Local equipment makers could do with govt boost
Local equipment makers could do with govt boost
Economy & Market

Local equipment makers could do with govt boost

Vikas Damle

Rakesh Sharma, Director, AMCL Machinery Ltd

Rajesh Pathak, Director, Sales & Operations, Raymond Bartlett Snow

Do you foresee any paradigm shift?
Rakesh Sharma (RS):
As far as the Indian cement industry is concerned, it proactively factored in the advancements in technology a decade ago. That's why plants with 10,000 tonne per day capacity continue to operate with the same number of personnel as earlier. However, NOx, SOx and carbon dioxide emissions might pose a challenge and cement plants, and the industry is trying to cope up with that. This provides an opportunity to Indian equipment manufacturers to work out cost-effective emission control technologies. Apart from that, the industry is continuously striving to reduce consumption of power and fuel. Equipment manufacturers like us are undertaking retrofit jobs to not only reduce power and fuel consumption but also release of polluting elements.

Rajesh Pathak (RP): I would say that there is no paradigm shift per se. No major capacity expansion took place in the cement segment after 2008. But with the government impetus to infrastructure projects from 2014, most cement, power and steel plants are again expanding capacity. I, therefore, don't see any threat in terms of redundancies. But I do agree that there is a need for pollution control norms. For example, in the cement sector, wherein there is an application of coal grinding mills, most cement plants use pet coke as it's cheaper. A recent Supreme Court judgment has asked states and union territories to consider banning the fuel. Avoiding pet coke is certainly going to help in reducing emission levels, but it is also going to put pressure on pockets of cement manufacturers.

So, what's your outlook for the Indian cement business?
RS:
I am very positive. Although things might not look very bright for equipment manufacturers at the moment, but growth is certain going forward. Today, we are talking about 7 per cent growth, but it's my guess that in the next 3-4 years it might touch 9 per cent. Normally cement consumption is one-and-a-half times GDP growth. The earlier high was around 8 per cent. Once the economy picks up pace, this might exceed 10 per cent! And, most definitely, by 2030 the per capita consumption of cement would reach 400 kg, which will help double the capacity of cement plants. RP: The cement industry will register further growth. If you look at the outlook for the next five years, there is a lot of talk about slag cement. This waste material from steel plants can be used for cement application. The talk is now about Portland Slag Cement (PSC). I also agree with Mr. Sharma's view on cement equipment manufacturers. They face a major challenge from their Chinese counterparts. Therefore, when we talk about 'Make in India', all equipment suppliers should have terms in their contract to either manufacturing or source only India-made equipment. This will ensure that local suppliers also get a chance to grow. The government could also mull levying extra import duty on equipment that are outsourced from countries like China and South Korea.

What can be done at the government level?
RS:
Unlike Chinese equipment manufacturers, where there is always a question mark on product quality, Indian manufacturers enjoy a favourable reputation. Leading global players like FLSmidth, KHD Humboldt Wedag and others have set up bases here, and are doing quite a bit of engineering and local sourcing. India will definitely acquire an edge over competition over the next few years and might become an exporter of machinery to countries that prefer quality. It's like in the automobiles industry, where we are today reckoned an important exporter of automotive components and automobiles.

RP: India is presently the second largest producer of cement in the world. Since we are now talking about smart cities, dedicated freight corridors and new roads & highways, there is undoubtedly good potential for the growth of the sector. In the Indian Subcontinent, we have favourable business treaties with countries like Nepal and Bhutan, and the government can incentivise Indian companies to set-up cement plants there. This would help expand the industry's footprint overseas.

Indian Cement Review
indiancementreview.com