Cement Industry in India

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Cement Latest News And Updates

JK Lakshmi Cement net profit rises 2.7 percent in 2014-15
May 16, 2015 10:17 AM
Reporting a sluggish market for cement in its areas of operation, JK Lakshmi Cement Ltd (JKLCL) posted a marginal growth of 2.7 percent in its net standalone profit at Rs.95.60 crore in 2014-15 against Rs. 93 crore in 2013-14. The total income from operations during the timeperiod under review rose by 12.18 percent at Rs.2,307.06 crore compared to the earnings of Rs.2,056.60 crore in 2013-2014. During January-March this year, the company's net earnings fell by 10.8 percent at Rs.578.15 crore compared to Rs.648.23 crore in the corresponding timeframe in 2014. The company's net profits were hit hard in this period which registered a fall by over 88 percent at a little over Rs.6 crore compared to over Rs.52 crore in January-March 2014. Source: IANS

India, being the second largest cement producer in the world after China with a total capacity of 151.2 Million Tones (MT), has got a huge Cement Company. With the government of India giving boost to various infrastructure projects, housing facilities and road networks, the cement industry in India is currently growing at an enviable pace. More growth in the Indian cement industry is expected in the coming years. The cement industry in India is dominated by around 20 companies, which account for almost 70% of the total cement production in India.

An Overview of Cement Industry

The history of the cement industry in India dates back to the 1889 when a Kolkata-based company started manufacturing cement from Argillaceous. But the industry started getting the organized shape in the early 1900s. In 1914, India Cement Company Ltd was established in Porbandar with a capacity of 10,000 tons and production of 1000 installed. The World War I gave the first initial thrust to the cement industry in India and the industry started growing at a fast rate in terms of production, manufacturing units, and installed capacity. This stage was referred to as the Nascent Stage of Indian Cement Company. In 1927, Concrete Association of India was set up to create public awareness on the utility of cement as well as to propagate cement consumption.

The cement industry in India saw the price and distribution control system in the year 1956, established to ensure fair price model for consumers as well as manufacturers. Later in 1977, government authorized new manufacturing units (as well as existing units going for capacity enhancement) to put a higher price tag for their products. A couple of years later, government introduced a three-tier pricing system with different pricing on cement produced in high, medium and low cost plants.

Cement Company, in any country, plays a major role in the growth of the nation. Cement industry in India was under full control and supervision of the government. However, it got relief at a large extent after the economic reform. But government interference, especially in the pricing, is still evident in India. In spite of being the second largest cement producer in the world, India falls in the list of lowest per capita consumption of cement with 125 kg. The reason behind this is the poor rural people who mostly live in mud huts and cannot afford to have the commodity. Despite the fact, the demand and supply of cement in India has grown up. In a fast developing economy like India, there is always large possibility of expansion of cement industry.

Technology Up-gradation

Cement industry in India is currently going through a technological change as a lot of upgradation and assimilation is taking place. Currently, almost 93% of the total capacity is based entirely on the modern dry process, which is considered as more environment-friendly. Only the rest 7% uses old wet and semi-dry process technology. There is also a huge scope of waste heat recovery in the cement plants, which lead to reduction in the emission level and hence improves the environment.

Major Players in Indian Cement Industry

There are a number of players prevailing in the cement industry in India. However, there are around 20 big names that account for more than 70% of the total cement production in India. The total installed capacity is distributed over around 129 plants, owned by 54 major companies across the nation.

Following are some of the major names in the Indian cement industry:

Company Production Installed Capacity
ACC 17,902 18,640
Gujarat Ambuja 15,094 14,860
Ultratech 13,707 17,000
Grasim 14,649 14,115
India Cements 8,434 8,810
JK Group 6,174 6,680
Jaypee Group 6,316 6,531
Century 6,636 6,300
Madras Cements 4,550 5,470
Birla Corp. 5,150 5,113

Mergers and Acquisitions in Cement Industry in India

  • UltraTech Cement is going to absorb its sister concern Samruddhi Cement to become biggest cement company in India.

  • World's leading foreign funds like HSBC, ABN Amro, Fidelity, Emerging Market Fund and Asset Management Fund have together bought 7.5% of India Cements (ICL) at a cost of US$ 124.91 million.

  • Cimpor, a Cement company of Portugal, has bought 53.63% stake that Grasim Industries had in Shree Digvijay Cement.

  • French cement company Vicat SA bought 6.67% share of Sagar Cement at a cost of US$ 14.35 million.

  • Holcim now holds 56% stake of Ambuja Cement. Previously it held 22% of stake. The company utilized various open market transactions to increase its stakes. It invested US$ 1.8 billion for that.

Recent Investments in the Indian Cement Industry

  • In a recent announcement, the second largest cement company in South India, Dalmia Cement declared that it's going to invest more than US$ 652.6 million in the next 2-3 years to add 10 MT capacity.

  • Anil Ambani-led Reliance Infrastructure is going to build up cement plants with a total capacity of yearly 20 MT in the next 5 years. For this, the company will invest US$ 2.1 billion.

  • India Cements is going to set up 2 thermal power plants in Andhra Pradesh and Tamil Nadu at a cost of US$ 104 billion.

  • Anil Ambani-led Reliance Cementation is also going to set up a 5 MT integrated cement plant in Maharashtra. It will invest US$ 463.2 million for that.

  • Jaiprakash Associates Ltd has signed a MoU with Assam Mineral Development Corporation Limited to set up a 2 MT cement plant. The estimated project cost is US$ 221.36 million.

  • Rungta Mines (RML) is also planning to invest US$ 123 million for setting up a 1 MT cement plant in Orissa.

Map Showing Indian Cement Plant Locations

Cement Industry in India
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Last Updated on July 9, 2015