operating conditions. According to the International Energy Agency Digitalisation and Energy Report, 2024, the adoption of advanced digital technologies could improve industrial energy efficiency by up to 20 per cent in heavy industries such as cement manufacturing. As cement plants expand capacity and adopt low-carbon technologies, intelligent material handling systems will play a critical role in maintaining productivity and reducing environmental impact.

Conclusion
Material handling systems have evolved from basic transport infrastructure into strategic operational systems that directly influence plant efficiency, reliability and sustainability. From quarry transport and automated stockyards to digital dispatch platforms and advanced conveying technologies, modern material handling solutions enable cement plants to manage large production volumes while maintaining process stability.
As India’s cement industry continues to expand to meet infrastructure and urban development demands, investments in advanced material handling technologies will become increasingly important. By integrating automation, digital monitoring and energy-efficient systems, cement manufacturers can improve operational performance while supporting the industry’s long-term sustainability and decarbonisation goals.

Kanika Mathur

Concrete

Modernise to Optimise

Published

1 week ago

March 18, 2026

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Cement plant modernisation is reshaping the industry through upgrades in
kilns, energy systems, digitalisation, AFR integration and advanced material
handling. We explore these technologies that improve efficiency, reduce
emissions, strengthen competitiveness, while preparing the industry for India’s
next phase of infrastructure growth.

India’s cement industry, the world’s second-largest, is undergoing a rapid transformation driven by infrastructure demand, decarbonisation targets and technological advancement. The sector’s installed capacity stood at approximately 668 million tonnes per annum (mtpa) in FY2025 and is projected to reach 915–925 mtap by 2030, supported by large-scale capacity expansions and infrastructure investment cycles, suggests CRISIL Intelligence Industry Report, 2025. At the same time, cement production remains highly energy intensive and contributes about 6 per cent to 7 per cent of India’s total greenhouse gas emissions, making efficiency improvements and modernisation critical for long-term sustainability as stated in CareEdge ESG Research, 2025. As a result, cement manufacturers are investing in advanced kiln technologies, digital monitoring systems, waste heat recovery, alternative fuels, and modern material handling infrastructure to enhance productivity while aligning with global decarbonisation pathways.

Need for modernisation
The need for plant modernisation is closely linked to the sector’s rapid capacity expansion and rising operational complexity. India’s installed cement capacity has grown significantly in the last decade and is expected to exceed 900 mtpa by 2030, driven by demand from housing, infrastructure and urban development projects, as per the CRISIL Intelligence Industry Report, 2025. However, increasing scale also places pressure on energy efficiency, logistics, and production stability. The report also suggests that the cement plants must upgrade equipment and processes to operate at higher utilisation rates, which are projected to reach 75 per cent to 77 per cent by the end of the decade, compared to around 72 per cent to 74 per cent in FY2026.
Environmental imperatives are another major driver of modernisation. Cement manufacturing is responsible for a significant share of industrial emissions because clinker production requires high-temperature processes that depend heavily on fossil fuels. According to CareEdge ESG research, the cement sector contributes 6–7 per cent of India’s total greenhouse gas emissions, with approximately 97 per cent of emissions arising from direct fuel combustion and process emissions in kilns. Consequently, plant modernisation initiatives now focus not only on productivity improvements but also on reducing emissions intensity, energy consumption, and reliance on conventional fuels.
“One of the most impactful upgrades implemented at Shree Cement in the last five years has been the adoption of advanced data management platforms that provide real-time visibility across major process areas. This digital advancement has strengthened plant automation by enabling faster and more accurate responses to process variations while improving the reliability of control loops. Real-time dashboards, integrated analytics and automated alerts now support quicker, data-driven decision-making, helping optimise kiln and mill performance, improve energy control and detect deviations early. By consolidating data from multiple systems into a unified digital environment, the company has enhanced operational consistency, reduced downtime and improved both productivity and compliance. This shift towards intelligent automation and real-time data management has become a key driver of operational excellence and future-ready plant management,” says Satish Maheshwari, Chief Manufacturing Officer, Shree Cement.

