Season 3 | Episode 15 | Dalmia Cement: Greening the Gray

Denise: Welcome to climate Biz Mahendra,

Singhi: Denise, and Sherri, and  a happy day to all your listeners. This is a pleasure and honor to be with IFC to share [00:02:15] on green journey. Of today and tomorrow.

Shari: And we have been wanting to talk to you for so long, and we're so pleased to have you on you produce, you know, a product that is part of the.

All of [00:02:30] our lives. You know, I'm sitting right now in a building that has a cement foundation, you know, in this morning I walk my dogs on a cement sidewalk and saw cars driving down the cement road. And while cement production creates a lot of carbon [00:02:45] it's embedded in our lives and it's really essential to developing countries.

Singhi: It's so true. And it's linked to all our lives. It's so interwoven in our lives that I call it. Happiness Material. [00:03:00] Cement is an essential glue that binds our dreams of having a beautiful house, better infrastructure, bridge, complete factory, or building [00:03:15] project. And you know, the countries we are competitively is more concrete.

Is normally understood as a developed country, like what us is, what Europe is, what Japan is. So they [00:03:30] have more punk rate than the developing country like India and few others. It may be effect that higher happiness or sending people in both countries than maybe the rest of the world. The lives [00:03:45] saved also due to concrete infrastructure.

In the aftermath of natural disaster, such as tsunami, cycling, et cetera, bros, that cement and concrete are also life buddies. [00:04:00]

Denise: You know, it's absolutely brilliant because I've actually never thought of the meant as a happiness tool. And it'll be hard to look at it. This is a different thing now, how did you actually get started?

Singhi: I [00:04:15] landed in a cement project 42 years back. So I called myself I'm cemented since last 42 years.

Shari: Well-preserved. It ties all together into [00:04:30] Sticking with a product that everybody needs, understanding that there is a social benefit to this product and a societal benefit to this product.

And also that there's a societal cost. There's the energy for the boiling. There's the CO2 that [00:04:45] comes out during the clinker process. And. What's really interesting is that before many other companies were thinking of this, you said, you know what? We can, we can minimize the cost and we can start making this.

We can start taking away [00:05:00] the carbon intensity. And there was something that you said you quoted Albert Einstein when you said imagination is the hardest research. And so I'm curious to know what is the impetus that made you think I'm going to take my company on a de-carbonization [00:05:15] pathway.

Singhi: Which are inherent to the chemical reaction. The essence in is about one, three to one to five CO2. Well, I would say [00:05:30] three to 500 kg per ton of cement, and depends on the type of cement you produce. And the same is the case when it gets, but I just don't get bored. By fossil fuel [00:05:45] that again, there's a CO2 lending from say 70 kg, kg partner of cement, depending on what type of cemented fuel you use in totality.

If I share with you, [00:06:00] is that all on global average of carbon emissions depending on type of cement  would it be ranging from say 750 kg to 950 kg for Dalmia cement? [00:06:15] We had a very small company in terms of a global companies or otherwise global industries, their job, but still we said that we would like to be done in building materials and also like to evoke pride in all stakeholders, [00:06:30] through innovation, sustainability.

Customer centricity and values. And for that purpose, we created a philosophy of green and green is profitable and sustainable [00:06:45] with this philosophy. Uh, I would like to share that by 20 17, 20 18, we became one of the lowest carbon footprint cement company globally as well. We could also become one of the most profitable [00:07:00] cement company in it.

By debt, the break, the myth that if you won't hold good activities, if you will, for sustainable activities, then it becomes expensive. So I would [00:07:15] say that having at June the substance of beginning, the lowest. We were just taking what motivated or done. And then along with my colleagues, Mr. Ashwepowder, Mr. [00:07:30] Macola, and a few others as well with the board, we taught that.

Now let us sell one more because the idea that let's go on to become great. So besides three, which means [00:07:45] that they have to now apply all green policies in 2018 and no company was going for net zero. And then besides that, yes, if you go for ABCD activities, [00:08:00] We can be, uh, that, you know, and we can be even double negative also.

And that is how with the philosophy clean and green is profitable and sustainable. We set GABA negative or bad 2014 [00:08:15] will lead the world. Good tagline.

Shari: Yes.

Denise: That really is quite commendable in, in so many ways. How do you integrate. To carbonize a company to that level to zero [00:08:30] carbon, as you say, or even negative, what kind of levers are you thinking about

Singhi: is a very important question.

