Cement industry targets 80 mt capacity addition in next 3 years
Cement

Cement industry targets 80 mt capacity addition in next 3 years

The cement industry is expecting an 80 million tonne (mt) addition in its capacity over the coming three years during FY 2024.

It is a quarter more than the previous three fiscals (64 mt) and would be the highest capacity addition in any sector of three continuous years.

The market share of the 10 leading players would grow as 70% of the new capacities would be added by them. To maintain their credit profiles strong, lower project risks and financing of this capital expenditure (capex) by internal accruals would help.

According to the media sources, capex plans of the leading 24 cement players account for India's nearly 450 mt of the total cement capacity of 538 mt.

After a massive impact of the pandemic last fiscal, cement demand is likely to develop strong at more than 10% on-year this fiscal, following the investments in the housing sector and infrastructure.

The government is also concentrating on constructing railways, roads, and resumption of housing construction this fiscal, which would drive the cement consumption.

The medium-term market outlook also continues to be strong, following the focus of the government on infrastructure (buildings, metros, roads, and railways). In the affordable housing sector, around 68% of the 19.5 million units targeted under Pradhan Mantri Awas Yojana (PMAY-R) is yet to be built, and cement demand should get a lift as these units get constructed over the coming 2-3 fiscal years.

Capacity addition would be skewed by nearly 45-47 mt addition in the Central and Eastern regions, backed by strong demand of these areas and current utilisations of 72%. In comparison to South, which is likely to observe only 6-7 mt additions, following the excess supply and lower utilisation levels of 54%.

Around 60% of the new capacities would be brownfield, which is improvements at the same location. So, keeping capital costs 40-50% below at Rs 4,100-4,600 per tonne and lowering the total value to nearly Rs 25,000-26,000 crore for these leading ten players.

From the total spend, around Rs 5,500-5,600 crore was already incurred by March 31, 2021. The balance is likely to be financed by an internal cash accrual of almost Rs 50,000 crore. It is expected to be generated in the coming three fiscals.

Image Source


Also read: Ramco Cements plans Rs 636 cr capacity expansion in Tamil Nadu

Also read: Ambuja Cements to add 20 mtpa capacity at Rs 10k cr

The cement industry is expecting an 80 million tonne (mt) addition in its capacity over the coming three years during FY 2024. It is a quarter more than the previous three fiscals (64 mt) and would be the highest capacity addition in any sector of three continuous years. The market share of the 10 leading players would grow as 70% of the new capacities would be added by them. To maintain their credit profiles strong, lower project risks and financing of this capital expenditure (capex) by internal accruals would help. According to the media sources, capex plans of the leading 24 cement players account for India's nearly 450 mt of the total cement capacity of 538 mt. After a massive impact of the pandemic last fiscal, cement demand is likely to develop strong at more than 10% on-year this fiscal, following the investments in the housing sector and infrastructure. The government is also concentrating on constructing railways, roads, and resumption of housing construction this fiscal, which would drive the cement consumption. The medium-term market outlook also continues to be strong, following the focus of the government on infrastructure (buildings, metros, roads, and railways). In the affordable housing sector, around 68% of the 19.5 million units targeted under Pradhan Mantri Awas Yojana (PMAY-R) is yet to be built, and cement demand should get a lift as these units get constructed over the coming 2-3 fiscal years. Capacity addition would be skewed by nearly 45-47 mt addition in the Central and Eastern regions, backed by strong demand of these areas and current utilisations of 72%. In comparison to South, which is likely to observe only 6-7 mt additions, following the excess supply and lower utilisation levels of 54%. Around 60% of the new capacities would be brownfield, which is improvements at the same location. So, keeping capital costs 40-50% below at Rs 4,100-4,600 per tonne and lowering the total value to nearly Rs 25,000-26,000 crore for these leading ten players. From the total spend, around Rs 5,500-5,600 crore was already incurred by March 31, 2021. The balance is likely to be financed by an internal cash accrual of almost Rs 50,000 crore. It is expected to be generated in the coming three fiscals. Image Source Also read: Ramco Cements plans Rs 636 cr capacity expansion in Tamil Nadu Also read: Ambuja Cements to add 20 mtpa capacity at Rs 10k cr

Next Story
Equipment

SANY Named Top Chinese Construction Machinery Firm in Forbes 2000

SANY Heavy Industry (600031.SS) has been recognized as China's premier construction machinery manufacturer in Forbes' 2025 Global 2000 list, ranking 956th position worldwide. The prestigious list evaluates companies based on four key metrics: sales, profits, assets, and market value, with data calculated from the latest 12-month financial results as of April 25, 2025. This achievement underscores SANY's leadership credentials in the global heavy machinery industry, validating its forward-looking "Globalization, Digitalization, and Decarbonization" strategy and reinforcing confidence in its inn..

Next Story
Infrastructure Urban

Vedanta Aluminium Marks Pride Month with Boost in LGBTQI+ Hiring

Vedanta Aluminium, India’s largest aluminium producer, is redefining inclusivity in manufacturing by actively recruiting and empowering transgender individuals across its operations. As part of the Pride Month celebrations, the company has announced that it will hire 15 transgender employees in 2026, increasing the total strength to 44 across its operations in Jharsuguda, Odisha and Korba, Chhattisgarh. Vedanta Aluminium has introduced a comprehensive framework of progressive policies to support the assimilation and well-being of transgender employees. These include sensitization workshops ..

Next Story
Infrastructure Urban

Reactor Containment Successfully Tested at Rooppur NPP Unit 1

At power unit No.1 of the Rooppur NPP, which is being built in the People's Republic of Bangladesh by the Rosatom State Corporation Engineering Division, tightness and strength tests have been successfully conducted at the containment of the reactor compartment. The tests confirmed full compliance with the design requirements and the highest safety standards of the reactor containment.During the tests, a compressor was used to increase the pressure inside the containment to the design value of 4.6 kgf/cm² (which corresponds to approximately 0.45 MPa) and a series of tests were conducted to co..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?