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Indian Cement Industry Analysis

October, 2014

With nearly 350 million tonnes (MT) of cement production capacity, India is the second largest cement producer in the world. The cement production capacity was 247 MT in FY12, and is estimated to touch 550 MT in FY 20. Of the total capacity, 98 per cent lies with the private sector and the rest with the public sector.

A total of 188 large cement plants together account for 97 per cent of the total installed capacity in the country, while 365 small plants make up the rest. Of these large cement plants, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu. Cement production in India increased at a compound annual growth rate (CAGR) of 8.3 per cent to 251 MT over FY 07-13.

The Government of India's strong focus on infrastructure development to boost economic growth will provide scope for the sector's growth. The government has also planned 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 and will provide scope for the growth of the Indian cement sector.

The cement sector has potential to grow in the North Eastern region, which has been in cement deficit for several years; the present demand in the region is around 5.2 metric tonnes per annum (MTPA). Also, 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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