Cement Industry Location Specific
Due to location specific nature of the cement industry, cement plants are concentrated at limestone deposits which are available only in a few States. The main raw material coal is available only in 4/5 States, mostly in the eastern region. In view of this, long leads of movements are necessary both for inward movement of raw materials coal, gypsum, etc. and outward movement of cement/clinker to grinding units/markets and Railways is the only economic mode of such transportation for the cement industry as cement is a high volume, low priced commodity. In order to cut the high Rail transportation cost, cement industry has been setting up grinding units near the markets.

Average lead of Transport
  Coal movement 1000 kms
  Cement movement 600 kms
  Gypsum movement 750 kms

Cement Distribution Transport Intensive
  Transport Cost 20% of operating cost as against 8 to 9% in Other developing/developed countries.
    – It is very high for a low cost commodity like cement
  Per kg. cement cost is now about one-third of per kg.SALT cost  

Cement – Major Customer
  Cement Industry is the third largest freight contributor to the Railways, after Coal and Iron Ore.
  Even with 35% Rail share, it is the Second largest Revenue contributor to Railways, after Coal. Its revenue contribution is about 9% - 10% of the total earnings of the Railways.

Cement Transportation by Rail
Although an economical mode of transport, inadequate availability of wagons, particularly during peak period, frequent increases in the freight rates (67% from February 2011 to May 2015), Infrastructure constraints at Terminals and on the top of all those Policies that are generally framed, interpreted and implemented as per the discretion of Zonal Railways, have made the overall transportation cost of cement by Rail costlier than Road transport.

Rail Share for Cement
Due to the reasons mentioned above, the Rail share for Cement has been continuously declining. Today, it is only 35% of the total despatches as against 53% a couple of years back.

There is potential to regain the lost share provided corrective policy measures are taken by the Railways.