India Cement & Construction Materials (vol 1 / issue 27) by CemWeek

india A CemWeek Publication

Cement

issue 27 • November / December 2015

& construction Materials

CW Research India’s October yearon-year green petcoke imports double

Feature

Cement Plants Going Green Q&A's:

• Rahul Akkara, Associate Vice President-Strategy & Brand, JSW Cement Ltd • Krishna Srivastava, Whole Time Director, Zuari Cement • JC Toshniwal, Executive Director, Wonder Cement

Exclusive The One Billion Target

News

Analysis

Market Coverage

Interviews

People

FEATURES

DEPARTMENTS

The One Billion Target

EDITORIAL LETTER

Cement Plants Going Green

NUMBERS IN BRIEF

The Coal Issue In India Became Complex Due To Cancellation Of Blocks A collective responsibility towards green cement plant

18 India Unscathed Despite Global Shock-waves

CW Research: Global Cement Trade Price Report

india

ANALYST RECOMMENDATIONS

Green Petcoke Imports Double

Latest Broker Recommendations

A CW Research analysis

& construction Materials

www.cemweek.com/india

CemWeek

Framework, Policy and Action

Performance of India’s cement sector

Cement

rOBERT MADEIRA cemweek publisher head of cw group research

Rahul kamat Senior Editor

MARINA FERNANDES Jr. Editor & Communications Assistant

research and analytics

cement

Luciana Murarasu

26 cement volumes

34 MARKET AND COMPETITION

Liviu Dinu

Marketing & Communications Coordinator

Advertising

36 M&A and FINANCE

29 coal market update

38 PROJECTS AND EXPANSIONS

30 energy price update

construction & building materials 44

INFRASTRUCTURE & PROJECTS Japan aid India for highway projects

Raluca cercel Silviu Stefanescu STEFANA ABICULESEI Sushimita rai

40 VOLUME AND PRICING

CONTRIBUTING ANALYSTS

41 PEOPLE

Sr. DESIGNER

42 REGIONAL UPDATE 43 EQUIPMENT HIGHLIGHTS

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letter from editor

Framework,

Policy and Action In a bid to support India’s role in curbing CO2 emissions, the current issue of Indian Cement and Construction Material magazine, features a story on environment management.

dditionally, the feature delves deep to understand the motivational drivers for Indian cement producers who are pursuing a strategy of conservation of natural resources by using the state-of-the-art technology as well as alternate fuels. Examples include an emerging player in JSW Cement, which is manufacturing “green cement”, and a major player in UltraTech Cement, which has established an Alternative Fuels & Raw Materials (AFR) business. This is recognized as an activity that can contribute significantly to the cause of climate change mitigation and sustainability.

A collective effort by the cement industry to mitigate its emissions is commendable, and showcases the importance of leadership and collaboration in the transition to a low carbon economy. However, these business measures can only achieve their full potential, if backed by the right policy frameworks and financial incentives. A major cause of concern has been the fact that in spite of many technologies being available, the presence of political roadblocks and the lack of adequate financial incentives has hampered the necessary investment to both implement existing and develop breakthrough technologies. These investments are a perquisite for implementing existing and developing breakthrough technologies required to deliver a meaningful reduction target. In the spirit of collaboration at CoP21, India has decided to amend its Electricity Act and the Energy Conservation Act in order to achieve the efficiencies that it has pledged to the UN Framework Convention on Climate Change. Although, given the current logjam in the Indian Parliament, it remains questionable whether any amendments to exisiting legislation will be enacted. However, ambitious targets on energy efficiency will have to be accompanied by rules and implementation. Lastly, the efforts undertaken by major cement players towards environmental management are praiseworthy, however, a valid question arises: can we call it as a genuine effort or a forced one? At the end, ICCM Magazine provides all the relevant news about the main indicators of the industry, including the latest facts and figures about cement volumes, energy prices, relevant people in the business, regional developments, equipment and construction projects. Don’t miss out the numbers and the trends laid out in the special sections.

With the eyes of the world on the negotiations at the CoP21, the cement industry is also taking steps to play its part in reducing its carbon footprint. Leading global cement companies have come together to reaffirm their commitment to help tackle climate change by releasing a set of action plans aimed at reducing carbon emissions by 1Gt by 2030 compared to business as usual.

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Rahul Kamat senior editor

numbersin brief

Encouraging sign for Indian cement industry With Indiaâ&#x20AC;&#x2122;s economy back on track, the cement industry is already drawing the benefits A couple of quarters ago the Indian cement manufacturers, which were waiting for the government to unlock infrastructure and residential construction projects that would help the domestic demand to recover, in the quarter ended September 30, 2015 (Indian FY2016, Q2), the industry is already feeling the positive effects of the construction projects that have been kick started.

As the largest cement manufacturer in India, UltraTech Cement witnessed a 4 percent increase in net sales, as compared the same period, a year earlier. The only major company in India to experience a year-on-year decrease in net sales was Ambuja Cement, as its net sales fell by 4.2 percent. In addition, the net profits of the company fell by 36 percent. The decline is attributed to lower EBITDA, even though cement sales in metric tons increased by 3.2 percent.

CHART: Net sales of Indian cement manufacturers (INR crore) FY 2016 Q2

6,000

FY 2015 Q2

UltraTech

ACC

Ambuja Cement

The major infrastructure and housing for all by 2022 mission planned by the government have not gone unnoticed by the leading cement manufacturers, most of which are planning capacity expansions and new plants during the next five years. A case in point would be UltraTech. The company, which has the capacity to produce over 60.2 million tons per year, agreed in

Shree Cement

Prism

Source: CW Research

3,000

December 2014 to purchase two cement plants from Jaiprakash Associates in Madhya Pradesh, which would take its capacity to 65 million tons. UltraTech is in the process of executing other expansion projects that are aimed at raising its capacity to 71 million tons upon completion. Other additions will come from JSW Cement, HeidelbergCement, and Zuari Cement.

CHART: GDP at constant prices growth rate Growth rate

8% 7%

5% 4% Q2FY2016

Q1FY2016

Q4FY2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Q3FY2015

November - December 2015

Source: CW Research

feature

The

ONE

billion target 4

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

The coal issue in India became a complex due to cancellation of blocks by the Supreme Court. Meanwhile, the government is likely to earmark 25 per cent of the coal production for the unregulated sector, mainly benefiting the cement industry.

of 1.5 billion tons. Of this, one billion tons will come from the state-owned Coal India Limited (CIL) and the remaining 500 million tons will come from non CIL sources, particularly from the mines that are presently being auctioned or allocated to nonCoal India entities. For the 42 schedule II mines, the peak rate is 90 million tons (MT) and for the 32 additional schedule III mines the peak rate is 130 MT. That said, the 204 coal blocks, together have an estimated coal production of over 800 MT. “Therefore, we can safely assume that by 2020, around 500 MT will be produced from these mines,” said the secretary. For the mines, currently owned by CIL, the MoC has drawn up a mine wise plan clearly detailing what is required to take a mine from level X to Y. This framework includes, evacuation, land acquisition, environmental clearance, law and order, etc. All the issues associated with increasing production or productivity have been clearly identified, and a strategy has been chalked out for each mine. In fact, the strategy is already being implemented. The progress is clearly evident in the coal production in the recent months.

iven the large number of stakeholders in the coal sector, bringing in transparency and objectivity were essential to mitigate the challenges. And indeed, the present government’s option for coal auction route, till now, has gone fine so far. In fact, the auctions have clearly demonstrated that even a complex issue, such as coal, can be tackled efficiently and efficaciously through the application of IT in a transparent manner. Meanwhile, with this coal auction process, the Ministry of Coal has set an example and it is expected that the ministry would follow the same auction methodology with minor modifications on the basis of their past experience. But, this process would, by and large, remains the same for all the 204 blocks. As far as other ministries are concerned, it will be their decision. But, having demonstrated a successful auction process, it would be useful for other ministries to follow the suit for their use.

“To my knowledge, in the past decade, coal production has never grown by 7 – 8 percent, so it has given us hope that we can ramp up production,” said Swarup, being hopeful about the way coal sector is behaving in India.

The Challenges Evacuation, environment and forest clearance, land acquisition and local law and order problems are the four major challenges, in varying degrees in different mines. Fortunately, the ministry has been able to identify these issues and will follow a specific strategy to address each issue.

India needs to understand the value, the regulator will bring to the system

The target: Is it achievable? In an exclusive interaction with ICCM, Mr Anil Swarup, Secretary, Ministry of Coal, Government of India set the tone right, while embarking upon the set coal production targets. According to him, the ministry is targeting coal production

For example; earlier all evacuation activities were being performed by the railways. Now a decision has been taken, along with the State governments, to set-up joint ventures in each of the concerned states.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

feature The MoC has drawn up a mine wise plan clearly detailing what is required.

For these joint ventures, each evacuation line will be an independent profit center, unlike railways, where evacuation is one of their many projects. The JV will be formed between Coal India Ltd with a 64 percent stake, Ircon 26 percent stake and the concerned State government with a 10 percent stake. The State governments, have in-principle, agreed to this arrangement and Memorandums of Understandings will be signed with them in the next one month. The Ministry is now in the process of circulating a draft, which is at various levels of approval. This arrangement will especially work well in the coal bearing states, as the intent is to move coal from accessible areas to inaccessible areas.

The government is likely to earmark 25 per cent of the coal production for the unregulated sector. These will primarily be the projects to evacuate coal to the main lines. India sits on 300 billion tons of coal. However, there is no evacuation, where these reserves exist. If the evacuation issue can be addressed, production will not be a challenge.

september November -- December october 2015 2015

Explain the grim scenario for evacuation process, Swarup said, “We have a situation, where it takes around 12 hours to fill a rake, and in others it is done in an hour and a half. Therefore the Ministry is also considering mechanization for improving the turnaround time leading to efficient evacuation.”

The Coal Swaping Initially, bilateral swapping has been approved, which is relatively simple. It is being done at the level of existing linkages, where coal is unnecessarily being carried to users located at a greater distance, when it can be utilized for closer units. So far, the country has witnessed 15 swaps, with the first set of swapping entailing a saving of INR 1,100 crore p.a. Ultimately, swapping is likely to lead to savings of INR 6,000 crore p.a. Swaurp mentioned, “We are also contemplating a second kind of swapping, i.e. tri-lateral and multi-lateral. These types of swapping are more complex as multiple stakeholders are involved and take longer to execute.”

INDIA INDIACEMENT CEMENT&&CONSTRUCTION CONSTRUCTIONMATERIALS MATERIALSMAGAZINE MAGAZINE

Increased production, but no off-takers Explains Swarup: it is mainly due to the subdued demand by the power utilities in India. Interestingly, even though the production level has increased, the demand is yet to pick up. But let me tell you, said the secretary, “ honestly that we are still short of the required coal, and need to grow that number in the coming months. And this scenario, according to my understanding is just a temporary phase.”

The auctions have clearly demonstrated that even a complex issue such as coal can be tackled efficiently. The central government is very intensively discussing with state governments to improve the financial health of the distribution companies (discoms), initiated by the Prime Minister. This has led us to meet all the chief secretaries of the states, and a detailed plan has been worked out with these chief secretaries. Once this happens, there will be an increase in demand for power. There will be financial restructuring, detailed planning on how to reduce transmission losses, how to improve the efficiency of power plants. A huge plan has been worked out and we are very hopeful that the demand from discoms will pick up and so will the demand for coal. Since the coal production is on an increasing mode, the government is likely to earmark 25 per cent of the coal production for the unregulated sector. Which would mean that

The coal swapping is likely to lead to savings of INR 6,000 crore p.a

there will be an additional coal available to the unregulated sector. Last year, through the linkages, the government allocated 55-60 million tons and it is likely to increase the limit almost by 40 per cent; so the country will have another 25 million tons or maybe more coming to this segment. Now, this additional amount will certainly be auctioned, not allocated through the standing committee system.

Fact file

1.5

is the ministry targeting coal production

bllion tons

For the 42 schedule II mines, the peak rate is

million tons

130

For the 32 additional schedule III mines the peak rate is

The 204 coal blocks, have an estimated coal production of over

800

At the end, when asked about the much hyped requirement of the coal regulator in India, Swarup told that India needs to understand the value, the regulator will bring to the system. “As you know that we have been occupied with the coal auction and coal production, which at present is our priority. Hence, we have not given a thought of having a coal regulatory authority, at this moment,” he said. According to Swarup, until India, fully appreciate the nuances of having a regulator, the country should not unnecessarily jump into it.

