|
Forecast
Period
|
2025-2029
|
|
Market
Size (2023)
|
USD
26023.83 Million
|
|
CAGR
(2024-2029)
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8.04%
|
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Fastest
Growing Segment
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Residential
|
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Largest
Market
|
West
India
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Market Overview
India Cement Market has valued at USD 26023.83
Million in 2023 and is anticipated to project robust growth in the forecast
period with a CAGR of 8.04% through 2029. As the country experiences rapid
economic growth and urban migration, the demand for robust infrastructure and
modern urban living spaces has increased. Urbanization is a defining
phenomenon, with millions of individuals relocating from rural areas to cities
in search of better employment opportunities, education, and improved
lifestyles. This mass movement has led to an increased need for housing,
transportation networks, healthcare facilities, and educational institutions.
Also, the government's various mission reflects this shift, aiming to transform
numerous cities into technologically advanced, sustainable, and livable urban
centers. This initiative encompasses a wide spectrum of projects, from building
efficient public transportation systems and waste management solutions to
creating green spaces and digital infrastructure. All these endeavors are
underpinned by the pivotal role of cement as a primary construction material.
The cement market was negatively impacted due to the COVID-19 pandemic, which
resulted in decreasing demand across the construction industry and the closing
of various manufacturing facilities. However, the market is recovering
gradually and is likely to reach pre-COVID levels soon.
Over the short term, the growing residential
constructions across the Asia Pacific region and the growing infrastructural
activities in the Middle East and Africa region are some of the driving factors
which are fueling the market demand. Moreover, the abundance availability of
raw materials, such as fly ash, is also expected to drive the market forward.
However, government regulations on carbon emissions
from cement manufacturing plants are hindering the market's growth.
Nevertheless, the shifting preference towards green
construction and encouraging performance of HBC (High Belite Cement) in China
are likely to provide opportunities to the market studied. Source:
https://www.mordorintelligence.com/industry-reports/cement-market
Key Market Drivers
Rising
infrastructure post-pandemic
The India Cement
business, which accounts for about 7% of the installed capacity, is the world's
second-largest cement industry, second only to China. It is also the
fourth-largest revenue contributor to the exchequer and the second-largest
revenue contributor to the Indian Railways, contributing nearly USD 7.14
billion (INR 50,000 crore) per annum to the government via taxes and levies,
and about USD1.29 billion (INR 9,000 crore) per annum to the Indian Railways
through freight.
Indian's infrastructure
and construction sectors have a lot of room for growth, and the cement industry
is likely to profit greatly from it. Some recent initiatives, such as the
development of 98 smart cities, are expected to provide the sector with a significant
boost.
Several foreign players,
including Lafarge-Holcim, Heidelberg Cement, and Vicat, have recently invested
in the country thanks to favorable government policies. The ready availability
of raw resources for creating cement, such as limestone and coal, is a crucial
aspect that promotes the growth of the India Cement industry.
Supportive Government policies:
The government has been allowing private sector
investment programs to assist them in driving the India Cement business. The
following are some of the government's recent initiatives:
• In July 2021, For the cement sector, the
government established a council of 25 members (including UltraTech Cement MD
Mr. K C Jhanwar and Dalmia Bharat Group CMD Mr. Puneet Dalmia) to decrease
waste, achieve maximum production, improve quality, lower costs, and encourage
product standardization.
• The government allocated an allocation of Rs.
1,18,101 crore (USD 16.22 billion) for the Ministry of Road Transport and
Highways in the Union Budget 2021-22, which is expected to drive cement
consumption.
Rising investments in the sector:
Cement and gypsum products drew US $5.87 billion in
Foreign Direct Investment (FDI) between April 2000 and March 2021, according to
data supplied by the Department for Promotion of Industry and Internal Trade
(DPIIT).
Working remotely is likely to become more popular
in 2021, and demand for cheap residences with ticket sizes of less than Rs.
40-50 lakh is expected to surge in Tier 2 and 3 cities, increasing cement
demand.
The following are some of the recent key
investments in the India Cement industry:
• In August 2021, Ambuja Cement has announced an
Rs. 310 crore (USD 41.82 million) investment in its Ropar Unit, Punjab, to
expand its manufacturing capacity to meet rising demand from the manufacturing
sector for house construction and public infrastructure development. By June
2023, the expansion activities should be completed.
• In February 2021, Shree Cement partnered with IBM
to run its database and critical business applications on IBM POWER9-based IBM
Power Systems utilizing AIX and Red Hat. Shree Cement will be able to improve
productivity and supply chain efficiencies across its manufacturing unit as a
result of the deployment.