And we said that we will be using a hundred percent renewable energy so that we can have fossil free electricity by 20, [00:08:45] 30, and long back, we became member of RD 100, which is a club of a company. Who commit themselves for using a hundred percent renewable energy can help me to know that at that time we were the second [00:09:00] manufacturing company to join this prestigious club Ari. 102nd bit gave member of EAP 100. And you know, the whole process was let us commit globally. Let us commit outside world so that we [00:09:15] are bound to act third one that we'll be using alternate raw materials. So that, so that we can exploit circular economy. And when I say , it means, you [00:09:30] said of flyers, which is a byproduct of this product of outline.

You sent the sled, which is a byproduct of waste product of the steel plant. And few such other material is a material as a [00:09:45] displacement of livestream. The more we use this space better. We are less likely spoon and we emit less CO2 at the globe. So that has also become one of the most important factor for us.

Thirdly. And most importantly, [00:10:00] we committed that at one point of time, we have to be fully aware for the fossil fuel, and then we identify certain products. So then the material, which can be used as a bonding material, the material, [00:10:15] which can give us the character value or the deed, which means there are various hazardous waste, not as that, the space municipal waste biomass.

And on top of that, without grace, it taught, [00:10:30] we came out that we made planting energy plants and energy plant means the bamboo. So we have started and by 20, 40 or 35. We will be fully going away from a [00:10:45] fossil fuel. And we'll be only using this type of alternate fuel based medicine. We call them green fuel.

Shari: I wanted to go back onto this concept of renewable energy and also you're moving away from fossil fuel because a lot of [00:11:00] people might think. Simple. All renewable energy is now so competitive. Just put, you know, wind or solar there. But my understanding of the cement industry is that your processes require a level of energy that most of the renewable technologies can't provide.

[00:11:15] So I kind of have two questions for you. There. One is, are you looking at some of these newer, renewable energy technologies, like concentrated solar that can have the level of power that you need, plus the renewable component. [00:11:30] And also how, I mean, this kind of gets to your point of using biomass and waste fuel.

Are you envisioning getting to these high heat, high power components by using, you know, municipal waste and the bamboo? Or are you thinking about the technology part [00:11:45] on some of these higher power, renewable energy source?

Singhi: Very good question. I would say first on the renewable electricity part, we will be using solar energy over in energy, and you'd be happy to [00:12:00] know that the cost of purchasing solar energy.

Now it does come down to 30% of the ECS in India, and maybe it's been awful. The cost of going down second. [00:12:15] The battery level is taking place, which may also help us to store renewable energy, uh, the full of power, which gets generated in the daytime to use it in the night time. Second would be [00:12:30] the same with the wind energy.

And third force will be the waste hot gas is which comes out of the event. Get your net and convert it into a letter waste, heat recovery. You [00:12:45] this trip recovery, which we call it green polo. So India and China, one of the pioneers in this part and accordingly, it would be a warning. They started working on it and maybe in three years [00:13:00] time, all our plants would be with this.

As then now with the new government policies, which are getting framed up for solar power we are quite confident that by [00:13:15] 2030 or before that we will be able to use a hundred percent renewable energy. And you might be also there now that he knows that it's happening in his storage batteries and his cost is also coming down.

So that would also [00:13:30] help. And this to this, we are collecting now the municipal waste from the various cities, municipalities, and now processing it and bonding it in Edison to this. What we thought is [00:13:45] like what I said earlier, that we'll be using one, the normal biomass, which is available in the society as a base.

And second to ensure that we have the full library of fuel. [00:14:00] The okay. Growing bamboo energy plants. You'd be happy to know that now the government of India is also considering some new policies on the economy, which they get a lot, [00:14:15] this plan, which on which the thing is being done today. So as to give it to the on license, to give it to the NGOs, to give it to anyone who can grow and do something for its usage.

So we [00:14:30] are quite confident that we'll be able to grow energy.

Denise: It sounds as though you are looking at it from your entire supply chain, which is incredible. And the fact that you are able to do this at what sounds [00:14:45] like, you know, not a significant additional cost to the company. So I'm wondering the idea and the concept of green cement does it actually cost more than regular cement?

Singhi: When we go for the renewable electricity, when we go [00:15:00] for use of waste or the energy. It would bring down the cost and that's why you do become more profitable. But at the same time that I have to bring down total innocence by a [00:15:15] technology widget, I said, God would get you. And you're pleasant. That that will be.

