In the past five years, the Indian cement industry has been affected by the overall slowdown in demand, resulting in strong competition among the biggest players in the country. The current industry scenario is dominated by mergers and acquisitions, which are aimed at lowering costs to sustain profits.
The growth of the real estate sector, which is one of the major consumers of cement, has remained slow for the past few years. However, it is expected to improve in 2021-2022 with an increase in infrastructure spending.
The Indian economy is estimated to register a GDP growth rate of 8 percent during FY21 and FY22. Factors such as government expenditure on infrastructure development, increasing private investment, and improving industrial performance will support economic growth.
The Indian cement industry is witnessing the third wave of consolidation. Several companies have entered into merger and acquisition (M&A) agreements to tap the growth potential in the market.
This will enable them to expand their market share and cater to a larger market. Major companies that have entered into M&A agreements include Ultratech cement, ABG Cement, Ambuja Cements, Grasim Industries, Jaypee Cement Corporation, Lafarge India, and ACC Cements.
The recent surge in construction activity and infrastructure development in India is expected to drive demand for cement in the country. The cement industry was estimated at around US$ 12.0 billion during FY2021. It is projected to grow at a CAGR of around 9% during 2021-2022.
The number of cement plants in the country has increased from 173 in FY2012 to 227 in FY2019. The total production capacity of these plants stands at around 588 million tons per annum (MTPA). The production capacity of these plants stood at around 431 MTPA during FY2016.
Indian cement market size
Cement Industry in India: The Indian cement industry is the second-largest in the world, with a capacity of 545 million tonnes per annum. It is one of the most energy-intensive industries and contributes significantly to the Indian economy. The per capita consumption of cement in India is greater than that of the USA, Europe, and Japan.
In order to meet rising demand, the Government has envisaged infrastructure development as a key growth strategy. In order to achieve this objective, it has made an allocation of Rs 1 trillion for infrastructure projects in the 2018-19 Budget.
The cement industry has a total installed capacity of 500 MTPA (million tonnes per annum). As of 2017-18, the total production stood at about 290 MTPA. The industry employs about 2 million people directly or indirectly, contributing about 7% of the country’s GDP. The top 20 companies account for around 70% of the total production.
The sector is highly fragmented with around 20 players accounting for 70 percent of the total production. The top 10 players occupy around 50 percent share whereas the balance 50 percent is split between 10 medium-scale and 30 small scale producers.
Cement demand in India
Cement demand in India is expected to increase due to government spending in the infrastructure sector and a housing push by the government.
India’s cement demand is expected to reach 550-600 million tonnes per annum (mtpa) by 2025. The housing sector is the biggest driver of cement, accounting for about 67% of India’s total consumption. Other major customers of cement are infrastructure 13%, commercial construction 11% and industrial construction 9%.
Cement production in India, capacity is expected to reach 550 million tonnes by 2025. To achieve this ambitious target, a sustained investment of US$ 23 billion will be required over the next seven years. About 60% of this investment would be required for greenfield projects and 40% for brownfield projects.
The growing interest among international players in investing in India’s cement industry is further expected to benefit the sector.
The surge was visible across all regions and was led by the eastern region (up 20%), followed by north (up 19%), south (up 15%), west (up 14%), and central (up 11%). Ultratech cement is in demand throughout the whole country because of the ultratech cement price.
Top 7 cement companies in India
The Cement Industry in India is at the apex of growth over the past decade. It contributes to the overall Indian economy in a big way. India is not an exception when it comes to cement production. Cement production also has a long history, which dates back to the year 1912.
The cement industry has been growing at a fast pace since then. The growth of the cement industry is witnessing a steady phase of expansion and consolidation. The cement industry of India is dominated by a few companies. The top 7 cement companies account for almost 70% of the total cement production in India. Here is a list of top 7 cement companies in India
1.UltraTech Cement Ltd
2.Shree Cements Ltd
3.Ambuja Cements Ltd
4.ACC Ltd
5.Ramco Cements Ltd
6.JK Cements Ltd
7.JSW Cement Ltd
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The cement industry in India is one of the country’s most important industries, providing employment to thousands of people and contributing more than $6 billion to the Indian economy. Cement production in India is expected to grow by another 8% over the next few years, as private investment continues to increase. With a broad range of manufacturers across the country, India’s cement industry is poised to remain a vital part of its economy for many more years.