INDIA INDIACEMENT CEMENT& &CONSTRUCTION CONSTRUCTIONMATERIALS MATERIALSMAGAZINE MAGAZINE

November september- -December october 2015 2015

feature

Cement Plants Going Green

he demand for carbon footprint reduction must not only the responsibility of international organizations related to climate change, as well the customers, government and community will require that "the cement plants be green".

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

feature During the next 20 years Co2 emissions will be the most important issue. Also put place this in on the corner.

At a recently concluded CoP21 Paris France Sustainable Innovation Forum 2015, one could visibly sense how developed and developing countries were at the loggerhead, while passing the buck to each other, promising their core duties towards climate change.

The kg Co2/ton cement will be the main Key Performance Indicator

Although, the baton of curbing the carbon emissions was swiftly passed on to the developing countries by the “rich nations”, it was only India, who issued a blunt warning. Quoting the Prime Minister of India, Mr Narendra Modi, here, he stated, “The richest nation still have a moral imperative to lead the fight against global warming, especially curbing the Co2 emission.” Notably, talking about India’s efforts towards reducing the Co2 emissions, the country’s growing industrial activities are still taking baby steps, in this regard. At present, of the total industrial Co2 emitter, India’s cement industry stand second after power sector.

But, the Indian cement industry deserves commendation for its longstanding efforts towards the reduction of its carbon footprint by adopting the best available technologies and environmental practices. This is reflected in the industry’s achievement of reducing Co2 emissions to an industry average of about 0.719 tons Co2 per tons of cement (direct and indirect emissions from Scope I and Scope II) from a substantially higher level of 1.12 tons Co2 in 1996.

The market and opportunities The outlook for the cement industry in India looks robust over the period from 2015 to 2020, given the large number of

Indian Cement Industry – Change in Pattern of Technology and Energy Efficiency Year Kiln Capacity (Tonnes/Day) Heat Consumption (Kcal/kg Clinker) Power Consumption (Kwh/Tonne Cement)

1950-60

1970

1980

1990

Post 1990

300 - 600

600 - 1,200

2,400 - 3,000

3,300 - 6,000

4,500 - 12,000

1,300 - 1,600

900 - 1,000

800 - 900

650 - 750

115 - 130

110 - 125

105 - 115

95 - 106

70 - 90

• Proactive Cement Industry constantly improves Energy Consumption. • Some plants have become global benchmarks in energy consumption, next to Japan

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

The production of PSC will curb

Co2 emissions significantly

Rahul Akkara, Associate Vice President-Strategy & Brand, JSW Cement Ltd What are the strategies that have been implemented or envisaged by JSW to curb the greenhouse gases?

At present, the Indian cement sector is dominated by players in OPC and PPC. However, we, at JSW Cement, to prevent the natural resources getting exploited, has decided to manufacture Portland Slag Cement (PSC) with the help of industrial waste. Importantly, today, the PSC category cement is far more superior than the cement which is made out of fly-ash or coke. In fact, the cement that we manufacture emits less CO2 as compared to PPC and OPC. Currently, we are marketing our PSC in regions including Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Maharastra, Orissa and Goa. Also, we sell PSC directly in the market to consumer for building, homes or foundations construction etc. Today, slag is more like an industrial waste, and there is a huge concern by the government (s) to essentially dispose it. As a matter of fact, we are actually recycling the industrial output from steel facility and reusing it to manufacture cement.

How would you justify the comparison? The production of PSC will curb Co2 emissions significantly and use of raw material such as coal, fly-ash and limestone. It will also curb the use of water in the entire cement manufacturing process drastically. In this case, in the process of manufacturing one ton of PPC, there is an equivalent amount of CO2 emission. While, manufacturing PSC, the CO2 emission is around 0.35 tons. So, in that sense, if you look at the extent at which CO2 emission by PSC, is far lesser that the norms set by pollution control boards in India. And, this makes PSC, an environmentally friendly product, a green product. According to you, which sector will drive the demand for PSC in India? The demand for PSC will majorly come from infrastructure sector, including road projects envisaged by the Ministry of Roads. The company has already received an order from NHAI for the utilization of the PSC in the concretization of roads. We also expect the 100 smart cities, planned by the current government will have major use of PSC. What is JSW Cement’s current market share in this segment? At present, in India, we holds around 90 percent of market share in PSC segment and fear a huge competition from major players including ACC and UltraTech in the coming year. We focus on eco-friendly products was a conscious decision, we intend to play a leading role in the sustainable construction material sector in the coming years. We also enjoy a competitive edge over other cement manufacturers, since JSW has its own blending material viz slag and fly-ash.

massive infrastructure projects that are already in early stages of implementation. Projects including “Housing for All by 2020”, concrete roads (another 100,000 km in addition to 100,000 km already in progress), 100 smart cities, 110 million toilets by 2020, and metro rail projects (Lucknow, Kochi, Jaipur, Ahmedabad, Chandigarh, Nagpur, Kanpur, Patna, Surat and Pune) are expected to boost demand for cement further. With India’s GDP growth expected at a CAGR of 7.6 percent, consumption of cement, if given the historical trend, should expand at 1.2x GDP growth rate. Even if consumption growth is in tandem with GDP, consumption is expected to reach an estimated 372.4 million tons by 2020. Per capita consumption is projected to increase from 213 kg in 2015 to 273 kg in 2020. Industry utilization levels are expected to increase as capacity additions occur at a slower pace than the increase in consumption.

Fact file • Co2 emissions from the Indian cement industry are projected to reach between 488 MtCo2 and 835 MtCo2 by 2050. • A possible transition path for the Indian cement industry to support the global goal of halving Co2 emissions by 2050. • Reduction of direct Co2 emissions intensity to 0.35 tons of CO2/t cement in 2050. • As much as 80 MtCO2 to 150 MtCO2 could be saved through efficiency improvement

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

feature Curbing the Co2 During the next 20 years Co2 emissions will be the most important issue in the operation and design of a cement plant. The kg Co2/ton cement will be the main Key Performance Indicator. despite With 99 percent of the installed capacity using dry process manufacturing, the Indian cement industry has been adopting latest technologies for energy conservation and pollution control as well as online process and quality control based on expert systems and laboratory automation. Example include, a major player, including ACC; an emerging player, including JSW Cement and Wonder Cement; and an established player in Zuari Cement are leaving no stone unturned on their commitments towards Co2 emissions.

Co-processing of wastes in cement kilns is recognized worldwide as an environment-friendly measure. That said, Mr Ulhas Parlikar, DirectorGeocycle India at ACC Ltd, has an interesting initiative to share with ICCM. ACC has been using waste materials as a substitute for hydrocarbon fuels to run its cement kilns and furnaces, which helps in reducing dependence on traditional fuels like coal. â&#x20AC;&#x153;Co-processing of wastes in cement kilns is recognized worldwide as an environmentfriendly and safe option of managing various kinds of hazardous and nonhazardous wastes,â&#x20AC;? Parlikar added.

November - December 2015

India requires a legislation to restrict

the use of OPC

Krishna Srivastava, Whole Time Director, Zuari Cement How much the company have invested in reducing carbon footprints?

Investment in carbon reduction is an ongoing process and Zuari Cement has been continuously investing in reducing the carbon footprint since 1998, when, our Yerraguntla plant set up a separate line calciner with 6 stage preheater.

More recently, since 2009, Zuari has invested in excess of INR 100 crore and continues to invest every year. Some of these investments are spread over two or more years and therefore, it would not be correct to talk about investment in a particular year.

Meanwhile, how these measures have helped the company to strengthen its position and the brand in the market? Zuari Cement is coming out with different products with a low carbon footprint. It is also helping the society by using industrial, agricultural and processed municipal solid wastes. These measures are being appreciated by our customers and helping Zuari being the preferred brand amongst our customers.

By what percent an energy efficiency improvement in a cement plant can be achieved while reducing the emission?

Depending on the age of the plant, there could be a significant potential for improvement in energy efficiency and thereby carbon emissions. For Zuari, the Yerraguntla plant has been already state-of-the-art and hence there is very little potential. The Sitapuram plant certainly has potential for improvement, but the retrofitting costs are so high that the projects are not financially viable. Some examples of technology employed to make our plant environment friendly are: flyash dryer, OK mill for utilization of wet fly-ash, high efficiency bag filters, alternative fuel feeding system, shredders for alternative fuels, CEMS for emission monitoring, waste management platform, ISO 14001 environment management systems etc.

Do you think that India, with stricter green norms, products such as GGBS and PSC possesses a good future?

This is a cultural issue and needs transformation of the mindset of users to shift from OPC to greener cements. The Eastern part of India (West Bengal, Bihar, Orissa and North East) already uses mostly blended cements, but other regions predominantly prefer OPC. A legislation, restricting the use of OPC for specific applications, only will help in promoting blended cements, thereby, reducing the national CO2 footprint of the Indian cement industry.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

The entire design of Wonder Cement plant is based on the latest environmental norms.

which is a huge concern for the State as well as central government.

What’s more? JSW Cement, in a way to safeguard the natural resources, has adopted a better strategy, while manufacturing “green cement”.

Worth to mention that in the process of manufacturing one ton of PPC, there is an equivalent amount of Co2 emission. While, manufacturing PSC, the Co2 emission is around 0.35 tons.

Retrofitting costs are high for an age-old cement plant, which makes it financially unviable.

When asked about it, Mr Rahul Akkara, Associate Vice President-Strategy & Brand, JSW Cement Ltd told ICCM that the company manufacture Portland Slag Cement. According to him, the cement is made out of using an industrial waste,

Cement Demand in various Scenario Low Demand Case

High Demand Case

1,600 1,400 1,200 1,000 800 600 400 200 0

2010

Source: CSI Data

2015

2020

2025

2030

2035

2040

2045

2050

Apart from JSW Cement, one of the major players, Zuari Cement is coming out with different products with a low carbon footprint. To this, Mr Krishna Srivastava, Whole Time Director, Zuari Cement said, “We are helping the society by using industrial, agricultural and processed municipal solid wastes.” Meanwhile, most of the cement bigwigs are in the process of manufacturing PSC, which is likely to cut their operating costs. That said, in a bid to be ahead of its peers, Wonder Cement too has undertaken various

Alternative Fuel Resource • Total Substitution Rate (TSR) of Indian cement industry is about 0.5-1 percent, in comparison to some developed countries where it is about 60 percent. • For year 2014 - Total Available Raw Material and Alternate Fuel436.68 tons 1. Hazardous waste 2. Refuse Derived Fuel from Municipal Solid Waste 3. Tyre chips 4. Biomass 5. Industrial plastic

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

feature There could be a significant potential for improvement in energy efficiency and thereby carbon emissions. The placement of the caption box must be in the corner.

Amongst fossil fuels, anthracite, high grade sub-bituminous, oil and coal considered high in carbon intensity, whereas petcoke and natural gas are considered low. In addition, internationally, biomass has a carbon intensity of zero, but it is impossible to operate a cement plant solely on biomass due to availability and other sustainability issues. Industrial waste fuels like dolachar, ETP sludge, organic residues, spent carbon, etc., are locally considered carbon neutral for initiatives like the “Perform, Achieve and Trade” (PAT) scheme, but it is not so as per international definitions.

Up to four percent could be reduced with the use of preventive maintenance practices environmental measures in its Nimbahera plant. The entire design of the plant is based on the latest environmental norms. Technologies, including a reverse air bag house and ESP. Also, a number of nuisance bag filters installed having emission of much below the permissible unit. That enables the plant to be clean and dust free. However, most of the cement manufacturers, we have approached were of the opinion that, depending on the age of the plant, there could be a significant potential for improvement in energy efficiency and thereby carbon emissions. For a state-of-the art plant, there is a little potential for an improvement, but for an age-old plants, although there is a potential, but the retrofitting costs are so high that the projects are not financially viable.

Energy conservation On the energy conservation front, the best levels achieved by the Indian cement

November - December 2015

industry, at about 680 kcal/kg clinker (cli) (2.85 GJ/ton clinker) and around 66 kWh per tons cement, are comparable with the best achievable levels in the world. To this, Mr SM Joshi, President-Works, Wonder Cement explains, “In terms of clinkerization, the plant is running at 5859 kWh/tons, and is aiming to reach 55 kWh/tons in the short term and in the long term to 50 kWh/tons. For cement grinding, Joshi said, “We are operating at 35 kWh/tons and want to achieve 30 kWh/tons.”

