Cement Industry Profile in India

India is the world’s second largest cement producer with ~509 million tonnes per year (mtpa) of cement production capacity as of March 2019 and accounts for over 8% of the global installed capacity.

The Indian cement sector accounts for about 1.2% of the country’s GDP and employs more than 0.5 million people.

Definition / Scope
Market Overview
Market Risks
Market Trends
Industry Challenges
Technology Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References

Definition / Scope

In India the cement industry has tremendous potential for development as limestone of good quality is found throughout the country. Cement is an important element in any construction initiative, from building a small factory to building multi-purpose projects. It is, therefore, correctly ranked as a basic industry. The Indian cement sector accounts for about 1.2% of GDP and employs more than 0.5 million people.

India is the world’s second largest cement producer with ~509 million tonnes per year (mtpa) of cement production capacity as of March 2019 and accounts for over 8% of the global installed capacity.

Cement production stood at 28.1 million tonnes as of July 2019. It is estimated that the capacity for cement production will reach 550 MT by 2020. Of the total capacity, 98% is owned by the private sector and the remainder by the public sector. Some 70% of the total production is accounted for by the top 20 companies.

Industry FDI inflows related to the manufacture of cement & gypsum products reached US$ 5.3 billion between April 2000 and June 2019. In order to boost economic growth, the Government of India is strongly focused on infrastructure development and is aiming for 100 smart cities.

The government also intends to expand the capacity of the railways and the handling and storage facilities to ease the transport of cement and reduce the cost of transportation. Due to the growing demands of various divisions, i.e. housing, commercial construction and industrial construction, the demand for the cement industry is expected to constantly reach 550-600 million tonnes per annum by 2025.

India has a lot of development potential in the infrastructure and construction sectors and is expected to benefit to a large extent from the cement sector. Some of the recent major initiatives are expected to provide a major boost to the sector, such as the development of 98 smart cities.

Market Overview

In FY20, the output of cement reached 334.48 million tonnes (MT). It is projected that the capacity for cement production will cross 550 MT by 2020.

A few firms dominate the Indian cement industry. Almost 70 per cent of the country’s overall cement output is accounted for by the top 20 cement firms. A gross installed capacity of over 410 MT is accounted for by a total of 210 large cement plants, with the rest being 350 small plants. Of these 210 major cement plants, 77 are located in the states of Rajasthan, Tamil Nadu and Andhra Pradesh.

In India, cement sales in 9MFY20 amounted to US$ 8.29 billion (INR 58,407 crore).

By FY 2024, cement production in India is expected to hit 410.21 Mn tonnes, growing at a compound annual growth rate (CAGR) of ~3.83% during the FY 2019-FY 2024 period, due to increasing demand from government and housing contractors.

During the forecast period, cement consumption is expected to increase at a CAGR of ~4.38% due to the approval of schemes to enhance road and highway connectivity and housing-related initiatives, and increasing demand from the commercial real estate sector. UltraTech Cement Limited, Ambuja Cements Limited, JK Lakshmi Cement, and Ramco Cements Limited are the major players operating in the Indian cement industry.

Together, the southern states of Tamil Nadu , Andhra Pradesh, and Karnataka accounted for the highest installed cement output capacity of ~35% among the major Indian states in FY 2018, followed by the northern states (Rajasthan, Punjab, and Haryana), which accounted for ~23% of the total installed capacity collectively.

Among the different cement end-user industries, the housing segment accounted for the highest demand in FY 2018. The rural housing industry, followed by the urban housing sector (~32 percent), generated demand of ~38 percent.

The rapid implementation of affordable government housing schemes such as Pradhan Mantri Awas Yojna and Housing for All by 2022 could be attributed to this high demand for cement from the housing sector.

The infrastructure segment accounted for a significant demand for cement in India, apart from housing, commercial and industrial investments.

Market Risks

Inflation rate: Inflation in the Indian economy plays an important role. In 2017-18, average inflation fell to a six-year low of 3.3 percent, and is expected to increase by 4.40 percent during FY 2018-19. An overall increase in demand for goods and services, which increases their prices, is one of the main reasons for inflation.

Raw material risk: The cement industry is heavily dependent on limestone and other raw materials, and there is limited availability of limestone, so the use of blended cement using alternative raw materials such as fly ash and slag is essential. Increased costs of these alternative materials may increase the cost of production further.

