When the economy was coming
to terms with the low rainfall this season, cement industry was the only sector in a
smiling mood. Delayed monsoon in most part of the country generated a strong
demand for cement fueled by the strong growth in the housing sector and
the government's thrust on infrastructure development. Housing sector has
remained the largest source for cement demand. India is the world's
second largest producer of cement, after China, with a total capacity of about 218
million tons (mt) at the end of fiscal 2009. During the last two years, the
industry registered a double-digit growth in capacity addition against a
moderate growth of 3-7% during the fiscal 2003-07. The growth was characterized
as both quantitative and qualitative, as cement from India is on a par with
the best in the world. The industry further enhanced its status in the global
market, when the export of cement and clinker crossed the 10 mt mark in
2008. Given India's feeble infrastructure and scores of upcoming projects, there is
a huge demand for cement, as the economy offers a tremendous
growth opportunity given its lower per capita consumption.
The industry witnessed an impressive per capita consumption during
the last couple of years and is on its way to catch up with the global averages.
Except for the western and northern regions, all other regions
outperformed the industry in consumption growth. Traditionally, the industry fortunes
are directly linked to the growth of the economy. Despite the economic
slowdown in fiscal 2008-09, the industry produced around 181 million
metric tons of cement, representing a growth of around 7.8% over the fiscal
2007-08. Consumption also increased at the same pace during the last fiscal.
Top players like Grasim Industries, ACC and Ambuja Cements performed
solidly by riding on higher sales volumes and better price realizations.
Low-cost technology and extensive restructuring have made them the most efficient.
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