Fuel usage Cement plants are increasingly being operated by using a basket of fossil fuels and waste fuels each with different carbon intensities. Although there is an International standard for carbon intensity of various fuels, this is locally and nationally tailored to suit environmental initiatives. [Refer box Alternative Fuel Resource]

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

“A better standardization of emission intensity, considering a wider variety of wastes will help this effort,” Krishna Srivastava from Zuari Cement suggested. To sum up, the focus today is in maximizing the utilization of waste fuels, as it definitely helps in sustainability.

Automation and maintenance In order to compete on cost and reduce emissions, in less than 10 years, the operating efficiencies of all plant equipment shall be of at least 95 percent. This means that all areas will be fully automated and that the level of maintenance should be excellent. The implementation of modern automatic control systems could reduce the kiln calorific energy up to six percent, according to a study developed by the CSI and the ECRA (European Cement Research Academy).

Our immediate focus is the

optimization of electrical energy JC Toshniwal, Executive Director, Wonder Cement

Up to four percent could be reduced with the use of preventive maintenance practices, according to the report carried out by Berkeley National Laboratory about the energy efficiency opportunities in the cement industry. For example, proper maintenance of compressed air systems helps cement manufacturers to maintain compression efficiency and reduce air leakage.

What are the green initiative measures applied by Wonder Cement to curb the CO2 emissions?

Our plant at Nimbahera, has undertaken all the necessary environmental norms suggested by the Ministry of Environment. In fact, the entire design of the plant is based on the latest environmental norms. Technologies, including a reverse air bag house and ESP. Basically, ESP have been used for gas cleaning of every aspect of cement manufacturing. Also, a number of nuisance bag filters installed having emission of much below the permissible unit. That enables the plant to be clean and dust free. Importantly, a fair amount of measures of the company’s concern on environmental issues was addressed by planting 55,000 tree saplings in 50 hectares in the last two years against a target of 75 hectares in 20 years. We are also in the process of using industrial waste as a source of fuel for our cement production process. We want to use the less hazardous industrial waste. So, by using these industrial wastes, we do not only disposing the waste, which anyway gets dumped, but also saving the environment too. But, these are our long-term plan.

Meanwhile, the use of alternative fuel resources plays an important part in bringing down the Co2 emission. Your comments.

Indeed! As I earlier told you that we are taking all the important steps to bring down CO2 emissions, and in this connection, we have tried different cementitious materials to conserve our limestone deposits. The limestone mine has a proven reserve of 330 million tons, with a lifecycle of 30 years. We extract around 18,000 – 22,000 tons of limestone, per day. Meanwhile, we produce blended cement apart from Portland cement, both 43 and 53 grade, where fly-ash is used as one of the ingredients. The level of fly ash absorption is 26 per cent at present. While raw material acquisition and refining is one of the most important stages of cement production for which Pfeiffer has supplied the latest VRM technology, the equipment for Pyro-processing and clinker grinding is supplied by ThyssenKrupp.

Apart from AFR, how the company is working on efficient energy consumption and productivity?

To begin with, this particular plant has a 40 MW captive power plant. In addition, we are constructing another, a 18 MW waste heat recovery system (WHS) to meet the power requirement of our recently completed second unit. This plant will be installed by Thermax and ThyseenKrupp. In addition, the company we are also planning to add another 40 MW plant purely based on the petcoke at the cost of INR 180 crore. On thermal energy, we are better off and rate ourselves ´good´ as our thermal energy consumption is 690 kcal per kg of clinker. However, on electrical energy, we still need to improve the performance.

Said, Luis Fuentes, a specialist in the cement sector, “Leaks, in compressed air systems, are very common and are significant sources of wasted energy and money, plants without proper maintenance of them may have 20 to 50 percent leakage.”

Waste Heat Recovery Captive power plants (CPPs) offer important energy security enhancement and emissions reduction opportunity. Assuming that CPP will continue to account for 60 percent of the cement electricity requirement in 2050, as much as 80 MtCo2 to 150 MtCo2 could be saved through efficiency improvement and use of alternative energy sources.

Waste Heat Recovery • Potential of WHR in Indian Cement industry is around 500 MW • Approx. Present installed capacity of WHR is around 300 MW. • More than 20 plants have installed WHR, rapid installation by other plants in progress • Up to 22 kWh/t clinker or about 20 percent of the power consumption of a cement plant can be met by using WHRS without significant changes in kiln operation.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

feature Wastes being fed to ACC Cement kiln

MW WHRS in its plant in Gujarat. Sanghi Industries had signed a memorandum of understanding with a Chinese firm in May, 2015 to set up this project.

And, definitely, in the near future, all the new cement plants worldwide will be designed with alternative fuels and WHR areas. [Refer box Waste Heat Recovery]

Decline in energy cost was due to lower petcoke and international prices, higher usage of petcoke (65 percent compared to 50 percent) and increased usage of WHRS (benefit of INR 15/tn).

The operating efficiencies of all plant equipment shall be of at least 95 percent Finally the CC area will be the last one area to be integrated into the cement plant layout. These technologies are currently being investigated in pilot plants. The IEA is considering these systems as the main lever to reach the 2050 Co2 emissions goal.

In addition, Wonder Cement too is installing a 18 MW WHRS with the help of ThyseenKrupp and Thermax. Also in the fray is Sanghi Cement, which is constructing a 15

In India too, many cement manufacturers are following the suite in this regard. A case in point would be ACC. The company’s operating cost/ton was down 1.6 percent year on year to INR 4,329 primarily due to decline in energy cost.

One percent reduction of clinker factor

November - December 2015

UltraTech Cement too has commissioned a 10 MW WHRS at Aditya Cement which is part of Line I and II. The remaining WHRS capacity of 5 MW will be linked to Line III by mid-2016.

Technology The industry suggested a few examples of technology employed that can make a cement plant environment friendly: fly-ash dryer, OK mill for utilization of wet fly-ash, high efficiency bag filters, alternative fuel feeding system, shredders for alternative fuels, CEMS for emission monitoring, waste management platform, ISO 14001 environment management systems etc. [Refer Indian Cement Industry – Change in Pattern of Technology and Energy Efficiency]

Levers of Emission Reduction Key Levers

Expected Kg CO2 Reduction / T of Cement 7.5 – 9

One percent AFR TSR Increase

2-3

2.4 kCal/kg Cl of thermal energy saving

1 kWh/T Electrical energy reduction

Source: CSI Data

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

As far as carbon capture storage is concerned, being a futuristic technology, it is yet to be developed commercially. At the moment, other than a few “Pilot Plant” level installations in Europe, there are none in commercial operation. It is already part of the technology papers and once the technology is commercially available, it will certainly be considered for implementation.

Capacity additions According to Centre for Monitoring Indian Economy in the year 2015-16, the incremental cement capacity is expected to more than double to 53.5 million tons per annum (MTPA). This is likely to be the highest capacity addition in the last six years, with a total of 30 projects are scheduled to come on stream with an aggregate investment of INR 226.4 billion.

KHD Humboldt Wedag and Siemens are certainly looking to leverage the advantage of their presence in India.

Conclusion In the absence of policy actions or technology development, i.e. in a business-as-usual scenario, Co2 emissions from the Indian cement industry are projected to reach between 488 MtCo2 and 835 MtCo2 by 2050.

Carbon capture storage is yet to be developed commercially

With a such magnitude of opportunities, the technology majors, including ThyssenKrupp, FLSmidth, Thermax,

This represents a 255 percent to 510 percent increase, compared to current emissions. The technologies, policy frameworks and investment require an outline to reduce the Co2 intensity in the Indian cement sector by about 45 percent by 2050, from the 2010 level. This would limit Co2 emissions growth to between 100 percent (low-demand Case) and 240 percent (high-demand case) compared to the current level. Summing up, several countries globally have utilized cement kilns as an effective option for their country’s industrial, municipal and hazardous waste disposal. This creates a win-win situation for both the local administration and the cement plants: the administration utilized the infrastructure already available at cement kilns, thereby spending less on waste management, and the cement kilns have their fuel requirements partly met.

• About 123 million tyres were produced in year 2013-14. • Recycling – a small scale option

• Surplus biomass- 150 MT (2014)

• High TSR (Upto 50%) can be achieved by co-processing tyre chips in the precalciner

• Easy availability and about 3 times the coal used in the Indian cement industry

• The calorific content value of tyres is between some 6450kCal/kg and 8000kCal/kg

• Calorific Value Varies From 3000 -4000 KCal/Kg

• 1 tonne of coal= .6-.95 tonne of tyre

Biomass

Tyre chips

• Plastic consumption in India is about 8 MTPY, out of which, 70 percent i.e. 5.6 MTPY transforms to waste. • Effectively destroys non-biodegradable materials without any additional environmental issue

Industrial plastic

SOURCE: Action Plan for Enhancing the use of alternative fuels and raw materials in the Indian cement industry

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

$$ $ feature

CW Research: Global Cement Trade Price Report

India unscathed despite global shock-waves

India has resisted the impact caused by a weakening global economy and the negative trends in terms of cement demand.

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

feature

ccording to the latest quarterly edition of the Global Cement Trade Price Report, released by CW Research, India remains one of the markets with a positive development in gray cement prices and slag exports, despite the global downturn mainly due to fall in commodity prices and exchange rates.

Foreign exchange impacts cement trade The global trade of cementitious products has witnessed a declining trend in terms of both volumes and pricesâ&#x20AC;&#x201D;due to a reduced demand for the materials caused by the weakening economic growth at a global level.

November - December 2015

Trade prices were mostly influenced by developments in foreign exchange rates, as many currencies have sharply depreciated against the U.S. dollar, while sluggish demand has also played a role in declining trade prices.

the year, the USD was worth around CNY 6.1, but by the end of August, one USD reached CNY 6.4 and stabilized around the above mentioned values. The depreciation of the Yuan had a ripple effect on the AsiaPacific-Japan region.

Recent months have witnessed an unusual movement in foreign exchange rates, mainly due to the depreciation of the Chinese Yuan, Vietnamese Dong, and Brazilian Real against the U.S. dollar. These have deeply impacted the price of cement and cementitious materials on the international market.

The Thai Baht followed the same descending path as the CNY. One USD reached THB 35.7 towards the end of August and ranging between THB 35.2 and THB 35.7, until November. A similar devaluation occurred in the case of the Vietnamese VND but

Unusually large movements in foreign exchange rates have deeply impacted the price of cement and cementitious materials on the international market.

The Chinese Yuan depreciated sharply against the US dollar in August 2015 in a effort to boost exports. At the beginning of

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

the .Japanese yen, on the other hand, recovered on the back of the depreciation of the Chinese Yuan.

Gray sees red Average sale prices of gray cement at a global level continued to decline in the third quarter of the year in U.S. dollar terms. While global economic growth is projected to be 3.1 percent in 2015, cement demand is projected to decline by about 2.7 percent in 2015, due to the slow progress of the economy. In emerging markets the falling prices of key commodities have negatively impacted economic growth. Low oil prices and the falling prices of key commodities such as gold, gas, and others have dictated much of the development in the global economic conditions in the third quarter of 2015, just as they have in the previous quarters of the year. The present economic environment is becoming increasingly difficult for developing countries in Asia, Latin America, and Africa. Not only they have weaker commodity prices, affected

the economic growth in these regions, but have even contributed to political instability as well (particularly in Latin America and Africa). Another source of pressure, on the global economy is the fact that, in the third quarter of the year, the Chinese economy continued to grow at a slower pace in comparison to previous quarters. This moderate growth is expected to affect both the developed and emerging economies— given the size of trading relationships China has with other countries. In the third quarter of 2015, China’s economic growth slowed to a six-year low of 6.9 percent year-on-year in spite of repeated interest cuts and other stimulus measures. As part of the paradigm shift from an exportbased economy, to one driven by domestic consumption, the Chinese government is trying to manage the transition. And, this trend continued in the third quarter of the year, with the government imposing

stringent environmental regulations on the manufacturing sector. The economic slowdown in China along with the weak recovery in the Eurozone is affecting global economic growth prospects and is likely to lead to further downward revisions in growth forecasts.

Mixed trends in prices The United States, United Kingdom, Colombia, Mexico, Germany and Australia, are some of the countries, which witnessed an increase in cement prices. The US saw price increase of0.2-1 percent in different regions, while the UK saw a hike of 0.1 percent month-on-month. Another major markets, that witnessed price rise were, Colombia, Mexico, Germany and Australia. A significant decline was reported in in Brazil, down by 10 percent month-on-month, in the same month. However, prices were flat to negative in France, Sweden, Romania, Greece, and Saudi Arabia.

