1 Mission
2 Objectives
3 Action points
3.1 Government
3.2 Action Points - Industry
3.3
Research / Industry Bodies – NCB
The mission for the initiative:
To transform Indian Cement Industry into a Globally strong and competitive industry
To realize the mission, Ministry of Commerce and Industry had mandated KPMG Consulting to conduct a study of Global competitiveness of Indian Cement. The study has been coordinated by National Council for Cement and Building Materials (NCB), under the overall direction of the Ministry of Commerce and Industry.
The objectives of the engagement were
n To analyze the competitiveness of Indian Cement industry vis-à-vis international competitors and to devise strategies to ensure long-term sustainability of growth in the cement industry in a globalized environment
n To assess the Global competitiveness of the Indian Cement Industry focusing on
- Progress and prospects of the industry
- Constraints faced by the industry
- Steps to contain them
n To recommend strategies for enhancement of global competitiveness of the Indian cement industry
The action points identified at the conclusion of the study conducted by KPMG Consulting are as classified under three heads:
Government: Action points for the Ministry of Commerce, Central and State government oragnisations
Industry: Action points for the Cement manufacturers and other players in the cement indfyustry
Research / Industry bodies (NCB): Action points for industry research bodies such as NCB
n Streamlining the limestone mine licensing policy in line with the consolidation within the industry new capacity additions in the coastal districts
n Simplifying and streamlining the process of leasing limestone mines and reduces the number of agencies involved in the process and finally move towards a single window for clearances
n Increasing the ceiling on the mining area that can be held by a single company, in tune with the requirements of the industry.
n Converting the process of charging royalties on limestone mining on a sliding scale or on an ad-valorem basis - ensuring equality in charges of royalty and making it remunerative for the cement manufacturers to utilise low-grade limestone (Mine quality index linked royalties)
n Encouraging creation of additional grinding capacities near demand points
- Incentives for mini cement plants for contract grinding
- Incentives for large cement plants putting up grinding units based on availability of blending material
- Incentives for large cement plants sourcing the clinker from kilns set up near lime-stone mines in remote locations
n Identifying the best cement plants (which compare favourably with global standards of operations) in the country based on agreed technical and operational parameters, (including nearness to the sea) and promoting exports from these plants
- Providing the identified plants with preferential mining leases, statutory clearances and liberalise other statutory requirements which would otherwise add on their cost and competitiveness.
n Creating special cement export processing zones on the lines with other EPZs, SEZs, in areas within 300km of the coastline to promote export oriented cement manufacture
n Lowering the import duties on coal used by cement plants on par with the reduced duties for coal imported by other industries (eg.: steel manufacturers)
n Encouraging fuel management enterprises, to whom cement manufacturers outsource the activities related to fuel management
- Providing tax and other incentives for the same and exploring the possibilities of bringing in participation from the industry
n Directing state governments to remove restrictions on choice of power source imposed on the cement manufacturers
n Incentivising the cement companies to source / develop the technology for power cost reduction, eg.: Cogeneration, Waste heat regeneration etc
n Removing the restrictions on usage of blended cement (of acceptable quality) for large infrastructure projects
n Introducing policy initiatives to discourage the usage of packed cement bags for large infrastructure projects and by ready mix concrete plants.
n Incentivising setting up of bulk handling facilities especially in coastal zones, to enable competitive exports
n Introducing policy measures to represent to the railways to endow a favoured preferential treatment to cement on par with coal and petroleum products
n Promoting cement specific inland waterways and encouraging development of inland ports and handling facilities dedicated to cement
n Identifying major / minor ports that would be able to support the requirements of cement exports from major clusters
n Removing the restrictions on constructing port based cement handling facilities
n
Encouraging “Made in
n Incentivising the R&D expenditure of the cement companies, especially those who invest in export oriented R&D.