Kiln and pyroprocessing upgradation
The kiln remains the technological heart of cement manufacturing, and modernisation efforts often begin with upgrades to pyroprocessing systems. Many older plants in India operate with four- or five-stage preheaters, while modern plants increasingly adopt six-stage preheater and pre-calciner systems that significantly improve heat efficiency and clinker output. These systems enhance heat transfer, reduce fuel consumption, and stabilise kiln operations under high throughput conditions.
Professor Procyon Mukherjee suggests, “Cement manufacturing is, at its core, a thermal process. The rotary kiln and calciner together account for energy consumption and emissions. The theoretical thermal requirement for clinker production is around 1700–1800 MJ per tonne, yet real-world plants often operate far above this benchmark due to inefficiencies in combustion, heat recovery and material flow. Modernisation, therefore, must begin with the
kiln system, and not peripheral automation or
isolated upgrades. The shift from wet to dry process kilns, combined with multi-stage preheaters and precalciners, has already delivered step-change improvements, making dry kilns nearly 50 per cent more energy efficient.”
Recent investment programmes across the industry have included kiln cooler upgrades, advanced burners, and improved refractory materials designed to increase operational reliability and reduce specific heat consumption. Such upgrades are essential because cement production remains highly energy intensive, and continuous efficiency improvements are required to meet global decarbonisation targets. According to the International Energy Agency (IEA) Cement Tracking Report, 2023, the cement sector must achieve annual emissions intensity reductions of around 4 per cent through 2030 to align with global net-zero scenarios.

Energy efficiency and WHRS
Energy efficiency remains one of the most important areas of modernisation in cement manufacturing, given the sector’s heavy reliance on thermal and electrical energy. Modern plants deploy advanced process controls, efficient grinding systems, and improved combustion technologies to reduce specific energy consumption. The adoption of energy-efficient technologies is particularly important in India, where energy costs account for a large share of production expenses. As demand grows and plants expand capacity, improving energy performance becomes essential to maintain competitiveness.
Waste Heat Recovery Systems (WHRS) have emerged as a key solution for improving plant energy efficiency. During cement production, large volumes of high-temperature gases are released from kilns and coolers. WHRS technology captures this waste heat and converts it into electricity, thereby reducing reliance on external power sources. According to energy benchmarking studies for the Indian cement industry, installed waste heat recovery capacity in the sector has reached approximately 840 MW, with an additional potential of around 500 MW states the Green Business Centre, Energy Benchmarking Report, 2023. Several leading producers have already implemented large WHRS installations; for example, UltraTech Cement has deployed systems with around 121 MW of waste heat recovery capacity, reducing carbon emissions by nearly 0.5 million tonnes annually according to the Energy Alternatives India Case Study, 2024.

Integration of AFR
The integration of Alternative Fuels and Raw Materials (AFR) is another critical dimension of cement plant modernisation. AFR refers to the use of industrial waste, biomass, refuse-derived fuel (RDF), and other non-fossil materials as substitutes for conventional fuels such as coal and petcoke. Increasing the use of AFR helps reduce fossil fuel consumption while simultaneously addressing waste management challenges. According to the NITI Aayog Decarbonisation Roadmap, 2026, scaling the use of RDF and other alternative fuels could enable the sector to achieve thermal substitution rates of around 20 per cent in the coming decades.
However, integrating AFR requires significant plant modifications and operational adjustments. Waste-derived fuels often have inconsistent calorific values, higher moisture content, and heterogeneous physical properties compared to traditional fuels. As a result, modern plants invest in advanced fuel preparation systems, dedicated feeding equipment, and automated dosing technologies to ensure stable kiln operation. These upgrades allow plants to maintain consistent clinker quality while increasing the share of alternative fuels in their energy mix.

Digitalisation and smart plant operations
Digitalisation is rapidly transforming cement plant operations by enabling data-driven decision-making and predictive maintenance. Industry 4.0 technologies such as IoT sensors, artificial intelligence (AI), and advanced analytics are now used to monitor equipment performance, optimise process parameters, and anticipate maintenance requirements. These digital tools enable plant operators to detect early signs of equipment failure, minimise unplanned downtime, and improve operational efficiency. Predictive maintenance systems, for example, analyse vibration, temperature, and acoustic signals from rotating equipment to identify potential faults
before they escalate into major breakdowns. Digital twins and integrated control systems further allow operators to simulate plant performance under different scenarios and optimise production strategies. Such technologies are becoming increasingly important as cement plants operate at larger scales and higher levels of process complexity.
Maheshwari also adds, “Plant modernisation is also increasingly central to the global competitiveness of Indian cement manufacturers. As cost pressures rise across energy, logistics and regulatory compliance, modern plants offer the structural efficiency required to operate reliably and competitively over the long term. Technologies such as AI-driven Advanced Process Control (APC) integrated with real-time data systems are emerging as essential investments for the future. These platforms use predictive algorithms, machine learning and live process inputs to optimise kiln, mill and utility operations with greater precision than traditional control systems. By continuously analysing variations in feed chemistry, temperature profiles, energy demand and equipment behaviour, APC enables stable operations, lower specific energy consumption, reduced emissions and improved product consistency. As regulatory expectations tighten and plants pursue higher efficiency with lower carbon intensity, AI-enabled APC will play a crucial role in strengthening automation, enhancing decision-making and ensuring long-term operational resilience.”