ASIA-PACIFIC-JAPAN OUTLOOK: CLINKER EXPORT PRICES (USD/ton)

China Korea

India Thailand

Japan Asia Paciﬁc Japan

Dec ‘14 Jan ‘15 Feb ‘15 Mar ‘15 Apr ‘15 May ‘15 Jun ‘15 Jul ‘15 Aug ‘15 Sep ‘15 Oct ‘15 Nov ‘15 Dec ‘15

Source: CW Research

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

feature Higher cement prices in India India is one of the few markets that have witnessed a positive development in terms of increase in gray cement prices over the third quarter of 2015, at a time, when retail cement prices in local currency terms showed mixed trends. Despite the average global decline in sales prices in U.S. dollar terms, the price increase in India was driven by strong demand, supported by increases in construction activity. Market prices gained 0.2 percent month-on-month in September 2015 in India, In India, retail cement prices have remained stagnant, owing to low volumes in the seasonally weak third quarter. However, there has been an 8-10 percent increase in cement prices since October 2015. The retail prices are strong in the Southern states of Andhra Pradesh and Telangana, along with a few other states, including West Bengal and Orissa in

Eastern India. Cement prices are facing stiff resistance in Northern part of the country including Delhi, Haryana and adjacent states, due to slow down in the real estate and housing investments.

A moderate cement export At a regional level, in terms of gray cement export volumes, the Global Cement Trade Price Report estimates a moderate price increase. By December 2015, import prices of gray cement in Asia-Pacific-Japan are projected to increase marginally, as compared to September 2015. This is mainly driven by an increase in CIF prices in India, Japan, Korea and Malaysia, while declines in Taiwan and Australia will somewhat offset the increase. Japan is likely to expect a steep increase, when CIF prices of gray cement are projected to reach around USD 45.5 per ton in December 2015, up by 1.6 percent, as compared to September 2015.

As for the white cement export price in the Asia-Pacific-Japan, it is expected to stabilize around USD 135 per ton in the fourth quarter of 2015. China is the

The global cement demand is projected to decline in 2015 by about 2.7 percent. country with the highest fluctuations expected in export prices. In October, FOB prices are expected to reach USD 133.0 per ton, which represents a 26.7 percent rise compared to September 2015.

Clinker prices above average In the Asia-Pacific-Japan region, India reported higher than average clinker prices, with a slight increase in the third quarter and a moderate growth forecasted

Asia-Pacific-Japan Outlook: Slag export prices (USD/ton)

Japan

Asia Paciﬁc Japan

India

Dec ‘14 Jan ‘15 Feb ‘15 Mar ‘15 Apr ‘15 May ‘15 Jun ‘15

Jul ‘15

Aug ‘15 Sep ‘15 Oct ‘15F Nov ‘15F Dec ‘15F

Source: CW Research

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

for the fourth quarter, according to CW Research estimates.

At the global level, trade volume for clinker fell by 1.2 percent year-onyear

While in the quarter between July and September, the price went from USD 40.9 to 43.6 per ton, and, the expected level in the last quarter of the month is estimated to be between USD 45 to 46.1 per ton. The regionâ&#x20AC;&#x2122;s average, for the third quarter was lower, and FOB prices for clinker sourced from the Asia-Pacific-Japan region is expected to see marginal monthon-month variations in the quarter to December 2015. While in the third quarter, prices ranged between USD 34.8 and USD 35.8 per ton, in the fourth quarter of the year, they are expected to range between USD 40.9 per ton and 41.5 per ton. Stronger pricing in India, China, and Japan will be responsible for improving the overall average price in the region. However, smaller exporters, such as Thailand and Malaysia are expected to moderate the overall improvement of prices in the region. At the global level, trade volume for clinker fell by 1.2 percent year-on-year, during the second quarter of the year to 9.3 million tons. The global average FOB price for clinker reached USD 40.9 per ton during the quarter. The highlight of the quarter is a 6.5 percent decrease in the price experienced year-on-year. Both, volume and price declined reflect the shrinking market for clinker exports.

Slag prices to recover India continues to be the second largest exporter of slag, with a market share of 8.1 percent, in the global arena. Slag export prices are projected to recover from the steep decline posted in July 2015, and touch USD 11.5 per ton by December 2015. India mainly exported slag to Bangladesh, which accounted for 69.2 percent of its foreign sales in volume terms.

FOB rates for slag shipped from India to Bangladesh stood at USD 11.2 per ton in the quarter to June 2015, down by 6.7 percent from USD 12.1 per ton posted in the previous quarter. With a smaller share of Indiaâ&#x20AC;&#x2122;s slag exports was Nepal, which accounted for 19.1 percent of shipments at a FOB rate of USD 7.1 per ton.

India reported higher than average clinker prices In the Asia-Pacific-Japan region During the second quarter of 2015, India exported 455,000 tons of slag, down 9.4 percent from 502,000 tons in the previous quarter. Japan, the largest exporter of slag in the region and in the world, exported 2.9 million tons in the three months to June 2015, at an average FOB price of USD 7 per ton, which was USD 0.3 per ton, 4.2 percent lower than in the previous quarter. The total volume of slag exports posted by the Asia-Pacific-Japan region for the quarter amounted to 3.9 million tons

of slag, which accounted for about 68 percent of the global slag trade.

Moderate expectations of growth Compared to the global economic trends, the positive developments in the Indian market through the past six months, may soon give way to a different outlook, as a result of regional developments. The main factors to take into account is that in Asia, economic growth slowed slightly, while the devaluation of the Chinese Yuan and the reforms in the exchange rate system adopted by many Asian countries dominated the economic news. The weaker performance of many Asian economies is expected to be further undermined by the effect of low commodity prices, especially in Indonesia. The uneven economic growth in developed markets including the United States, the Eurozone and Japan continues to be a drag on global economic growth. Slowing economic growth in China, widening conflicts, and the collapse in commodity prices are all clouding growth prospects.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

feature CW Research:

India’s October year-on-year green petcoke imports double

ccording to CW Research analysis, India’s imports of uncalcined petcoke totaled just short of 0.7 million tons in October 2015 with cement companies representing close to 60 percent of purchases.

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

West Coast of India on a Supramax vessel was recorded at around USD 25 per ton, down 4 percent month on month, while freight rate for the shipment on a Panamax vessel was recorded at about USD 22 per ton, down 4.0 percent MoM.

Major imports at ports Petcoke imports at Kandla (0.19 million tons) and Visakhapatnam (0.15 million tons) ports, together, accounted for a 50 percent of the total Indian petcoke imports in October. Tuticorin, Krishnapatnam and Gangavaram accounted for 13 percent, 12 percent and 8 percent respectively. The remaining 18 percent were imported at other ports including Pipavav, Mangalore, Nhava Sheva, Kolkata and Goa.

Future outlook Kandla and Visakhapatnam accounted for 50 percent of the Indian petcoke imports.

The monthly import volume represents a 17 percent increase over September’s imports and up 190 percent compared with the year-ago period. Indian uncalcined petcoke imports totaled 0.59 million tons in September 2015, while the country imported 0.29 million tons of uncalcined petcoke in October 2014.

Prices of fuel grade petcoke delivered to India on CFR basis remained stable in the second half of October 2015. Due to the low prices, some cement companies’ consumption has increased marginally. Due to an anticipated increase in construction activity, demand for petcoke is expected to increase from mid-November.

In October, the largest exporter of fuelgrade petcoke to India was from Saudi Arabia. The country exported 0.32 million tons, followed by the US at 0.29 million tons. Other exporters included China, Indonesia, Azerbaijan and Japan.

The freight rate for a bulk shipment of 50,000 tons of petcoke from Houston to

Petcoke imports by cement companies comprised about 56 percent of the total petcoke volume (0.39 million tons) imported in India in the month of October, this year. In comparison, petcoke imports by cement industry comprised 61 percent (0.35 million tons) in September, 2015. Petcoke traders, producers and suppliers accounted for 18 percent (0.13 million tons) and steel companies for 11 percent (0.08 million tons) of the total imports, respectively.

MAJOR SUPPLIER COUNTRIES (%)

Saudi

Azerbaijan

Indonesia

Source: CW Research

China

It is expected that the Indian petcoke imports to increase gradually due to the commencement of Reliance gasification plant in the first half of 2016, next year, possibly reaching 10 million tons per year by 2017. However, due to Saudi petcoke’s price and logistical advantage, India prefers to import fuel grade high sulfur petcoke from Saudi Arabia over petcoke from the US Gulf Coast. However, in order to stay competitive, US refineries are willing to drop their prices even further.

MAJOR INDIAN IMPORT PORTS (%)

Kandla

Visakhapatnam

Tuticorin

Krishnapatnam

Gangavaram

Others*

Source: CW Research

Note: Others* include Pipavav, Mangalore, Nhava Sheva, Kolkata and Goa

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

CEMENT MARKETS

CW Research

CEMENT VOLUMES Indian cement sector: Poised for recovery

In addition to the above, the proposed implementation of the GST at the start of FY2016 is expected to further contribute to economic activity and drive the demand for industrial/ commercial construction.

The Indian cement sector is poised to benefit from increased government spending on infrastructure, which is being helped by a reduced subsidy burden because of a sharp decline in international crude oil prices. The governmentâ&#x20AC;&#x2122;s decision to let the rates for petrol and diesel for consumption move in tandem with international prices has significantly reduced the fiscal subsidy burden on the central government. This has led releasing up much required funds to promote economic growth, which is only possible via the presence of ongoing infrastructure activities. Airports, seaports, national highways, state roads, dedicated freight corridors (DFC), 100 smart cities, and metro projects in various cities are all expected to contribute to the expected 40+ million tonnes of cement demand of which western India alone is expected to account for more than a quarter. Furthermore, the announcement of projects, including the building of the new capital of Andhra Pradesh and the Mumbai-Ahmedabad high-speed railway will further contribute to cement demand growth. In addition to the above, the proposed implementation of the GST at the start of FY2016 is expected to further contribute to economic activity and drive the demand for industrial/ commercial construction. The real estate industry is also slowly emerging from the doldrums of the past few years, and is initiating new projects across major tier 1 and tier 2 cities, as demand for housing continues to grow. The real estate market is also preparing to take advantage of the impact of the 7th Pay Commission recommendations, which will see a major boost in purchasing power of the Central government and public sector undertaking (PSU) employees in FY2016-17. The share of infrastructure, in overall cement demand is expected to rise, therefore, from the current estimated 18-20 percent in FY15 to 22-24 percent by FY20. The CAGR growth from 2015 to 2020 is expected to be around 10 percent, significantly higher than the four percent, or so, during FY09-12. The lower growth rate was a direct consequence of sharp reductions in government spending due to the high subsidy burden in order to meet fiscal deficit targets.

Cut in subsidies to be utilized for higher infra spends Major Subsidies

Capital expenditure 3,000 2,500 2,000

Source: Union Budget

1,500 1,000 500 0

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748.

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

FY16E

CW Research

Road cess fund to more than double in Road cess fund to more than double in (Rs. bn)

National Highway Authority of India 450

Cess funds 400

400 300 250

YoY Growith (RHS)

250

229

200

350

160 140 120 100

251

150

207

200

100

150 100

80 60

50 0

-20 FY14A

FY15R

CEMENT MARKETS

NHAI’s budgetary allocation to increase by 59% YoY in FY16 (Rs. bn)

FY16E

Source: Union Budget

FY11

FY12

FY13

FY14

FY15

FY16

-40

Source: Union Budget

Within the infrastructure sector, significant growth is expected from the road and highways, metros, DFC’s, irrigation, and urban infrastructure. The government is implementing initiatives to drive growth in the road and highways sector. The National Highways Authority of India (NHAI) has changed its allocation policy and started to award projects on an engineering, procurement and construction (EPC) basis rather than the previous built, operate and transfer (BOT) model, after the requisite clearances and land acquisition. Furthermore, in a bid to expand the use of mass public transportation, the government is focusing on expanding the metro network across a number of cities in the country. Increasing the number of cities under metro coverage from the existing 7 cities, a further 4 cities have been currently targeted, including Navi Mumbai, Kochi, Lucknow and Ahmedabad. Other cities under consideration include Pune, Vizag, Vijaywada and Nagpur. The housing sector, which currently accounts for more than 60 percent of cement consumption, will also be a major driver for growing cement demand. The government’s Pradhan Mantri Awas Yojana (PMAY) is expected to oversee the construction of approximately 20 million affordable houses in urban areas for low-income families. The 100 smart cities plan is further expected to contribute to incremental cement demand.

