The world's second biggest industry after China's, Indian Cement industry has come a long way. From a paltry per capita consumption of 28 kg in the 1980s, it has risen to 135 kg today. Though the growth rate looks quite impressive, it is still well behind the global average of 270 kg. However, with huge investments in infrastructure, both by the government and the private sector, and of course booming construction activity, the industry is in the process to catching up with global averages. The low-cost technology and extensive restructuring efforts have made Indian cement companies the most efficient and on a par with global majors.
India is a major producer of cement in the world. Despite some consolidation, the industry is still fragmented and merger and acquisition possibilities are strong. The government's renewed emphasis on improving the civic infrastructure along with housing facilities and favorable policies are driving the growth of the industry. As per industry forecasts, the growth pattern is expected to continue further, as housing sector is expecting investment to the tune of $25 bn over the next five years. Commonwealth Games are scheduled to be held in Delhi in 2010 and have been allotted $5 bn for urban infrastructure to be spent before the event.
Over the past decade, the growth trajectory of the industry has been remarkable. Its success story shines in the backdrop of robust economic growth and infrastructure boom. Besides, the ongoing industrial expansion and flourishing real estate sector are key drivers of cement demand in India. Among these, the real estate sector is the key driver and accounted for almost 55% of cement demand in FY07. The spending on housing, infrastructure and corporate capital expenditures contributed to the cement market boom like never before in 2007-08. With the cement companies' appreciable initiatives to set up more and more plants to supply cement for a rapidly expanding economy, the industry is poised to add 111 million tons (MT) of annual capacity by the end of 2009-10 against the current installed capacity of 203.5 MT. Continuous process of technology upgradation on the one hand and maintenance of international quality standards and benchmarks on the other have made the country globally competitive. |
