The Indian growth story got a temporary jolt but it is bottoming out
Has the economic slowdown impacted production capacity augmentation or the setting up of new cement plants?
There is no denying the fact that there was a serious economic slowdown in India, over the last couple of years, resulting in a dismal GDP growth rate. Consequently, cement consumption has suffered and created a large overcapacity situation. So it is natural that new cement capacity augmentation has not been too encouraging.
Are we in the state of cement production overcapacity?
Yes, we are in a state of overcapacity of cement for the time being. In the backdrop of sub five percent growth rate, rough estimates project a figure of as high as 80 to 100 million tonnes of overcapacity in the country. The situation is even more precarious in the southern belt.
What policy changes can help the cement industry regain momentum from the year 2014 onwards?
The first and foremost requirement would be to boost investor sentiment. Enabling polices and a stable vision for the future is equally mandatory. The low-capacity utilisation of already installed production lines is troubling. To improve cement consumption, the economic growth rate is vital. In this respect, we strongly feel that government spending and regulatory clearances of large infrastructure projects will play an important role to revive not only the cement industry but the overall economy as well. Housing sector is also vital for cement consumption.
One of the major reasons/excuses for the present day reduced level of capex spending on new projects lies in regulatory hurdles and inordinate delays in clearances. This needs to be taken care of.
Higher cost of borrowing is another impediment to new investments in this sector. For a supportive interest rate regime, food inflation specifically, needs to be controlled with particular focus on supply side bottlenecks.
Energy sourcing is another bottleneck for the cement sector. Cement plants are highly energy- intensive and require both thermal energy in form of coal (in the case of India) and electrical power. Quality/quantity and the cost of both these energies seem to be bothering the Indian cement industry. The issue of lower quality coal need to be addressed by blending imported high grade coal. Supply of more washed coal from CIL would help. For power, co-generation (through WHR technology) would give a big relief and should be made mandatory as it is in China. Usage of alternate fuels is also vital.
Which new design trends are we likely to see in cement plants and the supporting systems?
The Indian cement industry, over the years, has employed the best available technology for production. Thanks to a high degree of blended cement utilisation, Indian cement producers are at the forefront of fuel and electrical energy consumption on a per- tonne- of- product basis. An additional benefit in terms of sustainability is lower per tonne CO2 emission. Stricter regulatory requirements are leading increasingly towards greener technologies; and they, in turn, lead to further energy efficiency.
Utilising a Vertical Roller Mill (VRM) or roll press circuit in finish grinding mode for raw material grinding is the industry norm today, and it provides a significant energy cost reduction over the traditional closed circuit ball mill system. Likewise, for coal grinding also, a vertical mill is used. For the energy-intensive finish grinding process, the ball mill plus roll press system is widely popular. In specific cases where slag grinding is involved with high per cent moisture, VRM technology for finish grinding is used. Only in extreme cases today, do we get request for close circuit ball mill for grinding; it is inherently less energy efficient. High efficiency separators are standard today for all milling systems.As regards the pyro-processing area, Indian cement producers continuously strive to achieve the lowest specific fuel consumption along with high power saving. High efficiency fourth generation grate coolers are being utilised widely since they provide high recuperation efficiency along with lower maintenance interventions. As the total cooling air requirement reduces from the earlier 2.2Nm3/kg clinker to say, 1.8Nm3/kg clinker, there is a lot of savings through reduced exhaust air and fans power consumption. To achieve lower fuel consumption, six stage pre-heater systems is the popular choice along with in-line calciners. Advanced low NOx technologies are utilised in many cement plants. For process fans, a static efficiency = 82 per cent and use of variable speed drives reduces power consumption.
Do you see the demand for WHR systems growing in the future?
Waste Heat Recovery is slowly catching up in India. It is imperative to make WHR a mandatory requirement for any new cement plant, as is already the case in some countries. A significant portion of the energy requirement can be sourced through utilisation of waste heat from the pre-heater and cooler. In this context, Indian cement producers/consultants need to do a more specific, case to case basis, cost -benefit analysis for the six-stage vs. Five-stage pre-heater system, specifically when raw material moisture is high or when civil design parameters like wind speed/seismic conditions are not favourable. There is also the need to account for additional time taken for six- stage construction.
What is the scope for alternative fuels in cement plants?
Considering the dwindling quality/supply of domestic coal and logistic issues of imported supply, a variety of alternate fuels are being utilised cost-effectively. Not only Pet coke but a host of other materials from tyres to rice husk, plastic, sawdust are all being used. Utilisation of municipal wastes/sludge is still in its infancy in India primarily due to supply-side bottlenecks. It is worthwhile to mention here that cement pyro-processing systems are highly suitable for burning waste material, apart from contributing to the calorific value, due to the very high incineration temperature, close to 1,800 to 2,000deg C at the flame zone, higher residence time like five to six sec in calciners, assimilation of heavy metals in the clinker, negligible dust emission through kiln bag filters and dry dust curtains with high surface area in the pre-heater, etc.
What are your suggestions for improving energy efficiency in cement plants?
In terms of overall energy efficiency, we at Sinoma strongly recommend Waste Heat Recovery (WHR) from both the kiln and grate cooler. For the coolers themselves, we recommend fourth generation walking floor type or moving bar/S-type grate coolers. High efficiency, high momentum burner pipes are a must. Modern design low pressure drop high efficiency pre-heater cyclones also plays an important part. For grinding, we recommend the roll press and vertical mills depending upon the process and materials.
As an EPC service provider and supplier of critical plant and machinery what was 2013 like for you?
In the backdrop of poor growth rate and not much positive investor sentiment, 2013 was not a very encouraging year for the industry overall.
However, we are rather bullish on the India story. India cannot and shall not remain a sub 5 per cent growth rate country for long. The Indian growth story got a temporary jolt but is bottoming out. Already green shoots are visible. If we consider the stock markets reflect, at least to some extent, investor sentiment, clearly the sentiment is positive with indices hovering around all- time highs. Even events like the start of QE tapering made virtually no dent. The Indian currency stabilised rather quickly. Smart moves by the RBI in tackling the CAD issues have fortified confidence further. The expectation of a strong and stable government coming to power in May/June 2014, is boosting the overall outlook. Clearance of some high profile infrastructure projects through the Cabinet Committee is a big positive. With a favourable monsoon and the start of the harvesting season, easing of inflation expectations is widely anticipated.
Considering all this, we anticipate a much more exciting time from the second half of 2014 onwards.