The share of infrastructure, in overall cement demand is expected to rise, therefore, from the current estimated 18-20 percent in FY15 to 22-24 percent by FY20.

In conclusion, the government’s focus on creating the necessary platform to help launch the economy into a new level of sustainable growth needs the strong spine of infrastructure. Initiatives in the form of friendlier laws, lower taxes, and importantly increased spending backed by actual implementation will allow the sector to grow and take India’s economy forward along with it. Urban development spends increased by 30% YoY in FY16 (Rs. bn)

Metro networks likely to be executed faster, allocation increased by 37% YoY (Rs. bn)

Ministry of Urban Development

Metro Projects

120

90 100

100 80

60 55

30 20

20 0

10 FY14A

FY15R

Source: Union Budget

FY16E

FY14A

FY15R

FY16E

Source: Union Budget

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November - December 2015

MARKET DATA SNAPSHOT

CW Research

Volume variation analysis for selected countries that are major consumers, producer, importers and exporters of cement. This is a selection of notable markets. Additional detail is available from CW Research as well as on-line at http://www.cemweek.com to the market data section. CEMENT PRODUCTION (million tons)

CEMENT CONSUMPTION (million tons)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

CEMENT PRODUCTION MOM (%)

CEMENT CONSUMPTION MOM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

CEMENT EXPORTS (million tons)

CEMENT IMPORTS (million tons)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

CEMENT EXPORTS MOM (%)

CEMENT IMPORTS MOM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

Source: CW Group analysis estimates MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

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INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

CEMENT ENERGY MARKETS

CW Research

CEMENT ENERGY MARKETS Coal Market Update Global trading volumes increased to 96.93 million tons in August 2015, increasing 16.2 percent in comparison with 83.44 million tons recorded in July 2015. An increase in coal trading volumes was observed in Australia, Colombia, US, Russia and South Africa, whereas Indonesia showed some decline in coal trading volumes. According to a study by the National Academy of Sciences (NAS), many nations are attracted to the relatively low coal prices in order to satisfy their energy needs. It also finds that the share of coal in the energy mix indeed has grown faster for countries with higher economic growth. The US is shutting down coal plants at an unprecedented rate, on the other hand, India is adding capacity even more quickly.

Australia coal deliveries deceased 5.7 percent MoM in July 2015 to reach approximately 16.9 million tons, down 6.9 percent when compared to July 2014 index.

Australia coal deliveries increased 109.4 percent MoM in August 2015 to reach approximately 35.4 million tons and up 93.7 percent when compared to August 2014 index. Japan was the largest importer of the Australian coals with 11.7 million tons, China was the second largest one with 6.39 million tons, followed by South Korea with 5.05 million tons. Despite challenges that the industry is going through, the coal chain in the Hunter Valley was running at a record rate for the month, well in excess of 180 million tons. Colombia exported 7.1 million tons of coal in August 2015, increasing 16.8 percent in comparison to July 2015 and declining 17.9 percent from August 2014’s coal export volumes. Coal shipments from the country’s miner, Puerto Drummond, increased 4 percent MoM to 2.1 million tons, while Puerto Nuevo shipped 1.8 million tons, its highest monthly level since February. Shipments from third party port Carbosan-Sociedad Portuaria de Santa Marta more than doubled to 346,220 tons as compared to July exports. South Africa exported 5.7 million tons of coal in August 2015, increasing 1.7 percent MoM and down 5.9 percent as compared to August 2014’s exports. India remained the largest destination for South African thermal coal in August, with 2.36 million tons shipped during the month. Exports to Pakistan picked up in August, with 648,267 tons shipped to the country. Shipments to the whole of Europe in August were around 1.10 million tons. Coal Global Trading (million tons) Indonesia

120

Australia

Russia

South Africa

Colombia

Rest

100 80

Aug ‘15

Jul ‘15

Jun ‘15

Apr ‘15

May ‘15

Mar ‘15

Feb ‘15

Jan ‘15

Dec ‘14

Oct ‘14

Nov ‘14

Sep ‘14

Jul ‘14

Aug ‘14

Jun ‘14

Apr ‘14

May ‘14

Feb ‘14

Mar ‘14

Jan ‘14

Dec ‘13

Oct ‘13

Nov ‘13

Sep ‘13

Aug ‘13

Jul ‘13

Jun ‘13

Apr ‘13

May ‘13

Feb ‘13

Mar ‘13

Dec ‘12

Jan ‘13

Nov ‘12

Oct ‘12

Sep ‘12

Aug ‘12

Source: customs data

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November - December 2015

CEMENT ENERGY MARKETS

CW Research

Energy Prices Update COAL: The average coal price for November 2015 closed at $58.56 per ton, falling 19 percent YoY as compared to November 2014’s price of $69.25 per ton. It increased slightly by 2 percent as compared to October 2015’s price of $55.06 per ton. According to the Institute for Energy Economics and Financial Analysis, despite decade-low coal prices, worldwide coal consumption is likely to decline 2-4 percent in 2015.

China, which consumes almost 50 percent of the world's coal, reduced its consumption of the fuel by about 6 percent in the 12 months through September.

China, which consumes almost 50 percent of the world's coal, reduced its consumption of the fuel by about 6 percent in the 12 months through September. Other countries recording a decline in their coal consumption were the US, UK, Germany, Canada, Japan, Turkey, Indonesia, Mexico and Russia. South Korea's coal consumption was relatively stable. The only big coal consumers which showed increased consumption were India and Australia. Globally, coal is suffering from reduced prices, oversupply, and weak demand. The major reasons include an increasing shift away from coal due to market forces as well as regulatory pressure. The US is moving towards natural gas, while China is also trying to cut its coal consumption. China’s imports of coal for September dropped by 16 percent compared to the same month a year ago, forcing European coal prices to drop to a record low. China's economic slowdown is pushing down global coal prices. The prolonged price drop is starting to affect coal producers differently. Many Australian and Russian mining companies are profiting from exports because their countries' currencies are falling sharply against the US dollar. Meanwhile, mining companies in Indonesia, that engage in dollar-based transactions, are less likely to benefit from the depreciation of their own country's currency. As a result, Indonesian mining companies are becoming less competitive and are being forced to cut or suspend production.

Steam Coal Fob Average Prices (Us$/Ton) US exported

Colombia exported

Australia Newcastle

Indonesian HBA

South Africa Richards Bay

120 110 100 90 80 70 60

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November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Nov ‘15

Sep ‘15

Jul ‘15

May ‘15

Mar ‘15

Jan ‘15

Nov ‘14

Sep ‘14

Jul ‘14

May ‘14

Mar ‘14

Jan ‘14

Nov ‘13

Sep ‘13

Jul ‘13

May ‘13

Mar ‘13

Jan ‘13

Nov ‘12

Sep ‘12

Jul ‘12

May ‘12

Mar ‘12

Jan ‘12

Nov ‘11

Sources: EIA, Colombia Ministry of Mines and Energy, IMF, Indonesia Ministry of Energy and Mineral Resouces

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CEMENT ENERGY MARKETS

CW Research According to a new report from the IEA, renewables are set to become the largest source of new energy capacity over the next 35 years. The report states that renewables will overtake coal as the largest source of electricity by the early 2030s. Renewable energy technologies accounted for nearly half of all new electricity plants in 2014, and are now the second largest power generator after coal. US Petcoke Export Price (US$/ton) Monthly price

At the Paris Climate Change Conference, India pledged to boost non-carbon power sources (renewables and nuclear) to 40 percent by 2030, up from 30 percent today. This will require some 200 GW of new non-fossil-based power. Moreover, the country has also said that it may even cut back its use of coal, if sufficient cash for renewables emerges from a Paris deal. PETCOKE: US petcoke exports decreased 3 percent to 2.63 million tons in August 2015 as compared to the previous month, and down 5 percent as compared to August 2014. The US export price for petcoke for August 2015 closed at $63.02 per ton, decreasing 0.5 percent as compared to July’s price of $62.73 per ton and down 14 percent as compared to August 2014’s price of $73.33 per ton. European buyers are currently reluctant in finalizing deals for buying USGC petcoke as they wait for better offers due to the continued fall in petcoke prices. Additionally, an increase in Venezuelan petcoke exports can also have a negative impact on prices.

Source: customs data

A-15

J-15

M-15

A-15

M-15

F-15

J-15

D-14

N-14

O-14

S-14

A-14

J-14

M-14

A-14

M-14

F-14

J-14

D-13

N-13

O-13

S-13

Rolling 12-month average

A-13

90 80 70 60 50 40 30 20 10 0

US petcoke exports decreased 3 percent to 2.63 million tons in August 2015 as compared to the previous month, and down 5 percent as compared to August 2014.

The petcoke market is seeing very little demand from one of its key importers, Turkey. The country’s demand for petcoke has been declining since June 2015, partly due to political instability. The freight rate of carrying 50,000 mt of petcoke from Houston to Aliaga, is around $14-16/mt. According to data released by the Turkish Statistical Institute, the country’s August imports of uncalcined petcoke increased 27 percent YoY to 522,721 tons, the highest monthly volume since May 2012. Total sales volumes of uncalcined petcoke in Turkey amounted to $51.5 million, up 71 percent from July and up 26 percent from the same month last year.

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November - December 2015

CEMENT ENERGY MARKETS

CW Research

Due to stricter environmental legislation introduced by Beijing, ship-owners may face a loss of the key US Gulf Coast to China petcoke route. Regardless of whether Beijing sets the sulfur content threshold at 3 percent or 5 percent, almost all of the mid and high-sulfur petcoke out of the USGC will not be acceptable. Because of the same environmental regulations, Indian demand for US petcoke could increase as high sulfur petcoke production from China is eliminated.

Komsa, a subsidiary of Koch Industries, has purchased 90 percent rights to the petcoke that will be produced at Colombia’s newly renovated Reficar refinery in the coming 10 years.

According to EPA’s final performance standard rules for petroleum refineries, delayed coking units will now be required to depressure each coke drum to a closed blowdown system until the coke drum pressure equals 2 psig. The rule also establishes new provisions for decoking operations with water overflow design and double quenching. Komsa, a subsidiary of Koch Industries, has purchased 90 percent rights to the petcoke that will be produced at Colombia’s newly renovated Reficar refinery in the coming 10 years. The new coker unit is expected to produce 2,500 tons a day. The $8 billion renovation of Reficar will be completed by March 2016, though several units are already in operation and the plant will be producing 86,000 barrels per day by early November. NATURAL GAS: The US Henry Hub spot price traded at $2.09 per MMBTU in November 2015, decreasing 11 percent as compared to October 2015’s price of $2.34 per MMBTU and down 49 percent as compared to November 2014’s price of $4.12 per MMBTU. An unusually mild end-of-fall has resulted in a less-than-expected demand for natural gas, thereby affected the fuel prices. Prices of the fuel normally rise ahead of the winter as colder weather triggers heating demand. However, warmer temperatures throughout the autumn have led to limited demand, and concerns over an increasing supply glut are further driving prices to multi-year lows. The heating season from November to March is supposed to be the peak demand period for US gas consumption.

Natural Gas Prices (US$/MMBtu) 20

Europe

Japan LNG

16 12

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November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Nov ’15

Mar ’15

Jul ’14

Nov ’13

Mar ’13

Jul ’12

Nov ’11

Mar ’11

Jul ’10

Nov ’09

Mar ’09

Jul ’08

Nov ’07

Mar ’07

Jul ’06

Nov ’05

Mar ’05

Jul ’04

Nov ’03

Mar ’03

Jul ’02

Nov ’01

Mar ’01

Jul ’00

Nov ‘99

Source: EIA, World Bank

Volume variation analysis for selected countries that are major importers and exporters of coal and petcoke. This is a selection of notable markets. Additional detail is available from CW Research as well as on-line at http://www.coalweek.com/ to the market data section.