Modern material handling and logistics
Material handling systems play a critical role in ensuring smooth plant operations and efficient logistics. Modern cement plants rely on advanced conveying systems, automated stockyards, and digital dispatch platforms to manage the movement of raw materials, clinker, and finished cement. Long-distance belt conveyors and pipe conveyors are increasingly replacing truck-based transport between quarries and plants, reducing fuel consumption, dust emissions, and operational costs. Automated stacker-reclaimers ensure consistent blending of raw materials,
which improves kiln stability and clinker quality. Meanwhile, advanced packing and dispatch systems equipped with high-speed rotary packers and robotic palletisers enhance throughput and reduce manual labour. These technologies allow cement plants to optimise logistics efficiency while supporting higher production capacities.

Emission control and environmental compliance
Environmental compliance has become a central focus of cement plant modernisation as regulators and investors place greater emphasis on sustainability performance. Modern plants deploy advanced emission control technologies such as high-efficiency bag filters, electrostatic precipitators, and selective non-catalytic reduction systems to reduce particulate matter and nitrogen oxide emissions.
Sine Bogh Skaarup, Vice President, Head of Green Innovation and R&D, Fuller Technologies says, “One of our key focus areas is decarbonisation. We help cement producers reduce CO2 and overall carbon emissions. We offer alternative fuel solutions and calcined clay technologies to enable the production of LC3 cement, which play a significant role in decarbonising the cement industry. By combining alternative fuels and calcined clay solutions, CO2 emissions can be reduced by up to 50 per cent, making this a highly impactful approach for sustainable cement production.”
Continuous emission monitoring systems are increasingly used to track environmental performance in real time and ensure compliance with regulatory standards. In addition to air pollution control, cement companies are also investing in water recycling systems, renewable energy integration, and carbon reduction initiatives. These measures are essential for aligning the sector with national climate goals and improving the environmental footprint of
cement manufacturing.

Economic benefits and future outlook
Beyond environmental and operational advantages, cement plant modernisation also delivers significant economic benefits. Energy efficiency improvements, digital process optimisation, and advanced material handling systems reduce operating costs and improve asset utilisation. Waste heat recovery and alternative fuels help lower fuel expenditure and reduce exposure to volatile fossil fuel markets. As the industry expands capacity to meet growing demand, modernised plants are better positioned to achieve higher productivity and maintain profitability. The long-term outlook for the sector remains positive, with India expected to continue large-scale infrastructure investments in roads, housing, railways, and urban development.
Milan R Trivedi, Vice President – Projects, Prod & QC, MR, Shree Digvijay Cement, says, “The main focus in case of modernisation projects drives through the investment decision, which is mainly based on IRR and impact on overall efficiency improvement, cost optimisation and improvement in reliability. However, there are certain modernisation, which has high impact on environmental impact, statutory requirements, etc. has higher priority irrespective of ROI or payback period.”
“The energy efficiency and reliability investment projects generally provide fast return on investment whereas strategic, digitalisation and environmental investment projects provide long term and compounded benefits. Typical modernisation investment projects are decided with IRR of about > 20 per cent, payback period of typically 2-3 years for fast-track projects,” he adds.
In this context, modernisation will remain a key strategic priority for cement manufacturers seeking to maintain competitiveness in an increasingly sustainability-focused market.

Conclusion
The modernisation of cement plants is no longer a purely technical upgrade but a strategic transformation that reshapes how the industry operates. As India’s cement sector expands capacity toward the next growth cycle, improvements in energy efficiency, digitalisation, alternative fuels and advanced logistics will determine the competitiveness of individual plants. Modern technologies allow producers to operate at higher productivity levels while simultaneously reducing energy consumption and emissions intensity.
Looking ahead, the pace of technological adoption will play a decisive role in shaping the future of
the cement industry. Companies that successfully integrate modern equipment, digital systems, and sustainable production practices will be better positioned to meet rising infrastructure demand while aligning with global climate commitments. In this evolving landscape, plant modernisation stands as the cornerstone of both operational excellence and environmental responsibility.