The Indian Cement Industry Has a Bright Future Ahead

Since the last two decades, there has been immense boom in the amount of cement production
by cement companies as well as its consumption in the country. India has already made its
mark as one of the most prominent cement producers of the world. 

Analysis of the Indian market had predicted a massive increase in the industry during the second
half of the decade. The results exceeded compared to what was foreseen. For instance, according
to the CapEx database of the Centre for Monitoring Indian Economy (CMIE), “an incremental
capacity of a huge 68.5 million tonnes per annum(mtpa) would be covered during the time span
of 2015-2018”, which did happen.

In 2015 alone, more than 60% of the predicted production capacity had been successfully achieved.
Initially, the amount appended to India’s capacity was 40.5 mtpa in the year 2015. After that,
accommodation of 18.1 mtpa was under the process of installation by the end of the fiscal year
2016. The remaining amount of 10.1 mtpa was quickly added during the initial months of 2017.
So by 2017, the predicted amount had already been met.   

If we talk about the present scenario, the cement industry in India has got a total capacity of
about 400 mtpa. With the rate of increment in the cement capacity being so drastic, there is a
good possibility that it will reach a total of about 474 mtpa in the next two years.    

Both public and private sectors are part of these “boost projects” and an estimated investment of
Rs. 27,960 has been done in it already.

The major factors that are responsible for multiplying cement demand in the country are progress
ive government policies and the state government’s active role in driving infrastructural growth.

Various steps that were taken by the government to improve Housing and Roadways through
Pradhan Mantri Gram Sadak Yojna (PMGSY) and Pradhan Mantri Awas Yojana (PMAY), played
a key role as the major demand drivers for cement.

A report by Economic Times suggests that nearly 38% and 28% hike in the allotment of funds towards
the housing sector and roads/highways expenditure respectively, would increase cement
demand in the next fiscal year. 

The privately-owned cement companies in India have also upgraded and contributed towards
this industry in a number of ways. For example, after the completion of two large projects by
UtraTech Cement, it has bundled up four more under its belt. The company is operating in Bihar,
Maharashtra, Karnataka, and Rajasthan. It is set to increase its net production capacity by 12.4 mtpa.  

In the last three years, Reliance Cement’s Maharastra plant has added 8.5 mtpa to its production capacity.
As of now, it is planning to add an additional 5 mtpa, by introducing a new manufacturing plant in
West Bengal. 

With such an immense development, the cement industry is sure to grow more and more in the
coming years. This industry is rapidly upgrading in terms of technology and research, thereby
creating new job roles and opportunities. It’s surely going to give a good boost to the GDP and
employment of the country.