COAL - EXPORTS (million tons) - Aug 2015 Country

MoM (%)

PETCOKE - EXPORTS (million tons) - Aug 2015 YoY (%)

YTD

YTD %

Country

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

MARKET DATA SNAPSHOT

CW Research

YTD %

COAL EXPORTS MOM (%) US PETCOKE EXPORTS PRICES MOM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

COAL - IMPORTS (million tons) - Aug 2015 Country

MoM (%)

YoY (%)

YTD

YTD %

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

PETCOKE - GLOBAL EXPORT PRICES (USD/ton) - Aug 2015 Country

WWW.CEMWEEK.COM/SUBSCRIBE LM

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE COAL EXPORT PRICES MoM (%)

MoM (%)

YoY (%)

YTD

YTD %

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

COAL - GLOBAL EXPORT PRICES (USD/ton) - Nov 2015 Country

WWW.CEMWEEK.COM/SUBSCRIBE

YTD %

NATURAL GAS PRICES (US$/mmBtu) - Nov 2015 Country

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

NATURAL GAS PRICES

YTD %

MoM (%)

WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

Source: CW Group analysis estimates LM: latest month Jan 2015 except where specified; MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

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November - December 2015

cement market and competition

arket and competition

India: Next round of coal auction may benefit cement sector The government of India plans to earmark Scheduled III round of coal mines for non-regulated sector, including cement. The e-auction of the Schedule III mines will be held from January 18 to 22 January, 2016. The mines on the blocks are: Brahmapuri and Suliyari in Madhya Pradesh, Bundu and Gondulpura in Jharkhand, Gondkhari and Khappa & Extension in Maharashtra and Jaganathpur A and Jaganathpur B in West Bengal. The total reserves of the mines are around 1,143 million tons, and peak capacity of 12.86 million tons. The commencement of tender documents will start from December 31, 2015, while the government authorities will issue the order by the nominated members by March 10, 2016.

Blackstone to invest in cement sector in India USA-based equity firm Blackstone plans to invest in the Indian cement sector. According to the sources, “The fund is keen to acquire a consumer lending business, as they expect it (cement business) to grow significantly over the next few years. Apart from that, it is aggressively chasing cement assets in the country, as it doesn’t have an exposure in this segment in India yet.” Blackstone considers cement as a consumer product and believes that there

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

is a significant growth opportunity for new investors in the Indian market. The equity company has placed its bid to acquire Reliance Cement. Reliance Cement has a total installed capacity of 5.8 million tons per annum. Of this, 2.8 million tons per annum is located in Maihar, Madhya Pradesh, 2.2 million tons per annum at Kundanganj, Uttar Pradesh, and 0.5 million tons per annum in Butibori, Maharashtra.

Jaypee Group revives talks with JSW to sell cement portfolio Jaypee Group has resumed its negotiations with JSW to sell its entire 20 – 22 million tons per annum cement portfolio, in a move aimed at improving its financial situation.

India’s Prism Cement acquires stake in Coral Gold Tiles India’s Prism Cement has acquired a 50 percent stake in Coral Gold Tiles, a company that manufactures ceramic wall tiles. Coral Gold Tiles have become

a joint venture of the company (Prism Cement) with effect from November 4, 2015. With this, the capacity for ceramic or vitrified tiles of the H & R Johnson (India) Division of the company, along with its joint ventures and subsidiaries will increase to over 58 million per annum.

The company’s top officials, including Manoj Gaur, Executive Chairman and CEO of Jaypee Group, met Sajjan Jindal, Chairman of the JSW Steel, to discuss the acquisition. Jaypee Group has an outstanding debt of around USD 11.6 billion. The talks are still at an early stage.

SCR assures enhanced cement traffic by rail South Central Railway (SCR) General Manager Ravindra Gupta has assured the cement industry that SCR was open to look into the issues raised by them, so as to encourage and enhance cement traffic by rail.

be cleared and plans will be drawn to meet the specific requirements of the industry. This will enable them (cement manufacturers) utilize the rail sector for transport of cement, both for short lead and long lead distances.

He was addressing representatives of various cement companies, located on the SCR network, during a meeting. The meeting focused on plans and strategies for increasing transport of cement during the remaining period of the current financial year (2015-16) on SCR.

He also added that, along with cement, the cement sector should also utilize railways for transport of clinker, bulk cement, fly ash and raw material like gypsum and coal required for cement industry.

The general manager stated that the misgivings of the cement sector will

Representatives from the cement industry put forth their expectations and needs related to availability of rakes, freight discount schemes and settlement of claims.

Indian cement sector on a consolidation path The Indian cement sector is witnessing a wave of consolidation. After Reliance Cement finalizes the sale of its assets, it will join the long list of companies who have exited the cement market. The cement market has seen capacities concentrating in LafargeHolcim and UltraTech.

Ultratech Cement’s India capacity stands at 64.7 million tons, LafargeHolcim’s combined capacity is 5 million tons. Both companies together hold roughly 33 percent of the current market size of 390 million tons. LafrageHolcim capacity does not include the 5.15 million tons, as the talks are on with Birla Corp. UltraTech Cement’s capacity is expected to rise further, after it acquires assets from Jaypee Group.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

cement M&A AND FINANCE

&a and finance

India’s JSW Cement and JK Lakshmi shortlisted for Reliance’s assets India-based JSW Cement and J.K Lakshmi Cement are among the seven bidders shortlisted for Reliance Infrastructure’s 5.5 million tons cement assets. The deal offers cement companies, including JSW Cement and J.K Lakshmi Cement, an opportunity to increase their assets swiftly. JSW and J.K Lakshmi Cement has an installed capacity of six million tons and 8.4 million tons, respectively. It is expected that the next round of bidding is likely to happen in December, this year. Reliance Infrastructure is the parent company of Reliance Cement, and is selling its cement assets to focus on defence sector.

Lafarge deal in India sparks dispute The ownership dispute between the Birla family and the Lodhas have again flared up, involving one of the largest cement deals of recent times. The dispute involves the Lafarge deal. Last month, Birla Corporation pipped several larger rivals to announce its acquisition of two cement units from Lafarge India having a capacity of 5.15 million tons per annum for INR 5,000 crore.

According to an official statement by UltraTech Cement chairman Kumar Mangalam Birla, the company has no plans to acquire Jaiprakash Associates’ Bhilai cement unit. “As of now, there are no plans to buy Jaypee’s Bhilai plant,” Birla said.

Jaiprakash Associates operate the Bhilai unit in a joint venture with state-run Steel Authority of India. With its two earlier

November - December 2015

Ultratech, run by Kumar Mangalam Birla, is the largest cement maker in the country with a capacity of 63.2 million tons. The two units of Lafarge are amongst the most profitable cement units in eastern India, and their acquisition would substantially add to the footprint of Birla Corp in the eastern Indian markets.

UltraTech not to buy Jaiprakash’s Bhilai cement unit

It was previously reported that Ultratech is nearing a deal to buy Jaypee’s 2.2 million tons per year grinding unit in Bhilai for INR 600-700 crore.

The move may escalate the Priyamvada Birla “will” controversy. The Birlas and the Lodhas have been locked in a legal battle for the MP Birla group assets since July 2004, soon after the demise of MP Birla's wife Priyamvada Birla.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

cement unit acquisitions in Madhya Pradesh, from Jaiprakash Associates, Birla said formalities had been completed. “With these (acquisitions), an additional 4.9 million tons per year capacity and a thermal power generation capacity of 180 MW will be added,” said Birla.

India Cements profits surged due to lower operational costs India Cements have posted a fivefold increase in its net profit to INR 41 crore for the quarter ended September 30, 2015, as compared to INR 7.5 crore in the corresponding period of the previous year. This is mainly due to lower operating costs and the revival of cement demand in South India.

South Indian cement companies witness growth in Q3 South Indian cement companies have managed to increase the cement realization in the past four quarters. As compared to South India, other parts of the country have witnessed a lower cement realization. After struggling with over capacity for a long time, South-based cement companies have increased cement prices due to scope of new demand, after the creation of two new states— Telangana and Andhra Pradesh.

It is expected that, the two states combined, may have an incremental demand of about 23 million tons, which is higher than the peak cement cycle of united Andhra Pradesh (20 million tons). Meanwhile, the cement utilization in the South is in the range of 55-58 percent as compared to 80 percent in the rest of the country. As a result, the cement prices in the South have surged by INR 20-50 per 50 kg bag in the September quarter. In the Western India, cement prices have increased in the range of INR 20-40 per 50 kg bag.

India’s UltraTech Cement eye margin improvement in 2H2016 India-based UltraTech Cement’s EBITDA margin increased by two percent to 18.4 percent. Analysts have a positive outlook on the company’s performance, despite subdued organic volume growth. The company’s profit improved due to cost-efficiency measures, a 2.8 percent volume growth (due to acquisition) and a 1.2 percent year

However, the company’s net sales declined by 4.5 percent on a year on year basis to INR 1,079 crore in the quarter. In addition, the cement

on year increase in the average selling price, per ton. In addition, strong cement prices in the South India region, benefiting the company. The company improved its profit in the quarter ended September 2015, due to commissioning of a new waste heat recovery plant, increased usage of petcoke and acquisition of JaiPrakash Cement.

India: HeidelbergCement records decline in revenues HeidelbergCement India recorded a decline in standalone total income from operations to INR 402.69 crore, as compared to a total income from operations at INR 406.13 crore in the same period, last year. The cement company witnessed a net profit of INR 2.10 crore in the third quarter of 2015, as compared to INR 1.56 crore in the same period, a year earlier.

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November - December 2015

cement projects and expansions

rojects and expansions

Indian cement companies may benefit from “Housing for All India’s Housing for All (HFA) project is likely to benefit the sectors, providing critical inputs to construction sector mainly cement, reports The Economic Times. Similarly, an additional cement demand is estimated to be 13.2 percent of FY15 cement production. According to a recent report, much of the success will depend on the ability of the domestic industry to meet the huge demand for cement. "While the cement and steel sectors will get a boost from Housing for All by 2022, these sectors may also act as a constraint in realizing," said the report by India Ratings & Research (Ind-Ra).

India’s UltraTech Cement to expand Maharashtra plant Indian cement company UltraTech Cement has received approvals from the Environment Ministry to expand its production capacity in Awarpur cement plant in Maharashtra, India. The proposed expansion plan will be carried out within the existing area of the cement plant. The cement company had proposed to increase its clinker production capacity to 4.5 million tons per annum from existing 3.30 million tons per annum. The cement company plans to increase its cement production to 6 million tons per year from 4.48 million tons per annum.

November - December 2015

The cement company is required to set aside at least 5 percent of the total cost of the project to social commitment.

JK Lakshmi Cement to set up a new clinker grinding plant in Bihar Indian cement company, JK Lakshami Cement has received an environmental clearance to set up a new clinker grinding plant in Chakla (Bhedyiadang) in Bihar. The new clinker grinding unit will have a production capacity of 1.5 million tons per annum. The cement company will invest around INR 300 crore in 10 MW diesel generator.

The Environment Ministry has ordered UltraTech cement to meet certain criteria, like developing a green cover over 33 percent of the project area and monitor its air emissions.

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JK Lakshmi Cement manufactures gray cement from its plants located in Sirohi, Rajasthan and at Kalol, Gujarat in India.

UltraTech Cement starts grinding unit

million tons, after it completes planned expansions and acquisitions.

UltraTech Cement has announced the commissioning of a grinding unit in West Bengal, which will increase the company’s total cement capacity to 64.7 million tons. In the last six months, the cement company has announced three new capacity additions.

The cement company is in the process to acquire Jaiprakash Associates’ two cement assets in Madhya Pradesh for a deal value of INR 5,400 crore.

With the new grinding unit, UltraTech’s total cement capacity in the eastern region will be around 9.8 million tons per annum. UltraTech Cement plans to expand its total cement capacity to 71

Sanghi Cement inaugurates a new waste heat recovery facility Indian cement company, Sanghi Cement, has inaugurated a new waste heat recovery facility in Kutch district, Gujarat, India. Gujarat Chief Minister Anandiben Patel has laid the foundation stone for a 15 MW Waste Heat Recovery System. Sanghi Industries had signed a memorandum of understanding with a Chinese firm in May, 2015 to set up this project. The new unit will have a production capacity of 1.2 million tons per annum capacity.

Birla Corp commissions a cement blending unit in Uttar Pradesh India-based Birla Corp has commissioned a cement blending unit in Raebareli, Uttar Pradesh with an annual capacity of 50,000 tons. The company has eight manufacturing facilities located in Pune, Rajasthan, West Bengal, Gurgoan, Uttar Pradesh and Madhya Pradesh. Earlier in August, the cement company had agreed to acquire Jojobera and Sonadih Cement businesses from Lafarge India at a value of INR 5,000 crore.

Andhra Pradesh, India likely to up cement production Andhra Pradesh in India is likely to witness a surge in cement production in the next year, reports Money Control. The Chief Minister has asked the cement companies to increase their capacity, anticipating a construction boom in the region. According to an official estimate, around 35,97,869 metric tons of cement will be required every quarter for construction of 5.26 lakh houses for the poor under various development schemes.

