Cementing A Profitable Bond

India being in the league of developing nations, the scope for development of infrastructure is certainly high. As skyscrapers continue to reach for the skies, roads and other amenities are being developed at a rapid pace. The most important raw material needed for all infrastructural works is, undoubtedly, cement. It is but natural therefore for investors to place their faith in the cement sector, irrespective of whether the economy is in the grip of a downturn. Geyatee Deshpande provides an overview of the cement industry scenario

- Geyatee Deshpande

Currently, India is the second-largest producer of cement after China. It has an installed capacity of approximately 500 million tonnes. Globally, the industry contributes around 8 per cent of the global cement installed capacity. In India, the southern region contributes maximum by 35 per cent of the total cement capacity followed by the northern region with a capacity of 20 per cent, eastern region with a capacity of 18 per cent, western region with a capacity of 14 per cent and the central region contributing least by 13 per cent of the total cement capacity. In recent times, volume growth and capacity in some regions was affected due to election-related uncertainties.

Sneak Peak at Statistics

The Indian cement industry, which is one of the largest employment providers in the manufacturing sector with around 20,000 people for every million tonne of cement produced, has attracted various foreign and domestic investors. According to the Ministry of Commerce and Industry, the cement industry has shown a CAGR of more than 5 per cent in the year 2018-19 from 2014-15. Imports of cement, clinker, and asbestos cement were at a CAGR of 7.99 per cent to USD 158.49 million for FY19. Cement production capacity stood at 502 million tonnes per year (MTPY) in 2018. From FY19 to FY21, capacity addition of 20 million tonnes is expected depending on the economic conditions.