Concrete

Scarcity of Domestic Gypsum Supply

Published

3 years ago

July 17, 2023

admin

The Indian cement manufacturers are likely to face serious challenges regarding gypsum availability and cost in the near future. Ramachandran, Chief Executive Officer, Zawawi Minerals LLC, Sultanate of Oman, discusses how identifying and ensuring a consistent supply of gypsum will become an on-going challenge.

The Indian cement demand is set for its third straight year of growth with a 7 per cent to 9 per cent jump to over 400 million tonnes in fiscal 2024. Cement demand in India is expected to continue growing for the next few years, backed by the government’s push for infrastructure development and increasing demand in the housing sectors. However, India has a scarcity of domestic gypsum supplies, which does not bode well for the fast-growing cement industry. An essential, non-substitutable critical raw material, gypsum is required for all varieties of cement production.
Since 2009, the gypsum supply deficit in the Indian domestic market has led to increased dependence on largely imports of natural gypsum predominantly from the Sultanate of Oman, and other countries like Iran, Thailand, small volume from Pakistan and Bhutan by road to the northern part of India. This dependency shall continue in coming years and is growing day by day.
FY 2009 to 2023, India imported 57.09 million tonnes of gypsum cumulatively, witnessed at a CAGR of 16.60 per cent. The gypsum import volume represents nearly 35 per cent of the total gypsum consumed by the cement industry. The Sultanate of Oman alone supplied 28 million tons (49.05 per cent) and the remaining 29.09 million tonnes were from Thailand, Iran, Pakistan and Bhutan etc. FY 2022 to 2023 – India imported 5.76 million tons of gypsum, which represents 35 per cent of the total gypsum consumption. The Sultanate of Oman supplied 5.20 million tons (90.39 per cent) and the remaining 0.56 million tonnes are from Thailand, Iran and Bhutan.
According to the production growth of cement and gypsum board, the industry’s demand for gypsum is expected to reach nearly 380 million tons cumulatively by FY 2037-2038 with a CAGR of 5.15 per cent. The maximum local gypsum supplies could be around 200 million tons, which includes FGD gypsum, Phospho-gypsum, Natural gypsum etc. The limited availability of domestic gypsum will lead to supply constraints and increased dependence on imports, cumulatively needing to import nearly 180 million tonnes of gypsum to meet the domestic demands.
Natural Gypsum: India’s local natural gypsum production and supplies are limited due to deep seated gypsum reserves not feasible for mining.
Phospho-gypsum: Phospho-gypsum production in India is limited, the majority of the existing Phosphop-gypsum stockpile may be consumed for on-going road construction, as reported by the Ministry of Road Transport and Highways. Recently, the Central Road Research Institute (CRRI) carried out an R&D project to explore the feasibility of Phospho-gypsum for road embankment and subgrade construction. The performance of Phospho-gypsum was as good as conventional sand embankment. It was concluded that 100 per cent of Phospho-gypsum can be used for both embankment and subgrade construction.
An Indian fertiliser company has constructed a road using phosphor-gypsum, which was evaluated by the CRRI. Based on their report, the Indian Road Congress (IRC) has been accredited for using phosphor-gypsum waste material for the road constructions.
FGD (Flue Gas Desulphurisation) gypsum: The production growth of FGD gypsum uncertainty shall continue due to huge investments of over US$ 13 billion for installing FGD units by the heavy debt-burden coal power companies. India had initially set a 2017 deadline for 2,11,520 MW thermal power plants to install FGD units to cut Sulphur emissions. That was later changed to varying deadlines for different regions, ending in 2022, and further extended to a period up to 31st December 2026. According to the latest guidelines, the power plant which have plans to retire before 31st December 2027 will now be exempted from installing FGD units and if the non-retiring power plants fail to adhere to the new deadlines, they will have to pay ‘environmental compensation’ ranging from 20 paise to 40 paise per unit electricity generated.
According to the Central Electricity Authority (CEA) the FGD unit implementation status as of May 2023 – only 9,280 MW (4.40 per cent) capacity already installed and only 1,00,430 MW have been awarded bids for installing FGD units.
On the other hand, considering the huge capital investments, limestone costs for the FGD process and other operating costs, the FGD gypsum will not be available at a cheaper price for the Indian consumers – only the limestone cost itself for the production of per tonne FGD gypsum will be US$ 18 or above.