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Key Market Challenges
Environmental
Concerns
The cement industry is
known for its significant carbon emissions, leading to environmental concerns.
The sector is under increasing pressure to adopt greener technologies and
reduce its carbon footprint. Cement manufacturing requires substantial land and
raw materials like limestone, clay, and gypsum. Obtaining these resources can
be challenging, especially in densely populated areas.
Energy Intensive: Cement
production is highly energy-intensive, which can lead to high operational
costs. Rising energy prices and the need to reduce carbon emissions pose
challenges to the industry.
Regulatory Hurdles: The
industry faces various regulatory hurdles, including obtaining permits and
adhering to environmental and safety regulations. These can lead to delays and
increased compliance costs.
Market Competition: The
Indian cement market is highly competitive, with several major players and
numerous regional and local manufacturers. This competition can lead to price
wars and margin pressures.
Infrastructure
Bottlenecks: Transportation and logistics infrastructure in India can be
suboptimal, leading to delays and increased costs in the supply chain.
Changing Consumer
Preferences: Consumer preferences are shifting towards blended cements and
green building materials. Cement manufacturers need to adapt to these changing
demands and invest in research and development. The prices of key raw materials
like coal, petcoke, and slag can be volatile, impacting production costs and
profitability.
Monsoon Impact: The
cement industry is highly dependent on weather conditions, particularly the
monsoon. Monsoons can disrupt construction activities and impact demand.
Overcapacity: The Indian
cement industry has faced periods of overcapacity, which can lead to price
pressures and reduced profitability
To address these
challenges and ensure long-term sustainability, the Indian cement industry is
increasingly focusing on adopting cleaner and more energy-efficient
technologies, improving supply chain logistics, and diversifying product
offerings to meet changing consumer demands. Government support and policies
that promote sustainable practices and reduce regulatory bottlenecks can also
help the industry thrive while addressing environmental concerns.
Key Market Trends
Government
Supports
As per ICRA, in FY22, the
cement production in India is expected to increase by ~12% YoY, driven by rural
housing demand and government’s strong focus on infrastructure development.
As per Crisil Ratings,
the Indian cement industry is likely to add ~80 million tonnes (MT) capacity by
FY24, the highest since the last 10 years, driven by increasing spending on
housing and infrastructure activities. India is the second-largest producer of
cement in the world. It accounts for more than 8% of the global installed
capacity. India has a lot of potential for development in the infrastructure
and construction sector and the cement sector is expected to largely benefit
from it. Furthermore, on the back of rising rural housing demand, the
consumption of cement in India has been growing consistently as it is one of
the cheapest products to buy in terms of Rs./kg. Strong expansion of the
industrial sector, which has fully recovered from the COVID-19 pandemic shock,
is one of the main demand drivers for the cement industry. As a result, there
is a strong potential for an increase in the long-term demand for the cement
industry. Some of the recent initiatives, such as the development of 98 smart
cities, are expected to significantly boost the sector.
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 raw materials for making cement, such as limestone and coal. Currently, the
installed cement capacity in India is 553 MTPA with a production of 298 MTPA.
According
to Government Initiatives
The cement demand in
India is exhibiting a CAGR of 5.65% between 2016-22. As India has a high
quantity and quality of limestone deposits through-out the country, the cement
industry promises huge potential for growth. India has a total of 210 large
cement plants, of which 77 are in Andhra Pradesh, Rajasthan, and Tamil Nadu.
Nearly 32% of India's cement production capacity is based in South India, 20%
in North India, 13% in Central, 15% in West India, and the remaining 20% is
based in East India. India's cement production is expected to increase at a
CAGR of 5.65% between FY16-22, driven by demands in roads, urban infrastructure
and commercial real estate. India's cement production was expected to range
between 380-390 million tonnes in FY23, a growth rate of 8-9% year-on-year
(yoy).
Between FY12 and FY23,
the installed capacity grew by 61% to 570 MT from 353 in FY22. The Indian
cement sector's capacity is expected to expand at a compound annual growth rate
(CAGR) of 4-5% over the four-year period up to the end of the FY27. It would
thus begin the 2029 financial year at 715-725 MT/ year in installed capacity. India’s
cement production for FY24 is expected to grow by 7-8% driven by
infrastructure-led investment and mass residential projects.
The consumption of cement
in India is expected to grow at a CAGR of 5.68% from FY16 to FY22. As per
Crisil Ratings, the Indian cement industry is likely to add ~80 million tonnes
(MT) capacity by FY24, the highest in the last 10 years, driven by increasing
spending on housing and infrastructure activities. Cement consumption is
expected to reach 450.78 million tonnes by the end of FY27.
