Economy & Market

The cement industry should bounce back in next couple of years

Published

3 years ago

October 14, 2021

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Sumit Banerjee, Vice Chairman, Reliance Cement.

We are committed to sustainable growth. All our cement plants, either in the project phase or in the project development phase, will be very energy- efficient. These plants are designed to use AFR and are equipped with the WHR system for power generation. A roadmap with medium and long -term action plans to adopt various carbon emission reduction levels has been developed, says Sumit Banerjee, Vice Chairman, Reliance Cement. Excerpts from the interview.

How has the cement industry performed in the last four quarters?

Cement consumption has grown by about five per cent in FY2012-13 as compared to 7.1 per cent in FY2011-12. Demand growth in most of the regions is either declining or stagnating, with very few pockets of positive growth. Demand in the June quarter also remained weak due to early and heavy monsoons across India and poor infrastructure related growth.

Price reduction (~5 per cent reduction y-o-y in Q1FY14) and cost increases continues to hurt sector margins, as is clearly visible from the June quarter results of some of the cement majors. Freight costs are higher due to the increase in diesel price while the linkage coal price increase has already set off the benefit of lower imported coal.

Our per capita cement use is very low, 156 kgs, as compared to the global average of 396 kgs. What needs to be done to raise this?

Given the intense shortage of housing in the country, this segment will remain the primary demand driver for the cement industry. While urban housing will continue to be the cement industry’s mainstay, the rural/individual housing is expected to spring a surprise. Rural areas largely depend on temporary (kutcha) houses and there is an acute shortage of sustainable (pucca) housing in these areas.

The infrastructure sector which accounts for 20-25 per cent of the total consumption, also plays a major role in the demand for cement. With the country’s pressing need to strengthen its infrastructure further, increased construction activity might see a huge rise in the consumption of cement. However, give the current dismal sentiment in the infrastructure sector, this is unlikely to happen, in reality.

Recent ratings by CARE research indicate that we have hit over -capacity. Is it time to slow down?

Cement is a cyclical industry and continues to witness peaks and troughs cycles. What we are witnessing today is hopefully the bottom of the cycle and the industry should bounce back in the next couple of years, with demand picking up and a decline in new capacity creation.

How is the industry coping with rising costs of energy and transport?

In the current scenario of dampened demand, the industry is unable to pass on the cost increase and this is directly affecting the profitability margins of cement companies. Some cement majors are focusing on cost management like increased usage of alternate fuels and renewable energy.

The rate of tax on cement is very high in India, compared to other countries. How are we dealing with competition from foreign players?

Cement import in this country is negligible when you factor in the overall consumption. With the continuous depreciation of the rupee, whatever import is happening today will also be further unviable and hence there is no threat of foreign competition. Also, lack of infrastructure at the ports for handling of bulk cement are creating additional barriers for the import of cement.

Concrete

15th Cement EXPO: A Step Forward in Cement Innovation

Published

3 weeks ago

January 17, 2025

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Mumbai

Following the immense success of the 14th Cement EXPO, held on December 14-15, 2023, at the Manekshaw Centre, New Delhi, the next edition of this premier event is set to take place in March 2025. The 15th Cement EXPO will be hosted at Yashobhoomi, Delhi, on 12th and 13th November 2025.

Meanwhile, the Cement Expo Forum 2025 is scheduled for 5th and 6th March 2025 at Taj Krishna in Hyderabad. This exciting 3-in-1 event, organised by FIRST Construction Council (FCC) and Indian Cement Review (ICR), will bring together industry leaders, innovators, and stakeholders to discuss the future of the cement sector.

Building on the Success of the 14th Cement EXPO

The 14th Cement EXPO was widely praised for its strong participation, attracting over 1,500 senior managers and decision-makers from across the cement industry. The event was inaugurated by Dr. Vibha Dhawan, Director General of TERI, and Ali Emir Adiguzel, Founder and Director of the World Cement Association, alongside Pratap Padode, Founder of FIRST Construction Council (FCC). The two-tiered exhibition space featured cutting-edge products and innovations from top companies within the cement industry’s supply chain.

