Cement firms wage war on costs as competition soars

India's cement makers who once flexed their pricing muscles are caught in a bruising price war, eroding margins at a time of rising demand.

- Nehal Chaliawala

As competition rises, manufacturers are pursuing aggressive cost-cutting measures, from buying their own railway cars and ships to slashing energy costs—all in an effort to outlast rivals in an industry navigating one of its most competitive eras yet.

For the cement industry, two of the biggest costs are energy and logistics, jointly making up 60–70% of total costs.

The Adani Group that entered the cement industry two years ago aims to reduce costs by an ambitious ₹530 per tonne by FY28, leveraging synergies across its energy, logistics, and resource trading arms. By the end of the September quarter, the group, now India's second largest cement maker, achieved approximately ₹250 per tonne in cost reductions, according to chief financial officer Vinod Bahety.

Adani is pursuing a reduction in its energy costs through investments in waste heat recovery systems (WHRS) that convert waste gas heat into electricity. At a recent analyst call, Adani Cement chief executive Ajay Kapur said the company plans to raise its waste recovery capacity from 40 MW at the time of entry into the cement business to 218MW by March 2025.

Adani is also targeting around 1 GW of renewable energy capacity to go live by FY26, a move that would enable the company to source 60% of its power from green energy. Renewable energy offers cost savings compared with grid power and brings price predictability for up to 25 years.