23 March 2019

Cement & Cement Equipment

Solidifying the future

 

Being pivotal in the economic growth of the country, cement is an essential element for the construction sector and for all infrastructural projects. Owing to increased thrust from the government, the cement sector is expected to witness positive growth in the coming years, with consumption set to increase at a CAGR of around 9 per cent during FY 2017-FY 2020 writes ROHAN AMBIKE

 

 

 

India’s cement industry, the second largest in the world employing more than a million people, has so far remained recalcitrant to the impact caused by a weakening global economy and negative trends in terms of cement demand. Notwithstanding the global downturn due to fall in commodity prices and exchange rates it is one of the markets with positive development in gray cement prices and slag exports.

 

 

 

Cement demand in India is expected to increase due to government’s push for large infrastructure projects, leading to 45 million tonnes (MT) of cement needed in the next three to four years. India’s cement demand is expected to reach 550-600 Million Tonnes Per Annum (MTPA) by 2025. The housing sector is the biggest demand driver of cement, accounting for about 67 per cent of the total consumption in India. The other major consumers of cement include infrastructure at 13 per cent , commercial construction at 11 per cent and industrial construction at 9 per cent .

 

 

 

To meet the rise in demand, cement companies are expected to add 56 MT capacity over the next three years. The cement capacity in India may register a growth of eight per cent by next year end to 395 MT from the current level of 366 MT. It may increase further to 421 MT by the end of 2017. The country’s per capita consumption stands at around 190 kg.  The Indian cement industry is dominated by a few companies. The top 20 cement companies account for almost 70 per cent of the total cement production of the country. A total of 188 large cement plants together account for 97 per cent of the total installed capacity in the country, 365 small plants account for the rest. Of these large cement plants, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.

 

 

 

A report from Technavio states that in terms of geography, APAC accounted for the majority market share during 2016 and will continue to dominate the market for the next four years. Some of the major factors responsible for the market’s growth in the region is the increasing number of construction projects with the growing number of development projects, environmental regulations on the emission of carbon dioxide and NOx gases, and the use of alternative fuels such as hydroelectric power in the production of cement and concrete. IMARC Group reports that China currently dominates the global cement market accounting for the majority of the total global consumption. China is followed by India, the United States, Brazil, Iran, Vietnam, Russia and Turkey.

 

 

 

Additionally, China National Building Materials (CNBM) currently represents the world’s largest player followed by Lafarge Holcim, Anhui Conch, Jidong Development and Heidelberg Cement. The portland cement segment accounted for the majority market share during 2016 and will continue to dominate the market for the next four years. One of the major factors responsible for the market segment’s growth is the increasing use of portland cement more than the other types of cement in various construction activities.

 

 

 

Market Size

 

The housing and real estate sector is the biggest demand driver of cement, accounting for about 65 per cent of the total consumption in India. The other major consumers of cement include public infrastructure at 20 per cent and industrial development at 15 per cent.

 

 

 

Cement production capacity stood at 502 million tonnes per year (mtpy) in 2018. Cement consumption is expected to grow by 4.5 per cent in FY19 supported by pick-up in the housing segment and higher infrastructure spending. The industry is currently producing 280 MT for meetings its domestic demand and 5 MT for exports requirement. The Indian cement industry is dominated by a few companies. The top 20 cement companies account for almost 70 per cent of the total cement production of the country. A total of 210 large cement plants account for a cumulative installed capacity of over 350 million tonnes, with 350 small plants accounting for the rest. Of these 210 large cement plants, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.

 

 

 

Market Drivers

 

Now with the government focus on fast tracking of infrastructural development, players in the cement manufacturing and equipment business see a ray of hope of improvement in cement consumption. Projects in numerous sectors like ports, roads, airports and housing can extensively support the clearance of excess capacities and also in accelerating demand for cement.

 

 

 

Currently the housing sector with 67 per cent of total consumption is the biggest demand driver of cement, followed by infrastructure at 13 per cent, commercial construction at 11 per cent and industrial construction at 9 per cent. The push on the infrastructure development front, including the fast tracking of projects like ‘Smart Cities’ and ‘Housing for All’ , will energise India’s cement markets through 2016 and beyond. The latest industry assessment is that cement companies are expected to add 56 million tonnes (MT) capacity over the next three years. From the current level of 366 MT the cement capacity in the country could increase to 395 MT by the year end and further go up to 421 MT by the end of 2017. In the long term India’s cement demand is expected to reach 550-600 million tonnes per annum (MTPA) by 2025.

