India is not only one of the fastest-growing economies in the world but also the second-largest producer of cement globally, which accounts for more than 7 percent of the global installed capacity. Mr. Vishal Kanodia, Managing Director, Kanodia Cement Ltd. shares his views on the journey of Kanodia cement so far and the Indian cement industry.
Being one of the fastest-growing cement manufacturers in the Northern, Eastern, and Central regions, Kanodia Cement limited is one of India’s pioneers in the cement industry and building material trading, known for its hassle-free home-building solutions. It’s key product offerings which are tailor-made to suit the Indian climatic conditions, and aim to make its customers available with all kinds of cement, have helped Kanodia cement emerge as one of the most trusted cement brands in India. Kanodia cement has been in operation for the last 13 years and still going strong
Q1. You have been a pioneer in the cement segment. Tell us briefly about your approach and the R&D process that you follow for developing new products.
Ans. Being a retailer and distributor of cement for the past many years, Kanodia Cement carefully analyzes and identifies the demands and needs of the consumers and builders. Based on the consumer needs and market demand, we develop our products accordingly.
Q2. How do you view the current market for cement in India? Which products have been driving key opportunities for the company?
Ans. India is not only one of the fastest-growing economies in the world but also is the second-largest producer of cement globally, which accounts for more than 7 percent of the Global Installed Capacity. According to a report by Bureau of Energy Efficiency, at present, the Installed Capacity of Cement in India is 500 MTPA with production of 298 Million Tonnes per annum. Majority of the cement plants installed capacity (about 35%) is located in the states of south India. In PAT scheme, Total Installed Capacity of Cement in India is 325 MTPA which contributes to 65% coverage of total installed capacity in India. With the increase in growth of infrastructure, the cement production in India is expected to be 500 Million Tonnes by the year 2020 and 800 Million Tonnes by 2030. This means that cement manufacturing has a huge economic opportunity to cater to the unmet demand in the future in India.
The Cement Industry has had a record growth of 18-20 % volume over the last financial year. As per the ICRA Report of 2021-22, Cement Production & despatch reached the level of 355 million metric tonnes, relatively surpassing the pre-Covid levels by more than 6 percent. The surge has been mainly driven by strong demand from rural India due to a pick-up in infrastructural activity.
As per Crisil Ratings of cement, the Indian Cement Industry is likely to add 80 million tonnes (MT) capacity by 2024, driven by increasing spending on housing and infrastructure sectors. With this, Cement Production capacity will reach 550 million Tonnes Per annum.
But, despite the increase in net sales, realizations dipped by 5 Percent, and The Operating Profit before Interest, Taxes, Depreciation, and Amortisation (OPBITDA) per metric tonne declined by 10 percent YoY in the last financial year 2022 to Rs 1124. The reason behind this is that the various inputs cost has increased many folds from April -2022 to May 2020. The Cost of Pet Coke and Coal has increased approx. 300 percent, Kiln Operating cost increased by 67 Percent, Diesel increased by 74 percent, and Power cost by 140 Percent.
Our highest revenue generating products are:-
Bigcem Premium Plus Cement – Bigcem premium plus cement is technically a Fly Ash-based Grey Cement with the quality standards as specified by BIS, assuring stronger & durable structures that provide value for money. Premium Plus is an Eco-Friendly product that builds stronger Houses for peaceful Homes.
Concrete Gold Cement – An ultra-strong cement that is produced with a vision of building a greener future. Concrete Gold cement has the highest quality standard due to efficient plant operation with automated control. The company assures minimum coefficient of variation (CoV) in Concrete Gold cement by maintaining it below 5%, which is considered to be the best practice in India. The optimized quality of Concrete Gold Cement ensures the protection of buildings from all harmful chemical attacks, weathering agents, CO2, etc, and makes the structures more durable.
Q3. Kanodia Cement has set up a new cement grinding unit in Amethi, Uttar Pradesh. How does this contribute to the company’s overall manufacturing capacity and how does this help in meeting the demand-supply gap?
