COVID-19: Voices from the Cement Industry - Interview with Mahendra Singhi

As part of our programme of connecting our global members during the COVID-19 outbreak, WCA is hosting video interviews with our members to discuss the situations in their countries and to find out more about the impacts of the pandemic on the cement industry around the world. Here is an interview with Mr Mahendra Singhi, CEO of Dalmia Cement, India.


Video Transcript

[How has Dalmia responded to the COVID pandemic?]

On 24th March when the lockdown happened, the first decision of our company was we would pay salaries and wages five days in advance so people didn’t have any apprehension in their minds even though they were not able to go to the plants or to the office, and thereafter we said we would be giving wages for all the months to come, whether they do come or not, and let’s give good moral support to our people. Second message which we gave out was we will take care of society. 

We started Dalmia support line, a helpline on 25th March after lockdown, and we said this is a 24h manned helpline. And there was a tremendous response on this, because one of the things since lockdown happened was that people were finding problems in many areas, how to get their children back, how to get materials, or something or other, and the Dalmia support line gave great confidence to people.

(IR): I remember from my visits to India that many of the plants have a lot of people, the more people you have the more difficult safety management is, so do you think the pandemic will have helped with safety performance, either in terms of people’s consciousness, or in terms of the manning levels you have at the plants?

(MS): It has already having a great impact on people and safety, we made them understand that what is being done, what is being advised to you is in your interest, the interest of your family, the plant will come later, but you come first.


[What has been the impact of the pandemic on cement demand?]

So when lockdown happened, there was a big drop, and then slowly this has started recovering from the 25th-26th April, in the month of May, I would say there was roughly a 60% drop, so the demand was just 40-50% of what it was in May 2019. If I talk of June, then the demand was roughly 60-70% of what it was in June 2019. In the whole of India if you look at rural demand, it played a very big role not only in cement but in consumer industries, automotive sector also, so the demand is coming up but the major challenge is how big projects in cities that will restart, as the workers who came from far distances started going back to their homes, to take care of their families.

If you come to India, you will see that in many places the roads,  the bridges, you’ll find they are better than Europe, our infrastructure, whatever work has been done in India, day by day, we are now best in class for Airports, roads and all main roads are concrete, all major highways are made of concrete. The per capita consumption of cement in India is one of the lowest, it is about 225kg against a global average of maybe 500kg or so, against the Chinese average of 1600kg. So we have the ambition, though we are a developing country. After this COVID situation there is one mindset that maybe we remain closer to our houses, closer to our living places, which means many people would like to live in rural India or semi-rural India so we find there is a huge spike of customers so people can have their own houses. And by 2024 or so, everybody in the country must have a house, must have a roof.


[How has the pandemic changed working practices?]

Our performance in May and June 2020 has been better than our performance in May and June 2019. And the reason is that a lot of orders came from the customers because we were in touch with them, we have a good supply of transport and vehicles because we were in touch with them, and acted very promptly. So now, there is more closeness with our stakeholders, now the mindset of the government and people has changed, now we can meet them not in the office, but on virtual platforms, and that no-one thought of. For our business, I am working from home for the last 110 days, I have not stepped out of my home, it’s not just me, my whole team and head office, all the regional office, but at the same time we don’t feel we are missing something except meeting physically, hugging physically, and laughing together in a big way. So now, how virtual connectivity can happen, secondly, we’ve started virtual visits, by experts, meet any customers, if we want to see any plant where they would like visit, or to understand the machinery, everything is happening virtually. We are starting to realise, this is maybe the right way of doing it. For this video call, I would have travelled to London, using three days, but this is just half an hour.


[Dalmia has been visionary in setting a target of negative CO2 emissions by 2040. Do you expect COVID to have an impact on the sector’s efforts to combat climate change?]

If one has to take mid-term or long-term views, then normally companies should not restrain themselves for climate projects or any projects that helps efficiency because in our organisation, we have not considered that we have been brought down due to COVID or the slower demand, we have said it’s not new normal, it’s a better normal. Now considering the right cash balance, we should be faster in initiating our projects, so projects like CCUS, projects on how to use alternative fuels, green fuels to limit fossil fuels, these activities should go really fast. And I’m sure that not just in Dalmia Cement, not just in India but everywhere, it is important for all of us to create optimism, I’m not saying we should be irrational, but at the same time, there is no point in being pessimistic, and for that one has to create foresight, and that can definitely help you in creating different scenarios and having a roadmap, and we are considering how we can use our roadmap to reach carbon negative by 2040.

It’s the mindset in which it is difficult. People used to say that cement was a hard to abate sector. Slowly, we campaigned in a big way, now, what do they say, possible to abate. And along with the Energy Transition Commission, we have created Mission Possible. Our own philosophy is not to allow the waste to happen, and that’s resource efficiency, the circular economy in which we have a belief. And we have been able to show to ourselves, as well as the world, that clean and green is profitable, and sustainable, it may not be profitable in 2-3 years but we are doing business for decades, so our company is still young and has many decades to go ahead. The philosophy is, use any type of waste, and we have seen in the last 1.5 years how to do it, there are huge areas of wasteland in the world, in India in a big way, we can utilise this land for planting bamboo trees, which we call energy plants, which have a high carbon content after 2-3 years. Thereafter, you cut it, use it in the kiln, as an alternative fuel. This is an important lever for us, so by 2035, we should be able to use 100% biomass or hazardous waste or municipal waste, so we replace 100% of fossil fuels.