Building more will, first of all, require a substantial investment in additional new greenfield capacity. Further, the Indian cement industry will need to adopt an ecosystem mindset to work with suppliers and customers to accelerate growth for all construction-related industries.
The cement industry will also need to promote new applications of cement like concrete roads and AAC blocks that will not only stimulate cement demand but also deliver superior performance to existing alternatives.
To ensure construction demand can be fulfilled, the industry will have to work to promote sustainable supplies of key input materials.
At the same time, the cement industry must collaborate with the construction sector to improve its performance in areas like air pollution. This will prevent the increasing prohibitions on building activity in India’s cities that are dampening growth.
Along with the cement industry, the Government must also take important further steps to build a new India.
Firstly, there is a need to accelerate the positive steps already taken in infrastructure development. While road construction has accelerated under the Bharatmala initiative and the ambitious Sagarmala programme is underway, India still suffers from a large and persistent infrastructure deficit that will require $4.5 trillion investment by 2040. To illustrate this point, India’s infrastructure to GDP ratio remains around 5.8% while China has consistently invested at levels above 8%.z
Secondly, the early successes seen in the rural component of the Government’s Housing for All programme (PMAY-G) need to be replicated in the urban sector where challenges surrounding land availability and acquisition have slowed construction. In tandem, efforts need to be made to stimulate private sector demand for housing.
Thirdly, the current low levels of fixed capital formation in the industrial sector need to be kick-started by improving the flow of credit and easing the process of obtaining land and environmental clearances which are holding back investment.
Fourth and finally, the Government can play a critical role in supporting the cement industry by addressing infrastructure bottlenecks in the transportation of input materials and cement. In particular, by investing in waterways and rail freight, the Government can help reverse the continuously increasing share of road transportation in cement transportation - which is not only more expensive but also more CO2 intensive.
The second imperative for the Indian cement industry’s Vision 2030 is to build well. As the expectations of customers rise and the volume and complexity of building increases, the industry will need to become a value-adding partner for the construction industry.
First and foremost, cement companies must upgrade their know-how and product range for the coming wave of construction and design innovation - from 3D printing to factory-based pre-fabrication.
Second, to achieve the next level of efficiency and productivity gains, Indian cement companies will need to embrace industry 4.0 and digitalise their business. From tracking vehicles at the quarry to remotely monitoring the performance of completed concrete structures, digital can take cement to the cutting-edge. However, to realise its full potential, the industry also needs to promote the rapid digitalisation of the entire construction ecosystem.
Third, the future growth of the Indian cement industry will be dependent on attracting and developing the right talent. Today the sector suffers from a poor perception among potential employees and takes too narrow a view of talent. The cement industry needs to work together to change how young people see the industry by developing a clear value proposition to attract future talent. In parallel, the industry needs to invest in upgrading the existing workforce for the digital era and end the outdated dichotomy between skilled and unskilled labour.
Fourth and finally, to build well, the Indian cement industry needs a Research & Development (R&D) roadmap to avoid falling behind in product innovation, operational efficiency, and sustainability. Today, India accounts for less than 2% of patents filed in cement and concrete compared to 57% from China. By investing more in R&D, funding 7PhDs and establishing centres of research excellence for cement, the industry can begin to address this major shortfall.
Vision 2030 for Indian cement cannot be realised without ensuring the environmental sustainability of the industry’s growth. Building right is not only good for the planet but it also makes sound business sense. The Indian cement industry can build on past successes in sustainability by focusing on 7 key areas through to 2030.
1. Switch to alternative fuels
Switching to alternative fuels can help reduce the cement industry’s CO2 emissions. At the same time, it can address India’s current challenge of managing municipal waste and reducing the burning of crop residue. In Europe, over 36% of the cement industry’s energy needs are met by alternative fuels like biomass and household and industrial waste, and the figure is as high as 65% in Germany.
2. Invest in Waste Heat Recovery
Indian cement companies need to take bigger steps to address the huge unrealised potential in Waste Heat Recovery (WHR). The technology can reduce energy consumption and improve EBITDA margins by between 10% and 15%.
3. Increase clinker substitution
Substituting limestone clinker with waste products like fly ash and slag preserves scarce limestone reserves and reduces the emissions from the clinker production process. However, to prevent clinker substitution plateauing at current levels, the industry needs to ramp up efforts on composite cement and explore new options like calcined clay cements.
4. Explore carbon capture & storage and novel cements
Even with a higher substitution of clinker, CO2 emissions cannot be entirely eliminated. Therefore the Indian cement industry needs to actively explore and test carbon capture and storage (CCS) solutions that can be scaled up and rolled out at an affordable cost. In the same vein, Indian cement manufacturers need to get abreast of novel cements that emit lower emissions than Portland cement.
5. Promote Green buildings
Green buildings are a rapidly growing market in India as customers demand more energy efficient and environmentally friendly spaces. Concrete buildings are well placed to meet these increasingly stringent environmental standards due to their energy efficiency and durability. The cement industry should help popularise green building standards and raise awareness of concrete’s advantages.
6. Advocate concrete recycling
The cement industry can help improve the supply of aggregates and reduce the amount of construction waste going to landfill or being dumped illegally by encouraging concrete recycling. The industry can also use it in co-processing of new cement.
7. Engage and communicate more effectively with society
Lastly and perhaps most importantly, to realise Vision 2030 the Indian cement industry needs to transform its public perception by communicating more effectively with society. By learning from pioneers in this area like NASSCOM in IT, the cement industry can begin to speak with a common voice to raise awareness of its vital role in job creation, skilling, social development, innovation, and sustainability.