Concrete Proposals

Cement got back its mojo in FY19; this year it’ll rake in the moolah

India’s cement industry, the second-largest in the world, is set to cement its pricing power locally after a prolonged phase of capacity overhang that had prevented attempts at increasing realizations. Last fiscal year was favorable for the cement industry for several reasons. First, the industry clocked double-digit volume growth for the first time in the past nine years. Second, even capacity utilization, which reached close to 71%, improved 5% on the year — the highest in the past seven years. Third, cement prices climbed about 2% in FY19. Fuel costs also declined, in lockstep with crude prices.

Cement manufacturing companies to have been ramping up capacity on the back of expected demand. For instance, UltraTech Cement has got the environment ministry’s nod for Rs 2,500 crore project in Andhra Pradesh. Under the project, the company will set up an integrated cement plant in Kurnool district with a clinker capacity of 4 million tonnes per annum (MTPA), 6MTPA of cement, 60MW of the captive power plant and 15MW of waste heat recovery-based power unit.

Similarly, Dalmia Bharat Cement (DCBL) announced that it is investing Rs 2500 crore in Odisha for setting up two manufacturing units in Rajgangpur and Cuttack. DCBL has proposed to set up a new unit of 2.25MTPA cement manufacturing plant and 3MTPA clinker manufacturing capacity at Rajgangpur. Once commissioned, the company’s total capacity in Rajgangpur will increase to 6.25MTPA in cement and 5.9 MTPA in clinker manufacturing.