Competition risk: With several large players operating in the domestic market, India’s cement sector has become highly competitive. Earlier, most of the companies catered to particular parts of the country, now most players are expanding their pan-India reach, creating greater competition from the market.

Infrastructure risk: The infrastructure sector drives the overall growth of the economy and is a major focus of India’s government. Any government withdrawal from its initiatives will lead the cement industry to de-growth. In addition, too many regulatory approvals and compliance could be a barrier to the progress of the segment.

Power and fuel risk: The cement industry is highly energy intensive, and power and fuel costs make up 23 percent of its total expenditure. The cement sector will be adversely affected by any rise in crude oil prices.

Logistics risk: With the rise in diesel prices, road transport costs are rising. This increase in costs and a huge reliance on road transport would have an effect on this sector.

Top Market Opportunities

Lower Per-Capita Consumption

India is the world’s second largest cement producer with an annual production capacity of 334.5 million tonnes in 2019 and is projected to cross 550 million tonnes by 2024.

The per capita consumption of cement in India, however, is 216 kg, compares poorly with the world average of over 350 kgs and more than 660 kgs in China. Similarly in Japan it is 631 kg/capita while in France it is 447 kg/capita.

The process of catching up with international averages stresses the enormous scope for long-term growth in the Indian cement industry. In addition, one of the reasons for the strong interest shown by foreign players in India is that its cement consumption per capita is lower. This is definitely a major opportunity for cement firms in India to bridge the gap and, in turn , increase turnover.

Growth Potential in ready-mixed concrete segment

Globally, the ready-mixed concrete industry has been quite successful. India’s RMC is still in its nascent stage. RMC accounts for only about 10-12% of India’s total concrete production, which is small compared to Western countries, where it accounts for 50-70% of the total volume of concrete consumption.

The level of penetration is relatively higher in metropolitan and tier I cities and accounts for about 35-40%, while the level of penetration is about 20% in tier II cities. Due to technological improvements and innovations, there has been an increase in demand for RMC over the past year.

The central government is pushing for more infrastructure development as well as completing on-going projects in a time bound plan. Government is also focusing on the creation of “smart cities” which would lead to the construction of commercial, residential and recreational centers, along with public utilities like roads and railways.

This will boost the prospects for RMC as a viable alternative to traditional concrete. RMC is also finding better acceptance among the most real estate developers in the country, especially in urban areas. Thus, the potential for this segment remains quite large.

Higher spending on infrastructure and housing

The key growth drivers for the cement industry will be higher government spending on infrastructure and housing, and rising per capita incomes.

Positive moves have also been made on the policy front, in areas related to the ease of doing business, the promotion of start-ups, the rationalization of the tax structure and administration, and the automatic opening up of more areas for foreign investment. The government is stepping up infrastructure spending substantially.

Expecting such developments in the country and aided by suitable government foreign policies, several foreign players such as Lafarge-Holcim, Heidelberg Cement, and Vicat have invested in the country in the recent past. A significant factor which aids the growth of this sector is the ready availability of the raw materials for making cement, such as limestone and coal.

Market Trends

Growing Demand from Construction Activities

It is anticipated that the increasing demand for the construction of institutional buildings for the education and healthcare sectors will drive the market in the coming years. India’s healthcare sector is experiencing strong growth, which, in turn, is expected to benefit from demand growth in the coming years.

For example, India’s healthcare sector is projected to grow by almost USD 120 billion between 2017 and 2020, with a strong demand for construction activities.

India is regarded as the construction sector’s global growth engine. Therefore, the market is poised to experience enormous growth in the region. In recent years, India has witnessed substantial growth in construction output. In 2019, India’s construction sector had a contribution of over US$ 382 Billion to the country’s GDP.

Development of metro projects

The steady construction of metro projects in India and the extension of the current railway network to link ports across the country are expected to generate staggering product demand in the coming years. In the Budget of 2019, the government of India allocated almost USD 8 billion for the development of railways.

Zero or low cost of import of raw materials

Essential minerals used for the production of cement, including limestone (calcium), bauxite (aluminium), iron ore, and coal, are available in abundance in different parts of India.

