India's Cement Industry Set To Scale New Highs On Govt's Infra Push

The cement industry is known to be the backbone of infrastructure development in a country. Apart from contributing to the countries basic infrastructure such as bridges, roads, water treatment facilities, schools, and hospitals, the industry helps meet ever-increasing housing demands.

Interestingly, the Economic Survey 2014-15 has revealed that the recovery of industrial production in India was led by infrastructure sectors, namely electricity, coal, and cement. With the new government introducing new infrastructure programmes, residential projects and road networks, the cement industry in India is all set to witness rapid growth in future.

It was in 1982 the cement industry in India recorded an exponential growth with the introduction of partial state decontrol of the commodity. A total decontrol happened in the year 1989. This attracted huge investments in the industry, from domestic as well as foreign investors. According to the data released by Department of Industrial Policy and Promotion (DIPP), cement and gypsum products attracted foreign direct investment (FDI) worth US $3,099.80 million between April 2000 and June 2015.

At present, there are more than 70 companies in this sector, with nearly 200 large cement plants. The industry, which had a total production capacity of 29 million tonne (mt) in 1981-82, is expected to reach a capacity of 320 mt by the end of financial year 2015.  Since its inception in 1914, the industry too eight decades to reach the first 100-mt capacity, while the second 100 mt was achieved in 11 years. And, the third target of producing another 100 mt took only three years. The growing demand for cement has been driven by the infrastructure development in Tier-II and Tier-III cities.

However, in spite of heavy investments, factors such as raw material availability, regional market trends, and shortage of fuel and energy have posed significant hurdles for the cement producers from time to time.

Let us look at some key numbers that give an overview about the cement industry in India:

(Infographics by Sandeep Bhatnagar)