Trade Analytics
Cement
India is the second largest cement producer in the world, as of 2018

Cement industry in India

Latest update: November, 2019

Growth

 

Last Updated: November, 2019

Indian Cement Industry Report  (Size: 453.43 KB ) (November, 2019)

Introduction

India is the second largest producer of cement in the world. No wonder, India's cement industry is a vital part of its economy, providing employment to more than a million people, directly or indirectly. Ever since it was deregulated in 1982, the Indian cement industry has attracted huge investments, both from Indian as well as foreign investors.

India has a lot of potential for development in the infrastructure and construction sector and the cement sector is expected to largely benefit from it. Some of the recent major initiatives such as development of 98 smart cities are expected to provide a major boost to the sector.

Expecting such developments in the country and aided by suitable government foreign policies, several foreign players such as Lafarge-Holcim, Heidelberg Cement, and Vicat have invested in the country in the recent past. A significant factor which aids the growth of this sector is the ready availability of the raw materials for making cement, such as limestone and coal.

Market Size

As of June 2019, cement production capacity stood at 28.3 million tonnes per annum (MTPA). Capacity addition of 20 million tonnes per annum (MTPA) is expected in FY19- FY21.

The Indian cement industry is dominated by a few companies. The top 20 cement companies account for almost 70 per cent of the total cement production of the country. A total of 210 large cement plants account for a cumulative installed capacity of over 410 million tonnes, with 350 small plants accounting for the rest. Of these 210 large cement plants, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu. Capacity addition of 20 million tonnes per annum (MTPA) is expected in FY19- FY21.

Investments

According to data released by the Department of Industrial Policy and Promotion (DIPP), cement and gypsum products attracted Foreign Direct Investment (FDI) worth US$ 5.28 billion between April 2000 and June 2019.

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

  • Emami Cement currently has three cement manufacturing assets with a capacity of 5.6 million tonnes.
  • In May 2019, SEBI approved Emami Cement Ltd’s initial public offering (IPO).
  • JK cement will spent Rs 1,700 crore (US$ 246.7 million) to increase its production capacity to 15 million tonnes by the end of 2020.
  • As of December 2018, Raysut Cement Company is planning to invest US$ 700 million in India by 2022.
  • During 2017-18, Ultratech commissioned a greenfield clinker plant with a capacity of 2.5 MTPA and a cement grinding facility with 1.75 MTPA capacity in Dhar, Madhya Pradesh. The company is expecting to complete a 1.75 MTPA cement grinding facility and a 13 MW waste heat recovery system by September 2018 at the same location.

Government Initiatives

In order to help the private sector companies thrive in the industry, the government has been approving their investment schemes. Some such initiatives by the government in the recent past are as follows:

Enhanced interest deduction up to Rs 350,000 (US$ 5,250) for purchase of an affordable house

The Union Budget has allocated Rs 139 billion (US$ 1.93 billion) for Urban Rejuvenation Mission: AMRUT and Smart Cities Mission. Government’s infrastructure push combined with housing for all, Smart Cities Mission and Swachh Bharat Abhiyan is going to boost cement demand in the country. The move is expected to boost the demand of cement from the housing segment. As per Union Budget 2019-20, Government is expected to upgrade 1,25,000 kms of road length over the next five years.

Road Ahead

The eastern states of India are likely to be the newer and virgin markets for cement companies and could contribute to their bottom line in future. In the next 10 years, India could become the main exporter of clinker and gray cement to the Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance the plants in Gujarat and Visakhapatnam, will have an added advantage for exports and will logistically be well armed to face stiff competition from cement plants in the interior of the country. India’s cement production capacity is expected to reach 550 million tonnes by 2025.

As per Union Budget 2019-20, Government is expected to upgrade 1,25,000 kms of road length over the next five years.

Due to the increasing demand in various sectors such as housing, commercial construction and industrial construction, cement industry is expected to reach 550-600 Million Tonnes Per Annum (MTPA) by the year 2025.

A large number of foreign players are also expected to enter the cement sector, owing to the profit margins and steady demand.

Note: Conversion rate used as on September 2019, Re 1 = US$ 0.014019

References: Media Reports, Press releases, Union Budget 2018-19, Edelweiss Securities Ltd.

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

Cement India

Cement Clusters
Cement Clusters in India

Posters

Brand India Pharma

CEMENT INDIA

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

Agri Export Policy - Towards smoother trade, wider global presence

English

+ More Publications >

IBEF Publication

IBEF Blog - INDIA ADDA – PERSPECTIVES ON INDIA More

author_logo-ibef1.jpg India's leapfrog strategy from BS-IV to BS-VI
IBEF, Knowledge Centre

The Ministry of Road Transport and Highways (MoRTH) issued a draft notification of Bharat Stage (BS) VI emission standards in 2016 for all major on-road vehicle categorie...

author_logo-ibef1.jpg Television Industry in India
IBEF, Knowledge Centre

Television was first introduced in India on September 15, 1959 with the help of UNESCO. Since then the television industry has witnessed transformation with advancement i...

author_logo-ibef1.jpg Indian Tourism Industry: An Insight
IBEF, Knowledge Centre

During the celebration of 73rd Independence Day, Prime Minister Mr Narendra Modi addressed the nation from the Red Fort and underlined that India ‘has mu...

author_alok_kirloskar1.jpg From smart water pumps to drones: Technology is changing Indian farms!
Alok Kirloskar, Executive Director, Kirloskar Brothers Limited

Disruptive technologies and innovations in application engineering are fast changing farming practices in India. From preparing the land to sowing, to reaping and mentori...

author_logo-ibef1.jpg Mobile Phone Manufacturing in India: Towards A Brighter Future!
IBEF, Knowledge Centre

India is the world’s second largest mobile phone manufacturer after China. And with the current pace of growth, India is not far from becoming the leading handset m...

author_logo-ibef1.jpg Solar energy generation in India: Lighting lives!
IBEF, Knowledge Centre

The generation of power from solely renewable sources like solar energy is a prime focus of India’s energy planning. Started in the early 1970s, the process of crea...

ideas More

Ideas

Zomato: Top Of The Food Chain
Zomato, an Indian start-up is in the business of online food ordering. It initially launched Foodiebay.com in Gurugram in 2008, a website that scanned menus and provided ratings and recommendations on....

JOIN IBEF.org

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

Error

Already a member?
Login / Retrieve Password