This has resulted in the zero or low cost of importing raw materials for cement manufacturers, making cement companies profitable in India. As a result, cement production has increased steadily, driving over the years the supply side of the Indian cement industry.

Heavy Burden of Tariff

The sector faces a heavy burden of high excise duty, sales tax, limestone royalties, coal etc. The effective burden on cement is as high as 35% of the retail price of cement and 47% of the ex-factory price, excluding excise duty, sales tax and freight.

This is much higher as compared to the burden in other country. Naturally, this will make cement industry internationally uncompetitive.

Low Capacity Utilization

The industry is not working to the maximum capacity. Capacity utilisation fell from 82% to 75% during the planning period. As a result, there is a supply deficit, while demand for cement is increasing at an annual rate of 9 to 10%. The reasons for capacity under utilization and production shortage are as follows:

Acute power shortages and power cuts in cement-producing states ranging from 25 to 75%
Coal shortage
Limited furnace oil supply
Non-availability of wagons for transport etc.

Increasing Investment Costs and Declining Profits

Investment costs in the cement industry are rising, although the industry’s profits are decreasing. During the sixth plan period, the investment cost per tonne of installed capacity of a million tonnes per annum cement plant was estimated to be US$ 9 (INR 650).

It was projected at US$ 21 (INR 1,500) per tonne during the seventh plan period. It was estimated at US$ 50 (INR 3,500) per tonne during the Tenth Plan Period. The cost of investment has more than doubled and that, too, while the profits are dropping.

Industry Challenges

Obsolete Technology

More than 50% of the cement plants were employing the uneconomical wet process. The technology adopted is considered to be quite outdated, causing coal and electricity to be wasted.

In 2018-19, this outdated technology was reported to have resulted in more than 2.5 million tonnes of coal and 800 million units of energy being wasted per year. This works out to almost US$ 270 Million per year in financial terms.

Cost Escalation and Rigid Prices

The production cost of cement is rising year after year, as in the case of other sectors, but the price of cement has been kept rigid.

Cement manufacturers complain that while other building materials like steel, etc., are allowed to increase the coal prices to the extent of 123% between 2010 and 2019, the price of cement was allowed to be increased only by 42%. As a result, it had to face a loss heavily.

It was estimated that in the case of levy cement only 37% of the levy price went to the manufacturer and the balance of 63% was mopped up by the government in the form of excise duty, sales tax, railways freight etc.

Technology Trends

Major tech trends influencing the cement market include:

Green Cement

Green cement manufacturing reduces the consumption of cement, and discarded industrial waste such as blast furnace slag and fly ash are its major raw materials. Specialized forms of green cement characterised by attractive parameters such as high long-term strengths and higher ductility are hybrid green cements.

Carbon dioxide emitted during the manufacturing process is significantly reduced in the green cement manufacturing process. Green cement can decrease the carbon footprint by 40%.

The green cement manufacturing process also helps to maintain cement strength, in addition to reducing carbon dioxide emissions. Green cement consists of calcined clay and powdered limestone and has desired features such as decreased porosity and improved mechanical strength.

It is possible to levy green taxes on traditionally produced cement, increasing OPC prices by two times. Green cement therefore has great scope for the future and will offer advantages in terms of price and quality.

IoT In Cement Manufacturing

Digital technologies such as the Internet of Things (IoT) are increasingly used by cement manufacturing plants to improve plant efficiency. The IoT is a physical device network that communicates over the Internet.

IoT contributes to a cement plant’s remote monitoring and predictive maintenance. Remote monitoring is used to monitor large vehicle operations in quarries and to report on key metrics such as fuel consumption per tonne and hours of operation.

IoT can also be used to predict potential malfunctions and maintenance needs. In cement plants, predictive maintenance on critical cement equipment such as grinding mills and kilns can improve uptime.

Other IoT applications in the cement industry include the monitoring and measurement of concrete mixture durability, compliance reporting to international standards, and connected logistics to improve quarry production.

Zoomlin, a manufacturer of ready-mix concrete production equipment, is actively testing data-based metrics to enhance vehicle operations used in quarries.

Pricing Trends

Pan-India Cement Price Trend

Average cement prices in Pan-India decreased by 3.6 percent m-o-m (up 3.8 percent y-o – y) during 9MFY2020, which was due to monsoons and intermittent lockdowns in different states that kept demand weak.

