History of Indian Cement Industry | Materials | Engineering

The manufacture of Portland cement was started in England around 1825. Belgium and Germany started the same in 1855. America started the same in 1872 and India started the same in 1904.

The first cement factory was installed in Tamil Nadu in 1904 by South India Industry Limited and then onwards a number of factories manufacturing cement were started. Our country is the fifth largest producer of cement in the world and is expected to become the second largest, after China, by the turn of the century.

Cement is a key infrastructure industry. In our country, it has been decontrolled from price and distribution on 1st March, 1989 and de-licensed on July 25th, 1991. However, the performance of the industry and prices of cement are monitored regularly.

India is the world’s second largest producer of cement after China with industry capacity of over 200 Million Tonnes. With the boost given by the government to various infrastructure projects, road network and housing facilities, growth in the cement consumption is anticipated in the coming years. In order to meet the expanding demand, cement companies are fast developing new plants.

The cement industry is poised to add 111 Million Tonnes of annual capacity by the end of 2009-2010, riding on the back of approximately 141 outstanding cement projects. 95% of the production is consumed domestically and only 5% is exported. Demand is growing at more than 10% per annum. More than 90% of production comes from large cement plants.

The Indian cement industry comprises of 132 large cement plants with an installed capacity of 148.28 Million Tonnes and more than 365 small cement manufacturing plants with an estimated capacity of 11.10 Million Tonnes per annum. The Cement Corporation of India, which is a Central Public Sector Undertaking, has 10 units.

There are 10 large cement plants owned by various State Government. The total installed capacity in the country as a whole is 204.29 Million Tonnes as on August 31, 2008.

This includes India Cements Ltd’s new grinding unit at Vallur, Tamil Nadu with an installed capacity of 1.10 Million Tonnes. India’s cement industry is likely to record an annual growth of 10 per cent in the coming years with higher domestic demand resulting in increased capacity utilisation.

Among the leading domestic players in terms of cement manufacturing are- Ambuja Cement, Aditya Birla Group (Ultra Tech Cement). ACC Ltd., Binani Cement, India Cements, J. K. Cements, Century Cements, Jaypee Group, Madras Cements, Dalmia cements, etc. They are not only the foremost producers of cement but also enjoy a high level of equity in the market.

Rapid urbanization and the booming infrastructure have led to an increase in construction and development across India, attracting even the global players. The recent years have witnessed a surge of foreign direct investment in the cement sector.

International players like France’s Lafarge, Holcim from Switzerland, Italy’s Italcementi and Germany’s Heidelberg Cements together hold more than a quarter of the total capacity. Holcim, one of the world’s leading suppliers of cement, has 24 plants in the country and enjoys a market share of about 25 per cent.

Holcim has a global sale worth about 20 billion US $, where India contributes 2 to 2.5 billion US $. Holcim strengthened its position in India by increasing its holding in Ambuja Cement from 22 per cent to 56 per cent through various open market transactions with an open offer for a total investment of 1.8 billion US $. Italcementi Group of Italy acquired full stake in the K K Birla promoted Zuari Industries’ cement, for 126.62 million US $ in 2006 and plans to invest more in future years for various green field and acquisition projects.

German major Heidelberg Cement has merged Mysore Cement. The French cement major, Lafarge which acquired the cement plants of Raymond and Tisco to double its capacity in next fir years.

Almost all players of the industry, small to medium to large, have added capacity ranging between a minimum of 2 Million Tonnes and a maximum of 3 Million Tonnes in the last three years (April 2005 to March 2008), effecting a total addition of 45 Million Tonnes to the installed capacity by setting up green field projects and expanding and upgrading the existing plants.

Total export of cement grew to 170 Million Tonnes during 2007-08, as against 155 Million Tonnes in 2006-07. Region-wise, western region grew fastest with a growth rate of 15 per cent, followed by northern region 12 per cent and southern region 10 per cent. The continuous increase in the infrastructure projects along with the rise in construction activity has ensured rising demand levels for the cement industry.

Continuous technological upgrading and assimilation of latest technology has been going on in the cement industry. Presently 93 per cent of the total capacity in the industry is based on modern and environment friendly dry process technology and only 7 per cent of the capacity is based on old wet and semi-dry process technology.

