India is the second largest producer of cement on the globe after China. In total, India manufactures 251.2 Million Tones of cement per year. The cement industry in India has received a great impetus from a number of infrastructure projects taken up by the Government of India like road networks and housing facilities. While the Indian cement industry enjoys a phenomenal phase of growth, experts reveal that it is poised towards a highly prosperous future over the very recent years. Estimates state that the production in the sector will touch 262.61 MT in FY12. The cement industry in the subcontinent is dominated by around 20 companies. These major players alone account for about 70 percent of the total volume of cement produced in India. In the year 2009 alone, the Indian cement industry manufactured a total volume of 231 MT.
History of cement Production in India
The history of the cement manufacturing in India can be traced back to 1889 when a private firm in Kolkata began manufacturing cement from Argillaceous. However, only in 1900s, the cement industry took an organized shape. In the year 1914, India Cement Company Ltd started cement production in Porbandar with an output of 10,000 tons and a production of 1000 installed capacity. The First World War gave the initial momentum to the cement industry in India and the segment demonstrated a geometric growth in terms of installed capacity, number of manufacturing units and the volume output. Experts term this as the nascent stage in the history of Indian cement industry. The Concrete Association of India was established in the year 1926 to create awareness among the public with respect to the utility of cement in addition to promoting cement consumption.
1956 saw the introduction of price and distribution control system that regulated the cement industry in India which was meant to ensure the fair price model for the benefit of both consumers and the manufacturers of cement. Later in the year 1977, the government of India authorized the emerging as well as the existing manufacturing units to place an increased price tag for their cement and associated products. Two years after this, the government brought in a three-tier pricing system featuring different pricing regulators on cement manufactured in high, medium and low cost cement plants.
In every country, the cement industry plays a major role in deciding the growth. From the beginning, the cement industry in India was totally under the supervision and control by the government. The scenario changed to a great extent following the economic reforms. However, one cannot rule out the interference of the government in regulating the pricing. Though the country enjoys the credit of being the second largest manufacturer of cement in the world, it falls very low per capita consumption of cement estimated at 125 kg. This is largely due to the fact that the poor rural people in the country who predominantly live in mud huts cannot afford to buy cement. On the other hand, the demand and supply of cement has undergone a phenomenal growth in India. On the whole, the fact that India is a fast developing nation presents an enormous scope for the development of cement industry.
Production and Growth of cement industry in India
Domestic demand is one of the chief reasons for the rapid growth of cement manufacturing in India. One can say that the domestic demand for the commodity has in fact clearly overtaken the rate of economic growth in the country. It is estimated that the consumption of cement in the country is bound to rise more than 22% within the next two years. In terms of cement consumption, Maharashtra State leads the list with 12.18%, followed by Uttar Pradesh, whereas in terms of production, the State of Andhra Pradesh leads the table reporting 14.72% of production. The second place in the manufacturing is bagged by Rajasthan.
During October 2009, the country produced a total volume of 12.37 MT compared to a manufacturing of 11.61 MT recorded in the same month during the previous year. The cement manufacturing units are also motivated to take up their production rate owing to the rapidly increasing demand in the market. Most encouragingly, the cement companies witnessed a net profit growth rate of 85%. This huge success has further encouraged the firms in India to account for about 8% of India’s economic development. Some of the regions where major clusters of cement industries located in India are Satna (Madhya Pradesh), Yerranguntla (Andhra Pradesh), Chandrapur (Maharashtra), Bilaspur (Chattisgarh), Gulbarga (Karnataka), Nalgonda (Andhra Pradesh), and Chandoria (Rajasthan).
Technology Up-gradation
At present, the cement industry in the country is undergoing a technological change on account of up gradation and assimilation witnessed in the sector. Presently, not less than 93% of the total capacity is wholly based on manufacturing under the modern dry process, which is deemed more environment-friendly, while the remaining rest 7% employs old wet and semi-dry process technology. There is also an enormous scope of waste heat recovery in the cement manufacturing plants that will give way to reduction in the levels of emission and consequently contribute to environment-friendly practices.
The recent up gradation of technology across the cement industry segment has helped the industry to enormously conserve fuel and energy and make a huge saving on materials. The cement industry in India has developed its technical capabilities to produce a range of cement types including Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid HardeningPortland Cement, Sulphate Resisting Portland Cement and White Cement.
Major Players in Indian Cement Industry
A number of successful companies are leading the cement production in the country. However, about 20 big firms alone account for over 70% of the total cement production in the nation. The total installed capacity of cement in the country is found distributed over 129 plants, which are owned by 54 major companies functioning from the breadths and lengths of the nation. The major players in the cement industry in India include ACC, Gujarat Ambuja, Ultratech, Grasim, India Cements, jaypee Group, JK Group, Century, Madras Cements and Birla Corp.
Future Ahead of Indian Cement Industry
The annual demand for cement in India is consistently growing at 8-10%. NCAER has estimated after an extensive study that the demand for cement in the country is expected to increase to 244.82 million tonnes by 2012. At the same time, the demand will be at 311.37 million tonnes if the projections of the road and housing segments are met in reality. However, the realization of this capacity might get delayed on account of delay in equipment delivery and construction of plants caused by heavy pending orders in the books of suppliers. The crude oil prices have pronounced a heavy impact on the profits made by cement manufacturers. Once the economic growth passes on this burden to the consumers, this situation will be eased at the manufacturer’s end. The government has taken measures to increase the availability of indigenous coal for cement manufacturers to bring down production costs.
Developments in the domestic environment and a large number of infrastructure projects have created an unforeseen demand for cement consumption in India, which is bound to increase manifold over the coming years. While concrete steps are being taken to bring down, costs, the cement industry is heading towards a very bright future in India.
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