 

 

 

Equipment Expanse

 

The global cement mixer market will grow steadily at a CAGR of almost 11 per cent by 2020 as per reports. Renewed thrust on construction activities worldwide is one of the primary growth factors for this market. Increasing government initiatives to encourage manufacturers to use energy-efficient equipment and materials for the production of cement and concrete will aid in the growth of the market. Additionally, the rapid urbanisation in emerging regions such as APAC and Latin America also aid in increasing the demand for cement mixers. The APAC region consists of major emerging markets such as China, India, Indonesia, Malaysia and Vietnam where the construction market is growing at a rapid rate. The increased focus on the development of transportation networks to encourage cycling and the use of public transports in Europe and the focus of the Americas to renovate and expand existing public infrastructures will contribute to the growth of the market. Moreover, the increasing investments towards the development of smart cities and renovation projects of existing cities in all major countries across the globe will also have a positive impact on the growth of the concrete mixer market in the next four years.

 

 

 

Used for decades in all types of construction, the traditional concrete Hollow / Solid block Machine has evolved to levels never before seen. The production of concrete blocks today, with the greater variety of forms, sizes, textures and colours allows concrete Hollow / Solid block manufacturers, architects, engineers and builders to combine them to achieve spectacular aesthetic effects with significantly lower costs than other building products. High Strength, low cement consumption, dimensional accuracy and uniform density are the salient features of concrete blocks made on Columbia Machines. Due to the unique vertical mould vibration technology, concrete blocks made on Columbia Machines are superior to those made on German concrete Hollow block making machines or China / Chinese concrete Solid block making machines.

 

 

 

Investments

 

On the back of growing demand, due to increased construction and infrastructural activities, the cement sector in India has seen many investments and developments in recent times. According to data released by the Department of Industrial Policy and Promotion (DIPP), cement and gypsum products attracted Foreign Direct Investment (FDI) worth US$ 5.26 billion between April 2000 and June 2018.

 

 

 

Some of the major investments in Indian cement industry are as follows:

 

 

• As of December 2018, Raysut Cement Company is planning to invest US$ 700 million in India by 2022.

 

• During 2017-18, Ultratech commissioned a greenfield clinker plant with a capacity of 2.5 MTPA and a cement grinding facility with 1.75 MTPA capacity in Dhar, Madhya Pradesh. The company is expecting to complete a 1.75 MTPA cement grinding facility and a 13 MW waste heat recovery system by September 2018 at the same location.

 

• In May 2018, Ultratech Cement decided to acquire the 13.4 MTPA capacity cement business of Century Textiles and Industries.

 

• JK Cement is planning to invest ` 1,500 crore (US$ 231.7 million) over the next 3 to 4 years to increase its production capacity at its Mangrol plant from 10.5 MTPA to 14 MTPA.

 

 

 

Government Initiatives

 

In order to help the private sector companies thrive in the industry, the government has been approving their investment schemes. Some such initiatives by the government in the recent past are as follows:

 

 

 

In Budget 2018-19, Government of India announced setting up of an Affordable Housing Fund of ` 25,000 crore (US$ 3.86 billion) under the National Housing Bank (NHB) which will be utilised for easing credit to homebuyers. The move is expected to boost the demand of cement from the housing segment.

 

 

 

Increased use of blended cement

 

The trend of using blended cement is increasing globally. With the consumers becoming eco-conscious, construction companies and contractors are becoming very selective in terms of adopting the best materials possible which are eco-friendly. Owing to this, some of the construction companies executing projects prefer to blend cement at the construction site using ordinary Portland cement (OPC) and fly ash or ground-granulated blast-furnace slag (GBBS). This selection entirely depends on the commercial and technical factors required for particular construction project. Blended cement is produced by the amalgamation of pozzolanic materials, such as silica fume, fly ash, and slag with cement clinker and gypsum. The mixture enhances the quality of the concrete structure, making it resistant to high-temperature and corrosion. Blended cement is finer as compared to OPC, resulting in reduced permeability of concrete and improved durability. Therefore, the use of blended cement has been increasing rapidly, especially for construction projects.

 

 

 

Going green

 

Developing innovative methods for use in the cement business could minimise the cement market waste and pollution to a large extent. Many options such as energy efficiency, AF, and clinker substitution are anticipated to reduce air pollutants emanating from cement plants. By investing in R&D and involving modeling techniques such as designing of processes, the cement market will minimise air pollution and comply with existing regulations for protection of the environment in the future. In line with this, India has joined hands with Switzerland to reduce energy consumption and develop newer methods in the country for more efficient cement production, which will help India meet its rising demand for cement in the infrastructure sector.

 

 

 

Future Frontiers

 

Apart from the existing slew of infrastructure projects with the government looking to address the infrastructure deficit in areas like the north east – a virgin market – cement manufacturers see great business opportunities for the future. It is being assessed that in the next decade India could become the main exporter of clinker and gray cement to places to the Middle East, Africa and other developing economies. Cement manufacturers are increasingly looking to set up production facilities closer to ports to secure a logistical advantage over their competitors for exports. Assuredly the future looks busy.