The government has proposed housing projects, including housing for the poor, construction of roads, extension of ports and airports amongst others. The Minister has also asked the cement companies to supply cement to the government at a reasonable rate and not to hike the cement prices in an open market.

The new plant will increase Sanghi Cement’s production capacity to 4.1 million tons per annum from 2.9 million tons per annum. The cement company has invested around INR 125 crore in the new facility. The company will invest INR 150 crore to develop this green energy project and expects to commission it in next two years.

Lucky Cement in Pakistan gets permit to expand cement production The largest maker of the building material in Pakistan Lucky Cement is close to winning permit to extract limestone

in Punjab province of Pakistan. Lucky cement will get a limestone quarry for a cement plant in Punjab. The agreement will be finalized in next few days. Karachi-based cement maker is set to join producers, including Attock Cement and D.G. Khan Cement.

Lucky Cement operates two plants, at 85 percent of capacity in Pakistan. It also has a cement grinding facility in Iraq and is part of a venture that will build a cement plant in the Democratic Republic of Congo.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

cement volume & pricing

olume and pricing

India’s Sagar Cement records boost in cement production Sagar Cement witnessed its cement output increase in August 2015 by 6.87 percent to 114,600 tons, as compared to 107,236 tons produced in August 2014. The company’s sales of cement increased by a 5.23 percent in August 2015, as compared to the same month in 2014. The company also recorded a three percent increase in cement production in October, up to 96,247 tons, as compared to 93,865 tons same period, a year earlier. The sales increased by seven percent to 99,918 tons in October 2015, as compared to 93,472 tons in October 2014. In September, this year, the company recorded a seven percent rise in cement production at 122,642 tons. Cement sales increased by six percent, at 115,225 tons in September 2015, as compared to 108,611 tons in September 2014. Sagar Cements have one of the most modern mini cement plants in the state of Andhra Pradesh, India. The plant uses the dry method to produce cement.

November - December 2015

India’s October green petcoke imports double

imported 0.29 million tons of uncalcined petcoke in October 2014.

According to CW Research analysis, India’s imports of uncalcined petcoke totaled just short of 0.7 million tons in October 2015, with cement companies representing close to 60 percent of purchases.

In October, the largest exporter of fuelgrade petcoke to India was Saudi Arabia at 0.32 million tons, followed by the US at 0.29 million tons.

“In spite of a sluggish trend in the market, Indian buyers entered into numerous deals due to lower international prices for the product, resulting in increased volumes during the month. Moreover, it is expected that the country will be importing a lot more in the coming months," said Sushmita Rai, Sr. Associate Analyst, CW Group.

Other exporters included China, Indonesia, Azerbaijan and Japan. Petcoke imports by cement companies comprised about 56 percent of the total petcoke volume imported in India in the month of October. In comparison, petcoke imports by the cement industry comprised 61 percent in September.

The monthly import volume represents a 17 percent increase over September’s imports and up by 190 percent, compared with the year-ago period. Indian uncalcined petcoke imports totaled 0.59 million tons in September 2015, while the country

Indian construction builders oppose hike in cement prices The Indian real estate developers have approached the Competition Commission of India to prevent cement manufacturers from hiking prices as it has a direct impact on the cost of construction. States, including Bengaluru, Karnataka, Tamil Nadu and Kerala have been influenced by increasing cement prices. During first nine months of 2015, prices of cement have increased by 20 percent to 40 percent in metro cities across South India. The Competition Commission has taken active interest in the issue.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

cementPEOPLE

eople

India’s Ambuja Cements CFO resigned Ambuja Cements CFO, Sanjeev Churiwala have resigned and the company is looking for a suitable successor as his replacement. Joint President, Corporate Controlling, Sanjay Khajanchi will serve as an interim CFO, till then. Former CFO Sanjeev Churiwala worked with Ambuja Cements for about two decades in diverse roles including finance, business development, project management, commercial operations, business and financial integration. After leaving Ambuja, Churiwala was appointed as chief financial officer of United Spirits Ltd, India's largest alcoholic beverage company and a subsidiary of London headquartered Diageo PLC.

LafargeHolcim appoints new CFO Ron Wirahadiraksa has been appointed as a CFO of LafargeHolcim. He will report to the CEO of the group, Eric Olsen. Ron Wirahadiraksa will join the position in December 2015. He has joined the executive committee after the retirement of Thoma Aebischer. Ron Wirahadiraksa has a PhD in economics. He has held many executive

Meanwhile, the resignation comes after the company posted a 36 percent decline in standalone net profit to INR 153.57 crore in the third quarter, as compared to INR 239.06 crore in the same period, a year earlier. The company’s net profit declined due to lower operating earnings and an additional depreciation charges. Ambuja Cements Ltd, a part of a global conglomerate Holcim, has completed over 25 years of operations. The company, initially called Gujarat Ambuja Cements Ltd, was founded by Narotam Sekhsaria in 1983 in partnership with Suresh Neotia. Global cement major Holcim acquired management control of Ambuja in 2006.

positions in his career, most notably at Philips in the Netherlands, Greece, Malaysia and the USA.

India’s Shree Digvijay Cement appoints a Whole-time Director India’s Shree Digvijay Cement Company has appointed KK Rajeev Nambiar, current CEO, as a Wholetime Director to be designated. The appointment is effective November 1, 2015. KK Rajeev Nambiar takes over the CEO & Whole-time Director position from Chain Singh Jasol, who retired on October 31, 2015. Shree Digvijay Cement is a flagship company of the Cimpor Group, which acquired its management control in the year 2008. The company has one manufacturing facility at Sikka (via Jamnagar) with an installed capacity of 10.75 lacs metric tons per annum. The company exports cement and cement clinker to United Arab Emirates, Somalia, Yemen, Bangladesh, Qatar, Sri Lanka, Iraq, Kuwait, Bahrain, Philippines, and other South Asian Association for Regional Cooperation and African countries. Its basket of products includes, special cements like oil well cement, sulphate resisting portland cement and railway sleeper manufacturing cement in addition to other varieties of ordinary portland cement.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

regional news

egional news Pakistan to invest in Sri Lanka’s cement industry

China’s profits from the cement industry fall In September 2015, the profits of the Chinese cement industry fell by USD 645.88 million by about CNY 4.1 billion to CNY 2.7 billion. According to data released by the National Bureau of Statistics, an overall profit of the cement industry registered a fall of around 65 percent (or CNY 34.9 billion) to about CNY 18.4 billion during the first nine months of 2015. During the first nine months of the year, the average monthly profit of the industry was CNY 2 billion. The amount represents a third of the CNY 5.9 average monthly profit recorded in 2014. The cement prices have fallen in certain regions of China. The cement prices in

Hubei and Journal regions has fallen by CNY 10-30 per ton. Prices have increased in Fujian, Guangdong, and Sichuan regions in the range of CNY 10-20 per ton. The demand for cement continues to be low due to continuous rainfall, and reduced construction activity. Meanwhile, the cement prices are likely to improve due to several proposed projects by the government in the various regions.

A Pakistani business delegation, visiting Sri Langa with an interest in investing in the cement industry, reports Economy Next. The delegation is also looking at an investment possibilities in the sugar, pharmaceuticals, dairy and information technology sectors. The delegation to Sri Lanka was led by Khurram Dastigir Khan, Minister of Commerce of Pakistan, who has already met with Sri Lanka’s State Minister of International Trade Sujeewa Senasinghe. The Pakistani delegation has also expressed its interest in exporting coal to Sri Lanka.

Pakistan to challenge South Africa’s anti-dumping charges in WTO Pakistan is likely to challenge South Africa’s decision to impose anti-dumping duty on import of cement manufactured in Pakistan at the World Trade Organization. Earlier in May, South Africa had imposed various rates of anti-dumping duty on Pakistan’s cement exports, ranging from 15 percent to 68 percent,

November - December 2015

along with anti-dumping charges on import of Pakistan’s cement. The South African government considered that Pakistani cement imports were affecting the local cement industry. However, Pakistan considers the measures were inconsistent with several provisions of the WTO agreement.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Hence, the Minister of Commerce, Khurram Dastgir Khan, has initiated WTO settlement proceedings to safeguard its trade interests. Pakistan is the top exporter of cement to South Africa. After imposition of antidumping charges, Pakistan’s cement export to South Africa has continuously declined.

orders & equipment highlights

rders & equipment

KHD to supply slag grinding mills to JSW Cement Humboldt Wedag India and Humbold Wedag, the two subsidiaries of KHD Humboldt Wedag, have won contracts valued between EUR 55-65 million for the supply and maintenance of eight slag grinding mills. JSW Cement, an Indian cement manufacturer, placed the order for the KHD equipment. Each of the eight mills has two significant componentsâ&#x20AC;&#x201D;two KHD roller presses with a total capacity of 180 tons, per hour. The projects will be booked as order intake, as soon as the pre-conditions for project executions are fulfilled. KHD is represented in multiple growing markets, including India, Russia and the Asia-Pacific region. The German equipment manufacturer has been providing high quality equipment and services to cement producers for more than 150 years. KHD is a leader in environmentally friendly and energy-efficient product for grinding and a pyro processing section of cement plants.

Innovative separator plant launched in India In India, a new pilot plant for separation of iron, sand and carbon from Bottom Slag emitted by Neyveli Thermal Power Stations has been launched. Neyveli Thermal Power Stations, on an average produce 250-300 tons of bottom slag every day. In particular the slag generated from Thermal Power Station-II (TPS-II) contains, iron, un-burnt carbon and sand. It was inaugurated by Sarat Kumar Acharya, CMD, NLC. The Center for Applied Research and Development (CARD) has undertaken an in-house research project to develop a pilot plant for separation of the available material in the slag to be put in for useful purpose.

According to the report, the research underwent at a cost of INR 160 lakhs which has proved that iron, sand and carbon can be separated from the slag in a scientific way. Further, it has been found that the bottom slag contains 15 to 35 percent, 35 to 50 percent sand and a 5 percent unburnt coal.

ThyssenKrupp launches new product line Industrial machinery manufacturer, ThyssenKrupp Industries India has launched a new product line offering holistic crushing and screening solutions for the aggregate industry in India. Kubria cone crusher, single-toggle EB jaw crusher and multirock vertical shaft impactors, which cater to the infrastructure and mining sectors, were the new products unveiled at the Excon 2015, an international construction equipment industry event. "We are delighted to launch our indigenously manufactured new product line for aggregate crushing and screening plant at Excon 2015, including the display of our primary and tertiary plants and vertical shaft impactor," said Sivasubramanian Natarajan, MD, ThyssenKrupp Industries India, in a statement.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

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Infrastructure & projects

nfrastructure & projects Indian company to sell construction materials online

Japan to aid India for highway projects India has initiated talks with Japanese lending agencies for funding its ambitious highway program, which entails the addition of over 50,000 km over the next five years.

Construction materials storeâ&#x20AC;&#x201D; Supplifiedâ&#x20AC;&#x201D;is poised to sell construction materials online. The company's primary expertise is in selling raw materials and finished products for construction or renovation of houses and buildings.

Nitin Gadkari, Union Minister for Road Transport and Highways has recently held a discussion with representatives of Japan Bank for International Cooperation (JBIC) for increasing its lending to India, a senior ministry official said.

India required Rs 5 lakh crore, over the next five years, to expand its highway from the existing 96,000 km to 1.5 lakh km.

Supplified, can be an alternative, easier and faster route of getting all kinds of genuine construction material in one place at a standardized price.

"We want funding on soft terms for highways and expressway projects," said the official, who did not wish to be identified.

In addition, the country has an ambitious plan to construct 10 greenfield expressways, spanning over 16,000 km.

"According to our research, 81 per cent of the time, vendors do not entirely depend on the contractor and want to personally take on the task of closely monitoring procurement of construction materials," said Mohit Goel, CEO, Omaxe.

India: Study shows fly ash could reinforce concrete

fly-ash and ground granulated blast furnace slag (GGBS) added to the concrete mix.

Adding a small quantity of fly ash in the concrete mixture can help the structure last a lifetime, according to a study conducted in Indian Institute of Madras.

This can give durability and life to reinforce structures, including buildings and bridges.

Following a series of tests done on different types of concrete, the study conducted by the civil engineering department of IIT-M showed that a proportion of byproducts like

November - December 2015

Experts recommend that, the cement used for durable construction be partially replaced with or should contain at least 15 percent fly ash or 30 percent slag, along with the use of low water content in the concrete.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

He added, "The entire market of construction material is unorganized and is scattered in different areas all over the city. The entire route of navigating different areas like Chawri Bazaar or Bhagirath Palace with non-regulated prices are extremely frustrating and time consuming for builders and contractors alike. That is where Supplified.com comes in."

