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. 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 second globally. This has offered advantages to the industry.
There are 139 large cement plants and over 365 mini cement plants in India, with currently 42 players in the industry.
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 huge demand for cement. The industry is not only meeting the requirements arising within the domestic market but also fulfilling the burgeoning demands of the international arena. India is also exporting good amount of cement clinker and by products of cement.
The cement industry of India is expected to add 30-40 million tonnes per annum (MTPA) of capacity in 2013. The industry has a current capacity of 324 MTPA and operates at 75-80 per cent utilisation.
The cement and gypsum products sector has attracted foreign direct investments (FDI) worth US$ 2,625.90 million between April 2000 to November 2012, according to the data published by the Department of Industrial Policy and Promotion (DIPP).
"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 report titled 'Indian Cement Industry Forecast to 2012', by research firm RNCOS.
Government Initiatives
India would require overall cement capacity of around 480 MT. The industry will have to add another 150 MT of capacity during the period, according to the latest report from the working group on the industry for the 12th Five Year Plan (2012-17).
Highlights of the Union Budget 2012-13:
Excise duty rationalised for packaged cement, whether manufactured by mini cement plants or others.
Packaged cement, whether manufactured by mini-cement plants or others, attracts differential excise duty depending on the Retail Sale Price per bag. It is proposed to prescribe a unified rate of 12 per cent + Rs 120 (US$ 2.22) PMT for non-mini cement plants and 6 per cent + Rs 120 (US$ 2.22) PMT for mini-cement plants. It is proposed to charge this duty on the Retail Sale Price less abatement of 30 per cent.
- The Indian construction industry has shown significant development over the years with eminent and efficient engineers at the helm and is among the best in the world, said Anand Sundaresan, Managing Director, Schwing Stetter (India) Pvt Ltd, while inaugurating a conference on 'Latest Trends in Construction Industry'
- The private sector is expected to contribute 44 per cent of the total projected spend of US$ 100 billion on roads and highways over the Twelfth Five Year Plan (2012-17) period
- The Union Budget 2012- 13 is a pragmatic and growth-oriented one. "Infrastructure sector has been given due thrust in the budget
Road Ahead
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 pave 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.
Exchange Rate Used: INR 1 = US$ 0.01850 as on February 12, 2013
References: Media Reports, India in Business, Cement Corporation of India, Department of Industrial Policy and Promotion (DIPP), Cement Manufacturers Association (CMA)