Cement
India is the second largest producer of cement in the world.

Cement industry in India

Latest update: June, 2014

Domestic cement consumption

The domestic cement consumption is expected to increase at a CAGR of 10.2 per cent during FY11-17 and reach 398 million tonnes.

Domestic cement consumption

Major cement demand drivers

Housing sector accounts for 64 per cent of the total cement demand in India.

Major cement demand drivers

Production of cement

Cement production increased at a CAGR of 9.7 per cent to 272 million tonnes over FY06–13.

Production of cement

Infrastructure spending as % of GDP

The Planning Commission estimates total infrastructure spending to be about 10 per cent of the GDP during the 12th Five Year Plan.

Infrastructure spending as % of GDP

Updated: June, 2014

SECTORAL REPORT | April, 2014

Introduction

Cement is one of the core industries and plays a vital role in the growth and development of a nation. The cement industry of India is the second largest producer in the world. The production of cement has increased at a compound annual growth rate (CAGR) of 9.7 per cent to reach 272 million tonnes (MT) during FY 06–13. The production capacity is expected to grow to 550 MT by FY 20.

India's potential in infrastructure is huge. The country is expected to become the world's third largest construction market by 2025, adding 11.5 million homes a year to become a US$ 1 trillion a year market, according to a study by Global Construction Perspectives and Oxford Economics.

Notwithstanding its current position as one of the leaders in cement production, India’s riches in the sector remain somewhat untapped. “Lafarge's India business has been very successful and the country is among the top 10 markets globally for Lafarge. But going forward, we should rank higher because of the potential of the Indian market,” says Mr Martin Kriegner, CEO of the Indian branch of the world’s largest cement manufacturer, Lafarge.

Market Size

India is among the best cement markets in Asia, according to Switzerland-based cement major Holcim. The company operates in India through group companies ACC and Ambuja Cements.

The Indian cement sector is expected to witness positive growth in coming years, with demand set to increase at a CAGR of more than 8 per cent during 2013–14 to 2015–16, according to the latest RNCOS report titled, ‘Indian Cement Industry Outlook 2016’. The report further observed, after analysing the regional trend of cement consumption, that the Southern region is creating maximum demand, which is expected to increase in future.

Investments

The cement industry has been expanding on the back of increasing infrastructure activities and demand from the housing sector over the past many years. According to data released by the Department of Industrial Policy and Promotion (DIPP), cement and gypsum products attracted foreign direct investment (FDI) worth Rs 13,370.32 crore (US$ 2.24 billion) between April 2000 and February 2014.

Some of the major investments and developments in the Indian cement industry are as follows:

  • Ambuja Cement, part of the Holcim Group, plans to invest Rs 802 crore (US$ 134.39 million) in 2014 in various ongoing projects. The company has proposed to fund the entire capex through internal accruals, as per Ambuja Cement’s annual report.
  • Prism Cement Ltd has become the first Indian company to get the Quality Council of India's (QCI) certification for its ready-mix concrete (RMC) plant in Kochi, Kerala. The company received the certification from Institute for Certification and Quality Mark (ICQM), a leading Italian certification body authorised to oversee QCI compliance.
  • After commissioning its first waste-heat recovery plant at Gagal in Himachal Pradesh, ACC plans to replicate the success at its cement plants in Wadi (Karnataka), Jamul (Chhattisgarh), Kymore (Madhya Pradesh) and Chanda (Maharashtra) with an investment of about Rs 360 crore (US$ 60.32 million).
  • Ultratech Cement Ltd, India’s biggest maker of cement, plans to buy the local assets of Holcim Ltd and Lafarge SA.
  • ACC plans to invest Rs 3,000 crore (US$ 501.16 million) in a capacity upgrade and expansion project at its Jamul plant in Chattisgarh and its grinding unit in Jharkhand.
  • UltraTech Cement, an Aditya Birla Group Company, has acquired the 4.8 million tonne per annum (MTPA) Gujarat unit of Jaypee Cement Corp for Rs 3,800 crore (US$ 634.81 million).

Government Initiatives

The housing segment accounts for a major portion of the total domestic demand for cement in India. The Government of India is strongly focused on infrastructure development to boost economic growth and plans to increase investment in infrastructure to US$ 1 trillion in the 12th Five Year Plan (2012–17). During the Plan, the industry is estimated to add a capacity of 150 MT.

Some of the major initiatives taken by the Government of India to boost the Indian cement industry are as follows:

  • An expert appraisal committee under the Ministry of Environment, Government of India, has given its approval to India Cements to double its capacity and set up a 40 megawatt (MW) power plant at one of its facilities in Tamil Nadu. The proposed expansion project will come up at Dalavoi in Ariyalur district.
  • The Competition Commission of India (CCI) has approved the proposed acquisition of cement plants of Jaypee Cement Corporation Ltd, comprising an integrated cement unit at Sewagram and grinding unit at Wanakbori in Gujarat by Ultratech Cement Ltd.
  • Giving impetus to green initiatives, Goa State Pollution Control Board (GSPCB) has signed a memorandum of understanding (MoU) with Vasavadatta Cement, a company with its plant in Karnataka. The cement manufacturer will use the plastic waste collected from Goa as fuel for its manufacturing plant.
  • Road Ahead

    The cement industry in India is globally competitive as the industry continues to witness positive trends such as cost control, continuous technology upgradation and increased construction activities.

    India’s cement industry needs to nearly double its manufacturing capacity by 2025, according to a report titled ‘Cement Vision 2025: Scaling New Heights’ by the Confederation of Indian Industry (CII). The report highlights that an additional capacity of 330–380 MT in cement and 240–270 MT in clinker could be needed by 2025. This translates into an investment of close to Rs 300,000 crore (US$ 50.1 billion).

    In addition, major cement manufacturers in India are also increasingly using alternate fuels, especially bioenergy, to fire their kilns. This is not only helping to bring down production costs of cement companies, but is also proving effective in reducing emissions.

    With the ever-increasing industrial activities, real estate, construction and infrastructure, in addition to the onset of various Special Economic Zones (SEZs) being developed across the country, there is a demand for cement.

    Exchange Rate Used: INR 1 = US$ 0.0156 as on May 12, 2014

    References: Media Reports, India in Business, Cement Corporation of India, Department of Industrial Policy and Promotion (DIPP), Cement Manufacturers Association (CMA)

    Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Posters

Brand India Pharma

CEMENT INDIA

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

India Now Magazine


India Now Business and Economy

English

+ More Publications >

IBEF Publication

Perspectives More

Loading...
Loading blogs ...

ideas More

Ideas

Building Robots with Human Intelligence
Innovator-entrepreneur Aakash Sinha foresees a disruptive future for intelligent robotics in India. His company Omnipresent Robot Tech is set to be among the first movers.

JOIN IBEF.org

Join IBEF.org now. Enjoy FREE subscriptions downloads, updates and more.

Error

Already a member?
Login / Retrieve Password

Copyright © 2010-2015 India Brand Equity Foundation

All material, information, data, images or content on this website is subject to copyright or other applicable intellectual property laws and no part of it can be reproduced in any form (including paper or electronic form) without prior written consent and approval from IBEF. Infringements are subject to prosecution under the applicable laws. For consent related queries and conditions,
please write to info.brandindia@ibef.org

IndiaAn initiative of the Ministry of Commerce & Industry, Government of India