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Incredible India Cement Industry
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The Indian cement industry is the subsequent leading marketplace after China. It had a total cement production capacity of about 425 million tonnes as of September 2017. Cement is a recurring commodity with a high correlation with GDP.
The demand for cement in real estate sector is spread across rural housing (40%), urban housing (25%) and construction/infrastructure/industrial activities (25%). While the rest 10% demand is contributed by commercial real estate sector. Cement demand in India is expected to grow by 7 percent this year but intense competition and "not enough" consumption will lead to excess capacity to -1.54 %.
The demand has grown in 2018, and helped by the Centre's push on big infrastructure projects and continued focus on rural development and affordable housing schemes. Consequently, the demand for cement plant in 2018 is expected to increase from 6 percent to 7 percent.
The total mounted capability of the cement industry in India is around 465 million tonnes. Around 66 per cent of its demand came from the housing sector, followed by infra with 18 per cent and 16 per cent by commercial sectors. However, the industry is battling with under-utilisation of the fixed capacity as it is currently producing 305 million tonnes (MT) for both internal demand and export requirement.
Cement in India is grappling with sub-optimal effective capacity utilisation of 70 per cent, with capacity overhang of more than 100 MT. While cement mixture plants are produced at levels above 85 to 90 per cent of capacity in arctic, central and eastern regions of the country, excess capacity in the southern region has repressed the industry's middling capability utilisation.
Intense competition and not enough demand pull, has continued to lead to excess capacity in 2018. It is also seen that a social welfare surcharge of 10 per cent, will replace the existing 3 per cent education cess on customs duty, which will marginally inflate the charge of imported inputs such as petcoke and non-coking coal products.
The demand for cement plant in India is expected to reach 550-600 Million tonnes per Annum (MTPA) by 2025. To meet the rise in demand, cement companies are expected to add 56 million tonnes capacity over the next three years, till 2019.
Furthermore, the per capita depletion of cement in India still remains extensively low at less than 200 kg when associated with the world average which stands at about 500 kg. In case of China, it is over 1,000 kg per head. This highlights the incredible scope for growth in the Indian cement industry in the long term.
For the past 3 years I have been writing informative and high quality articles on Indian cement industry. In the above article have covered topics such as cement industry in India,cement mixture plants, cement plant in India
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