Cement Industry

With increasing demand from rural, public infrastructure and enabled by the government’s impetus on infrastructure, the cement industry in India is growing.

Drivers for Cement Industry

420 Million tonnes of cement demand estimated in FY27

The Union Budget FY24 raised the allocation for essential infrastructure by 33%

10,000 kms of additional highway added YoY

80 more airports planned in next 4-5 years

20-25% increase in railway budget towards new tracks and high-speed corridors

36% increase in real estate sales volume in top 7 metro cities

With the macro-factors primed for bringing a new phase of growth in the cement segment, Qwixpert has identified key trends that companies should be cognizant of:

  • Asset utilisation is key in cement industry due to high CapEx: Since mines are on lease basis for limited period and heavy-duty expensive machinery is used for transportation and crushing activities; the utilisation of asset in both extraction and production process are key to maximise value. Interventions targeting line balancing from the mining activity, transportation, crusher to the kiln can yield healthy bottom-lines. With healthy growth forecasts for the industry, the importance of improving capacity utilisation (from median 75%) can generate better returns. Qwixpert has experience in helping companies plan production around bottle neck processes in order to enhance the overall productivity of the system.
  • Strong focus on logistics cost reduction prevalent across the sector: Compared to traditional consumer goods, pharma etc. the share of logistics cost in revenue (~25% in cement) is 5 -8x more. Transporting a low-value but bulky material over long distances is challenging and requires large fleet size, diligent planning of dispatches and careful balance of inventory levels. Through government support of cement corridors, measures taken such as integrated plants, optimising fleet usage and network design to identify right location for nodes, we believe there are multiple levers for realising savings in logistics. Qwixpert has a strong portfolio in logistics cost reduction. We have designed the entire outbound network for a large manufacturer consisting of Logistics, warehousing and inventory strategy. Our solution focused on reducing multiple handlings, increasing share of long-haul direct dispatches to customers and recommending larger truck sizes that can increase utilisation rates. 8% reduction on supply chain cost was unlocked through this engagement. In another engagement, Qwixpert undertook route-optimisation of dispatches from warehouse to customer (Dealer) by identifying the right routes for milk-run, planning for fleet requirement during peak and non-peak months and vendor negotiations.
  • Input material availability and inflationary pressure: Apart from the challenge of inbound logistics with material such as coal, limestone that are produced in specific geographies and are transported for ~700 kms to integrated units; the challenge of surges in input prices and shortages of raw material also threaten margins. Increase in coal and crude oil prices due to geopolitical disruptions had previously resulted in a ~10% decline in margins (H1FY23). By exploring low-cost additives or alternate fuel sources, reusing and reducing wastages in raw material and by establishing long-term contracts or vertical integrations, companies can counter the challenges of input price volatility. Product innovations like blended and premium products can also help with margin pressures.

The favourable growth projections makes this an ideal time to invest in capacity expansion and other expansion projects; but for long term value generation, cost-reduction and efficiency improvement measures are important. Qwixpert has experience in doing just that. Let us help you get healthy bottom lines while helping you realise your growth ambitions.

What can we do?

Our Solutions for Cement Industry

Business Plan

To cater better to the growing market, it’s critical for the business to have focused long-term strategies in place and undertake activities such as capacity expansion, capability development etc. towards it. We specialize in developing comprehensive long-term plans for business expansion – new geographies, adjacent products and a new business division like Ready-to-mix concrete. Our team will work closely with you to create a strategic roadmap that brings together investment requirement, organisation capacity building and stakeholder requirements.

Capacity Expansion Strategy

With almost all cement players in India focusing on capacity building and investing heavily in setting up new plants, leasing rights etc; we can help you understand the size of market opportunity and work backwards to devise focused capacity addition programmes in your manufacturing. The choice between integrated units, volume addition, product mix for production should be designed to reflect your plans for the future.

