How To Start Your Own Cement Business In India?
Table of Contents:
2. How To Start Your Own Cement Business?
1. Cement Factory
Construction and infrastructure business are one of the fastest growing and sought-after businesses in India. India has a fairly great scope in the cement industry compared to other countries.
As per the study of IBEF.org, ‘India is the second largest cement producer in the world and accounts for over 8 percent of the global installed capacity, as of 2019’. Read on to know about the steps you need to take to start a cement factory:
2. How To Start Your Own Cement Business?
Make A Plan & Analysis Of Cement Factory Cost
Although a cement factory is a growing and profitable business, it needs proper planning before you start executing. Starting a cement factory involves a lot of natural and unnatural factors. Natural factors involve things like raw material like limestone or power supply for which you need a reliable source like coal or proximity to the power grid.
Unnatural factors cover finances, manpower, real estate and more. When you make a plan, consider having all these big and small factors which are required to proceed further. Remember it is a high cost physical business, not an online venture and hence needs more commitment and surety.
Prepare A Budget- Cement Factory
Once you have your analysis and plan made, you can move on to the next step which is preparing a budget for your factory. Now, as mentioned earlier, cement factories involve high operating costs so you have to take all kinds of fixed and non-fixed expenses into account.
Make sure your budget includes, cost of land, promise, procuring raw material and power supply, salaries, operating expenses as well as maintenance and transportation cost for supply of your product. Here you can also estimate the production so that you can decide on profit and adjust the operating cost accordingly. You can now apply for loans or raise capital from the market to secure the cost of starting the factory.
Select Your Market Or Region For Cement Factory
One thing you must know about a cement factory is that it caters to not just the region it is based at but also to places located far, but have customers. You need a proper supply chain for uninterrupted supply of your produce. So, select a region which is not saturated and still has a lot of scope for a cement factory to run. Study the region and then go ahead with the plan.
Select location for good raw material supply
The selection of your location also depends on the availability of raw material. That’s right, there can be no factory unless you have a constant supply of limestone, gypsum, water and power, to name a few. Ensure that your location has all these supplies.
Understand the cement manufacturing process
Now is a crucial step which is to understand the cement manufacturing process in detail. It involves the following steps:
- Mining – The process begins with Limestone mining which will be the base of your manufacturing. Must have some reliable mining companies in the area.
- Crushing and stacking the raw materials- The mined limestone is not straightway fit for use. It needs to be crushed and stacked to be suitable for going ahead with production. Here it is given the right shape and size and often mixed with other material if required for proper consistency.
- Next, this ready raw material is sent for grinding and comes out as raw meal. The raw meal is then stored and homogenised in a concrete silo. When the raw meal is extracted it’s called kiln feed.
- Now you can manufacture cement at your factory using various equipment. Use different compositions of meal to get different types of cement.
- Packing – After the production, you need to get it packed, it is sent from the silos to the automatic packers in packages of 25 or 50 kg. it is then dispatched to the customers.
Determine the supply of Raw Material and energy supply
Finding a constant supply of raw material which is gypsum, limestone, coal and water, is highly important here. Not just for a couple of years, you need to secure this supply for the next 20 to 40 years for your cement factory to be making profit. If your factory location is far from mines, make sure the cost of transporting raw material doesn’t increase your cost of production or product cost considerably. There are also cases of illegal mining in India so it is recommended you find out before going ahead with a mining company. For a regular production your factory needs a high voltage power supply so finding a place that is a mix of both raw material and power is the best idea.
Get Environment clearance
Once these operating factors are decided, you will need licences and environmental clearance to establish the factory. It means your factory is not violating environmental laws, damaging trees and greenery in the area or causing pollution for the local community. Waste discharge is also included here because it also pollutes the environment. Once your plan is found feasible environmentally and community wise, it will be given the required license and environmental clearance.
Make your project in line with CSR and sustainability
This is something you need to take care of on your own. Most large cement factories in India have their own Corporate Social responsibility as well as sustainability programs. You need to do your bit for the programs society as a large business that impacts hundreds of lives. Carrying out social work in your area as well as opting for sustainability makes your project CSR friendly which helps in the long run.
Also Read: Best Cement Brands in India
Get the required manpower and Start production
With everything set up and available, now you need manpower to start the cement production. Although you might be educated and experienced, you need specific knowledge to run a factory equipment. You need to hire appropriate engineers and subordinates to start the process. Without a proper and experienced manpower, your factory will be of no use. Your cement factory is now ready to start production. Go for the first batch of production and determine the daily output. This will help you get an idea of the operating cost, production speed, drawbacks and more.
Gauge Your Competition
Now that you are a full-fledged cement manufacturer, it is time to study the competition. What raw material they use, their operating and supply cost, and more. This will help you understand where you stand in terms of the whole cement industry and the areas you can work on to make the business more profitable.
Conclusion: Cement factories usually take 6 to 9 months to become an operating business from a plan. So be patient and keep at it. The results will be more than satisfactory as you will see the business right when it starts. All you need is to be ready to be consistent when you are planning and executing and not let any loophole because any fall back on any step, may result in getting you adverse results. It is also highly recommended to take professional help wherever necessary.
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Cement Manufacturers in India
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FAQs On Cement Factory Cost
Q. How To Start Your Own Cement Business In India?
Ans- Below is a Step-by-step process to Start a Cement Factory-
- Make a proper plan and analysis of the cement factory
- Prepare a budget estimate based on your cost-benefit analysis
- Select the market or region which you want to target
- Select location for good raw material supply
- Understand the cement manufacturing process
Q. Is cement business profitable in India?
Ans- In any cement dealership in India you can expect a profit margin ranging anywhere between 3% to 8%. The profit margin in any Cement Factory is directly proportionate to the no. of sales you have made. i.e If you make more deals, then you'll be able to earn more offers and rewards offered by the organisation.
Q. How much does it cost to start a cement company?
Ans- The first question that arises during How To Start Your Own Cement Business is its Cement Factory Cost. You'll be required to make an initial investment anywhere between 50,000 Rupees to 5 Lakhs as a security deposition and additional requirements to the enterprise, based on the brand you choose. Usually, these businesses would return this money to you with applicable bank interest.
Q. How many cement factory are there in India?
Ans- Out of the total 210 large cement plants in India, 77 are located in Andhra Pradesh, Rajasthan, and Tamil Nadu.
Q. Which is the biggest cement factory in India?
Ans- The Wadi cement plant of ACC Limited, situated in India's southern state of Karnataka is now known as the world's largest cement plant.