Ambitious infrastructure development plans by the new government has infused the cement industry with optimism. Most of the major cement plants are looking ahead for capacity expansion. However, since the lime-?stone reserves are limited, growth will be driven primarily by consolidation.
A report released by Barclays states that greenfield capacity additions in the north by newer players will significantly decrease. Limestone is one of the key raw materials in manufacturing cement. The north has only 16 per cent of India?s total limestone resources compared with 50 per cent concentrated in the south, according to the Barclays report.
Talking about the shortage of lime-?stone, VM Mohan, Joint President of Corporate Finance at The India Cements, said that since the raw material is limited, it is possible for firms to acquire smaller assets in the region and grow.