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India’s economy plays a vital role in the surge of its cement Industry

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India’s economy plays a vital role in the surge of its cement Industry

September 29
07:14 2021
A boost in Indian Cement Industry is proportional to the economic state of the country

The evolution of the cement industry in India is related to the country’s economy. Despite its pre-Independence origins, the genuine capacity building and admission of various actors into the private sector occurred in the late 1990s. From 2000 to 2010, many international investors, including MNCs in the area and private equity, have shown an interest.

In 1914, in Gujarat (Porbandar), the first cement plant in the country was put up. Massive ongoing investments in rural and urban housing, government estate growth, and enormous industrial parks and estates have sprung up all over metropolitan India. Central (MNREGA, GaribKalyan, Nation Highway extension, etc.) and state governments are big consumers of cement via contractors. Few examples of Indian Cement Industries:

Rank

Company

Promoting family/company

1

Ultratech

Aditya Birla Group (Kumar Mangalam Birla

2

Ambuja

Gujarat Ambuja Group

3

ACC

Public listed co, ACC

4

Shree Cements

Bangur Family and group

5

Dalmia Cement

Dalmia Bharat – Public listed

6

M P Birla Group

Mrs. Priyamvada Birla, Harsh Lodha

7

India Cements

N Srinivasan, Chennai

8

Ramco Cement

Ramco Family and group, Chennai

9

Binani Cement

BrajBinani Group (now Ultratech)

10

Other players

The state-regulated prices since India was once an agricultural economy with a large population below the level of affluence of western nations. From 1956 through 1977, the government set the price, and companies had to sell it at that price.

After 1977, the government allowed more private operators to set up businesses and sell their products at a greater price. Finally, deregulation came to the cement sector in 1982, allowing private players to price cement according to demand and supply.

Currently, there are 210 major cement factories and around 365 micro cement plants. Across the country, there are approximately 40 significant players. The top 20 companies produce around 80% of Indian cement.

The government’s push for infrastructure development has made the country the world’s second-largest cement producer, with 7% of worldwide installed capacity. Only China has more.

It has sparked tremendous interest from global players and major investors. Industries like Heidelberg, Lafarge Holcim, Vicat, and others have already acquired Indian cement companies in whole or in part. Between April 2000 and March 2017, FDI in India for cement and gypsum products totaled $5.24 billion.

The Binani Group started operating a grinding unit in UAE in early 1995 manufacturing slag cement and then took over a new operating cement plant in Shandong province of China in 2007. Later the company expanded its clinker capacity by four times. As a result, a few corporations were able to advertise Indian brands in China and the UAE.

With abundant local raw materials and government initiatives, the cement business is positioned for explosive growth over the next decade.

The country’s recent cement production was 329 million tonnes (FY20), and by FY22, it is predicted to reach 381 MT.

Despite these massive expenditures and capacity, India’s per capita consumption is only 195 kg.

It can only imply one thing: the Indian cement industry is poised for explosive growth like the Indian economy and infrastructure.

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