n Developing an integrated policy for enhancing the relevance of Indian cement industry in the world – encompassing the skill base, the producers, the R&D associations and the equipment suppliers
n Introducing policy initiatives preventing non-usage of RMC for large infrastructure projects. Amending the evaluation criteria for infrastructure suitably taking into account the advantages that accrue on the use of RMC
n Removing the tax (sales tax and excise duty) imbalances on RMC and enabling reduction in the cost of RMC used for construction
n
Incentivising the RMC
industry by suitably lowering the import duties on RMC equipment / components to reduce
the overall capital cost of the RMC plants in
n Sourcing inexpensive global funds and on-lending the same to the Indian cement manufacturers, thereby reducing the cost of finance for the Indian cement industry
n
Developing a suitable exit policy for enabling
easy reorganisation of manufacturing capacity to increase the
overall competitiveness of cement manufactured in
n Encouraging consolidation by providing access to the inexpensive funds from global sources to the large Indian players intending expansion / lateral consolidation within Indian industry
n Encouraging professional expertise in limestone mining and supply homogeneous limestone from the heterogeneous deposits – out sourcing of the limestone mining to professional globally renown miners
n Outsourcing the critical function of mine planning to specialized organizations such as NCB
n Proactive investments in introduction of technology for flexible fuel operations
n Proactive creation of organized markets for alternate fuels for domestic / imported alternate fuels such as agricultural wastes, tyres etc.
n Commitment for usage of alternate fuels, especially no ash fuels such as natural gas as well as fuels such as RDF – representing to the government for specific financial (tax incentives, subsidies etc.) and non-financial incentives for the same
n Outsourcing power generation to specialized utility companies - consider setting up of cluster based IPPs to meet the needs of power by the manufacturers across the cluster
n Commitment to invest in efficiency improvement of the older plants in a time-bound manner
n Proactive investments in pozzolona material handling facilities
n Proactive development of independent bodies to manage the supply and distribution of pozzolona material on a cluster basis (on line with shared infrastructure for limestone and coal handling).
n Proactive investments in Bulk material handling and transport facilities to bring down the overall cost of cement – sharing of the investment requirements for the same across the industry
n Proactively pursuing common cluster based approach for railway siding and railway transport handling
n Proactively pursuing common service providers (experts) for logistics handling, across multi-modal transport facilities of road, water and rail - in line with Automotive Industry
n Proactive industry investments in feasible cement handling ports at identified centres
n Encouraging the cement industry players to practise common / strategic sourcing across the cement plants and prioritise strategic sourcing in a cluster
n Industry players commiting resources for creating brand equity for their products and bringing in differentiation
n Committed target based investments in areas of basic research, technology development and absorption and sourcing of new technology
n
Utilising the services
of the research organizations in
n Proactively pursuing setting up of RMC units, either directly or in association with third parties such as players from the construction industry, urban local bodies etc., at various demand points across the country
n Actively promoting the expertise in developing joint mine planning programmes at the cluster level with the industry the requirement of mine-planning
n Proactively prospect, monitor and assist in the globally sourcing of the most competitive inputs for the Indian cement industry’s requirements
n Proactively support the industry’s efforts in import substitution and value engineering for the various inputs
n Undertaking committed target oriented programmes for developing the manufacturing efficiencies such as those in energy conservation, waste utilization, pre-calcination, etc.
n Pursuing the creation of a shared sourcing organisation, to provide sourcing services (domestic as well as global) of the cement plants irrespective of their ownership
n Proactively encouraging the adoption of global quality testing procedures by Indian cement companies
n Proactively pursuing the process of streamlining the BIS protocols to be congruent with the global standards and continuing the process of setting the standards for the cement industry which are globally acceptable
n Taking over the responsibility of prospecting for, realising and following up on the avenues to improve global competitiveness across the Indian cement industry, across the value chain
n Continuing the strides made in the R&D across areas such as Limestone mining, mineralisers, alternate fuel usage, refractory bricks design, new product development, new packing material development etc., which would improve the overall global competitiveness of the Indian cement industry
n Taking suitable measures, including those taken on a case to case basis, to enhance the stature of the Indian cement industry
- Short-listing major cement producers for this purpose and continuously evaluate further measures required to improve their global competitiveness
n Organisational and financial reorganisation to meet the requirements of the cement industry in the current scenario
- Developing a reliable, project oriented funding programme
- Developing an accountable organization for the successful handling and completion of the research and other projects as demanded by the industry