Cement Industry in India – An Overview

An increased outflow in infrastructure sector, by the government as well as private builders, has raised a significant demand of cement in India. It is the key raw material in construction industry. Also, it has highly influenced those bigger companies to participate in the growing sector. At least 125 plants set up by the big companies in India with about 300 other small scale cement manufacturers, to fulfill the growing demand of cement. Being one of the vital industries, the cement industry contributes to the nation’s socioeconomic development. The sum total utilization of cement in a year indicates the country’s economic growth.

Cement plant was first set up in Calcutta, in 1889. At that time, the cement used to manufacture from Argillaceous. In 1904, the first organized set up to manufacture cement was commenced in Madras, which was named South India Industries Limited. Again in 1914, another cement manufacturing unit was set up in Porbandar, Gujarat, but this time it was licensed. In the early years of that era, the demand for the cement tremendously exceeded but only after few years, the industry faced a severe downfall. To overcome from this the worsening situation, the Concrete Association of India was founded in 1927. The organization has two prime goals, one was to create awareness about utility of cement and another was to encourage cement utilization.

Even after the independence, the growth of the cement industry was too gradual. In the year 1956, a Distribution Control System was established with an objective to provide Indian manufacturers and consumers self sufficiency. Indian government then introduced a quota system to provide an impetus to this industry, in which 66% of the sales was imposed to government or small real estate developers. After the implementation of quota, the cement industry tasted a sudden growth and profitability in India. In 1991, the government de-licensed the cement industry. The growth of the industry accelerated forthwith and majority of the industrialists invested heavily in the industry with the awarded freedom. The industry started focusing on export also to double the opportunity available for it in global markets. Today, the cement manufacturers in India have transformed into leading Indian exporters of cement across the world.

The demand of cement in year 2009-2010 is expected to increase by 50 million tons despite of the recession and decline in demand of housing sector. Against India’s GDP growth of 7%, the experts have estimated the cement sector to grow by 9 to 10 % in the current financial year. Major Indian cement manufacturers and exporters have all made huge investments in the last few months to increase their production capability. This heralds an optimistic outlook for cement industry. The housing sector in India accounts for 50 % of the cement’s demand. And the demand is expected to continue. With the constant effort made by cement manufacturers and exporters, India has become the second largest cement producer in the world. Madras Cement Ltd., Associated Cement Company Ltd (ACC), Ambuja Cements Ltd, Grasim Industries Ltd, and J.K Cement Ltd. are among few renowned names of the major Indian cement companies.