The steep rise in the southern region’s average cement prices in May 2020 kept it up by 16.8 percent y-o – y (down 5.9 percent m-o-m) during August. Excluding the southern region, average cement prices in pan-India remained nearly flat y-o – y (up 0.6 percent y-o – y) and decreased by 2.9 percent m-o-m. In the northern , western and central regions, average cement prices fell 2-3 percent m-o-m, while prices in the eastern region fell 4.1 percent m-o-m.

Overall, in August 2020, cement companies are expected to face weak demand, while m-o-m prices have decreased, driven by both the monsoon season and the effect of intermittent lockdowns in states.

Key variable costs rise

For August 2020, the international average petcoke price increased by 32 percent m-o-m, while for August 2020 it remained flat y-o-y. For August 2020, domestic pet coke prices rose by 8 percent m-o-m, while they were up 5 percent y-o – y.

In August 2020, average metro retail diesel prices decreased marginally by 1.7 percent m-o-m (although they rose by 14.2 percent y-o- y).

The rail freight average remained marginally higher for July 2020 (up 0.7 percent y-o – y, up 0.3 percent m-o-m). Overall, domestic and international pet coke prices increased m-o-m over the course of August 2020, while diesel prices remained marginally higher.

Regulatory Trends

In order to help private sector firms thrive in the industry , the government has approved its investment schemes. Some of the late initiatives taken by the government are as follows:

In the Union Budget 2020-21, the Government of India extended the benefits under Section 80-IBA of the Income Tax Act until 31 March 2020 to encourage affordable housing in India.

The Union Budget has allocated Rs 139 billion ( US$ 1.93 billion) for the Urban Rejuvenation Mission: AMRUT and Smart Cities Mission.

Combined with housing for all, the government’s infrastructure push, Smart Cities Mission and Swachh Bharat Abhiyan will increase the country’s cement demand. The move is expected to increase the housing segment ‘s demand for cement. As per Union Budget 2019-20, Government planned to upgrade 1,25,000 km of road length over the next five years.

Under Pradhan Mantri Awas Yojana, an outlay of Rs 27,500 crore ( US$ 3.93 billion) was allotted in the 2020-21 Union Budget.

Impact of COVID

Demand in India’s cement industry is projected to decline by 45-50 percent year-on-year in the first quarter of the 2020-21 financial year, while India Ratings and Research predicts that the second quarter could see low single-digit growth. Ind-Ra expects cement industry growth to plunge year-on-year to a historical low of negative 4-5 percent.

Ind-Ra expects a consecutive drop in cement capacity utilisation to a historical low of around 61 percent in FY21, with successive demand declines in FY20 and FY21.

Although companies have not yet announced any capex deferral, in the next few months, some instances could arise. In the event of a 20 percent slippage in capacity additions, utilisation could improve to around 62 percent.

Coastal grinding units relying on imports of clinkers may have to operate at lower rates until normalcy at ports is restored. Compared to the earlier FY21 estimates, these factors could reduce EBITDA by around 20 percent.

Future of the Industry from post COVID

Ind-Ra expects a significant recovery starting in Q3 FY21, with a gradual pick-up in infrastructure spending and the release of pent-up demand. Given the impact on discretionary spending over the next year of the slowdown in economic growth, growth in the housing segment, which accounts for 60 percent -65 percent of cement demand, is likely to be affected.

Such a serious public health emergency and the resulting slowdown in the economy will put stress on government finances, limiting the ability to increase capital expenditure, thereby affecting infrastructure growth, which accounts for nearly one-fourth of total demand

Grants / Support from Government

A financial stimulus of about INR 20 trillion (USD 267 billion) was announced by the Indian government. The objective of the intervention is to inject liquidity into the financial system, revive the economy, limit the impact on the labour market and increase trust.

The Government of India has announced several stimuli to fuel the growth of the real estate sector that have a positive impact on the cement industry, as the segment relies mostly on the growth of the real estate sector, the announcements related to the real estate sector are shared below.