Which in today's understanding would be very expensive. So that would cost more. But at the same time today in [00:15:30] India, we are producing green cement, but at the same time, we are not getting any premium on that. But with this CO2 captain prism, it would be costing more so now discusses are on that, helping [00:15:45] meet that extra cost.

And that's what this extra cost would be met by carbon trading. I think indicates that interest, the government market should be developed [00:16:00] for winners, clean technologies, and then whatever. Say emphasis gets. That should be treated. And that may act that may act as one of the source of revenue to [00:16:15] bring down the cost of cement.

We are another also I will get the now how there can be green procurement policies, which may give preference and maybe sometimes. At surprise[00:16:30] to green cement, green building materials, green etc. In India, now they renting off the refrigerators, air conditioners,  that it does, it can [00:16:45] this thing and a few other material by the moment. And someday it will also start for cement. But at the same time, a few organizations like contractors, enough Indian industry, they have [00:17:00] started certifying cement and other material as a green product.

So we have also everyone, one of the first to get that green certificate for our prep. So now the point is. Which we have been talking through this [00:17:15] back, your money, lot of the organizers that, and obviously is required to create demand for good product.

Shari: This is really interesting. This follows several threads that I know that we've been looking at over at IFC.

I mean, we joined you in the [00:17:30] looking at carbon capture and storage. I think there's, there's no scenario that has been put forward to get to net zero that does not include carbon capture and storage. So we are also. With you and hope that that the costs of that will come down, it'll become a commercial one.

It's one [00:17:45] that we're looking into as well. I think this is fascinating that you, that you've got a green cement certification and I'm sure you aware that there's these green buildings, certifications. IFC has one it's edge and in our edge certification, we have a piece that is [00:18:00] materials, right? It's it's it has to be.

20% or in some others higher than that, more carbon efficient in your materials and what we're also finding that there's a demand for that, that has a price premium already. And I'm curious [00:18:15] to see if you're finding that if, if this certification of the green cement is, is there's a demand coming, not so much from the policies that you're talking about, but just simply from the market and from people wanting to build green buildings and the construction company wanting [00:18:30] to have Greenville.

Is this something you're seeing, are you seeing a price premium right now?

Singhi: It looks like that the time would come, that people will pay a premium for it, or it will be sold, uh, in product. Yeah. Today in [00:18:45] India. Also, we see a lot of new projects in which the real estate companies, the builders, they are talking about dream leveling certificates, and there does cement with the [00:19:00] lower carbon footprint would give them barking and men, but this word mocking, they wouldn't be able to fetch a premium or the extra cost from the bias about bending.

So, this is [00:19:15] slowly, slowly coming up. Now it's dying and it will all depend on the government. On the NGOs and on the fences that you've done. So each one has to play their own role.

Denise: And [00:19:30] you've been talking about zero carbon, of course, you know, and thankfully, as you detailed, this is a goal of a host of companies and countries, et cetera, but you've gone about one step further and a negative carbon goal is what you're seeking.

[00:19:45] So how do you intend to achieve.

Singhi: The call is race to zero and how and more companies can commit for, for eight in this race to zero, having understood our board members and our [00:20:00] commitment and our G to become a couple negative, but 30, 40, uh, 36% he invited us to be one of the 36 business leaders. [00:20:15] And which mean a big thing for us because so far only 13 other global business leaders, including uni level Ikea

I have been dead to become a [00:20:30] business leader for .

Shari: Congratulations on getting named as one of the business leaders for cop 26. That is certainly a huge honor. This is one of the biggest cops that's going to be coming up. So congratulations on that. And I'm curious to know we're [00:20:45] going to probably have to wrap up soon, but you've had quite the journey on this starting off with starting off with thinking about this before everybody else, you know, you've been called crazy.

You've probably been accused of breaking ranks with the others among companies, and [00:21:00] it's been quite a process. And I'm curious to know what you've learned. During this process. And as we, as we reach this to hallow date of 2050, which presumably could be the starting line of another race, what more do you [00:21:15] expect to learn?

Singhi: The whole intention would be to learn more and more, to learn more and more that how often every day access to the for that long, my [00:21:30] son takes the other. Uh, you are fully aware that when to see some profitability in any, and then they immediately embrace it. But if it is not like that, then some more lessons [00:21:45] think differently.