There is tremendous scope for waste heat recovery in cement plants and thereby reduction in emission level. One project for co-generation of power utilizing waste heat in an Indian Cement plant is being implemented with Japanese assistance under the Green Aid Plan. The induction of advanced technology has helped the industry immensely to conserve energy and fuel and to save materials substantially.

India is producing different varieties of cement like Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement, Blended cement, etc. Production of these varieties of cement conform to the BIS Specifications.

Ready-mix concrete (RMC) is sometime preferred to on-site concrete mixing because of the precision of the mixture and reduced worksite confusion. The Indian RMC business is growing by 25 per cent every year. In India only 2-3 per cent cement consumption by cement industry goes through RMC, as against 60 per cent in developed countries. At present, India has 200 RMC plants across the country.

Lafarge, the world’s second largest cement maker has bagged Larsen and Toubro’s RMC business. Lafarge will be acquiring 66 concrete plants located across India, in key markets such as Delhi, Kolkata, Mumbai and Bangalore with a total market share of approximately 25 per cent.

Government initiatives in the infrastructure sector, coupled with the housing sector boom and urban development, continue being the main drivers of growth for the Indian cement industry. Increased infrastructure spending has been a key focus area over the last five years indicating good times ahead for cement manufacturers. The government has increased budgetary allocation for roads under National Highways Development Project (NH-DP).

This coupled with government’s initiatives on the infrastructure and housing sector fronts would continue to remain the key drivers. Appointing a coal regulator is looked upon as a positive move as it will facilitate timely and proper allocation of coal (a key raw material) blocks to the core sectors, cement being one of them.

Other budget measures such as cut in import duty from 12.5 per cent to nil, removal of 16 per cent countervailing duty, 4 per cent additional customs duty on Portland cement and differential excise duty are all intended to cut costs and boost availability.

Some of the important highlights of the Indian cement industry can be summarized as follows:

(i) The energy consumption is substantially higher than that in the efficient plant abroad.

(ii) The environment protection activities require to be improved and updated.

(iii) The manpower productivity is low. It is nearly one-seventh as compared to that of Japan.

(iv) India’s per capita cement production is 130 kg per annum while world’s average of per capita cement production is more than 280 kg per annum.

(v) The modern technologies i.e. high efficiency separators, roll presses, vertical roller mill, precalcinators, etc. have been introduced.

(vi) To improve demand of cement further push to housing development programmes is to be given, concrete Highways and roads are to be promoted and in large infrastructure projects ready-mix concrete should be used.

The Indian consumers have become very quality conscious and as the global high worth companies in the cement sector are planning to enter the Indian cement industry, the cement companies of our country have decided to update their cement manufacturing technologies by importing equipment from foreign countries mainly based in U.S.A., Germany and U.K.

The main machinery in a cement plant comprises limestone crusher and stacker reclaimer, roller mills for grinding, coal crushers, packers, pollution control equipment, belt conveyers, etc.

It is a fact that the cement industry is a major consumer of the energy using 1.5 per cent of the world-fuel and about 2 per cent of electricity produced globally. Hence the attention is paid to find out ways and means to optimise power consumption in raw materials, coal and clinker grinding.

One of such development is the Vertical Roller Mills (VRM) and it allows for higher drying capacity with less consumption of power. The coal is also increasingly replaced by the groundnut husk to fire the kiln.

The technology for mining has also been improved and instead of conventional mining, the process known as the surface mining is adopted. It is carried out without drilling, blasting and crushing when extracting valuable minerals. The surface mining greatly reduces the vibrations, noise and dust loads.

The Indian cement industry is governed by the buyers because of the decontrol policy of the government. It is therefore a good sign indeed that the consumers have their own choice in selecting the cement which is required for their end application.

On the top of it, the government has set up consumer courts all over India in cities and towns where the consumers can lodge their complaints, if any and get the justice.

It is encouraging to note that many cement companies have changed their philosophy from selling to marketing. The philosophy of marketing always keeps focus on the customer requirements. Some of the leading cement companies have introduced innovative methods of marketing.

For instance, the companies have opened chain of office units from where free technical services are given to the customers through qualified and experienced application civil engineers.

The companies also use various medias like television, radio, press, technical magazines, lecture series, seminars, etc. to educate the masses. Such a trend has brought consumer awareness to use right cement for right end application.