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Cement Industry
Cement is the preferred building material in India. It is used extensively in household and industrial construction. Earlier, government sector used to consume over 50% of the total cement sold in India, but in the last decade, its share has come down to 35%. Rural areas consume less than 23% of the total cement. Availability of cheaper building materials for non-permanent structures affects the rural demand.

Demand for cement is linked to the economic activity in any country. Broadly, it can be categorized into demand for housing construction (homes, offices etc.) and infrastructure creation (ports, roads, power plants etc). The real driver of cement demand is creation of infrastructure, hence cement demand in emerging economies is much higher than developed countries where the demand has reached a plateau. In India too, the demand for cement will be affected by spending on infrastructure (including housing).

With the boost given by the government to various infrastructure projects, road network and housing facilities, growth in the cement consumption is anticipated in the coming year. The favourable housing finance environment is expected to fulfill the vast housing requirements, both in rural and urban areas. The increase in infrastructure projects by the government coupled with the construction of the Golden Quadrilateral and the North-South and East-West corridor projects have led to an increase in consumption of cement. This increase is expected to continue in the future. The reduction in import duties is not likely to affect the industry as the cement produced is at par with the international standards and the prices are lower than those prevailing in international markets.

  • Indian cement industry dates back to 1914 - first unit was set-up at Porbandar with a capacity of 1000 tonnes
  • Currently India is ranked second in the world with an installed capacity of 114.2 million tonnes.
  • Industry estimated at around Rs. 18,000 crores (US $ 4185 mn)
  • Current per capita consumption - 85 kgs. as against world standard of 256 kgs
  • Cement grade limestone in the country reported to be 89 bt. A large proportion however is unexploitable.
  • 55 - 60% of the cost of production are government controlled
  • Cement sales primarily through a distribution channel. Bulk sales account for < 1% of the total cement produced.
  • Ready mix concrete a relatively nascent market in India.

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