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Digitization is eminent in every industry and for cement industry, the potential seems unlimited, says Jamshed Cooper, Managing Director, HeidelbergCement India and Zuari Cement

Digitization is eminent in every industry and for cement industry, the potential seems unlimited, says Jamshed Cooper, Managing Director, HeidelbergCement India and Zuari Cement

The Indian cement industry is facing multiple challenges such as low capacity utilisation, allegation of cartelisation, loggerhead over price with realty players. We are now stepping into a new world order. Will these challenges be addressed? Your Comments

Cement being a major constituent in the construction industry and linked directly to the infrastructure sector, has its own set of challenges. Over the years, competition within the industry has increased, and has put pressure on the margins. At current realizations, putting up new capacities would become a challenge, and this could have an adverse impact on the future prices of cement. Capacity concentration varies from region to region, so is the intensity of competition and capacity utilization. Predominantly, cement has been a commodity and its prices have a direct relation to supply and demand. It is unfortunate that increasing prices are linked to cartelization whereas the receding ones are not.

The pandemic has virtually changed the basic business model for most industries and cement is no exception. We are amidst a major disruption which will change the way cement will be sold and bought in the future. The construction practices too shall change significantly as automation will accelerate given the depleting human element at construction sites.

Covid-19 has thrown in new challenges, the primary being following all the guidelines of the government to restart the manufacturing facility. What are the operational strategies you have adopted to commence your business taking into consideration safety concern of the employees as well growth of the organisation?

Covid-19 has led to emergence of cautionary practices, which are here to stay for times to come. Be it a construction site or manufacturing process, such challenging times will impact speed and output to an extent till such time we find ways to manage the circumstance. However, in the medium term we should expect automation to take over and restore production levels to its earlier state. “Safety” at HeidelbergCement India (HCIL) remains our foremost priority and therefore our company has taken every possible measure to ensure safety of its people both in terms of health and sustainability. The company took adequate steps well before the Government announced the Nation-wide lockdown. “Contingency Management Teams” (CMT) were already in place to keep a track ofemployee’s health. Empowering employees digitally to ensure business continuity has been a key focus area.

The safety measures being undertaken across industries are increasing cost of production which also happens due to lower capacity utilization. Given the uncertain business environment, at this point of time, “growth” for most would seem to be a luxury and “survival” a necessity. Lower capacity utilizations threaten the companies with high leverage and poses a major challenge.

Digitization, IoT, Robotic process automation (RPA), Automation, Artificial Intelligence, data analytics, henceforth, will play a key role from cement manufacturing to final dealers’ delivery. How has implementation of these technologies changing your organisation for the better?

Digitization is eminent in every industry and for cement industry, the potential seems unlimited. Over the years most of the processes and material handling have been manual because of the availability of low cost labour in our country. Going forward, it will not be the labour cost that will come in the play, but it is the availability of labour and the method of working that will compel organizations to automate and digitize. At HeidelbergCement, globally there has been a strong drive to digitize during the past few years. Now the drive has been stepped up considerably with several IT projects being taken up for implementation.

The government has promulgated an Ordinance for amendment of MMDR Act and the industry through The Cement Manufacturers Association has raised concern over the likelihood of deletion of section 10A(2)(b) of the MMDR Amendment Act, 2015. Your message for the industry on this?

Traditionally, cement plants and the mines have remained as a single entity. Without limestone mines, a cement plant cannot exist, and this is to be understood by the people framing the laws. Removing the mines from the plant is like removing fish out of water. We know the consequences of the latter.

I am sure that government is looking at a bigger picture and the need for stepping up industrialization is duly recognized to support its revenue stream. By making raw material inaccessible or costly, the value addition happening through industrialization would receive a set back and could defeat the overall objective. Therefore, the government needs to review its decision on 10A(2)(b) keeping the above in view.

In all probability it will take time for the major consumer of cement, infrastructure and realty sector to bounce back. Is there any plan to come up with value-added products or to diversify?

The pandemic has triggered a sense of fear and conservation among consumers. Because of frequent lock downs and restrictions to operate, it has been putting breaks on carrying out business in normal course. In my view such a phase cannot prevail for long and things should get back to normal once there is remedy available to treat the disease. Getting a vaccine for this disease could be a far cry but expecting a medical remedy to treat the disease would be reasonable.

In such times when conservation mode gets triggered, value added products are the least the consumers would prefer. At this moment producing low cost, high quality basic products would become prime drivers to keep consumption and revenue streams going on. However, demand for value added products that support health and hygiene will continue to increase.

Coal is a depleting resource and a major source of greenhouse gas emission. What are the alternatives and innovations you have come up for manufacturing cement?

HeidelbergCement Group has committed to deliver against its Sustainability Development Goal targets 2030. We are aggressively looking at low carbon alteration fuel and renewable energy for manufacturing cement. Nevertheless, the biggest benefit would come if our industry is able to reduce the clinker factor and therefore we are aggressively promoting use of blended cements. It is high time that Cement Industry takes active measures to discourage OPC and promote consumption of PPC. HeidelbergCement Group at international level is experimenting on various carbon sequestration technologies as we have a target to achieve carbon neutral concrete by 2050.

With environmental degradation at an all-time low, the demand for ‘Green Cement’ has seen a surge. What are this Green Cement and your offerings?

What we call Green Cement is nothing but a cement that has lowest clinker factor. HeidelbergCement Group in India produces close to 70% Green Cement (PPC) and we continue to aggressively promote its usage. In Central India we produce 100% PPC cement. HCIL has recently launched an initiative “friends of Earth” under which the Company is motivating people to plant and nurture trees and increase the green cover of our planet. The trees planted under this initiative are then cataloged and geo tagged which can be seen on our website We continue to be driven by our ambition to make the world a better place to life for generations to come.

What are the growth plans for your organisation for the next three years? Is there any plan for expansion, new plant, acquisition in the offing?

HCIL entered India in 2006, acquiring a small capacity of less than 3 MnT. Today the Group operates in India with close to 13.6 MnT,with aspirations to continue its growth trajectory. The Group has always been on a look out for acquisition opportunity, at the same time investing in de- bottlenecking and brown field projects too. We also have opportunities at hand to put up green field projects which would fructify in the medium term.

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