Residential

Significant reduction in the rate of repo to 4.0 percent, reverse repo to 3.75 percent and cash reserve ratio (CRR) to 3.0 percent to provide banks with incentives to infuse loans into the economy.
For the housing sector, the credit-linked subsidy scheme (CLSS) has been extended until March 2021, providing homebuyers with an incentive of INR 700 billion ( USD 9.3 billion).

Infrastructure

INR 81 billion ( USD 1.1 billion) has been allocated to social infrastructure by the government, providing up to 30 percent of the total project cost with viability gap funding.

Market Size and Forecast

In India, cement sales in FY20 stood at Rs 63,771 crore (US$ 9.05 billion). India’s cement, clinker and asbestos exports increased between FY16-FY19 at a CAGR of 6.44 per cent. It reached US$ 1.66 billion in FY20 (till January 2020).

The Indian Cement Industry is severely affected by the effect of COVID-19 which caused the extended lockdown imposed by the government of India causing the relocation of migrant workers, disruption caused in the logistics and supply side of the raw materials, increase in raw material prices such as pet coke, thereby causing a fall in the EBITDA Margin to the tune of 20% and growth in the sector is expected to plunge to a historical low of negative 4-5% year-on-year basis.

Further Analysis on the Optimistic and Pessimistic scenarios are as presented in the table below

SCENARIO	DECLINE IN DEMAND	MARKET GROWTH	CAPACITY UTILISATION	EBITDA	EXPORT IN 2020
OPTIMISTIC	– 45%	+1%	-45%	-12%	US$1.53 Bn
PESSIMISTIC	-50%	-5%	-61%	-20%	US$1.39 Bn

Cement and gypsum products attracted Foreign Direct Investment (FDI) worth US$ 5.28 billion between April 2000 and March 2020, according to data released by the Department for the Promotion of Industry and Internal Trade (DPIIT).

India’s cement, clinker and asbestos exports increased between FY16-FY20 at a CAGR of 1.68 per cent and stood at US$ 1.98 billion in FY20.

Nepal, Sri Lanka, the United States, the Maldives and the UK were the country’s top export destinations for cement, clinker and asbestos cement in FY18.

Pakistan, Bangladesh, Japan, Vietnam and Thailand were the nation’s top five import sources for cement, clinker and asbestos cement in FY18.

Cement production reached 329 million tonnes ( MT) in FY20 and is projected to reach 381 MT by FY22. However, consumption stood at 327 MT in FY20 and will reach 379 MT by FY22. The capacity for the production of cement is estimated to reach 550 MT by 2020.

A few firms dominate the Indian cement industry. The top 20 cement companies account for almost 70 per cent of the country ‘s total cement production.

A total of 210 large cement plants account for a cumulative installed capacity of over 410 MT, with 350 small plants being the rest. In the states of Rajasthan, Tamil Nadu and Andhra Pradesh, 77 of these 210 large cement plants are located.

Market Outlook

As per CRISIL, the growth in cement demand will witness a mid-cycle slowdown to this fiscal 5-5.5%, down sharply from 12% in fiscal 2019. Growth would be even lower if the demand in the construction and housing sector does not increase.

The industry has seen lower demand for its products, leading to overcapacity, as the COVID-19 outbreak has slowed construction in many countries. It is largely expected that cement companies will survive the crisis, but they must reinforce their sustainability and competitiveness.

The industry was not operating at full capacity before the pandemic; plants are expected to see further drops in utilization rates with the global economic slowdown.

According to projections, the global average utilization rate, which refers to the actual output of producers over potential output based on fully utilized production capacity, could drop as low as 60 percent by 2020, from about 70 percent annually over the past five years.

The overall pick-up observed in government spending on infrastructure and the downward trend in interest rates are expected to boost demand across sectors, from a long-term perspective.

The 7th Pay Commission is expected to help with the demand for housing. Government pressure on affordable housing to realize its vision of “Housing for All” by 2022 and the Smart City programme should also assist in increasing cement demand. It has also greatly slowed down the rate of new capacity additions. Therefore, the outlook for the cement sector looks better in the long-term.

Technology Roadmap

Innovations in Cement Production

Another new trend in the cement industry is using Alternate Fuel and Raw Material (AFR). In the rotary kilns, tyer chips, paint sludge and other industrial waste are incinerated to replace traditional raw materials and fuels in the rotary kilns. The increased use of alternative raw materials in cement production produces improved product quality and reduces environmental impact.

