Business India ×
  Magazine:
Cement

Published on: Dec. 28, 2021, 4:07 p.m.
Cement demand sets to revive
  • Cement industry: expanding capacity for future demand; Photo: Sajal Bose

By Sajal Bose. Deputy Editor, Business India

The second wave of Covid-19 had adversely impacted the domestic cement industry. But the sharp rebound in production was driven by pent-up demand in rural areas and an increase in infrastructure activities. Cement production accounted for 295 million tonnes in FY21 and is projected to reach 381 MT by FY22.

According to the rating agency ICRA, rural housing demand is expected to be supported by the robust kharif harvest and continued healthy procurement, supporting farm income. In infrastructure, the National Infrastructure Pipeline (NIP) is likely to see healthy traction in terms of new project awards and its execution in the medium term is expected to boost demand. The ICRA report also predicted that by FY22, cement production in India would increase by 12 per cent YOY.

“For the last two years, the government had prioritised healthcare management due to the Covid pandemic. This has now shifted to the nation’s infrastructure building. Therefore, the future looks encouraging for the cement industry,” explains Subhas Jajoo, CFO, Shree Cement. But he is apprehensive about whether the current financial year will match the record profit levels of the previous financial year.

India is the second largest cement producer in the world after China. But the per capita cement consumption is merely 200 kg as against the world average of 500 kg and China’s 1,750 kg. India is a growing country, and 25 million tpa would need to be added every year. The high quantity and quality of limestone deposits is an advantage for the industry. As per the Crisil report, the Indian cement industry is likely to add 80 mtpa cement capacity by 2024, the highest for the past 10 years. Several large players have announced capacity enhancement. The higher allocation for infrastructure – 34.9 per cent for roads, 8.7 per cent for metros and 33.6 per cent for railways in the budget estimates of FY22, is likely to boost cement demand.

The industry has made significant moves towards energy efficiency as well as fuel substitution, and has increased the percentage of blended cement to reduce clinker volume, lower costs and improve volumes. The segment has been taking pioneering initiatives to protect the environment and has integrated sustainability into its business practices.

Cement plays a key role in the development of the economy. Not only does it generate employment but it also contributes significantly to the country’s GDP. “Although cement is a high volume, low value product, it is one of the highly taxed commodities – even more than luxury goods. It is far higher than the other developing and developed countries,’ says Nikhil Saboo, senior analyst of SKP Securities.

Going forward, the eastern states of India are the untapped markets for cement companies and could contribute to their bottom line in the future. Significant grinding capacities have been built in the region and this has kept competitive intensity high among existing players. In the next decade, India could become the main exporter of clinker and grey cement to the Middle East, Africa, and other developing nations.

Don't miss this

Corporate Report

DCM Shriram in a sweet spot

DCM Shriram goes on an expansion programme

Corporate Report

An officer and a businessman

Radiant’s offerings cover the spectrum of retail cash management services except for ATM related services

Corporate Report

Sahajanand Medical Technologies clock a hearty growth

With the future of heart care and minimal therapy increasing, there’s huge potential for SMT’s business categories

Focus

Moving India towards Net-Zero

The transition to an RE based future requires careful Change Management, which does not impact the growth of GDP and employment

Our letter to you, once a week.
Register with The CSR Weekly for free!

E-MAGAZINE
Where to invest 2022
Looking back looking forward
The dilemma
FROM THIS ISSUE

Automobiles

Real Estate

Textiles

Manufacturing

Guest Column

Cement

Social Responsibility

Healthcare

Goodyear India partners Americares India Foundation

Published on Feb. 2, 2021, 9:21 p.m.

The partnership will support COVID-19 healthcare facilities in Faridabad and Aurangabad

Environment

Tata Motors launches a 'Go Green' initiative

Published on Dec. 23, 2020, 10:34 a.m.

The company will plant a sapling for the sale of every new commercial vehicle

Women Empowerment

Tata Starbucks ties up with Educate Girls to empower women

Published on Dec. 2, 2020, 3:10 p.m.

The partnership aims to provide volunteering and educational support to those who have relocated to urban cities from villages

Environment

Indian Oil has a social initiative for a clean and green world

Published on Nov. 25, 2020, 2:53 a.m.

The public sector company is planting a tree for every retail customer visit during its TreeCheers campaign period

Climate Change

Government and Policy

India, IRENA join hands

Published on Jan. 19, 2022, 11:54 a.m.

The two will work closely to assess the potential role green hydrogen can play both as an enabler of the transition in India and as a new source of national energy exports

Renewable Energy

The hydrogen future

Published on Jan. 19, 2022, 11:29 a.m.

Hydrogen is not a new oil. And the transition is not a fuel replacement but a shift to a new system with political, technical, environmental, and economic disruptions

Women Empowerment

Rourkela wins global award

Published on Jan. 19, 2022, 11:11 a.m.

The Odisha city is among 15 winners for innovative urban projects

Renewable Energy

Tata Power opens two solar projects in UP

Published on Jan. 19, 2022, 10:42 a.m.

The projects have been completed by TPREL within the agreed timelines despite Covid challenges

Stay ahead of the times.
Register with The Climate Change Weekly for free!