Cement production to increase by 12% in FY22: ICRA report

19 Oct 2021 CW Team

In the last five months, Indian cement production has increased by 44% on a year-on-year basis (YoY) and 2% compared to the pre-pandemic year in 2019 April-September to 142 million tonne (mt).

According to the Investment Information and Credit Rating Agency (ICRA) report, Indian cement production is likely to increase by 12% to 332 mt in FY22 and 358 mt in 2022-23.

The demand will further increase due to rural housing and the pick-up in infrastructure activity, ICRA said.

ICRA expects all-India cement production to increase by 12% to 332 mt in 2021-22, supported by rural housing demand and infrastructure activities.

It added that the production is expected to increase by 8% to 358 mt in FY23.

The cement industry utilisation levels will maintain moderate levels of 62-64% during 2021-22 and 2022-23 due to capacity additions.

During the first half (1H) of 2021-22, the cement prices were higher by 4% YoY.

The cement demand has increased due to increased input costs of power, fuel and freight in the past few months.

ICRA said that the coal prices were higher by 103%, pet coke by 87% and diesel by 20% YoY in 1H FY22.

ICRA's total revenue, consisting of 12 cement companies, is expected to grow by 13% in FY22.

It added that this would be supported by the volumetric growth, and increased input costs may put pressure on the operating margins, resulting in the main contraction by about 200-230 basis points.

Anupama Reddy, Assistant Vice-President and Sector Head of ICRA, said that the capacity additions might increase to about 18-20 million tonnes per annum (mtpa) in FY22 and about 27-30 mtpa in FY23 from 15 mtpa in FY21.

The eastern part of India may be the leading zone of capacity expansion and is likely to add around 17 mtpa, followed by the central region to be around 13 mtpa in 2022-23.

Anupama further said that with the expected increase in cement demand in FY22 and FY23, the utilisation might improve by 62-64% from 57% in FY21.

Image Source

Also read: Cement firms in India increase cement costs as input prices inflate

In the last five months, Indian cement production has increased by 44% on a year-on-year basis (YoY) and 2% compared to the pre-pandemic year in 2019 April-September to 142 million tonne (mt). According to the Investment Information and Credit Rating Agency (ICRA) report, Indian cement production is likely to increase by 12% to 332 mt in FY22 and 358 mt in 2022-23. The demand will further increase due to rural housing and the pick-up in infrastructure activity, ICRA said. ICRA expects all-India cement production to increase by 12% to 332 mt in 2021-22, supported by rural housing demand and infrastructure activities. It added that the production is expected to increase by 8% to 358 mt in FY23. The cement industry utilisation levels will maintain moderate levels of 62-64% during 2021-22 and 2022-23 due to capacity additions. During the first half (1H) of 2021-22, the cement prices were higher by 4% YoY. The cement demand has increased due to increased input costs of power, fuel and freight in the past few months. ICRA said that the coal prices were higher by 103%, pet coke by 87% and diesel by 20% YoY in 1H FY22. ICRA's total revenue, consisting of 12 cement companies, is expected to grow by 13% in FY22. It added that this would be supported by the volumetric growth, and increased input costs may put pressure on the operating margins, resulting in the main contraction by about 200-230 basis points. Anupama Reddy, Assistant Vice-President and Sector Head of ICRA, said that the capacity additions might increase to about 18-20 million tonnes per annum (mtpa) in FY22 and about 27-30 mtpa in FY23 from 15 mtpa in FY21. The eastern part of India may be the leading zone of capacity expansion and is likely to add around 17 mtpa, followed by the central region to be around 13 mtpa in 2022-23. Anupama further said that with the expected increase in cement demand in FY22 and FY23, the utilisation might improve by 62-64% from 57% in FY21. Image Source Also read: Cement firms in India increase cement costs as input prices inflate

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