Cement is one of the core industries which plays a vital role in the growth and development of a nation. The industry occupies an important place in the Indian economy. India ranks as the second largest producer of quality cement in the world.
There are 139 large cement plants and over 365 mini cement plants in India. The country has a total of 40 players in the industry currently.
The demand for cement, being a derived one, depends mainly on the industrial activities, real estate business, construction activities and investment in the infrastructure sector. With the ever-increasing requirement for infrastructure, in addition to the onset of various Special Economic Zones (SEZs) being developed across the country, there is a huge demand for cement. India's 330 million tonne (MT) cement industry grew by 6.4 per cent in FY12, on back of robust demand revival in the second half of the year. The industry sold 223.02 MT of the building material, compared with 209.5 MT in FY11.
"India's cement market is expected to see demand growth rate double and pricing power improve in FY13-14," as per a research report by Anand Rathi.
The cement and gypsum products sector has attracted foreign direct investments (FDI) worth US$ 2,618.30 million between April 2000 to August 2012, according to the data published by the Department of Industrial Policy and Promotion (DIPP).
The demand for cement is expected to grow at 10 per cent over 2011, as per ACC Ltd's annual report. India's total installed capacity of cement stood at 320 million tonnes per annum (MTPA).
The cement industry plans to add new capacity of about 71 MT in the next two financial years. At present, it has an installed capacity of over 315 MT to cater to the demand of about 230 MT.
"It is anticipated that the cement industry players will continue to increase their annual cement output in coming years and the country's cement production will grow at a compound annual growth rate (CAGR) of around 12 per cent during 2011-12 - 2013-14 to reach 303 MMT," according to a RNCOS report titled 'Indian Cement Industry Forecast to 2012'.