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Updated: April 6, 2014 23:33 IST

‘We don’t compete with cement anymore’

Vaishna Roy
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Carlo Pesenti
Carlo Pesenti

On the desk is a sleek, white, smooth-as-silk table lamp that can be turned on with a mere touch of your palm. "It is made of cement," says Italcementi group CEO Carlo Pesenti. And that in many ways symbolises all that Italcementi stands for today.

With consolidated revenues of more than 4.2 billion euro, the group is the world’s fifth largest cement producer. Just ahead of a function organised in Bergamo, Italy, to announce the winner of its annual global women’s architecture award, the arcVision Prize, Mr. Pesenti took time off to speak to The Hindu about the importance of looking beyond cement.

Edited excerpts:

Since you have taken over, Italcementi has been on an aggressive growth chart, with several acquisitions across the globe. What are your plans going ahead?

We believe that market diversification across the world is a strategic priority. We are seeking and targeting emerging and growing countries that offer a long-term growth trend. Today, we are focusing on sub-Saharan Africa, the Middle-East, India, which we believe has a great potential for growth, and South-East Asia, with Myanmar and Thailand offering potential.

Through your subsidiary Zuari Cements, you have about 5% of the market in south India. What are your specific plans for the country?

I think today the most efficient way to create value in India is to take the organic route. We are developing greenfield projects, both full cycle plants and grinding centres. We are working on a greenfield cement plant in Gulbarga, a grinding centre in Sholapur and a port terminal in Kochi. We will smoothly improve and enlarge our net production footprint in the country starting from the south and moving north. The Gulbarga plant will give us a 50% increase in production capacity.

Sustainability has always been very high on your list. You are co-chairman of the Cement Sustainability Initiative (CSI) for the second time. Tell us a little bit about what’s being done.

We are trying to take this strategy, this attitude towards sustainability forward. We have been able to set targets, priorities, objectives. We measure them, we disclose them, and we monitor the progress. This policy is applicable throughout the Italcementi group across the world, including in Zuari Cement, our subsidiary in India. This includes safety, environment, social development, energy, quality initiatives. Now we are evolving our approach in the area of ethics as well.

Let us look at a few specifics of sustainability that are of particular interest to India, for instance, concrete recycling. Concrete and cement are 100% recyclable. You simply need to grind it in an efficient way, and this is a technology that we are developing in Europe.

These technologies can easily be adopted by India. Reducing emissions during the production process is something else that can be done through very sophisticated technology, but I think the best way to reduce emissions is by using alternative fuels, by using bio-mass for example.

The incremental investment required for alternative fuel is not that big. We have already made the best technology available for India. The new plant is a step forward; it is really a pilot plant. Thanks to experience we are going to develop there, we will be able to further reduce emissions everywhere. Finally, looking at quarry rehabilitation, it is a responsibility. We are extracting, from nature, huge volumes of raw material. We have to give back to nature. In quarry rehabilitation, we redesign and replant used quarries so that biodiversity is restored. We sometimes use photo-voltaic cells for rehabilitation. It is not technology, but know-how. We have hundreds of plants; because we are part of CSI, every quarry needs to have a rehabilitation plan from the beginning.

India is facing a shortage of sand, which in turn is pushing up cement and construction costs. How do you see this playing out?

This is an expected trend. It is what happened in the U.S., in Europe, in other developed countries. So as soon as the economy begins developing, you need norms and rules. You need to adopt rules. You must push for concrete recycling. You have to look for alternatives, sand from crushed glass, from waste material, from sea sand. We have to get responsible and treat natural resources as scarce and valuable.

Your lab has a fascinating sort of megaphone made of concrete and extraordinary cement avatars that were like ceramic or even glass. How important is innovation in your scheme of things?

We explore many new and unusual collaborations. The cement industry produces on the basis of quality standards, just like the industry that makes fuel for your car. These industries prevent innovation, because all the efforts are made to improve the quality of the product according to the standard. My view is different.

There are standards but also, there might be other products and other needs. I think our innovation strategy is proving this. We offer engineers, architects, designers a chance to innovate with very extraordinary results, small in terms of economics but potentially with huge impact. We are not competing anymore with cement; we are competing with other materials that have a totally different value per kilo (glass or ceramics). I think we can really get value because we are not cement anymore. You can call it cement but its something different.

(The correspondent was in Italy at the invitation of Italcementi)

vaishna.r@thehindu.co.in

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