Introduction:

The Indian cement industry is extremely energy intensive and is the third largest user of coal in the
country. It is modern and uses latest technology, which is among the best in the world. Also, the
industry has tremendous potential for development as limestone of excellent quality is found almost
throughout the country.

Current scenario:

 India ranks second in world cement producing countries.

 At present we have around 150 large plants and 360+ small plants.
 The industry's capacity at the beginning of the year 2009-10 was 217.80 million tonnes.
During 2008-09, total cement consumption in India stood at 178 million tonnes while exports
of cement and clinker amounted to around 3 million tonnes.

Production and capacity Trends:

250

200

150

Capacity
100 Production

50

0
Production
2004-05
2005-06
2006-07 Capacity
2007-08
2008-09

Source: Cement Manufacturer’s Association

 Cement Industry, which was branded as the highest polluter of environment, now meets the
pollution standards, and no longer a polluter today.
 India is currently exporting Cement/Clinker to around 30 countries across the globe.
Some of the major exports is listed in the graph below.
 (Tonnes)
1000000
900000 876883

800000
700000 648259
600000
500000 2008-2009
419619
2007-2008
400000 334970
300000 248468
200000 163864 138018
90202 96472
100000 39577
30160 35956
0
Nepal Iraq Qatar UAE Kuwait Sudan

Government’s continued thrust on infrastructure will help the key building material to maintain
an annual growth of 9-10 per cent in 2010.  According to the Ministry of Commerce and
Industry, the capacity is expected to touch 236.16 MT and 262.61 MT by the end of FY 2011
and 2012

Innovations in the sector:

 CDM (Clean Development Mechanism) and Carbon Trading

Indian Cement Industry continues to enjoy its iconic status among all cement producing
countries of the World in the number of registered CDM Projects and Carbon credits applied
for or earned so far. CDM projects are based on reduction of emission of any of the Green
House Gases (GHG) in the manufacturing.
 Fly Ash Utilization :

Cement Industry also contributes to environmental cleanliness by consuming hazardous

wastes like Fly Ash (around 30 Mn.t) from Thermal Power Plants and the entire 8 Mn.t of Slag
produced by Steel manufacturing units.

 Conventional fuel Security and use of alternative fuels

Substitution of fossil fuels used in cement kilns by fuels derived from waste, installation of
waste heat recovery system, modification of the composition of cement by using cement
constituents which require less energy to produce than cement clinker are some of the
innovations in this regard .

 Eco Cement :

Cement companies have come up with Eco-Cement, which has a reduced environmental
impact as compared to conventional cement. It sets and hardens by sequestering CO2 from
the atmosphere and is recyclable

Major players:

Some of big names in cement industry are listed below:

 Ultratech Cement
 Century Cements
 Madras Cements
 ACC
 Gujarat Ambuja Cement Limited
 Grasim Industries
 India Cements Limited
 Jaiprakash Associates and
 JK Cements.
 Holcim
 Lafarge
 Heidelberg Cement
 Italcementi
 25000

20947.67
20000
18005.12
15861.66 16318.97
15000

Cement Production in 2008-09

10000 ['000 Tonnes]
9111.36
7215.61 Capacity Added in 2008-09
6271.27 '000Tonnes
5000 5299.27

0
h y s C ja s e
tec tur d ra AC bu sim ent rg
a fa
tra Ce
n
M
a m Gr em La
Ul A
iaC
d
In

Economic outlook and policy decisions affecting the sector

Despite having high demand in India, our per capita cement consumption is very low, where the world
average is 396 kg, in India the per capita consumption is only 156 kg. India being the country of young
population has a huge potential and its ushering social and economic base will improve the domestic
consumption.

Government initiatives in the infrastructure sector, coupled with the housing sector boom and urban
development, continue being the main drivers of growth for the Indian cement industry.

 Some of the key drivers for the growth of cement industry are:

 Buoyant real estate market

 Increase in infrastructure spending
 Various governmental programmes like National Rural Employment Guarantee
 Low-cost housing in urban and rural areas under schemes like Jawaharlal Nehru National
Urban Renewal Mission and Indira Aawas Yojana

 Policy decisions affecting cement industry :

 Increased infrastructure spending has been a key focus area. In the Union Budget 2010-11,
US$ 37.4 billion has been provided for infrastructure development. This will boost the cement
industry.
 The excise rollover of about 2% and the proposed cess on coal will increase the cost of
production as well as cost of cement per bag.
 The government has also increased budgetary allocation for roads by 13 per cent to US$ 4.3
billion, which will in turn push the cement industry further.
 FDI Policy:  100 per cent FDI is now permitted in the cement industry which is a good sign .
 However The Industry has been facing a chronic problem of insufficient availability of the
main fuel coal - driving the manufacturers to resort to use of alternatives at steep cost
  Taxes and Government levies on cement are the highest compared to countries in Asia
Pacific Region. This needs to be checked as it is hampering the growth of cement industry .

 Other Key developments boosting cement industry

 In January 2010, Swiss cement company Holcim announced plans to invest US$ 1 billion for
setting up 2-3 greenfield manufacturing plants in India in the next five years. The expansion
will take the company’s total cement-making capacity to 60 mtpa (million tonnes per annum)
from 50 mtpa currently.
 Madras Cements Ltd is planning to invest US$ 178.4 million to increase the manufacturing
capacity of its Ariyalur plant in Tamil Nadu to 4.5 MT from 2 MT by April 2011
 Cimpor, a Cement company of Portugal, has bought 53.63% stake that Grasim Industries had
in Shree Digvijay Cement.

Future Outlook

Growth in domestic cement demand is expected to remain strong, given the revival in the housing
markets, continued Government spending on the rural sector, and the gradual increase in the number
of infrastructure projects being executed by the private sector. Thus, the trend in demand growth seen
during the last five years is expected to continue over the medium term. Also, with Government
targeting an over 8% GDP growth rate, cement demand should grow at 8-10% over the next few
years.

The industry may be expected to add another 130-135 million tonnes of cement capacity in phases
over the next four years, that is, during the period 2009-10 to 2012-13.