The decision to concretise the National Highway is going to be a big boost for the cement sector, says Rahul Akkara, Vice President Strategy & Brand, JSW Cement
India has an impending need to build infrastructure to nurture it’s economic growth? What are your views on this?
India, one of the fastest growing economies in the world, is witnessing an unprecedented growth in infrastructure. JSW Cement believes that this growth needs to be sustainable and is consciously contributing to creating a self-reliant India by manufacturing the building blocks of the Indian development story with its world-class cement.
What are the major sectors, where you feel that immense possibilities exist and why?
Infrastructure growth is expected in sectors like housing, development of national highways, smart cities, sagarmala link to connect all ports, development of ports, highways and airports.
What are the major challenges for the infrastructure growth in India?
Implementation of the various infrastructure reforms defined by the centre and the state governments within timelines are going to be the major challenges.
Is the government encouraging research & development, innovations in terms of new products & technologies in the sector? How more can be achieved?
Infrastructure development is directly related to GDP growth rate, which is expected in the range of 6-6.5 percent for FY 2015-16. This will help to raise the demand of cement in the range of 7-7.5 percent. On the back of huge infrastructure push by the government as announced in the Union Budget, recovery in overall economy, cement industry is likely to improve by third or fourth quarter of the current fiscal year.
With the government’s new schemes--Housing for All, AMRUT and Smart Cities--to bolster urban infrastructure and housing, we certainly feel that Government is taking right steps towards building solid infrastructure growth. Having said that, it is too early to comment on the impact on the cement sector as these schemes are at the design stage and will take another 2-3 quarters to gain concrete shape.
With the government scheme and boost in economy and investment, demand of the cement is expected to increase in near future and this may enable cement manufacturers to pass-on some of the cost to the consumers.
What is the role JSW Cement would be playing in the India Infrastructure growth story?
JSW Cement is currently selling its Portland slag cement (PSG) across south India and southern parts of Maharashtra and Odisha. In addition to cement, JSW has also ventured into manufacture of grounded granulated BF Slag (GGBS), which is used in manufacture of Ready Mix Concrete (RMC) and site mix plants. The company is supplying GGBS to Bangalore Metro Rail Corporation. Annually, it sells one million tonnes
of GGBS.
What is the percentage of slag cement in the OPC dominated Indian market? How do you foresee the penetration of slag cement in the Indian construction industry ?
The PSC accounts for about 7 percent of the total cement business in the country. Out of 360 million tonnes of cement sold annually, PSC accounts for about 23 million tonnes. Of this, JSW Cement contributes 6 million tonnes or about 26 percent.
What is the advantage of using Combi Finish Mode Roller Press Circuit and automated loading system ?
For grinding, cement roller press is used in combination with a traditional ball mill.
The capability of the roller press to grind cement in finish mode has the following advantages:
• Grinding energy saving of 2.5 Kwh/t of OPC cement
•Water saving of 5.5 lit/ton of OPC
•Reduction in fixed maintenance cost
•Advantages of Automated Loader
•Human exposure to dust is avoided as loading is done with auto loader which operates with vacuum system
•Stacking of bags is uniform and bag counter is inbuilt in system, hence less chances of loading errors
•No human intervention is required (it operates on set parameters predefined in the system)
•Bag damages are very minimal
•No manpower is required for stacking of bags in trucks
•Trailer can be loaded without problems, filling the complete platform with bags (with manual loading in trailers without side panels chances of falling down is high)
•One operator and one helper can control 3 to 4 machines
(in manual loading minimum 12 persons are required to load 4 trucks)
Tell us more about the expansion plans for clinker making at Chittapur, Karnataka?
Currently, JSW Cement is focusing on expanding its current facilities at Bellary &Dolvi. Gulburga project is a little too early to discuss right now. We have plans for Gulburga but not in the immediate.
India’s per capita consumption of cement is still much lesser than the developed and the other developing economies, how do you see this changing in coming times?
JSW Cement Infrastructure Ltd plans to almost double its ability to handle cargo at its ports to 62 million tonnes, with a target to further increase it to 200 million tonnes by 2025. Prime Minister NarendraModi is stepping up efforts to implement his plan of luring investment to build roads, navigable waterways and power plants to improve India’s creaky infrastructure, whose quality is ranked below that of Kazakhstan and Namibia. Boosting infrastructure spending by 1 percent of gross domestic product could add 3.4 million jobs, reported by McKinsey & Co 2013. We will build our own cement plants instead of acquiring an existing business even as other firms sell factories.
The government has decided to adopt concrete roads instead of asphalt roads for the construction of all new road projects, How do you see this decision? How do the concrete roads score over the asphalt roads in terms of cost and sustainability?
The decision to concretise the National Highway is going to be a big boost for the cement sector. the life of the concrete roads is much better than the asphalt roads where regular maintenance is required from time
to time.
China and Brazil have more than 30 percent RMC share in the total concreting business as compared to 8 percent in India. What are the cement companies doing about the low penetration of RMC in the Indian market?
With the emergence of smaller metros and cities becoming global cities, the RMC business is only going on a upswing.
What would be the growth drivers for the cement industry in the near future? What is your total cement capacity? Please give us break up of cement capacity of your various plants?
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 percent of the total consumption in India. The other major consumers of cement include infrastructure at 13 percent, commercial construction at 11 percent and industrial construction at nine percent.
To meet the rise in demand, cement companies are expected to add 56 million tonnes (MT) capacity over the next three years. The cement capacity in India may register a growth of eight percent 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 percent of the total cement production of the country. A total of 188 large cement plants together account for 97 percent of the total installed capacity in the country, with 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.
Which are the green cements introduced by JSW Cement in the past two year?
As you are aware, slag is a by-product obtained from JSW Steel manufacturing facility which is being used to make PSC, as a result we are achieving ‘zero waste’ norm of industry. It is well known that the production of each ton of OPC is accompanied by the release of approximate 0.83 tonnes of CO2, which is one of the gases primarily responsible for the greenhouse effect and global warming. About 7 percent of the world’s CO2 emission is attributable to the Portland cement industry. By replacing OPC with slag we are reducing the CO2 emissions to half.
Over the last few years cement capacity utilization has gone down despite the government announcing slew of infrastructure projects, your comments?
Inspite of the downturn, cement companies in India are working on an average capacity utillisation of 45-50 percent. JSW cement has been able to achieve a capacity utillisation of almost 55 percent and recorded a growth of 7-8 percent inspite of degrowth in cement sector.
Tell us about the market for slag cement? What are the advantages of slag cement? What is your total market share in slag cement?
PSC is blended cement. Slag is, essentially, a non-metallic product comprising of more than 90 percent glass with silicates and alumino-silicates of lime. At JSW Cement, we use superior quality slag produced at our steel manufacturing plant, conforming to IS:12089 standards for producing PSC. It is created with a combination of upto 45-50 percent slag, 45–50 percent clinker, and 3-5 percent gypsum.
PSC has been voted as the most suitable cement for mass construction because of its low heat of hydration.
What are your capex plans? Any plans of expansion, acquisition or launching new products?
We are looking at scaling up our capacities from current 6MTPA to 20MTPA in next 3-4 years. Each facility would have an investment of 800-1000 crores. We are putting up 8 such facilities in existing and new markets.