Ans. Under the able leadership and guidance of Hon’ble Prime Minister Narendra Modi & Chief Minister Yogi Adityanath, Uttar Pradesh has emerged as the largest cement-consuming state in the country. But Uttar Pradesh has always remained a cement deficient state where out of the total consumption of 45 lacs tonnes per month, hardly 50 percent of the demand is met. The balance is met through the help of other states like MP, Rajasthan, Uttarakhand, Bihar, Chhattisgarh, and parts of southern India. There has been a huge gap between the demand & supply and that is the major reason why we preferred to set up a Cement Grinding Unit in Amethi District in Uttar Pradesh. Currently, the company has an annual cement production capacity of 4.3 million tonnes per annum (MTPA) with five cement grinding units across the country. This will fulfill the dream project of the Industrialization of UP of Hon’ble Chief Minister Yogi Aditya Nath Ji with the vision of Hon’ble Prime Minister Sh. Narendra Modi Ji’s vision of Make in India and Atmanirbhar Bharat.
Q4. What is the company’s current market share in the Central and Eastern UP? What are the plans to expand the company’s footprint across the country?
Ans. Uttar Pradesh has emerged as the largest cement-consuming market in the country, with an average monthly consumption of 40-45 lacs tonnes. Kanodia Cement has a total of five grinding units spread over Uttar Pradesh (UP) & Bihar with a total installed capacity of 4.30 million tons per annum units. The company established its three cement grinding units with a 100% automatic grinding technique at Sikandarabad (District Bulandshahar) and one plant in Kaimur Bhabua (District Bihar). Their fifth grinding unit having a capacity of 1.50 million tons per annum was set up in Amethi, UP, to serve the requirement of the growing demand of central and eastern UP is operational from March 2022 itself.
Percentage-wise our share may not be very high but with the growth in the cement industry and increase in the production from the existing five cement grinding units, we have been able to meet the demand-supply gap in Uttar Pradesh. Comparatively, last year our Capacity Growth is more than 50 percent and we are in process of establishing more cement grinding units in the state of Uttar Pradesh and the other parts of the country, intending to make the best quality of cement available to the consumers easily, thereby creating more job opportunities.
Q5. How is the company incorporating technology into its manufacturing units?
Ans. With the increasing cost of construction, and shortage of skilled labor, there is an increasing demand for technological improvements in the concrete industry. The industry expects a lot of manpower for the construction, but with the outgrowing technologies and trends, the industry now prefers the upcoming concrete technologies to depreciate the labor work and reduce the construction costs. We are using Ball Mill technology for our cement production. Operation of a ball mill is relatively simple, with no moving mechanical parts within the mill itself. The system is tolerant to variations in both mill feed quality and quantity. Also, cement produced in a ball mill is steep PSD cement that results finely grinded cement.
Q6. Sustainability and growth – how are they going hand-in-hand for the company?
Ans. As the environment is evolving faster than ever, our potential to deliver profitable boom hinges on sustainable practices to pre-empt and act on the megatrends and deliver the right product to the consumer at the right time. Kanodia Cement Ltd. through its numerous sustainable interventions in like (name a few) aims to develop in an inclusive manner that guarantees equitable improvement.
As a part of our long-term growth strategy, we are currently focusing on delivering low carbon and sustainable product portfolio to our clients. We also aim to boost decarbonization by decreasing the quantity of clinker in cement production by making use of gypsum or industrial wastes like fly ash and slag as raw fabric. The long-term achievement of our business is likewise rooted in our ability to maintain sustainability at the center of our endeavors. Our unwavering commitment to balancing growth, environmental wellbeing, and social welfare, is the testimony of our concerted efforts toward transitioning to a brighter future. For our business, sustainability is a way of life and it will put in force bolder plans to foster a surrounding for sustainable production and a sound financial system within the country.
Q7. What are the technological innovations adopted in the cement manufacturing process that helps in the reduction of carbon emissions?
Ans. The by-product of coal combustion – Fly Ash is produced in large quantities in cement industries and requires a large area of land for its effective disposal. However, using advanced technology in cement production not only utilizes most of the Fly ash but also other harmful elements like blast furnace slag. We are consuming flyash to the maximum permissible level (15-30%) to reduce carbon emissions. Also, we are using several grinding aids that not only help in better grinding of raw materials but also help in reducing power consumption which ultimately leads to a reduction of carbon emissions.
Q8. What do you see as the long-term potential of cement demand in India?
Ans. India is the second largest cement producer in the world and accounted for over 7% of the global installed capacity. India’s overall cement production capacity was nearly 545 million tonnes (MT) in FY22. Of the total capacity, 98% lies with the private sector and the rest with the public sector. As India has a high quantity and quality of limestone deposits throughout the country, the cement industry promises huge potential for growth.
