Who stacks, how

Cement industry is not doing too badly

Published: Saturday 31 December 2005

Who stacks, how

-- With an overall score of 36 per cent, the Indian cement industry gets a three leaves award -- an above average environment performance. Companies were rated on more than 150 performance indicators -- from assessing the environmental impact of raw material sourcing, through assessing the environmental performance of the product to assessing their initiatives in corporate environment and occupational health management. Due cognisance was also given to the perception of people involved, including communities near mines and factories. The Indian cement industry scored better than the three earlier rated by grp (see table: Discomfort zone).

Discomfort zone
Earlier GRP ratings


Weighted average score (%)

1st phase pulp and paper     27.4
Automobile     31.3 31.3
Chlor-alkali 30.2
2nd phase pulp and paper 29.1
Cement 36.0
Source: Green Rating of Indian Cement Sector, CSE, New Delhi, 2005

Of the 41 cement plants rated, 17 plants received the three leaves award (above average) and two leaves award each. Five plants got no award (bad performers). The company that tops the rating -- Madras Cement Limited's Alathiyur Works -- with a score of 51 per cent was awarded the four leaves award -- the first.

With just 24.4 per cent, the sector has performed poorly in mining. It does not use environment-friendly technology nor invests in mine management and reclamation.

The industry has not performed well in raw material consumption and waste substitution either, because of the wide variations in the performance of companies. The same goes for management and storage of materials -- fugitive emissions represent the main source of air pollution. The sector has poor management as well as no infrastructure for proper handling of dry and fine materials. This is exacerbated by poor regulation. The cement industry performs badly in occupational health and safety management. It has not taken proper measures to protect its workers from fugitive dust. The documentation on the health status of the workers is wanting as is the monitoring of ambient air quality in dust-prone work areas.

Employment generation is also a problem area. Plants have come up without providing many jobs, creating social tensions in surrounding areas where displacement takes place. To compensate, some companies have started social programmes to provide basic necessities, like water and medical facilities. But most programmes are small and do not address local needs and are framed without consultation.

Though the industry has scored 40.8 per cent in stakeholder perception that is largely a reflection of the high score it has received from regulators. Very few cement plants are non-compliant and easily meet standards.

Highs and lows
More than 30 per cent separates the best and worst in the Indian cement industry. Moreover, no company has done well in all areas. Madras Cement Limited's Alathiyur Works has performed well in all respects, except mine management. It produces 86 per cent blended cement, uses paper bags to pack cement, surface mining technology, is energy-efficient and has done exceptionally well in reducing air pollution. It is also the only plant that has the infrastructure to handle and store raw materials.

Gujarat Ambuja's Gujarat unit, with a 48 per cent score is the second best company in the country. It uses surface miners and has a robust vision for mine reclamation and has already converted part of its exhausted mine areas into grazing land. The company has taken significant initiatives to generate livelihood opportunities by constructing rainwater-harvesting structures and outsourcing its limestone-transportation operations. The result is a top score in stakeholder perception. It has done reasonably well in energy use and emissions, but scores poorly in waste material utilisation and storage.

Three companies -- acc 's Gagal Unit in Himachal Pradesh, Prism Cement in Madhya Pradesh and JK's Laxmi Cement in Rajasthan -- with 46 per cent each, occupy the third position. Though Gagal has done everything well -- from closed storage for most raw materials to state-of-the-art pollution control technology and mine management -- the very fact that it is located in eco-sensitive Himanchal Pradesh ensures adverse environmental impact. Prism Cement has the most advanced production and pollution control technology , but its raw material handling is poor and mine management average. JK's Laxmi Cement has reached the third position by being consistent in every aspect, not exceptional in some.

The plants that are at the bottom of the heap -- India Cements Limited (Vishnupuram and Shankarnagar plant), Century Textiles' Maihar Cements at Satna, Diamond Cements at Damoh and JK Synthetic's Nimbahera plant -- are the ones which had everything to hide. Though they refused to participate, grp's research shows bad performance.

Take India Cements Limited. It is the third largest cement producer, with a 9 million-tonne capacity spread over seven plants in south India. It has expanded fast, but done little to manage pollution. The survey of its Vishnupuram plant shows fugitive emissions cause big problems.

Many plants that participated in the ratings were poor performers. But they were transparent and open enough to participate in the exercise and learn from the process. Andhra Cement told grp that they were participating not for the rating, but to develop a plan for the future.

Way ahead
Considering the potential for environmental destruction inherent in the industry, grp's, initial perception was that this sector was going to be one of the worst. This was right in some senses and wrong in others.

Though the cement industry remains environmentally destructive, many companies have taken measures to reduce the impact. Performance in mining remains very poor, yet it had done lots to ensure that energy consumption, co2 emissions and stack emissions remain as low as possible. In terms of production technology, it is perhaps the only industry that is sometimes global leaders. The study of the cement industry shows it is possible to align economic and environmental interests, if a reasonable regulatory framework is in place.

But it is not just a question of the physical environment. To optimise performance, the cement industry has to look at social issues, especially the question of equity. With increasing awareness and changing state policy, it is difficult to push through any project that causes deprivation without compensation. This is a problem for cement companies because their capacity to generate employment is limited. They will have to innovate, create partnerships and involve themselves in local development projects to be acceptable to people in the areas where they plan to set up shop.

Click here to see the Report Card>>

Chandra Bhushan, Monali Zeya Hazra, Radhika Krishnan, Nivit Kumar Yadav and Sujit Kumar Singh

Big deal
Environmental performance of Indian cement sector

Key Indicators

Average sector performance     (in percentage)

Mining and its environmental impact  24.4
Raw material consumption and substitution  26.9
Benchmarking technology   48.7
Energy consumption and conservation    54.6
Water sourcing and consumption    40.0
Point source pollution and control equipment  44.0
Material handling and management    33.9
Environment and occupational health and safety management    29.7
Stakeholders perception    40.8
Source: Green rating of Indian cement sector 2005, CSE, New Delhi

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