What are the new global trends in the cement space?
The biggest global cement trend is overcapacity and the rise of China as a cement making superpower. I have spent a lot of time in China and the country is completely revamping its entire cement business to provide greater capacity and quality. It is doing through increased automation and data sharing. This will push into all markets, including India, because it is able to make cheaper and efficient cement than anyone else in the world. So, the rest of the world also needs to become a lot more efficient. The way we can move forward is to be able to use our data to become an information-driven industry.
We think of cement as a more traditional and slow-moving industry. It's not! Cement factories are huge data warehouses and there is so much we can know about our product that we can use that data to improve it. For example, SABIA has been cooperating with customers in Texas to more effectively use their data to control their production process. In one case, a plant of a large global player went on from being one of its worst performing to the best through better utilisation of data by turning into a 'smart factory'.
Given this backdrop, where does India figure in your scheme of things?
India is key because it is next to China as the biggest market. India, if it chose to, could export cement. And India is the place where we could learn to stand up to China. In order to do that we need to modernise the Indian cement industry, and that's where SABIA comes in. Historically, SABIA has been around for a long time, but we have always been in the areas of quality control and increased automation. Our newer products such as software allow customers to have much greater control over their processes and also much better visibility when they have a problem. SABIA analysers not only improves the quality of cement but also points out problems to customers so that they can fix and improve upon them. A typical cement plant in India will produce maybe up to 70 to 80 per cent of its total potential. Application of SABIA smart analysers and data can increase that by up to 98 per cent. That's a huge saving as a huge of amount of capacity gets added to the plant at no cost and the money drops directly to the bottom line. That's what is happening in China right now. If we have to keep up in order to stay competitive, we have to do this in India and around the world.
The President of United States
has emphasised on redeveloping America's ageing infrastructure. Do you see an opportunity for India's cement makers there? Of course! The US is the world's largest economy. Most of its infrastructure was built 50 years ago. There is tremendous amount of new infrastructure that could be built. That could generate cement demand growth of 10 to 15 per cent over the next 5 to 7 years. If President Trump gets his way, we will need at least that much cement. That's a huge opportunity for exporters because probably in the US we won't build new cement plants. The environmental regulations are too difficult and the expense are very high. This is a huge opportunity for Indian companies. I know the amount of cement export from India is very small. You have lot of unused capacity here. So, you have potential for huge growth if your cost can be competitive.
How can the Indian cement industry become more cost competitive?
I have to be fair. Indian cement production is pretty efficient. It is one of the best in the world. But then again, better efficiencies that can be had by turning those factories smart by using IT, big data, artificial intelligence. These are the trends of the future. I have seen them in operation in other countries and I think it's a huge opportunity for India.