Not like us. Like we are aware that in the short term it may cost more, but in longterm it will not cost both. So we are now looking for. From all types of actors [00:22:00] from all areas with the NGO. Who can fund certain projects as a demonstration project, we are looking at the banks climate fund, or the investor [00:22:15] who are interested in investing their money in the company, which is linking high on ESL.

Which is the ranking high on Amazon to lead the world on climate change. [00:22:30] So we have been, you know, impossible. So we have been associated with IFC. IFC had funded our one project, which was for manufacturing, good cement. So when the years back and accordingly, we are now working with [00:22:45] five sisters is also in Edison.

We are also now making club of climate leaders and a few months back, or the leadership of Dr. , who was at the time, daddy [00:23:00] dive to general. And now the chairman of Alliance, we created a industry charter that we will be working on it. And so it's all created colorism create, uh, [00:23:15] And also work with one philosophy.

And, you know, I like to the side from our ancient text, which is Argo Barbara, this is in Sanskrit, which [00:23:30] means let knowledge come to us from all over the world. Oh,

Shari: that's awesome. It's beautiful.

Singhi: I seen in my people. I see in my other stakeholders that they do respite [00:23:45] people being is we are thinking it differently.

We are thinking for the future, and we are fully committed for our grandchildren also. And I'll [00:24:00] be very happy to share with you that what I spoke and

I said that I've committed my grandchildren Niesha Navea [00:24:15] and the one that I bought for everything so that your future is safe. and that's the process in between. That's a

Denise: very optimistic and very positive [00:24:30] note and, you know, Mahindra you've made me happier about cement today. That's climate business. We like to end with what we call the fairy godmother question.

So if you were granted one wish that [00:24:45] would help you in your pathway to sustainability. What would that be?

Singhi: One, I would say the only me or my organization. But businesses would need doing finance. There would be a [00:25:00] lot of new technologies which will be getting developed, but to demonstrate that success of those technologies, the most recent projects would require to be put out.

And that too, particularly in developing countries. [00:25:15] So one good finance should be made eligible, add five, finished you 2 cents. Like I have, see what bang ADP did or various other, uh, citizens. They should take this in [00:25:30] a combined way. They should should dark room just on the find some victims. But at the same time, they must look at if they don't act without business.

That one would be the fate of future or what would be the [00:25:45] phase of recovering the money from the lights? So one would be that we finance and second it moment is required to create evidence about green product [00:26:00] until unless I've done less, the society demands. Green product will not get produced or manufactured.

And the great example are two. One. When the demand came up [00:26:15] about the solar power plants, the costs came down both on a Bridget cost part and opposite cost back. And now everybody in the world is talking about renewable energy. And thirdly, [00:26:30] I would say. Let we all collaborate together. So from cement sector, point of view, I would say, let us work for grade two grade.

From outside to men who always [00:26:45] looked like they always look like great, but when you more insight or do the deep, how does he make one short episode that yes, it has been made with green policies with green [00:27:00] technology, and then people get freely. Make use of cement and concrete. And without thinking that I'll watch gobble, I might be imitate if I make my house.

If I make an [00:27:15] infrastructure, if I make anything from the concrete. So that's the reason with which we are working. And so ultimately when these, all these two things comes together that I can see.

Shari: Awesome. [00:27:30] That is quite the comprehensive fairy godmother wish, but we've got a generous fairy godmother will shield them.

She'll take care of all of it. We've got the policy, the awareness, the finance, and I think a major thread through what you've been talking about is the [00:27:45] need for collaboration. And I've heard that really strongly. And I have to say on your thread of happiness and I can hear Denise giggling in the background.

You have certainly made us happy this morning. So my sincere. To you, my Android, this has been just a fantastic and inspiring [00:28:00] conversation.

Singhi: Thank you very much to both of you. And thanks to IFC, who's played a very important role in not only providing finance, but promoting climate throughout the world.

[00:28:15] Thank you. Thank you. Thank

Denise: you.

Shari: So are you feeling happier now after speaking with Mr. Singhi? Oh, I am

Denise: definitely happy. And I'll tell you what Sherri, I will never look at summit the same way.

Shari: It is going to [00:28:30] bring far more joy to me to now look around at the cement around me in the city. It's going to feel better to be in the city than it used to.

Absolutely.

Denise: It was actually, I would say just fantastic to have someone approach what is, I [00:28:45] mean, metaphorically and physically. A dry issue in such a positive and happy way

Shari: it was. And it also struck me when I was thinking of past conversations about hosts. So much of the [00:29:00] conversations with leaders talk about driving talent to their company, how he is a fantastic spokesperson for driving talent over into a cement company.

