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Indian Cement Industry Analysis

April, 2014

With nearly 300 million tonnes (MT) of cement production capacity, India is the second largest cement producer in the world. By 2020, cement production is expected to reach 550 MT. The sector is dominated by private players. Of the total capacity, 98 per cent lies with the private sector and the rest with public sector. The cement production capacity was 247 MT in FY 12, and is estimated to touch 550 MT in FY 20.

Cement production in India increased at a compound annual growth rate (CAGR) of 9.7 per cent to 272 MT over FY 06–13. As per the 12th Five Year Plan, production is expected to reach 407 MT by FY 17. Currently, India has 185 large cement plants spread across all states. Andhra Pradesh is the leading state with 37 large cement plants, followed by Rajasthan and Tamil Nadu with 21 and 19 plants, respectively.

The Government of India is focusing on infrastructure development to boost economic growth. It plans to increase investment in infrastructure to US$ 1 trillion in the 12th Five Year Plan (2012–17). Infrastructure projects such as Dedicated Freight Corridors as well as new and upgraded airports and ports are expected to further drive construction activity. All this brings about a tremendous scope for the cement industry in the country.

The North Eastern (NE) region in India has consistently been in cement deficit for several years. Cement manufactured locally is inadequate to meet the local demand for cement, and the deficit is met through cement purchased from other parts of India. Thus, there is a vast opportunity in this region for the cement industry to flourish. Also, the major policy and fiscal initiatives are expected to catalyse infrastructure and industrial development in the region, driving the demand for cement.

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