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Cement

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Cement industry in India

August, 2013

Introduction

Cement is one of the core industries which plays a vital role in the growth and development of a nation. The cement industry in India has been expanding significantly on back of increasing infrastructure activities and demand from housing sector.

Keeping in line with the technological world, the Indian cement industry has transited itself into a more advanced one. At present, the Indian cement industry is positioned on the second rank globally and comprise of 183 large and 365 mini cement plants.

Moreover, the Indian cement majors, including ACC Ltd, Shree Cement Ltd and Ultratech, have signed a co-operation pact to support low-carbon investments in India. The pact was signed in Geneva with member companies of the World Business Council (WBC) for Sustainable Development’s Cement Sustainability Initiative and International Finance Corporation (IFC). The roadmap will pose as a possible transition path for the Indian cement industry to reduce its direct emissions by 18 per cent by 2050. This is the first roadmap to focus on one specific industrial sector in a single country, as per a WBC release.

Market Size

A RNCOS report titled “Indian Cement Industry Outlook 2015” estimated that the total installed capacity of cement in India will increase with a compound annual growth rate (CAGR) of around 7 per cent during 2012-13 to 2014-15.

The production of cement has increased at 10 per cent CAGR over FY07-11. The market size of the industry is expected to grow from 223.4 MTPA during FY12 to 550 MTPA by FY20. The cement companies in India are receiving full attention from the private equity (PE) firms for funding their business plans. India’s cement sector is with an overall capacity of 350 MTPA. The compaies including UltraTech, ACC, Ambuja Cements, Jaiprakash and Shree Cement control almost half the country’s cement market. In the 11th Five Year Plan (2007-12), the industry added 120 MT of new capacities and is expected to reach close to 470 MT by 2017.

Investments

The cement and gypsum products sector has attracted foreign direct investments (FDI) worth US$ 2,656.29 million between April 2000 to June 2013, according to the data published by the Department of Industrial Policy and Promotion (DIPP).

  • Malaysia’s Construction Industry Development Board (CIDB) has expressed interest in the construction of 300 km long Agra-Lucknow expressway project, linking the Taj city with the state capital, at an estimated cost of around Rs 11,000 crore (US$ 1.78 billion) in Uttar Pradesh
  • The Government of Jammu and Kashmir (J&K) will set up a cement plant with 1,000 tonnes per day capacity with the aim of capturing local market share for the cement
  • Ultratech Cement has initiated steps to set up a Rs 2,500 crore (US$ 405.38 million) greenfield cement plant in Tamil Nadu (TN) and will add to the 36 MT cement production capacity in TN. The Aditya Birla Group company also plans to set up a 5.5 MTPA cement plant with 4.5 MT clinker production, 75 megawatt (MW) captive power plant and a waste heat recovery facility of about 15 MW
  • Orient Cement Ltd has received environmental clearance for its three MTPA cement plant at Chittapur in Gulbarga district of Karnataka
  • Shiva Cement plans to enhance its production capacity to one MTPA with an investment of Rs 270 crore (US$ 43.78 million)
  • ACC Ltd, the cement major, aims to enter the north-coastal Andhra Pradesh market through its product called Coastal Plus particularly suited to coastal areas as it is corrosion-proof, according to Mr Kurian Chandapillai, Director (sales) of the eastern region. The company had acquired a small cement (Encore) in the Visakhapatanm Special Economic Zone (SEZ) and spent Rs 80 crore (US$ 12.97 million) on it, making it a 30,000 tonne per month plant