 

 

 

Road Ahead

 

The eastern states of India are likely to be the newer and virgin markets for cement companies and could contribute to their bottom line in future. In the next 10 years, India could become the main exporter of clinker and gray cement to the Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance the plants in Gujarat and Visakhapatnam, will have an added advantage for exports and will logistically be well armed to face stiff competition from cement plants in the interior of the country.

 

 

 

As far as global cement market is concerned, according to Technavio research, it is anticipated to grow at a steady rate and will post a CAGR of more than 9 per cent during the forecast period. The increasing use of energy efficient technologies will drive the growth prospects for the global cement market until the end of 2021. According to the market research analyst, the manufacturing process of cement requires a lot of energy. Also, this process involves the emission of carbon dioxide in high volumes, which can be conserved and used in different aspects..

 

 

As a result, cement manufacturing units or cement plants are using new technological innovations that are designed with efficient working capabilities to conserve energy efficiently. For instance, with new technologies such as fillers and cement additives like DOW latex powder and MasterCem, the level of carbon dioxide emissions will reduce, which in turn, will drive the adoption rate of cement and cement additives across the globe.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key Players

 

ACC

 

ACC Limited is India’s foremost manufacturer of cement and ready mixed concrete with a countrywide network of factories and marketing offices. Established in 1936, ACC has been a pioneer and trend-setter in cement and concrete technology. ACC’s brand name is synonymous with cement and enjoys a high level of equity in the Indian market. Among the first companies in India to include commitment to environment protection as a corporate objective, ACC has won several prizes and accolades for environment friendly measures taken at its plants and mines. The company has also been felicitated for its acts of good corporate citizenship.

 

 

 

Bharti Cement

 

Bharathi Cement Corporation Private Limited (BCCPL) is a producer of Superior Quality Cement has set new standards in the cement business. It is a joint venture of Vicat Group, France (pioneers in cement) in India having 51 per cent majority stake.

 

 

 

Bharathi Cement has 2 production lines using state-of-the-art technology having a total capacity of 5 MTPA and is located at Nallalingayapalli, in Kadapa district of Andhra Pradesh. The cement is marketed as “Bharathi Cement” since 2009.

 

 

 

Nord Drivesystems

 

Cement based materials are essential for sustainable building. However, cement manufacture is a sophisticated process whose individual stages require a great deal of energy. This makes energy costs one of the largest cost factors for the industry. Because of this, cement production requires drive units which can stand up to harsh conditions and are also especially energy-efficient.

 

 

 

For more than 45 years, NORD DRIVESYSTEMS has been at home in almost every branch of industry where conveying solutions are used.

 

 

 

Rossi Gearmotors

 

Supported by more than 60 years of Rossi Group knowledge Rossi Gearmotors (India) Pvt. Ltd. develops business for the most demanding application & specialist in heavy duty industries such as metal, cement, mining, plastic, construction, crane sectors.

 

 

 

According to customer or industry needs Rossi offers technology, high quality solution even in the toughest environment. Products alone are not everything, service, customized solution, Rossi high customer orientation are essential part of the package.

 

 

 

thyssenkrupp Industries India

 

thyssenkrupp Industries India (tkII), has built cement plants that are fuel and energy efficient and also environment friendly. Its sustained success in winning repeated new orders has established it as one of the leading cement plant making companies in India. tkII has designed, manufactured, supplied, installed and commissioned large capacity sophisticated cement plants for more than three decades in association with thyssenkrupp Industrial Solutions AG (tkIS), Germany.

 

 

 

tkIS is one of the world’s leading engineering firms specializing in plant and equipment for the cement and mineral processing industry. tkIS plant and equipment with a brand name “POLYSIUS” are at the forefront of the technology and are available for comminution, pyro-processing, material handling and automation.

 

 

 

UltraTech

 

UltraTech Cement Ltd. is the largest manufacturer of grey cement, Ready Mix Concrete (RMC) and white cement in India. It is also one of the leading cement producers globally. UltraTech as a brand embodies ‘strength’, ‘reliability’ and ‘innovation’. Together, these attributes inspire engineers to stretch the limits of their imagination to create homes, buildings and structures that define the new India.

 

 

The company has a consolidated capacity* of 102.75 Million Tonnes Per Annum (MTPA) of grey cement. UltraTech Cement has 20 integrated plants, 1 clinkerisation plant, 26 grinding units and 7 bulk terminals. Its operations span across India, UAE, Bahrain, Bangladesh and Sri Lanka. UltraTech Cement is also India’s largest exporter of cement reaching out to meet the demand in countries around the Indian Ocean and the Middle East.