I'm sure he has attracted the best and the brightest, which has probably enabled him to reach some of these targets that he's getting at [00:29:15] now,

Denise: clearly the ship's shown that and, you know, I will say, certainly found a commendable that he had a clear vision in terms of what the purpose of the company is, which was beyond producing cement, but [00:29:30] rather having at its core, the benefits to the society environment, his stakeholders and shareholders.

Shari: Yeah. He had certainly a very grand vision and then he broke it down [00:29:45] on how exactly to get there. He was very, very specific on what it's going to take them very pragmatic on how it takes them to get from here to greener, how it takes, what it takes to get from greener to net zero. And then what it's going to take to get from net zero [00:30:00] to negative zero.

I mean, these are clear steps with different cost structures. What I noticed was in each.

Denise: Yes. And remarkably he's able to achieve greenest immense today at no premium. He's gone [00:30:15] through the supply chain with a fine tooth comb. And I think one thing about some men that came across to me is this is a substance that hasn't changed much since inception, right?

It's one that doesn't matter if you will develop to emerging [00:30:30] market, the process is pretty much the same. Wherever you are. And in fact, the quality of cement, it seems is that so long as you have at least a minimal level, it's pretty much the same thing. Brands, irrespective of branding. [00:30:45] So to me, that means that there is quite an opportunity to have a consumer shift to a better place.

It is just, how do you move to that next level? And of course, if you had a, an alternative material that [00:31:00] didn't require limestone, then perhaps that in itself would be where to go. There's just so much innovation that could

Shari: occur here. Yeah, I agree. And I think that then the next step, he's certainly looking at how to reduce the cost and how to get over now to the net zero, [00:31:15] either with creating a price premium for the greener cement or.

Being able to do it at a cheaper cost. And I think that, you know, one of the key things that he kept hammering down was reducing the cost of carbon capture and storage, which of course is something that I have see has been looking at again [00:31:30] quite a bit.

Denise: Yeah. Yes. And so we've got to make that call again, upstairs to our colleagues and a disruptive department to you and upstream to get moving on it.

Yes.

Shari: Call Bill Sonneborn. We've been wanting to get him on the show anyway. We'll ask them that exact question. [00:31:45] And, you know, the other piece of it is could there be a price premium for a greener, for a greener cement? And one of the things that we're seeing in the construction industry, at least in the housing industry, from our edge program, which is our green [00:32:00] buildings program, is that there is a price premium for a green building.

So how do you then translate that down into a price premium for green space? Mm,

Denise: no, indeed. And I think once we are able to crack that code and you will [00:32:15] see more, um, produces following CTC.

Shari: Yes. You know, the other thing that really struck me was, um, his, his emphasis on collaboration. It wasn't just collaboration among his peers, but it was also collaboration with the [00:32:30] financial institutions.

Like he, he mentioned he really had a call to arms on the MDBs at the end, and then also a collaboration with policy makers. And this gets back to your very original point. Holistic view. He looks at his purpose holistically and he looks at [00:32:45] his process very holistically.

Denise: Indeed. He's gone through his entire supply chain with a fine tooth comb with the vision of embedding sustainability through it, rather phenomenal and commendable indeed.

And [00:33:00] beyond that he's even thought about the capital markets. And one of his aspirations is for all finance to be sustainable finance. Which of course to me, was music to my ears. I was delighted to hear.

Shari: Yeah. So we're going to have to end here thanks to [00:33:15] Mahendra Singhi from Dalmia Cement for joining us.

Denise: Thank you, Mahendra for making us happy for making us happy. If you like what you've been hearing, please review us on iTunes, Spotify, or wherever you listen to [00:33:30] your podcasts. We'd love to hear your comments. You can find show notes bio's and leave messages on our website at ww.ifc.org/climate biz. That's BI is that

Shari: the content producer is [00:33:45] Andrew Hiller.

The news researcher is Elizabeth Minshew. Our audio editor is Gabriella Jones. A special, thanks to the Vivek Pathak, Lyudmila Podgola, Hlazo Mkandawire, Irina Sarchenkor, Daisy Serem, and Nicolas Dolillet. The theme music was composed and engineered by Crime [00:34:00] Dog Revival.

Denise: This podcast was made possible by the generous support of the ministry of foreign affairs of the Netherlands.

Thanks again for joining us and see you soon.

Shari: Bye-bye have a happy day.[00:34:15]