Sector structure/Market size
India is the world's second largest producer of cement according to the Cement Manufacturers’ Association.
During September 2010, the cement production touched 12.54 million tonnes (MT), while the cement despatches quantity was 12.56 MT during the month. The total cement production during April-September 2010-11 reached 81.54 MT as compared to 77.22 MT over the corresponding period last fiscal. Further, cement despatches also witnessed an upsurge from 76.50 MT during April-September 2009-10 to 81.10 MT during April-September 2010-11.
Moreover, the government's continued thrust on infrastructure will help the key building material to maintain an annual growth of 9-10 per cent in 2010, according to India's largest cement company, ACC.
In January 2010, rating agency Fitch predicted that the country will add about 50 million tonne cement capacity in 2010, taking the total to around 300 million tonne.
Further, speaking at the Green Cementech 2010, a seminar jointly organised by the Confederation of Indian Industry (CII) and the Cement Manufacturer's Association in Hyderabad in May 2010, G Jayaraman, Executive President, Birla Corporation Ltd, said that in 2009, 40 MT of capacity was added and he expects a similar trend to follow this year.
Cement and gypsum products have received cumulative foreign direct investment (FDI) of US$ 1,971.79 million between April 2000 and September 2010, according to the Department of Industrial Policy and Promotion (DIPP).
The cement industry is pushing for increased use of cement in highway and road construction. The Ministry of Road Transport and Highways has planned to invest US$ 354 billion in road infrastructure by 2012. Housing, infrastructure projects and the nascent trend of concrete roads would continue to accelerate the consumption of cement.
Increased infrastructure spending has been a key focus area. In the Union Budget 2010-11, US$ 37.4 billion has been provided for infrastructure development.
The government has also increased budgetary allocation for roads by 13 per cent to US$ 4.3 billion.
Gujarat plans to treble its cement production capacity in 3-5 years. Proposals have been invited from cement companies such as ACC, ABG, Ambuja Cement, Emami, Indiabulls, Adani group, Ultratech and L&T and the state hopes to raise its capacity from 20 million tonnes per annum to 70 million tonne. The state will host the biennial Vibrant Gujarat Global Summit in January 2011 and expects to witness investment proposals worth US$ 13.2 billion in the cement sector.
Exchange rate used: 1 USD = 45.42 INR (as of December 2010)