Traditionally, limestone has been the principal raw material used in the production of cement. Approximately 60 percent of the industry’s CO2 emissions are caused by decarbonation of limestone during the production process. Some natural raw materials have already been replaced by waste and by-products from other industrial processes by innovation and R&D projects in the industry.

The waste and by-products elements such as calcium, silica, alumina and iron are used as alternative binding materials instead of natural substances such as clay, shale and limestone in cement production.

In India approximately 3-4% of the raw materials used in the production of clinker are alternative raw materials and fuel-based ashes, totalling approximately 14.5 million tonnes per year. The clinker-to-cement ratio is 73.7%, whereas ordinary Portland cement can contain up to 95% of clinker and the remaining 5% of gypsum.

Distribution Chain Analysis

The supply chain of the Cement Industry in India begins with the sourcing and extraction of raw materials which is delivered by the Fuel suppliers supplying Oil, Quarries supplying Coal and Limestone suppliers.

The raw materials are then taken to a supplier, which acts as the wholesaler, by a logistics provider. The materials are taken to a manufacturer or, perhaps, to different manufacturers who refine and process them into a finished product.

Subsequently, it goes to a distributor who sells the finished product wholesale, which is next delivered to a retailer. The retailer sells the product to consumers in a store.

This completes the cycle once the consumer purchases it, but it is the demand that then goes back and drives more raw material production and the cycle continues.

Competitive Landscape

With a few large players controlling significant market share, the Indian cement sector is much more consolidated than a couple of decades ago. With various large players operating in the domestic market, the industry has become highly competitive.

Earlier, most of the companies catered to particular parts of the country, now most players are expanding their pan-India reach, creating greater competition from the market.

Key Market Developments

In February 2020, Nirma Group announced acquisition of Emami Cement Limited (ECL) for an enterprise value of Rs 5,500 crore (US$ 786.95 million).

In May 2019, SEBI approved Emami Cement Ltd’s initial public offering (IPO).

JK cement planned to invest Rs 1,700 crore (US$ 246.7 million) to increase its production capacity to 15 million tonnes by end of 2020.

Competitive Factors

To increase their market presence and product portfolio, several businesses are forming joint ventures, mergers , and acquisitions. Market players are making rapid investments to broaden their capacities.

UltraTech cement, for example, announced plans to invest Rs 940 crore (US$ 134.50 million) in October 2019 to increase the production of premium products to strengthen its position in the eastern markets.

Key Market Players

key players in the Indian Cement Industry include ACC Ltd., Ambuja Cement, Binani Industries Ltd., Birla Corporation Ltd., Ultra Tech Cement Ltd., Heidelberg Cement India Ltd, JK Cement Ltd, India Cements, Shree Cements, etc.

ACC Ltd is the leading cement and concrete producer in India. The organisation is engaged in the manufacturing and sale of cement and ready-mixed concrete. For general construction and special applications, they produce a variety of Portland cement. In addition , two items are also offered: bulk cement and ready-mix concrete. With 17 modern cement plants, more than 57 ready mix concrete plants, 21 sales offices, many zonal offices, and a large distribution network of over 11,000 dealers, the company’s activities are spread across the country. ACC Concrete Ltd Bulk Cement Company (India) Ltd is a subsidiary of ACC Mineral Resources Ltd Lucky Minmat Ltd National Limestone Co Pvt. Ltd and Pvt Ltd. of Encore Cements & Additives.

Ambuja Cements Ltd is part of the multinational LafargeHolcim conglomerate and is among India’s leading cement companies. Under the Ambuja name, the firm sells cement. The company has 6 direct subsidiaries, 1 joint venture and 1 joint operation as of 31 December 2018. Ambuja Cements Ltd (ACL) was incorporated as Ambuja Cements Pvt on 20 October 1981. Ltd, ltd. The company was established as a joint venture between Gujarat Industrial Investment Corporation (GIIC) and Narottam Sekhsaria & Associates, a public sector company.

Binani Cement Limited, based in Mumbai, Maharashtra, India, is engaged in the manufacture and distribution of cement and clinkers. It is Binani Industries Ltd ‘s flagship subsidiary. The Company is ISO9001, ISO14001 and OHSAS18001 compliant certified. The subsidiaries of the Company comprise Krishna Holdings Pte Limited, Muku, Dubai (BCFLLC).

