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There is a huge opportunity for the Indian cement companies to play catch up

There is a huge opportunity for the Indian cement companies to play catch up

Digitization is at the top of our business agenda and we have invested heavily in business applications says Himansh Verma, Founder & Chairman of Navrattan Group

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

India is the 2nd largest producer of cement in the world, next only to China. Its production capacity, which was 502 million tons annually in 2018, is expected to cross 600 million tons by 2021. However, against that, the average consumption of cement in India is way below the world average and way, way below that of China. There is a huge opportunity for the Indian cement companies to play catch up. But this journey is fraught with several challenges, the main ones being over-capacity, pressure from populist governments to not increase prices, shortage of domestic coal, and resulting emphasis on coal imports at a premium, higher cost of electricity. The resulting cost of logistics for cement production is, thus, very high. There is no doubt that the Indian cement sector has great potential, which has not been realized because of these challenges. However, despite that, it is headed towards a bright future. Notwithstanding the Covid-19 and its aftermath, operational strategies will become adaptive and the companies will consider safety concerns and increasing manufacturing facilities will see to it that the industry reaches its full potential. In the new world order, steps like digitization, Robotic Process Automation (RPA), Artificial Intelligence, Data Analytics, etc are some of the strategies, which will play a huge role in the new-age world order in cement manufacturing.

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 the safety concerns of the employees as well the growth of the organization?

These are tough times for everybody, including business owners and employees. Thankfully, there are Standard Operating Procedures (SOPs) in place from the government’s side and we just have to follow those. The initial days were a bit hotch-potch because everything was uncertain and the country was new to lockdowns. Nevertheless, with the passage of time, things have improved and for us, the impetus to return to work grew with each passing day. Along with following norms like social distancing, sanitization, masks, etc, we followed four main strategic realignments in our operations to ensure that we could get back on track. These steps are Fast-tracking digital transformation, Preparing our workforce for the new world, Create new revenue opportunities, Sharpening productivity, and Realignment of cost-structure.

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 an implementation of these technologies changing your organization for the better?

The world is going digital, so how can the cement industry remain untouched? Digitization is at the top of our business agenda and we have invested heavily in business applications like ERP, CRM, etc. We had begun putting our trust in the latest technologies like Business Intelligence, Automation, Data Analytics, IoT, RPA, etc prior to the Covid-phase. However, the current pandemic only acted as a morale-booster for us to ensure renewed investment in these technologies on a war-footing, so that our company remains future-ready for any kind of eventuality.

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

The government amendment of the MMDR Act is a welcome step because it opens up the country’s natural resources even more. I consider this ordinance a good initiative, which will provide equal opportunities to different players within the Cement industry and ensure an overall development within the cement sector. Besides ensuring an increase in employment opportunities too, because of new projects, the ripple effect of this amendment will be felt in the surrounding areas of the new projects. As for the concerns raised by the Cement Manufacturers Association, I am sure there will be a fruitful discussion between the Association and the govt. and a middle-ground will be achieved eventually.

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?

Consumers are afraid and they have suddenly turned conservative with a lot of products, cement being one of them. Though frequent lockdowns and restrictions have put a spoke in the wheel of development in the country, this phase won’t last long. Already, we are seeing government putting in the money where their mouth is, by announcing several infrastructure projects, which will push the demand for cement in the near future. Besides, with guidelines being relaxed, slowly but steadily, the construction activity in the private sector will catch up soon as well. In such a scenario, a value-added product like our NGC is bound to be a prime driver of growth and consumption. In reality, Covid-19 has made the world aware of environmental degradation. So, I am confident that my product, Green Cement, which is manufactured with waste material primarily, will definitely be a remedy to resolve the issues that the cement industry is facing currently.

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

In absence of oil and gas fuels, coal remains the main fuel used in the manufacture of traditional cement in India. Clinker, a stony residue obtained from burnt coal, is mainly used in the manufacturing of cement and it is a stony residue obtained from burnt coal or a coal furnace. Clinker consumption of the Indian cement industry stands at about 10 million tons of coal per year, which makes it the third-largest consumer of coal, after the iron and steel industries. As a result of this status quo, there is an increase in environmental pollution, both at the manufacturing and the usage levels of traditional Portland cement. By virtue of this, our product, Navrattan Green Cement (NGC) is the future, not only because of its lower cost and high quality but also because of its zero negative impact on the environment. NGC doesn’t use coal directly, instead, it uses a by-product of burnt coal – fly ash, thus taking care of the disposal of the resulting waste material from coal usage as well.

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

The planet is becoming warmer with each passing day and heat-waves are already creating havoc around Europe. Carbon emissions are a major source of global warming, especially those released in the production and usage of traditional Portland cement. An MIT study, published earlier this year, says, “About 1 kg of CO2 is released for every kg of cement made today.” In view of this fact, and also keeping the future in sight, it remains a challenge for builders to create a viable alternative to the regular cement. One way to counter this problem is to go green, even in cement. Thus, our revolutionary product, Navrattan Green Cement, manufactured by the Navrattan Green Cement Industry, is the need of the hour. The Navrattan Green Crete is a unique product in that it involves zero use of Limestone and clinker in its manufacturing. Apart from that, it is made from industrial waste like fly ash, etc, and lastly, there is 0% carbon emission resulting from its manufacture and usage.

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

To start with, we are committed to sustainability in business and manufacturing sectors. Our focus remains static on our flagship product - Navrattan Green Crete. In 2021, we are planning to formally launch our green cement product in the market. As a technology company, we are also going to license territorial production of the same and we also intend to become the exclusive suppliers of our proprietary binder, which makes up for 10% of the total composition material in our green cement.

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