7 Crucial Steps for Cement Factory Setup

Cement manufacturing is a process that needs to be monitored and controlled in order to achieve the desired product quality. The cement factory setup plays a vital role in this process.

 

Setting up a cement factory is rather complicated. Here is how you can do that, one step at a time.

 

Step 1 - Planning your Cement Factory

 

Although starting a cement factory is a profitable and growing business. 

 

But, it will not be possible without proper planning. 

 

Therefore, you will have to do good research. After that, make a plan from that research.

 

For this purpose, choose the type of cement you want to manufacture.

 

The most common types of cement produced in India are the following:

 

1. OPC (Ordinary Portland Cement)
2. PPC (Pozzolana Portland Cement)
3. White Portland Cement
4. Quick Setting Cement
5. Refractory Cement

 

After choosing one, find out details, such as:

 

• Is it easy to manufacture?
• How much investment will it require?
• Where can you find the raw materials for production?
• Will it be profitable?
• Who are the competitors?
• Where are their factories located?
• Who are they targeting?
• Do they have an international market?
• Are they performing well?
• Will you be able to do more than they are doing?

 

Further, when making the plan for the cement factory, keep all the natural and unnatural factors in check.

 

For example,

 

• Accessibility to raw materials
• Accessibility to the market
• Natural Power Supply (Constant source of coal)
• Finances 
• Manpower 
• Real Estate

 

Keep in mind that it is a high-cost business to start a cement factory. 

 

Hence, it will need more commitment, planning and dedication.

 

Step 2 - Determine your Production Scale and Budget

 

Next is determining your production scale and setting a budget accordingly.

 

The production capacity of cement factories varies greatly. 

 

You can produce as low as 50 TPD (tons per day) or 10,000 TPD.

 

But, the choice will depend on the market, price of raw materials and your investment capacity.

 

The higher the production scale, the higher will be construction and manufacturing costs.

 

However, whether it will be profitable or not depends on market demand and local competition.

 

Once you have analyzed that, proceed with making a budget and arranging the funds.

 

As mentioned above, to start a cement factory, you will have to invest a very good amount.

 

It has a very high operational cost. Thus, keep in account the fixed and no fixed expenses as well.

 

Your budget should include the following:

 

• Cost of Land
• Construction and Installation costs
• Logistic costs for raw materials
• Power Supply Cost
• Salaries and Wages
• Operating and Maintenance Expenses
• Cost of packaging
• Cost of transportation for supply 

 

Therefore, decide on your production scale before setting a budget. It will help you with an estimate of the profits and funds you require.

 

For an estimate, you may require anywhere between Rs. 1 Lac to Rs. 10 Lacs initially (not including the construction cost).

 

After that, you can consider the following options if you are looking for financial help:

 

• Bank Loans
• Investors
• Realtors
• Partnership 
• Venture Capital
• Self Financing

 

Step 3 - Find a Location

 

It is a very crucial decision while starting a cement factory.

 

Besides, a good location can make everything easier. Also, it will save production and operational cost. 

 

For example, Shree Cement which is one of the largest cement producers in India has considered these factors very wisely.

 

They have located their production unit in Rajasthan (Beawar) and is the largest single location manufacturer in Northern India. 

 

Why did they choose Beawar (Rajasthan) for production?  

 

Setting up a cement factory will require a very large coverage area. 

 

Moreover, as it produces a lot of pollution, it is usually located in rural areas or away from cities.

 

Also, you require approval from the local government and it must be as close as it can be to the raw materials to reduce the transportation cost.

 

And the raw materials I am talking about are limestone, gypsum, water and power supply. 

 

These are very important to look for when starting a cement factory and Beawar fulfills all of the above.

 

Thus, when you are starting a cement factory you will need a professional team of engineers to investigate the site and soil on all the above factors before selecting a location.

 

After selecting the location, you can go ahead and purchase it.

 

After that, consult an architect to make the blueprint of the factory layout.

 

Meanwhile, you can continue with the legal part.

 

Important note : Cement factories generate a lot of waste material. Finding the right market for them can help you increase your profit margins.

 

Step 4 - Registration

 

To start a cement manufacturing business in India. you will of course have to register it with the MCA (Ministry of Corporate Affairs)

 

As a cement factory is a big-scale production activity, we recommend you go for Private Limited Company Registration or LLP (Limited Liability Partnership).

 

However, if you are a single owner, you can apply for One Person Company.

 

Documents Required for Registration

 

• Passport size photo of all Owners
• PAN Card
• Identity Proof (Passport, Voter ID, Driving License)
• Aadhar Card
• Address Proof of Business Office (Electricity Bill, Internet Bill, Mobile Bill)
• Rent agreement or No Objection Certificate (NOC)

 

Get in touch with an expert by filling out the form on right to guide you with the legal structure of the cement factory.

 

Further, you will also need to apply for the following license and permits:-

 

• GST Registration
• Trademark Registration (to avoid clashes with some other cement brand)
• Environment Clearance
• Shop and Establishment Act Certificate (In some cases)

 

Step 5 - Purchase the Equipment and Raw Material

 

Once all your registrations are complete, open a business bank account and start with business transactions.

 

Such as purchasing the raw material and equipment for the cement factory.

 

Before purchasing, here is the process of cement manufacturing.

 

 

The main machines you will require in a cement plant are:

 

1. Cement Rotary Kiln
2. Shaft Kiln
3. Cyclone Preheater
4. Cement Vertical Mill
5. Cement Ball Mill
6. Cement Roller Press
7. Long Distance Belt Conveyor
8. Packing Machine

 

Apart from these, you may also require thermal equipment, grinding machines, dust removal machines etc.

 

Further, buy the raw materials from your business bank account and use your GST number to avail yourself of input credits.

 

Step 6 - Construction and Installation

 

After all these, now your cement factory is ready to start building. 

 

For this purpose, you will need a civil engineer and professional team to install the equipment.

 

Always keep a check on construction when the work is in progress to make sure it is according to the blueprint.

 

It could take around 8-10 months for construction and installation, depending on the speed of work and area of construction.

 

Step 7 - Recruitment and Training

 

Meanwhile, you can recruit and train your employees for the cement factory.

 

Since you will need more than 30 - 40 people for running a factory, you should outsource the task. For this purpose, you can hire a manpower consultancy.

 

You can even choose to hire one that provides orientation and training as well.

 

Initially, you will need civil engineers and associates to start the operations.

 

Later on, you can set up your own HR department to do this work.

 

Conclusion

 

When you look for how to setup a cement factory, know that it can take around 9-12 months to become an operating business.

 

Further, when it comes to profits, a cement factory can make a 10-30% profit margin.

 

But, you have to be patient and consistent. 

 

Most importantly, you should be willing and ready to take professional help and advice as and where necessary.