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August, 2011

Cement Industry in India

The cement industry in India has been on a robust growth trajectory for more than a decade, led by buoyancy in sectors like real estate and construction. The Indian cement industry is very energy intensive and is the third largest user of coal in the country. It is modern and deploys latest technology, which is among the best in the world. Additionally, the industry has great potential for development as limestone of excellent quality is found almost throughout the country.

India is the second major cement producing country following China with 137 large and 365 mini cement plants. The large plants have employed approximately 120,000 people, according to a recent report on the Indian cement industry published by Cement Manufacturers Association (CMA).

India produces variety of cement based on different compositions such as Ordinary Portland cement, Portland Pozzolana, Portland Blast Furnace Slag cement, white cement and specialised cement. Cement in India is produced as per the Bureau of Indian Standards (BIS) specifications and the quality is comparable with the best in the world.

Some of the major players in the cement industry include Ultratech Cement, Gujarat Ambuja Cement Limited , JK Cements, ACC Cement, Century Cements, Madras Cements, Holcim and Lafarge to name a few.

Market Size

The Indian cement industry can be divided into five geographical zones — North, South, East, West and Central — based on localised differentiation in the consumer profile and supply-demand scenario.

Demand in the cement industry has seen tremendous growth on the back of infrastructure, residential and commercial projects. Cement production in India is anticipated to swell to 315-320 million tonne (MT) by end of this fiscal year from the current 300 MT. “The target was 290 MT by the end of this year, which we have already achieved. So, we expect the capacity to increase up to 320 MT by the year end,” according to N A Viswanathan, Secretary General, Cement Manufacturers Association (CMA). CMA is targeting to achieve 550 MT capacity by 2020.

The industry has seen constant modernisation and implementation of latest technologies during past few years. About 93 per cent of the total capacity is based on eco-friendly dry process technology. The demand for office space in India is being driven by the entry of multinational companies and the growth of the services sector, particularly the IT-BPO industry. Progressive liberalization and easing of foreign direct investments (FDI) norms in various sectors paved the way for growth in FDI, which led to growing demand for office space from multinational companies (MNCs) and other foreign investors. Total FDI in the cement sector between April 2000 and August 2010 stood at US$ 1.9 billion.