Segmental Insights
Type Insights
According to the report, Portland represented the
largest segment. The prominence of portland cement can be attributed to its
adaptability across a spectrum of applications, from residential buildings and
commercial complexes to infrastructure projects and industrial facilities. Its
inherent strength, ability to set and harden underwater, and compatibility with
various supplementary materials make it a preferred choice for construction
professionals and engineers worldwide. The broad range of Portland cement
variations, including Type I, Type II, Type III, and Type V, tailored to
specific requirements such as rapid setting or sulfate resistance, further
underscores its flexibility. The demand for Portland cement is supported by its
established performance history, reliable characteristics, and compliance with
construction standards. Moreover, its ubiquity is supported by the extensive
distribution networks and manufacturing capabilities of cement companies
globally. As the construction industry continues to evolve, Portland cement's
legacy endures, playing a pivotal role in shaping the physical landscapes of
cities and nations.
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Region Insights
West and Central India are home to abundant
limestone reserves, a primary raw material in cement production. The proximity
of these reserves to major cement manufacturing hubs ensures a steady supply
chain, minimizing logistical complexities and reducing production costs. This
competitive advantage gives manufacturers in these regions the ability to
produce cement more efficiently, contributing to their dominance in the market.
Furthermore, the region’s well-developed transportation networks, including road,
rail, and port facilities, facilitate the seamless distribution of cement
products across the country. This logistical superiority enhances the
accessibility of West and Central India's cement offerings to a broader market,
encompassing not only local construction projects but also those in distant
states. The concentration of infrastructure development and urbanization
activities in these regions further solidifies their leadership. West and
Central India's dominance is also underpinned by their proactive approach to
adopting advanced technologies and sustainable practices in cement production.
Recent Developments
- FDI inflows in the industry, related to the
manufacturing of cement and gypsum products, reached USD 5.49 billion between
April 2000-March 2023.
- In April 2023, the infrastructure and real estate
asset class recorded USD 3 billion in
PE/VC investments, an 82% increase y-o-y and a 3% increase over March 2023.
- An MoU was signed between Star Cement Limited and
the Government of Assam for an investment worth Rs. 1,400 crore (USD 170.9
million) for setting up a Cement Grinding unit in Guwahati and another Cement
Grinding unit in Cachar and AEC Block and other construction manufacturing
units in Guwahati.
- Ramco Cements is planning to invest a total of USD
91.3 million towards growing its capacity FY24. Its planned investments consist
of USD 15.8 million in an expansion to its Haridaspur grinding plant in Odisha
and USD 75.5 million in the acquisition of land in Bommanalli, Karnataka, on
which to establish a limestone mine.
- Dalmia Cement (Bharat) is planning to invest USD
560 million following the signing of a memorandum of understanding (MoU) with
the Assam government on the construction of a new cement plant in the state.
- Real estate sector received the highest value of
PE/VC investments in Q1 (January-March) of 2023 at USD 5 billion, registering
an year-over-year 123% growth.
- In 2022, PE/VC investments in real estate and
infrastructure stood at USD 5.81 billion across 71 deals and USD 7.9 billion
across 47 deals respectively.
- PE/VC investments in real estate and infrastructure
witnessed a sharp growth of 27%, at USD 13.7 billion in December 2022 as
compared to USD 10.7 billion in December 2021.
Key Market Players
- Ultratech
Cement
- Ambuja
Cement
- ACC Limited
- Shree Cement Limited
- Dalmia Bharat
- Birla Corporation Limited
- India Cement Limited
- The Ramco Cement Limited
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By Type
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By Application
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By Region
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- Portland
- Blended
- Other Types
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- Residential
- Commercial
- Infrastructure
- Industrial
Institutional
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- North India
- West India
- South India
- East India
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Report Scope:
In this report, the India Cement Market has been
segmented into the following categories, in addition to the industry trends
which have also been detailed below:
- India Cement Market, By Valve Type:
o Portland
o Blended
o Other Types
- India Cement Market, By Application:
o Residential
o Commercial
o Infrastructure
o Industrial Institutional
- India Cement Market, By Region:
o North India
o West India
o South India
o East India
Competitive Landscape
Company Profiles: Detailed analysis of the major companies present in the India
Cement Market.
Available Customizations:
India Cement market report with the given
market data, Tech Sci Research offers customizations according to a company's
specific needs. The following customization options are available for the
report:
Company Information
- Detailed analysis and profiling of additional
market players (up to five).
India Cement Market is an upcoming report to be
released soon. If you wish an early delivery of this report or want to confirm
the date of release, please contact us at [email protected]