Do you still see a preference for OPC in certain segments of the cement market such as institutional or in certain geographies? How do you deal with these national preferences?
Ordinary Portland Cement (OPC) is generally preferred by Institutional customers across regions. The reason being that these customers have their own batching plants in most cases and prefer to do blending at their end. Also, compatibility of admixtures is another reason for Institutional customers still buying OPC. The other major reason is that many institutional projects have OPC mentioned in their specifications and therefore we as manufacturers have to conform to the same. In the trade segment, there are only certain few pockets in the country where the end consumer still prefers OPC and therefore the channel network has to sell the same. However, efforts over the past many years in educating the customer has resulted in some amount of shift to blended cement even in these pockets.
What is your company's overall product mix - OPC, PPC and PSC? To what extent is this mix is influenced by market preferences and to what extent by availability of fly ash?
As mentioned before, OPC is mainly preferred in the Institutional segment. PPC and PSC is in the Trade segment reaching our customers through the channel network. Therefore, we as manufacturers produce all these type of cements. The product mix is certainly influenced by market preferences as our efforts have always been to cater to customer preferences. However, availability of fly ash and slag is not only an important factor for us but most of the manufacturers. E.g. PSC is sold predominantly in the East because steel plants are located in this part of the country which makes it easier for cement companies to source slag. Similarly, PPC is sold in South and North East because slag is almost not available which makes fly ash the natural choice. So to put it in a nutshell, apart from OPC - the other two types of cement viz. PPC and PSC are mainly driven by availability of the two commodities i.e. fly ash and slag.
How do you view the historical growth rates of PSC & PPC in your markets? How do you project this growth in the coming five years?
The growth rates of PPC and PSC have been pretty steady in our markets. Infact from the time the usage of blended cement has increased, it has been a steady growth. This has been possible through education of customers on the merits of blended cement which has led to higher awareness and increased usage. As the cement sector grows, we expect both these types of cement to grow as well.
What are the applications or regions where you would recommend use of PPC/PSC to your customers and why?
Both PPC and PSC cement types have their advantages, varying on applications. More than geographic regions impacting its use, it is preferable to give the application importance. Both Portland Slag Cement, commonly known as PSC, and Portland Pozzolana Cement, also known as PPC are blended cements.
PSC's chemical composition gives it several advantages over ordinary cement. Apart from being eco-friendly, it has high compressive strength and offers excellent resistance to chloride and sulphate attacks. It boasts a superior finish and minimize shrinkage cracks. PSC cement can be used for all types of residential and commercial projects. It complements work on dams and other water retaining structure due it is high resistance alkali-silica reactions and fewer shrinkage cracks. For this reason, it is mostly used for marine constructions.
PPC's hydration process is slower than PSC cement, therefore, making it suitable for mass concreting. It shows greater resistance to aggressive weather and is cheaper than PSC. PPC cement has an amazing pore refinement leading to an improved density of concrete.
We have heard a lot about peculiar customer perceptions about color and smell of cement in some markets? Have you experienced this phenomenon? Are these related to presence of slag/fly ash in cement? How do you deal with such idiosyncratic ideas?
We have not heard about any customer perceptions about smell, but colour is perceived by customers across regions. E.g. in East, where PSC has been predominantly used in the past, people prefer light colour of the cement. Whereas in the South, PPC has been mainly used by customers and therefore people have a perception that dark colour of cement is good. So, colour is one of the reasons PSC sellers in the South have not met with much success.
As you can see from the above that colour is indeed related to the presence of slag or fly ash in cement. It is also how the market is shaped up by big players in the industry which influence customer perceptions through education and awareness.
Recently BIS have permitted composite cements to be manufactured and sold in India. What is your strategy for introducing this product in the market and what are the manufacturing and marketing challenges?
We have already introduced composite cement in the East over a year back. As the name indicates, composite cement is a blend of slag and fly ash. This means that composite cement is being typically manufactured by companies where both these commodities are readily available. East region is where most of the players have introduced composite cement. Some of the manufacturing challenges are:
How do you see the current demand and supply scenarios of these two commodities - Fly ash and slag? What are the price movements of these two commodities?
In terms of availability of slag, we as cement manufacturers can state that overall there is ample availability of this commodity except for certain pockets. Also over the past few months, slag prices have softened mostly due Nepal's exit from slag purchase. Also, slight impact has been there due to introduction of composite cement.
Similarly is the case for fly ash where ample availability is there but again there are pockets where demand-supply scenario gets disrupted at times because of operational periods of power plants. To give some examples, prices of fly ash within clusters in Tamil Nadu are different because of power plant operations. In some places fly ash prices have crashed whereas it has increased in couple of clusters. This is also the case in certain parts of Maharashtra.
In Bengal, fly ash availability is an issue at times and prices are a bit on the higher side because it is going to Bangladesh to service their requirement.
In NE, typically fly ash sourcing is a problem:
Due to the above, prices of fly ash have been steadily rising for cement cos. in the North East almost for more than a year now. Representation have been made by cement cos. towards this but we feel that it should be taken up more seriously with appropriate higher authorities.
- BS SRINIVASALU REDDY