Birla Corporation (BCL), a flagship company of MP Birla Group, operates four cement, jute, vinoleum and auto trim divisions. Later, in a multi-product business, it gradually increased. The name was altered to Birla Corporation in 1998. Assam Jute Supply Company, Talavadi Cements, and Lok Cements are subsidiaries of Birla Corporation. BCL produces 43 and 53 grade ordinary portland cement, portland pozzolana cement based on fly ash, portland slag cement and cement resistant to sulphate. It has 5.8 million tonnes of installed capacity.

UltraTech Cement Ltd. is the largest manufacturer of grey cement Ready Mix Concrete (RMC) and white cement in India. It is also one of the leading global producers of cement. The company has a grey cement installed capacity of 93 million tonnes per annum ( MTPA). There are 18 integrated plants, 1 clinkerization factory, 25 grinding units and 7 bulk terminals at UltraTech Cement. Its operations include India, UAE , Bahrain, Bangladesh and Sri Lanka. UltraTech Cement is also the biggest cement exporter in India, reaching out to meet demand in the Indian Ocean and Middle East countries.

HeidelbergCement India Limited is engaged in Portland cement production. Portland Pozzolana Cement (PPC) and Portland Slag cement (PSC) are part of the Company’s product range. In Ammasandra, Karnataka, Damoh, Madhya Pradesh, and Jhansi, Uttar Pradesh, the company’s manufacturing facilities are located. The Company has an annual total cement production capacity (MTPA) of 5.4 million tonnes, with a clinker capacity of 3.4 MTPA.

JK Lakshmi Cement, an ISO 9002 accredited firm, began operations in the Sirohi district of Rajasthan in 1938. It provides a broad spectrum of cement. It is part of the diversified JK Group with business projects in various segments such as paper, tyres, sugar, agri-genetics and testing in clinics. The company has US$ 200 million in revenue. The company has a network of 70 cement dumps throughout the states of Rajasthan, Gujarat, Delhi, Haryana, U.P, Uttaranchal, Punjab, J&K, Mumbai and Pune, and over 2200 dealers. The company’s combined capacity today stands at 4,75 million tonnes per annum. In northern India, it became the first cement manufacturer to launch colour bags to advertise its product.

India Cement, a cement manufacturing company, was founded in 1946. Seven plants throughout Tamil Nadu and Andhra Pradesh have been set up. It is the largest cement producer in southern India. India Cements holds 28% of the market share and is the South Indian leader. India Cements has an annual production capacity of 9 million tonnes of cement. The brands used by ICL to market their produce are Sankar Cement and Coramandel Cement.

In India, Shree Cement Limited (Shree Cement) is mainly engaged in the production and selling of cement. The business usually operates in two divisions, namely Cement and Electricity. The company offers cement, including Shree Ultra Jung Rodhak Cement, Bangur Cement, and Rock strong Cement, under various brands. Via distributors and suppliers, as well as through sales offices, the company markets cement. Shree Cement Limited is setting up a new green field project in Rajasthan with a clinker production capacity of 3000 tonnes per day, and the company is also expanding its Captive Power Plant’s power generation capacity to meet the power requirements of the upcoming plant.

Strategic Conclusion

India’s eastern states are likely to be the cement companies’ new and untapped markets and could add to their bottom line in the future. India could become the world’s largest exporter of clinker and grey cement to the Middle East, Africa, and other developing nations over the next 10 years.

Cement plants near the ports, such as the Gujarat and Visakhapatnam plants, would have an additional export advantage and will be well-armed logistically to face strong competition from cement plants in the interior of the country. It is estimated that India’s cement production capacity will reach 550 MT by 2025.

The cement industry is expected to hit 550-600 million tonnes per annum (MTPA) by 2025 due to growing demand in various sectors, such as housing, commercial construction and industrial construction.

Owing to profit margins and steady demand, a number of international players are also expected to enter the Indian cement market.

References

Appendix

SMEs – Small & Medium Enterprises
GDP – Gross Domestic Product
mtpa – million tonnes per year
FDI – Foreign Direct Investment
INR- Indian National Rupee