Sector structure/Market size

India is the world's second largest producer of cement after China, with cement companies adding nearly 11 million tonnes (MT) capacity during April-September 2009, taking the total installed capacity to around 231 MT by September 2009.

With the boost given by the government to various infrastructure projects, road networks and housing facilities, growth in the cement consumption is anticipated in the coming years. According to Jyotiraditya Scindia, Minister of State, Ministry of Commerce and Industry, cement production could rise to 236.16 MT in FY11 and touch 262.61 MT in FY12.

With almost total capacity utilisation levels in the industry, cement despatches have maintained a 10 per cent growth rate. Total despatches grew to 170 MT during 2007–08 as against 155 MT in 2006–07.

According to the Cement Manufacturer’s Association, cement despatches were 14.13 MT in December 2009, showing a growth of 13 per cent as compared to 12.48 MT in December 2008. During December 2009, cement production was 13.91 MT, registering a growth of 13 per cent as compared to 12.31 MT in December 2008. Between April to December 2009, cement production totaled 116.01 MT while cement despatches totaled 115.31 MT.

A few of the leading manufacturers are UltraTech/Grasim combine, Dalmia Cements, India Cements, Holcim etc.

Technological change

Continuous technological upgrading and assimilation of latest technology has been going on in the cement industry. Presently, 93 per cent of the total capacity in the industry is based on modern and environment-friendly dry process technology and only 7 per cent of the capacity is based on old wet and semi-dry process technology. There is tremendous scope for waste heat recovery in cement plants and thereby reduction in emission level.

New Investments

• Dalmia Cement, South India’s second largest cement maker, will invest over US$ 652.6 million to add 10 MT capacity over the next 2-3 years.
• India Cements Ltd will invest US$ 104 billion to set up two thermal power plants in the southern states of Tamil Nadu and Andhra Pradesh.
• Anil Ambani Group company Reliance Infrastructure will invest US$ 2.1 billion to set up cement plants with a total capacity of 20 mtpa over the next five years.
• Reliance Cementation, an Anil Dhirubhai Ambani Group (ADAG) company, plans to set up a 5 MT integrated cement plant in Yavatmal district of Maharashtra at a cost of US$ 463.2 million.
• Swiss cement company Holcim plans to invest US$ 1 billion in setting up 2-3 greenfield manufacturing plants in India in the next five years. The expansion will take the company’s total cement-making capacity to 60 mtpa from 50 mtpa currently.
• Jaiprakash Associates Ltd will invest US$ 973.07 million to take its cement manufacturing capacity from 20 mtpa to 33 mtpa by 2012.
• Chettinad Cement, the flagship company of the diversified Chettinad group, has chalked out an aggressive expansion plan to boost its capacity to 13 mtpa in another four years from its current capacity of 7.5 mtpa at an investment of US$ 259.42 million.
• Kolkata-based Shree Cement plans to invest US$ 432.38 million to increase its cement output by two million tonnes to 12 MT by March 2010 and raise power generation capacity by over four-fold by FY'12.