Substantial capacity expansion in India's cement industry

The Indian cement industry is set for a significant expansion in the coming years, according to a recent report by CRISIL Market Intelligence and Analytics. The industry is expected to increase its capacity by 15 to 16 crore tonnes per annum (MTPA) over the next five years, starting from this financial year.

This expansion is anticipated to occur through both organic and inorganic growth, driven by projected demand increases in the infrastructure and housing sectors. Currently, India's total cement manufacturing capacity stands at approximately 59.5 crore tonnes per annum, with an addition of 11.9 crore tonnes per annum over the past five financial years.

The report predicts that the capacity increase will begin in the next financial year, with an expected addition of 7 to 7.5 crore tonnes per annum. About 55% of this increase is concentrated in the eastern and central regions of the country.

Large companies are expected to contribute 50 to 55 percent of the planned capacity increase. The strong demand witnessed in the last two financial years has bolstered the balance sheets of major and some mid-sized companies, encouraging them to pursue capacity expansion.

This expansion in the cement industry is a reflection of India's growing focus on infrastructure development and the housing sector, indicating a robust economic outlook and a commitment to meeting the increasing construction demands.

Source: CGImpact