Gypsum Export Supply Outlook
Supply from Thailand: Asia’s past dominant gypsum exporter began to cap their exports with the goal of conserving resources for their own significant domestic industries. The government authority regulated the minimum FOB (Free on Board) export selling price. Presently Thailand exports its gypsum at an FOB price of over US$ 20 per tonne and exports over 97 per cent of its gypsum to the historical gypsum importing countries in Southeast Asia.
Supply from Iran: Iran gypsum export volume significantly started falling after tightening the sanction parameters. Gypsum exports to India started dropping, the exports dropped to 0.17 million tonnes in the FY 2022-2023 from 1.57 million tonnes in the FY 2021-2022, nearly 89.35 per cent dropped.
Historically, Iran exports around 10 per cent of its annual production of gypsum majority to India and other GCC countries like UAE, Qatar etc. If the sanctions are lifted, the Iranian construction and infrastructure sector will grow exponentially, and this will create an immense demand for gypsum in the local construction industries. Hence, the gypsum export volumes shall be limited and the FOB selling price may be increased to the level of the pre-sanction period, i.e., FOB US$ 14 -15 per ton or more.
Supply from the Sultanate of Oman: The World’s largest gypsum supplier – Oman exports nearly 10 million tonnes of gypsum yearly, which is 50 per cent of Asia, Southeast Africa and GCC countries’ imported gypsum demand. Oman exports 50 per cent of its total volume to India and the remaining 50 per cent are exported to the historical gypsum importers like Bangladesh, Indonesia, Malaysia, Vietnam, Philippines, Japan, South Korea, UAE, Southeast Africa etc.
Gypsum, key critical raw material for the cement and gypsum board manufacturing industries, much of the imported gypsum consuming the above countries is now turning to the Sultanate of Oman for its requirements of the commodity. The Sultanate of Oman is emerging as the single most important supply source for gypsum, with no rivals. However, Oman’s present exportable gypsum reserves are very limited.
The Government authority of the Sultanate of Oman introduced w.e.f. January 2017, a FOB floor price of US$ 12.50 per ton of raw gypsum exported out of the country, which is keen to increase the FOB prices in coming years to meet its own objectives, to increase the country’s non-oil export revenue.
Even though gypsum accounts for just 2 per cent to 3 per cent of the total cost of cement sales, the Indian cement manufacturers are likely to face serious challenges regarding its availability and cost in the near future. Identifying and ensuring a consistent supply of gypsum will become an on-going challenge.

Data Sources

Global cement magazine
Global gypsum magazine
The Fertiliser Association of India (FAI)
Central Electricity Authority of India (CEA)
The Ministry of Energy and Mining – The Sultanate of Oman
Directorate General of Foreign Trade (DGFT) – Government of India
The Ministry of Road Transport and Highways of India
The Central Road Research Institute (CRRI) of India
Various published reports on Cement and Gypsum industries

ABOUT THE AUTHOR
Ramachandran is the Chief Executive Officer with Zawawi Minerals LLC in The Sultanate of Oman.

Up Next

Cement demand to outpace supply growth

Don't Miss

Driving Efficiency

Concrete

Dalmia Acquires Five Point Two MnTPA Cement Assets in Central Region

Acquisition adds capacity, power and rail access

Published

11 hours ago

May 26, 2026

admin

Dalmia Cement (Bharat) Limited (DCBL) executed a business transfer agreement on 21 May 2026 to acquire a cement undertaking from Jaiprakash Associates Limited (JAL) and Adani Infra (India) Limited. The assets include plants at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh with five point two million tonnes per annum (mn tpa) cement capacity and three point three mn tpa clinker capacity, plus 99 megawatt (MW) thermal power and railway sidings. The transaction carries an enterprise value of Rs 28.5 billion (bn).

DCBL, a wholly owned subsidiary of Dalmia Bharat Limited (DBL), will see cement capacity rise to 54.7 mn tpa on completion. Ongoing expansions at Belgaum, Pune and Kadapa are expected to raise capacity to 66.7 mn tpa by the second to third quarter of fiscal 2028. The company said the transaction would be consummated within two weeks.

The deal follows a framework signed in December 2022 to settle long running disputes with JAL, including a long term clinker supply arrangement. Completion was delayed when JAL entered insolvency and the earlier sale did not finalise. Following approval of a resolution plan under the Insolvency and Bankruptcy Code, DCBL executed a fresh business transfer agreement to resolve pending legal and arbitral matters.

Company statements described the acquisition as strategic, accelerating access to central markets compared with a greenfield route and offering scope for expansion through debottlenecking and brownfield investment. Proximity to the company’s captive mines and established vendor relationships should support faster ramp up. The assets should augment EBITDA delivery and enhance returns by enabling entry into newer markets with relatively better prices.

