Shalini Chauhan Negi, Pankaj Sood and Deven Parti of Holtec Consulting explain the process of setting up a greenfield integrated cement plant, which is generally coined as an integrated unit (IU) in common industry parlance. All other types of cement manufacturing plants are essentially a subset of an IU itself.
Cement industry is a part of the core industrial sector and plays a crucial role in building up of the nation's economy. Cement is a key ingredient of construction sector and is one of the indicators of development in a country. Setting up a cement plant is both time and capital intensive; it could take anywhere between five to seven years from concept to commissioning and an investment of around to Rs 1,800-2,000 crore for a typical integrated plant of 3 million tpa cement capacity. Size of a cement plant could vary from 0.2 million tpa to 5.0 million tpa.
Before starting to build a cement plant, it is imperative to know what the cement making process involves. The cement manufacturing process starts with mining of limestone followed by grinding it with other raw materials like clay, shale, bauxite, iron ore, etc. to prepare a raw meal, which is heated at a sintering temperature of 1,400 to 1,500 degree Celsius in a kiln to manufacture clinker. The clinker is then finely ground along with additives like gypsum, fly ash, slag, etc. to produce the desired type and quality of cement. Cement is then stored in silos from where it is dispatched to the market in 50 kg bags and/or in bulk.
Cement is of various types, but can broadly be classified in the following two categories:
The following sections explain in detail each of these stages:
Initiation & conception stage
First step is to decide the kind of plant to be set up for manufacturing cement. There are four major types of plants (units) that can be set up:
The next major step is to identify the location for setting up the cement plant. A plant location is an irrevocable strategic decision. Parameters for determining the location principally depend on the type of plant envisioned to be set up. Salient parameters in context being:
At the end of this stage, a broad concept of the project should be in place in terms of plant location(s), capacity and investment requirement. This phase can span anywhere between 0.5 to 2 years depending upon when the board gives its approval to go ahead to the next phase.
Initiation/conception stage lays the foundation for the next important milestone of setting out the action plan for the "pre-project activities". The pre-project stage is the preparatory stage where the concept and configuration of the proposed cement plant needs to be transformed to a relatively structured form from the initial broad concept.
The major milestones of pre-project stage are:
Securing limestone: Limestone is the key ingredient in cement manufacturing and thus, it is very critical to secure limestone before going ahead with setting up of a cement factory.
This involves following activities:
The salient features of a typical TEFR/DPR are as follows:
Land procurement: Acquisition of land for mines and plant is a tedious and time taking process. This typically involves the following steps:
Regulatory and statutory clearances: Many regulatory and statutory clearances are required for setting up of a plant and starting operations, the few major ones out of many such required clearances/permissions are:
Financial closure: Ideally the company should arrange for the funds before starting the project. Although some large business houses begin the project by first putting in a portion of the equity and then parallelly commencing the process of arranging for other types of finances.
Detailed techno-economic feasibility report is usually submitted to the financial institutions for obtaining loan. The project is appraised by financial institutions based on their own paraments to validate the results highlighted in the TEFR. Once the institution is satisfied with feasibility, loan is sanctioned for the project. The institution can either grant the loan on its own or form a consortium of financial institutions that together finance the loan.
The aforementioned activities play an important role in determining the overall success of the proposed cement project. Pre-project activities can span across 1 to 2 years dependent primarily on the time taken on securing limestone mines and getting financial closure.
Project execution stage
Project execution is a crucial stage and needs to be carefully planned to avoid cost and time overrun. Mostly companies set up a multi-functional team of technical professionals for project execution. Liaison, finance and administration functions are also important to ensure that land acquisition, clearances and funds availability do not create a bottleneck in project execution, as many of these activities from pre-project stage continue well into the project execution stage. Project execution has two main components ' planning and monitoring, and implementation.
Project planning and monitoring: Establishment of an efficient system for project planning and monitoring, including exporting procedures for progress review and coordination, is very vital for successful project execution. This can either be done by an in-house team or can be outsourced to a project management consultant.
Project implementation: Project implementation comprises of the following steps.
Basic engineering: This step covers the following:
Procurement of main equipment and services: This covers the following:
Detailed engineering: This covers the following:
Many companies engage a technical consultant for some or all stages of project management/construction monitoring to ensure a smooth execution process. Key factors in setting up of a cement plant Some of the important factors which need to be kept in mind during setting up a cement plant are:
To conclude, setting up the cement plant requires detailed planning from concept to commissioning to avert time and cost overruns.
ABOUT THE AUTHORS: The article is authored by Shalini Chauhan Negi, Pankaj Sood and Deven Parti of Holtec Consulting. They may be reached at firstname.lastname@example.org.
Holtec Consulting is an advisory firm, primarily positioned to service the entire gamut of consulting needs of the global cement industry. Its portfolio spans services in all disciplines of engineering, business consulting, geology and mining, project and construction management, environment management, performance enhancement, etc.