CIL to store fly ash in abandoned mines

UK seeks India's partnership in infrastructure projects The United Kingdom wants to become India’s biggest partner in the infrastructure projects and make London the world’s center for offshore trading in the Indian national currency, the rupee, British Prime Minister David Cameron said during Indian prime minister Narendra Modi’s visit to London. Cameron added that, British and Indian companies plan to conclude commercial deals with a combined value of 9 billion pounds (USD 13.68 billion). Cameron highlighted the United Kingdom’s leading role, ahead of the United States, as the third-biggest

The abandoned mines of the Coal India Limited (CIL) in Chhattisgarh is likely to be utilized for storing fly ash, generated from the power plants in the state.

investor in Indian economy. New Delhi is London’s third-largest trade partner in terms of number of projects. Cameron announced plans to issue the equivalent of over USD 1.5 billion of the London Stock Exchange bonds, including the first ever UK governmentbacked rupee denominated bond to be issued, internationally.

Maharastra introduces new green rules for coal mining The Maharashtra Pollution Control Board (MPCB) has made coal wash and corporate social responsibility, mandatory for the coal mining projects. It will help in controlling a high level of pollution at coal mines and also thermal power stations. Also, the thermal power stations, especially owned by Maharashtra State Power Generation Company (Mahagenco) will benefit to a great extent, as washed and will benefit coal increase power generation and also save conveyance cost. The MPCB's consent appraisal committee headed by Malini Shankar, additional chief secretary, the environment department, took the decision in the meeting held on November, last week. The committee has framed a new bank guarantee regime policy for mining and coal washery.

Total 18 aspects have been finalized under the new policy for controlling water, air, non-hazardous waste, hazardous waste, operation and maintenance pollution. Also time bound program has been planned for a compliance of each concept with bank guarantees. The coal mining companies will have to comply with all these 18 concepts in stipulated time period or else face legal action.

The state government had identified, such mines earlier, operated by the South Eastern Coalfields Limited (SECL) — country’s largest coal producing company and the highest profit making entity of the CIL. The SECL, has 113 approved coal projects (80 underground projects and 33 open-cast projects) for a total ultimate capacity of 149.02 million tons per annum. Most of the mines of the SECL, that was incorporated in 1985, had been located in Chhattisgarh. A few mines have been abandoned, after extracting the entire reserve. The Chhattisgarh government is planning to use the abandoned mines to store the fly-ash even as its utilization is below 40 percent.

Japan to aid INR 5,536 crore loan for metro projects India and Japan have exchanged notes for Japan's Official Development Loan Assistance (ODA) worth INR 5,536 crore for Chennai and Ahmedabad metro rail projects. The Japanese government has committed Official Development Assis-tance (ODA) loan of an amount of about INR 1,080 crore for the Chennai Metro Rail Project (phase IV) and INR 4,456 crore for Ahmedabad Metro project. The notes were exchanged here between S Selvakumar, Joint Secretary, Department of Economic Affairs and Yutaka Kikuta, from the Embassy of Japan to India.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015

analyst recommendations UltraTech Cement

consumption going higher.”

Coal India

Mayuresh Joshi of Angel Broking sees UltraTech Cement as a company that stands out from the cement pack.

“Subsequently, the fall, thereof will have a substantial effect on the EBITDA per tonne for Ultratech Cement,” he added.

“The numbers were impressive, both on the EBITDA front as well as the expectation coming through in terms of volume growth and how the realizations will pan out assuming that power and fuel costs with petcoke

BUY Coal India, says Sudarshan Sukhani of s2analytics.com.

The current juncture trades around enterprise value to EBITDA and trades around USD 178 EV to tons. “Clearly we believe there is a strong upside for the stock over the next three to four quarters," added Joshi.

Ambuja Cements VK Sharma of HDFC Securities puts his verdict as a BUY on Amuja Cements. "I am suggesting buying 195 Put in Ambuja Cements at around Rs 3 with stop loss at Rs 2 and target around Rs 7 and one can hold on to the stock for the rest of the series," said the broker. The

company's trailing 12-month EPS was at Rs 6.61 per share. (Sep, 2015). The stock's price-to-earnings (P/E) ratio was 29.17. The latest book value of the company is Rs 65.11 per share. At current values, the price-to-book value of the company was 2.96. The dividend yield of the company was 2.59 percent.

JK Cement

ACC Aditya Agarwal of Way2Wealth Securities advises market players to go long on ACC. "If we see a whole cement pack now, we are witnessing some fresh long positions getting built up in all the cement counters,” Agarwal said. “ACC has been trading in a very narrow band for the last couple of weeks; Rs 1,300 is a lower band on the higher side, Rs 1,380-1,440 is the range. This stock is trading currently at lower levels, at lower band of levels,” he added.

Ravi Shenoy, VP-Midcaps Research, Motilal Oswal Securities expects good times ahead for JK Cement. “We have just come out of the festive season, before which, there is a lot of home renovation that does happen, which consumes white cement. So, you are getting the best of both—grey cement as well as white cement, here in this company, plus to build up their capacity because they have ramped up their capacity pretty significantly over the last two odd years," said Shenoy.

The analyst suggests, from these levels, stock may see some good pull back and higher side can test Rs 1,380-1,390 levels. So, from these levels, the risk reward ratio is clearly in favor of buyer."

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

"Coal India broke down in a longer time frame. It fell from Rs 452, all the way to Rs 300. However, after Rs 300, the prices not going lower. It has rallied and in spite of bad news hasn’t seen a cracked down. It is now, in a very narrow range,” he said. “We are only anticipating that because the lows are not being made new lows this should break on the upside. I would be a buyer in Coal India, the risk is very small and the potential reward is quite good," Schukani added.

He further added, "They have raised debt of around Rs 2,600 crore and over the next two or three years, we expects this debt coming off, as Reserve Bank of India (RBI) and the banks help interest rates to lower down, you will have this company start benefitting from lower interest rates as well as lower debt.” “So, that is the reason why we are asking investors to get in over here,” he said. Lightening of debt would mean that the investors will get their share of market cap out of the EV of this particular company and we have a healthy target of Rs 811 on the stock, according to the analyst.

CEMENT RESEARCH

CW Research

GLOBAL cement trade price REPORT BENCHMARK CHARTBOOK AND ANALYSIS WITH MONTHLY IMPORT, EXPORT, EX-WORKS, SLOVAKIA

RETAIL PRICES FOR GRAY CEMENT, WHITE CEMENT, CLINKER AND GRANULATED SLAG. COLOMBIA

PRODUCT DESCRIPTION The Global Cement Trade Price Report (GCTPR) is the source for monthly gray cement, white cement, clinker and granulated blast furnace slag trade prices and volumes. The extensive report, published on a quarterly basis, includes data for about 70 individual markets worldwide on monthly average selling prices, retail price changes, a trade price forecast and volumes for the past 24 months as well as a forecast for the next 3 months for each country. The report also includes regional price indices as well as a quick review of trading dynamics and drivers in the different regions. Beneﬁts of subscribing to the Global Cement Trade Price Report : Evaluate the competitiveness of cement trading worldwide

WHY BUY? Monthly data series (US$/ton and tons) National: Ex-works and retail pricing Trade: Import and export pricing, plus traded volumes Regional benchmark price indices Forecasted trade prices (1Q ahead)

WHO IS THIS REPORT FOR?

Track quarterly cement, clinker and granulated slag prices on a consistent and comparable multi-year basis

Business development professionals

Understand changes in national cement prices, ex-works average prices as well as retail level changes

Strategy teams

Follow benchmark regional price indices in key regions including Mediterranean Basin, Gulf of Mexico, Northern and Central Europe, among others

Country managers

SELECTED VIEWS

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RELEASE DETAILS Quarterly 150+ pages per update

CEMENT • CHEMICALS • ENERGY • STEEL • METALS & MINING • PORTS COMMUNICATIONS • FINANCIAL SERVICES • AGRICULTURE GREENWICH (US) • HOUSTON (US) • MUMBAI (IN) • BUCHAREST (RO) • SAO PAULO (BR)

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MOST POPULAR ON CEMWEEK.COM The most-read stories on CemWeek over the past two months reflects the industry’s mixed outlook. The India column shows the 20 most popular stories from CemWeek featuring India-related coverage, and the Global column shows the global events that gathered the most attention worldwide during this period. Visit CemWeek.com to access the full stories.

INDIA

GLOBAL

1. India’s Reliance Cement plans to exit from cement business

1. Nigeria:Lafarge-Holcim merger to produce 14mtpa of cement

2. India: Jaypee Group likely to sell its cement assets to JSW

2. FLSmidth signs agreement with Mamba Cement

3. India’s cement demand likely to increase by mid-October 2015

3. Essroc Cement in Nazareth, U.S. gets its new CEO

4. India’s JK Lakshmi Cement to set up new clinker grinding plant in Bihar

4. Votorantim helps Sivas Cement set up new plant in Turkey

5. India-based Sagar Cement records increased production in September 2015

5. Vietnam’s Lam Thach cement plant halts production

6. Indian cement market continues to witness low demand

6. Dangote Cement declares its half-yearly profit

7. India’s UltraTech Cement expects margin improvement in 2H2016

7. Palestine to get its first cement plant

8. India: Delhi NCR witnesses decline in cement prices

8. Egypt: Misr Qena Cement plans to complete three projects by next June

9. India’s JSW Cement and JK Lakshmi shortlisted for Reliance’s assets

9. Vietnam: Cement prices stabilize after increased consumption

10. India’s UltraTech Cement gets permit to expand Maharashtra plant

10. Italcementi, HeidelbergCement to be presented to antitrust commission

11. India’s Prism cement’s net loss widens in 2QFY16

11. Chinese company to set up new cement plant in Russia

12. Blackstone to invest in cement sector in India

12. Indocement to close three cement plants

13. Ultratech’s financial results offer positive surprise

13. Latest project by Eurocement Group to open in 2017

14. India-based UltraTech Cement expected to post increased income in Q2

14. Proposed cement plant in Vallejo, California faces opposition

15. India’s Dalmia Cement to expand its activities in Goa

15. Supply of cement stabilizes in in Egypt

16. India: HeidelbergCement unveils Q3 results

16. Pakistan: Attock Cement to expand its production capacity

17. Cement output falls in India

17. CFO of HeidelbergCement lays groundwork for announced merger with Italcimenti

18. India’s Shree Digvijay Cement names CEO & Whole-time Director

18. HeidelbergCement completes acquisition process of Italcementi

19. India’s Sanghi Cement inaugurates new waste heat recovery facility in Kutch

19. Dangote Group appoints new Chairman

20. JSW Steel’s Salboni cement plant under review

20. Namibian cement maker sets up Special Composite Cement Plant

November - December 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

CW GROUP MEETING AGENDA The CW Group will be hosting and participating in a number of webinars and conferences. We invite you to join us on-line or in person at the events to discuss our views of the industry.

Conferences where the CW Group will be presenting

CBI Brazil & LatAm 2016

CW Summit Middle East & Africa

SFS SFS SFS SFS

Middle East 2016 Middle East 2016 Middle East 2016 Middle East 2016

EUROPE EUROPE

2016 2016

EUROPE

2016

EUROPE

2016

Solid Fuel Summit Middle East 2016

February 24 – 25, 2016

April 4 – 5, 2016

April 5 – 6, 2016

Sao Paolo, Brazil

Dubai, UAE

webinars hosted by cw research

Energy Price Outlook: Coal and Petcoke

Thursday, January 14, 2015 2:00 PM GMT

Cement, Clinker and Oil Well Cement Price Assessments

Thursday, January 28, 2015 2:00 PM GMT

Speciality Cements Market Outlook: White Cement & Oil Well Cement

Thursday, February 11, 2015 2:00 PM GMT

Dubai, UAE

cw summits AshTrade Europe

April 21-22, 2016

Rome, Italy

CBI Africa 2016

June 13-14, 2016

Johannesburg South Africa

Supply Chain Management & Logistics Summit May 19-20, 2016 Mumbai, India

FOR QUESTIONS OR INQUIRIES PLEASE CONTACT

FOR MORE INFORMATION PLEASE VISIT

Liviu Dinu, Market Services & Marketing Consultant at the CW Group at ld@cwgrp.com

http://research.cwgrp.com/meetings

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

November - December 2015