Ashwin Moghe, Vice President – Technical Services, Ultra Tech Cement
Polypropylene packing, according to Ashwin Moghe, Vice President – Technical Services, UltraTech Cement, is the best suited for cement in India, considering transportation, pilferage and importantly, handling.
How important is packing when it comes to cement industry and what part of cost goes into this bagging system of the overall production cost?
There are different kinds of packing. One is polypropylene packing (PP), second is paper packing and third is laminated PP. Basically, PP is an advanced version of laminated PP. The main purpose of laminated PP is to have lesser dust formation on the packaging. However, it adds to the cost. That said, bags also vary for different purposes i.e., paper bag - which has been usually witnessed in household usages. Meanwhile, packaging indeed plays an important role in the cement sector, because, it has to sustain the handling process. In India, since we do not have much of mechanised handling process, the quality of cement packaging has to be as per standards set by Indian authorities. Most of the time, labourers apply hooks to the cement bags, which is not a correct method. However, despite efforts being made by cement manufacturers in terms of some extra financial benefits to stop such practices, it is still in use. This is why most of the manufacturers use PP bags over paper bags, HDPE or UFlex bags. As it is more cost effective way considering transportation, pilferage and importantly, handling.
So packaging has to comply with the standards that have been carried out in cement plants while testing the breaking strength. Here, as a cement manufacturer, we have to give specifications to suppliers.
Do you see a trend shift from bag to bulk?
In fact, the use of bulk over bags has already started due to a couple of reasons. Since the current government is emphasising on big infrastructure projects, the use of ready mix concrete (RMC) plant has witnessed an increase. Here, it is more convenient to use bulk cement than procure cement in bags, purely considering the nature of the project. Importantly, it is more economical for any project developer to utilise cement in bulk format than bag.
Another factor considered while procuring bulk cement is moisture. There are chances that cement in bags may come in contact with moisture, which is not in case with bulk, as it is untouched and directly transported to the project. Here, with bulk cement, chances of clogging are minimal. This has also led to use of RMC in a big way. However, according to my knowledge, use of bulk cement is more on the urban side of this country.
Do you feel any potential for smaller bags for packaging especially for repairs and maintenance?
There is a provision in IS code that cement can be packed in 5 to 25 kg. However, cement is a low cost commodity, and, the cost of packaging and transportation does not permit use of smaller bags, as it becomes expensive. That said, use of smaller bags can be applied in white cement as there is not transportation required. To be precise, one white cement bag costs around Rs 600 or Rs 12 per kg; whereas a grey cement bag cost Rs 250 per 50 kg, or Rs 5 per kg. Hence, in case of grey cement, smaller bags will not work at all for the manufacturers. In fact, it will not even cover the manufacturing cost.
Also, we need to consider the popularity. In India, there have been multiple attempt to manufacture cement in 5 kg bag, however, there was no success. This is because, in India, for household purpose usage, consumers tend to buy loose cement instead of a whole bag, even it is 5 kg. Sometime, masons purchase a whole 50 kg cement bag and utilise the same on various requirement in a timely manner.
How can packaging play an important role in branding products?
It depends on what kind of product a manufacturer is positioning. For instance, ADStar bags or laminated PP bags are considered as premium packaging products. Of course, there is an additional cost attached to it, but it all depends on user preferences. At construction sites or for that matter in real estate projects, use of ADStar bags or laminated PP bags will be minimal because the brand or product is not premium and may not give extra benefit. However, consumers constructing individual houses may use premium products with ADStar, laminated PP or UFlex packing, to avoid dust issues. It’s like, for any premium and extra convenience, consumers have to pay extra.
But don’t you think, using of premium packaging can give added benefit to the cement manufacturer?
Again, here, pricing will differ from one manufacturer to another. For instance, there will be difference in pricing between a manufacturer in the eastern and western part of the country, even if they use same packaging such as laminated PP. Plus, considering cement is a fine material and comes in a powder format, what is the use of putting so much of branding material on packaging.
We understand handling or storage and transportation cost to cement is closely related to mode of packaging….
In cement industry, handling is one part and transportation is another. In transportation, what kind of packing cement manufacturers use is irrelevant. However, in handling, packaging matters the most. Because, if a cement bag is in ADStar, UFlex or laminated PP format, manual handling needs to be careful and costs extra.