Senior executives said the addition aligned with a long term plan to build a pan India presence and would provide a head start in central markets. They noted that familiarity with the plants under earlier tolling arrangements offers operational insight and strengthens channel relationships, supporting quicker market entry. Management expressed confidence that the assets’ expansion potential would generate value for stakeholders.

Concrete

Ramco Cements Reports FY26 Revenue Growth And Higher Profit

Net debt reduced as exceptional items boost FY26 earnings

Published

11 hours ago

May 26, 2026

admin

Ramco Cements reported standalone audited results for FY26 with net revenue of Rs 90,560 million (mn) and profit after tax of Rs 6,940 mn. EBIDTA rose to Rs 14,820 mn and blended EBIDTA per tonne was Rs 788 on a two per cent volume rise to 18.81 million (mn) tonne (t). Cement revenue increased by five per cent and construction chemicals revenue rose by 66 per cent.

Raw material cost per tonne rose to Rs 1,023 from Rs 956 mainly due to a mineral bearing land tax of Rs 160 per t in Tamil Nadu, adding about Rs 86 per t. Power and fuel cost per tonne fell to Rs 1,098 from Rs 1,123 with petcoke mix down to 47 per cent and green power up to 40 per cent.

Profit before tax after exceptional items was Rs 8,790 mn. Net exceptional items were Rs 5,530 mn, including Rs 5,740 mn from sale of surplus land and Rs 200 mn of past service cost. The company monetised Rs 10,980 mn from non core asset sales over the past two years and recorded capex of Rs 9,970 mn, with guidance of Rs 8,000 mn for FY27.

Net debt fell by Rs 8,170 mn to Rs 36,640 mn at 31 March 2026 and cost of debt eased to 7.29 per cent, reducing net debt to EBIDTA to 2.47 times. Management indicated the full impact of higher fuel costs is expected from Q2 FY27, while packing and diesel cost increases will be visible in Q1 FY27. The board has proposed a dividend of Rs two point five zero per equity share and the company flagged risks from elevated fuel and logistics costs, commodity volatility and competitive pricing.

Concrete

Dalmia Cement to Acquire 5.2 MnTPA Capacity

Deal covers cement assets in Madhya Pradesh and Uttar Pradesh

Published

11 hours ago

May 26, 2026

admin

Dalmia Cement (Bharat), a wholly owned subsidiary of Dalmia Bharat, has executed a Business Transfer Agreement with Jaiprakash Associates and Adani Infra (India) to acquire cement assets with 5.2 MnTPA capacity in the Central region.

The acquisition covers cement plants located at Rewa in Madhya Pradesh, and Churk, Chunar and Sadwa in Uttar Pradesh. The assets include 5.2 MnTPA cement capacity, 3.3 MnTPA clinker capacity, 99 MW thermal power capacity, railway sidings at Rewa and Chunar, and a common railway siding at Churk. The enterprise value of the transaction is Rs 28.5 billion.

Following completion of the transaction, Dalmia Bharat’s cement capacity will increase to 54.7 MnTPA. Its ongoing expansion projects at Belgaum, Pune and Kadapa are expected to further raise capacity to 66.7 MnTPA by the second or third quarter of FY28. The transaction is expected to be completed within two weeks.

Dalmia Cement had entered into a framework agreement with Jaiprakash Associates in December 2022 for the sale of business assets and related agreements, including a business transfer agreement and cement sale purchase agreement. The agreements were intended to settle disputes between the parties, including those under the long-term clinker supply agreement. However, the transaction could not be completed after Jaiprakash Associates was admitted to insolvency.

Following approval of the Adani Group’s resolution plan for Jaiprakash Associates under the Insolvency and Bankruptcy Code, Dalmia Cement requested that the earlier agreement be considered to settle pending disputes. The company has now executed a fresh Business Transfer Agreement with Jaiprakash Associates and Adani Infra (India) for the cement undertaking.

The acquisition supports Dalmia Bharat’s strategy to become a pan-India cement player and provides faster access to Central markets compared to a greenfield project. The assets also offer expansion potential through debottlenecking and brownfield development.

Puneet Dalmia, Managing Director and CEO, Dalmia Bharat, said the assets are a strong strategic fit and will help the company serve high-potential markets in the Central region. He added that the expansion potential of the assets and their proximity to Dalmia’s captive mines could help create a future capacity hub.