Role of Cement Industry in Indian Economy

The Role of Cement Industry in India GDP is significant in the economic development of the country. The cement industry in India is one of the oldest sectors in India.

The industry is driven by the immense growth in the housing sector, the infrastructure development, and construction of transportation systems.

Indian Cement Industry is the second largest cement producer in the world after China with a total capacity of 151.2 Million Tonnes (MT). Government of India has been giving immense boost to various infrastructure projects, housing facilities and road networks, the cement industry in India is currently growing at an enviable pace. In the coming years more growth in the Indian cement industry is expected to come. It is predicted that the production in India would rise to 236.16 MT in FY11 & expected to rise to 262.61 MT in FY12 in the Cement Industry.

The Indian cement industry is dominated by 20 companies, which account for almost 70% of the total cement production in India.The companies all over India have produced 11 MT cement during April-September 2009. The Indian Cement industry plays a major role in the growth of the nation for that case in any country. Industry Cement Industry was under full control and supervision of the government. However, it got great relief at a large extent after the economic reform which made its growth easier. Still government interference, especially in the pricing, is evident in India.

Top Leading Companies

  • Ultratech Cement
  • Century Cements
  • Madras Cements
  • ACC
  • Gujarat Ambuja Cement Limited
  • Grasim Industries
  • India Cements Limited
  • Jaiprakash Associates
  • JK Cements
  • Holcim
  • Lafarge
  • Heidelberg Cemex
  • Italcementi

Role of Cement Industry in Indian Economy

Role of Cement Industry in India GDP-Facts

  • The Indian cement industry is one of the booming sectors of the Indian economy
  • The infrastructure development of the country in the recent years is the demand driver for the cement industry
  • The Indian Cement Industry is experiencing the entry of many foreign players in the Indian market
  • The average monthly capacity utilization during the year 2006-07 was 94%
  • The cement dispatches in the year 2006-07 was 155 million tonnes
  • The growth of the cement sector pertaining to the total output was 10% in 2006-07

Role of Cement Industry in India GDP-Production

  • India ranks second in the production of cement in the world
  • The growth rate of the production of cement during the year 2006-07 was 9.1%
  • The export of the cement in the year 2006-07 was 9.3 million tonnes
  • The cement industry in India constitutes of 365 small cement manufacturing units and 130 large cement manufacturing units
  • The total installed capability of the cement manufacturing is 165 million tonnes per year
  • The large manufacturing units accounts for 94% of the total output of cement

Role of Cement Industry in India GDP-Mergers and Acquisitions

  • Heidelberg Cement-Indorama Cement Ltd
    • Heidelberg Cement Company entered into an agreement for a 50% joint venture with the Indorama Cement Ltd, situated in Mumbai, originally possessed by the Indorama S P Lohia Group.
    • Heidelberg Cement Company has two manufacturing units in India
  • Italcementi cement-Zuari Cement Limited
    • Italcementi cement company has acquired share of the famous Indian cement manufacturer, the Zuari Cement Limited
    • The acquisition was of 50% shareholding and the deal was of about 100 million
    • It took over the plant of the Zuari Cement Limited in Andhra Pradesh
  • Holcim Cement-Gujarat Ambuja Cements (GACL)
    • Holcim Cement signed an agreement of 14.8% take over with the Gujarat Ambuja Cements (GACL).
    • Holcim Cement Company is among the leading cement manufacturing and supplying companies in the world.
  • Lafarge India
    • Lafarge India is the subsidiary of the Lafarge Cement Company of France.
    • It was established in 1999 with the acquisition of the Tisco and the Raymond cement plants
    • Lafarge Cement presently has three cement manufacturing units in India one of them is in Jharkhand and two other in Chhattisgarh

Total Contribution to the economy / sales

The Indian Cement Industry comprises of 125 large cement plants with an installed capacity of 148.28 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum. The Cement Corporation of India is a Central Public Sector Undertaking which has 10 units. State Governments owns 10 large cement plants. Indian Cement production in 2002-03 was 116.35 million tonnes as against a production of 106.90 million tonnes in 2001-02, registering a growth rate of 8.84%. The Major players in cement production are Ambuja cement, Aditya Cement, J K Cement and L & T cement.

Latest Developments

  • The Indian cement industry is expected to grow steadily in 2010-2011 and increase capacity by another 50 million tons in spite of the recession and decrease in demand from the housing sector.
  • The industry experts project the sector to grow by 9 to 10% for the current financial year provided India’s GDP grows at 7%. India ranks second in cement production after China.
  • The major companies have made investments to increase the production capacity in the past few months, heralding a positive outlook for the industry.
  • The housing sector accounts for 50% of the demand for cement and this trend is expected to continue in the near future.