Cement Industry of India

The following table shows the Installed Capacity and production of Cement in India since 1950-51:

India is the second largest manufacturer of cement in the world. The modern Indian cement plants are the state-of-the-art plants and are comparable to the best in the world. The cement industry comprises of 156 large cement plants with an installed capacity of 233.94 million tonnes and more than 350 operating mini cement plants with an estimated capacity of 11.10 million tonnes per annum, make a total installed capacity of 245.04 million tonnes as on 31-12-2009. There are a few large cement plants that are owned by the Central and the State Governments.

Stats of Large Cement Plants and Industry in General

• Companies – 46
  
• Cement Plants (Nos.) – 156
  
• Installed Capacity (Mn. t.) – 233.94
  
• Cement Production (Mn. t.) 2008-09 – 187.6
  
• Plants with Capacity of 1 Million ton and above (Nos.) –95
  
• Manpower Employed (Nos.) Approx. (One Mn.T cement generates downstream employment to 50,000 persons) – 1,40,000
  
• Turnover in 2008 (Mn. US$) around – 18,500
  
• India in Global Cement Production
  
  • Largest cement producing country in the world, only after China
    
  • Produces about 7 percent of the world production.
    
  • Per capita cement consumption is 156 kg (2008) as against world average of 396 kg. (2006).
    
  • Cement technology and production cost comparable with the best in the world.
    

Cement production during the year 2009-2010 (April, 2009 to December, 2009) has been 150.12 million tonnes registering a growth of 10.52 per cent over the corresponding period of 2008-09. India exported 3.42 million tonnes of cement and clinker during April, 2009 – December, 2009. The buoyant demand and improved profitability in this sector are conducive to the growth of industry. The industry is planning capacity addition of approximately 100 million tonnes during the 11th Five Year Plan. (Department of Industrial Policy & Promotion)

Per Capita Consumption:

Per capita consumption in India continues to be low at 143 kg, as compared to other countries such as China (1,014 kg) and Japan (524 kg). There is a significant potential for growth.

Problems of Indian Cement Industry

6 industries in India have been identified as energy-intensive industries. They are Aluminum, cement, fertilizer, iron and steel, glass, and paper. Together they account for 17% of manufacturing value of output (VO) and for 39% of all fuels consumed in the manufacturing sector. So, most problems of the cement industry are related to “power”. They are as follows:

1. Drastic cut in the electricity
2. Shortage of Coal
3. Inadequate availability of wagons for transport
4. Limited availability of furnace oil.

Leading producer & Consumer States

Andhra Pradesh, Rajasthan, Karnataka, Madhya Pradesh, Gujarat and kerala are largest cement producing states in India. Maharashtra is largest consumer state of Cement.

• Andhra Pradesh with a production of 37.52 million tons in 2008-09 which is 17.12 % of all India Production is largest Cement producing State in India.
• Rajasthan with 34.82 million ton production in 2008-09 which is 15.89% of all India Production.

Major Players

ACC is India’s largest cement producer with an installed capacity of 18640 tons and production of 18000 tons. The other largest players are Gujarat Ambuja, Ultratech, Grasim, India Cements, JK Group, Jaypee Group, Century, Madras Cements, Birla Corp.

Cement Clusters

There are 7 cement clusters in India. They are as follows:

1. Satna (Madhya Pradesh),
   
2. Chandrapur (North Andhra Pradesh and Maharashtra),
   
3. Gulbarga (North Karnataka and East AP),
   
4. Chanderia (South Rajasthan + Jawad & Neemuch in MP),
   
5. Bilaspur (Chattisgarh),
   
6. Yerraguntla (South AP),
   
7. Nalgonda (Central AP).
   

With a total capacity of 75.23 mtpa they together account for 49% of the total installed capacity of India.

Market Segments:

Cement industry in India can be divided into the five geographical zones of India —North, South, East, West and Central based on localized variations in the consumer profile and supply-demand scenario. The South zone is the largest market, with the highest installed capacity of 67 million tonnes, followed by the North zone with about 48 million tonnes, in 2009. The following graphic shows the regional share of installed Capacity of Cement Production.

Indian Cement Industry : Growth Drivers & Opportunities

Housing Sector

• The housing segment accounts for a major portion of the total domestic demand for cement in India.
• The housing segment is expected to be a key demand generator for the cement industry, considering the intensive demand the segment is currently witnessing.
• According to the Eleventh Five Year Plan (2007–2012), housing demand is estimated to increase from more than 24 million units in 2007 to over 26 million units at the end of the Plan period.
• Growing urbanization, an increasing number of households and higher employment are primarily driving the demand for housing.

Infrastructure:

• The Government of India (GoI) is strongly focussingon infrastructure development to boost the economy’s growth. The GoI plans to spend about US$ 350 billion on infrastructure development under the Eleventh Plan.
• Infrastructure projects such as the Dedicated Freight Corridors (DFCs) and upgraded and greenfieldairports and ports are expected to drive construction activity.
• Further, upcoming industrial clusters and infrastructure development in emerging tier-II and tier-III cities are also expected to fuel growth in the sector

Real Estate:

• The commercial real estate (CRE) segments, comprising retail space, office space and hotels as well as civil facilities including hospitals, multiplexes and schools, have been on the rise with a growing economy.
• Service sectors such as telecom and financial services, as well as the IT/ITeS sector (which accounts for the maximum commercial office space in the country) are growing.
• Manufacturing sectors (pharmaceuticals, biotechnology, automotives) and fast moving consumer goods (FMCG), are likely to drive the demand for office space.
• Government initiatives are expected to provide impetus to construction activity in rural and semi-urban areas through large infrastructure and housing development projects.
• According to the Eleventh Plan, the GoI intends to substantially augment railway capacity and facilities for handling and storage to ease the transportation of cement and further reduce its transportation costs.
• The industry is also focussingon the modernisation of trade through high-end technology adoption and low energy consumption, which is comparable with the best in the world.
• The demand for cement in India is expected to increase in the long run, since fundamental growth drivers of the economy, such as infrastructure, trade and per capita income, are intact.

Housing, infrastructure and industrial and commercial construction are expected to be the key drivers for future growth. The allocation for many infrastructure sectors in the Union Budget 2010-11 over the budget estimates for the previous year, especially for the National Highways Development Programme (NHDP), Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Accelerated Power Development and Reform Programme (APDRP). Demand for housing, which accounts for the largest share of the total domestic demand for cement in India, is set to grow rapidly due to increasing urbanization, rising number of households and growing employment. According to the Eleventh Plan, the demand for housing in India is estimated to increase from more than24 million units in 2007 to over 26 million units by the end of the Plan period.