Product Strategy

o New product innovation in cement is driven by the ability to sell at premium, produce at lower cost or make sustainable products. The shift towards greener and cheaper blended cements (73% of the market) is in progress and market is more receptive to greener solutions. Our product strategy expertise can help you design the right offering for the customer. Based on consumer profiling and competitive benchmarking, we can identify the product gap in the market. Our skilled consultants will thoroughly evaluate the business case for new product development, helping you make informed decisions that align with your goals.
o As cost of servicing market is very high in cement due to high logistics spend; optimising the product-market fit is critical to keep costs in check. By considering both financial and operational efficiency, we ensure your products resonate with your target audience while maximizing profitability.

Brand Communication and Marketing

With companies investing heavily on ATL and BTL spend, launching 2-3 new brands per year and expanding their sales region; customers have more choices making strong brand recall a key success factor. We help determine the right brand communication strategies based on your desired brand perception. Our experts work closely with you to develop a marketing mix that aligns with your brand values and resonates with your target audience. By incorporating green goals in your messaging, we can help develop a strategy to stand out in the market.

Market Analytics

We will help convert your data to insights by leveraging our industry experience and our analytical skills. We can develop trackers and dashboards to ensure that leading trends are detected and you can plan for disruptions.

Procurement Cost Reduction

As mentioned above, the volatility of input prices and availability threatens the stability of margins. We can help you identify potential to redesign your product using low-cost additives or reduce reliance on volatile commodity. For essential inputs like Coal, Limestone etc. we can look at reducing wastages or reusing the through heat recovery etc. We can also help you strategically choose vendors for cost-efficient stable supply and help develop long-term contracts that can help you benefit even during inflationary periods.
The procurement cost reduction will also help companies with ESG goals through identification and alternate raw materials and fuel and more efficient use of it.

Improving Asset Utilisation

During the transportation of limestone from the mine to crusher or for making cement from clinker and additives; the system comprises of expensive capital machinery. Asset utilisation of these equipment is key and we can help you study the utilisation rates and through production planning; ensure line balancing of the mining and production system. We can also help you with machinery efficiency improvement through better planning of bottle-neck operations.

Network Design

Location of node has implication on the logistics cost; since location of mines are constrained due to geology; the location of plant (Integrated and Clinker units) should be determined considering both inbound and outbound logistics. The network design will also consist of recommendation of mode of transportation – road, rail and sea. Our in-house network optimisation tool will factor in logistics cost and the handling cost (detention and demurrage charges) and we will identify the most cost-efficient mode of transportation for inbound and outbound movement.

Logistics Cost Reduction

For a network consisting of 1,000+ trucks, Qwixpert can help look at truck utilisation rate and recommend changed to the truck size with the objective of minimising cost of transportation while also balancing inventory levels. For the secondary network – supply to dealers Qwixpert will leverage it’s inhouse route-optimisation tool to design dynamic routes that will reduce the overall cost of secondary supply.

Our in-house products can help get to solutions faster

Our Technology

Our insights

In the financial year 2022, the cement companies we track have shown promising growth with an industry median of 15%. However there has been a slight dip of 1% in ROCE resulting in industry median to reach 14%. Despite this slight dip, the industry’s performance remains commendable, reflecting the sector’s overall positive trajectory.

Demand Generation

Cement industry is typically conservative on marketing and promotional expenses. FY22 saw a 25% growth in these expenses but restricted the contribution to 1% of the revenue generated.


Procurement has witnessed a growth of 15% due to hike in raw material cost contributing to 18% of the revenue generated. Due to this continuous price hike, companies are placing bulk orders which resulted in 27% growth in raw material inventory days (median is 55 days).


Manufacturing expenses have grown by massive 42% due to increased power and fuel expenses and resulted in a contribution of 27% of the revenue generated. Capacity utilization has improved to 75% to post a significant growth of 9% in fixed asset turnover from median of 1.45.

Order Fulfilment

Logitstics cost is one of the major issue faced by cement industry. Increased fuel price in FY22 caused logistics cost (contributing 22% of revenue) to further surge by 19%. Median FG inventory days is 19


Organization expenses grew at a rate of 6% in FY22 accounting 6% of the total revenue. Median Debt to equity ratio is 0.85

Analysis: Growth VS RoCE

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