The event also garnered significant support from key government bodies, including the Ministry of Road Transport and Highways, Government e-Marketplace (GeM), and the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India (GoI).

Recognition and Excellence in the Cement Industry

The 7th Indian Cement Review Awards celebrated excellence by presenting awards to 11 companies in various categories, recognising their contributions to growth and innovation within the industry. Notably, Parth Jindal, Managing Director of JSW Cement, was honoured with the prestigious Indian Cement Review – Person of the Year Award 2023. Meanwhile, Vinita Singhania, Vice Chairman and Managing Director of JK Lakshmi Cement Ltd, received the Lifetime Achievement Award for her outstanding leadership and contributions to the sector.

A Vision for Sustainability

With the theme of “Driving Sustainability Through Technology,” the 9th Indian Cement Review Conference hosted thought-provoking discussions and presentations, highlighting the industry’s commitment to adopting innovative, sustainable practices. The conference served as a platform for dialogue on the latest technological advancements aimed at transforming the cement sector, addressing key challenges, and fostering growth.

What to Expect from Cement EXPO 2025

The 15th Cement EXPO, along with the 10th Indian Cement Review Conference and the 8th Indian Cement Review Awards, is set to be even bigger and more impactful than the 2023 edition. With an expanded exhibition space, greater participation, and more in-depth discussions, the 2025 event will continue to drive the industry forward. This 3-in-1 event promises to be a pivotal moment in the ongoing transformation of the cement sector.

As the industry evolves, the 15th Cement EXPO 2025 will serve as a crucial platform for showcasing innovations, discussing emerging trends, and forging new partnerships to shape the future of cement and construction.

For more details:

Cement Expo Forum 2025: https://cementexpo.in/forum

15^th Cement Expo 2025: https://cementexpo.in/

FOR CONFERENCE SPONSORSHIPS

Sheetal Talreja

Mob: +91 842 2874 030

Email: sheetal@IndianCementReview.com

FOR EXHIBITION/SPONSORSHIPS

Sujoy Gomes

Mob: +91 865 7795 881

Email: Sujoy.g@ASAPPinfoGlobal.com

FOR SPONSORSHIPS

Ratan Rajbhar

Mob: +91 842 2874 021

Email: ratan.r@ASAPPinfoGlobal.com

Concrete

Construction sector growth slows to 8-10% for FY2025: ICRA

Published

3 weeks ago

January 15, 2025

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The revenue growth for construction companies in FY2025 is projected at 8-10 per cent, down from the earlier estimate of 12-15 per cent, according to ICRA. This marks the slowest growth in three years, driven by factors such as the Model Code of Conduct in Q1, prolonged monsoons, and milestone-based billing in Q2, particularly affecting road-focused players.
ICRA’s analysis of 19 companies with a combined turnover of Rs.1.28 trillion in FY2024 shows modest revenue growth of 1.5 per cent YoY in H1 FY2025. While execution is expected to improve in H2, FY2025 growth remains below the historical CAGR of ~15 per cent (FY2018-FY2024).
Order inflows in urban transport, water and sewage projects are healthy, but road-focused entities face challenges due to muted inflows and high competition. Operating margins are projected to remain range-bound at 10.5-11 per cent, with debt levels rising to manage working capital needs, though debt coverage metrics remain stable.

Concrete

SANY India expands Pune factory to boost production capacity

Published

3 weeks ago

January 15, 2025

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SANY India inaugurated a cutting-edge factory expansion at its 90-acre Pune facility, elevating its production capacity to over 14,000 units annually, alongside a robust fabrication capacity of 100,000 metric tonnes.

The advanced facility reinforces SANY’s commitment to ‘Make in India’ by enhancing localised manufacturing and supporting global exports. Chairman Xiang Wenbo highlighted the strategic importance of India as a global hub, while Vice Chairman Deepak Garg emphasised the expansion’s role in driving innovation and infrastructure development. This investment enhances efficiency, reduces timelines, and strengthens SANY’s leadership in the construction equipment sector.