Concrete

Indian Cement Industry Sees Further Consolidation

Cement industry to face consolidation soon.

Published

5 months ago

September 13, 2024

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India’s cement sector is set for further consolidation in the near-to-medium term, according to a recent report. With increasing competition, rising input costs, and the need for economies of scale, companies are expected to explore mergers and acquisitions (M&A) to strengthen their market positions. As the industry faces various challenges, including high energy costs and fluctuating demand, consolidation is viewed as a strategic move to drive growth and sustainability.

Key Points:
Market Consolidation: The Indian cement industry has already witnessed significant consolidation over the past few years, with several large firms acquiring smaller players to enhance their market share. The trend is expected to continue, driven by the need to optimize operations, cut costs, and gain better pricing power. Consolidation helps companies to expand their geographic reach and strengthen their portfolios.

Rising Costs and Challenges: One of the primary drivers of consolidation is the rising cost of inputs, particularly energy and raw materials. With costs of coal and petroleum coke (key energy sources for cement production) soaring, companies are looking for ways to maintain profitability. Smaller and medium-sized players, in particular, find it challenging to cope with these rising costs, making them more likely targets for acquisition by larger companies.

Economies of Scale: Larger cement companies benefit from economies of scale, which help them absorb the impact of rising input costs more effectively. Consolidation allows firms to streamline production processes, reduce operational inefficiencies, and invest in advanced technologies that improve productivity. These efficiencies become critical in maintaining competitiveness in an increasingly challenging environment.

M&A Activity: The report highlights the potential for more mergers and acquisitions in the cement sector, particularly among mid-sized and regional players. The Indian cement market, which is highly fragmented, presents numerous opportunities for larger companies to acquire smaller firms and gain a foothold in new markets. M&A activity is expected to accelerate as firms seek growth through strategic alliances and acquisitions.

Regional Focus: Consolidation efforts are likely to be regionally focused, with companies looking to expand their presence in specific geographic areas where demand for cement is strong. Infrastructure development, government projects, and urbanization are driving demand in various parts of the country, making regional expansions an attractive proposition for firms looking to grow.

Impact on Competition: While consolidation may lead to a more concentrated market, it could also intensify competition among the remaining players. Larger firms with more resources and market reach could dominate pricing strategies and influence market dynamics. Smaller firms may either merge or struggle to compete, leading to a reshaping of the competitive landscape.

Demand Outlook: The near-term outlook for the cement industry remains uncertain, with demand being influenced by factors such as construction activity, infrastructure projects, and government initiatives. The report notes that while urban demand is expected to remain stable, rural demand continues to face challenges due to slow construction activities in those areas. However, the long-term outlook remains positive, driven by ongoing infrastructure developments and real estate projects.

Sustainability Focus: Companies are also focusing on sustainability and environmental concerns. Consolidation can provide larger companies with the resources to invest in green technologies and reduce their carbon footprint. This focus on sustainability is becoming increasingly important, with both government regulations and market preferences shifting toward greener production practices.

Conclusion:
The Indian cement industry is poised for further consolidation in the coming years, driven by rising costs, competitive pressures, and the need for economies of scale. M&A activity is likely to accelerate, with larger firms targeting smaller and regional players to strengthen their market presence. While consolidation offers opportunities for growth and efficiency, it could also reshape the competitive landscape and influence pricing dynamics in the sector.

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Organisations valuing gender diversity achieve higher profitability

Aparna Reddy, Executive Director, Aparna Enterprises talks about company plans.

Published

19 hours ago

February 22, 2025

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The building materials industry is projected to grow by 8-12 per cent over the next five years. How is Aparna Enterprises positioning itself to leverage this momentum and solidify its market presence?

The Indian construction and building materials industry is projected to witness significant expansion, with estimates suggesting an 8-12 per cent compound annual growth rate (CAGR) over the next five years. This growth is fuelled by rapid urbanisation, increased infrastructure investments and sustainability-focused policies. With India’s real-estate market expected to reach $ 1 trillion by 2030, the demand for high-quality building materials is at an all-time high.

The Government of India’s flagship programmes, such as PM Gati Shakti, the Smart Cities Mission and the Housing for All (PMAY-Urban) initiative, are key drivers of this surge. The infrastructure sector alone is expected to receive a budgetary push of over Rs 11 trillion in FY25, with enhanced capital expenditure allocation.

At Aparna Enterprises, we are proactively aligning with this momentum through capacity expansion, product diversification, and cutting-edge technological integration.

Our key strategic priorities include:

Expanding operations in high-growth regions across Tier-2 and Tier-3 cities, ensuring access to quality building materials nationwide
Investing in automation, AI-driven quality control systems and digital integration, enhancing efficiency and precision in manufacturing
Scaling up production capabilities in our RMC, tiles, uPVC and other divisions to meet the anticipated surge in demand.

To read the full article Click Here

Concrete

Global Start-Up Challenge Launched to Drive Net Zero Concrete Solutions

Innovandi Open Challenge aims to connect start-ups with GCCA members to develop innovations

Published

2 days ago

February 21, 2025

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Start-ups worldwide are invited to contribute to the global cement and concrete industry’s efforts to reduce CO2 emissions and combat climate change. The Global Cement and Concrete Association (GCCA) and its members are calling for applicants for the Innovandi Open Challenge 2025.

Now in its fourth year, the Innovandi Open Challenge aims to connect start-ups with GCCA members to develop innovations that help decarbonise the cement and concrete industry.

The challenge is seeking start-ups working on next-generation materials for net-zero concrete, such as low-carbon admixtures, supplementary cementitious materials (SCMs), activators, or binders. Innovations in these areas could help reduce the carbon-intensive element of cement, clinker, and integrate cutting-edge materials to lower CO2 emissions.

Thomas Guillot, GCCA’s Chief Executive, stated, “Advanced production methods are already decarbonising cement and concrete worldwide. Through the Innovandi Open Challenge, we aim to accelerate our industry’s progress towards net-zero concrete.”

Concrete is the second most widely used material on Earth, and its decarbonisation is critical to achieving net-zero emissions across the global construction sector.

Concrete

StarBigBloc Acquires Land for AAC Blocks Greenfield Facility in Indore

The company introduced NXTGRIP Tile Adhesives alongside its trusted NXTFIX and NXTPLAST brands.

Published

4 days ago

February 19, 2025

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StarBigBloc Building Material, a wholly-owned subsidiary of BigBloc Construction, one of the largest manufacturers of Aerated Autoclaved Concrete (AAC) Blocks, Bricks and ALC Panels in India has acquired land for setting up a green field facility for AAC Blocks in Indore, Madhya Pradesh. Company has purchased approx. 57,500 sq. mts. land at Khasra No. 382, 387, 389/2, Gram Nimrani, Tehsil Kasrawad, District – Khargone, Madhya Pradesh for the purpose of AAC Blocks business expansion in central India. The total consideration for the land deal is Rs 60 million and Stamp duty.

StarBigBloc Building Material Ltd currently operates one plant at Kheda near Ahmedabad with an installed capacity of 250,000 cubic meters per annum, serving most part of Gujarat, upto Udaipur in Rajasthan, and till Indore in Madhya Pradesh. The capacity utilisation at Starbigbloc Building Material Ltd for the third quarter was 75 per cent. The planned expansion will enable the company to establish a stronger presence in Madhya Pradesh and surrounding regions. Reaffirming its commitment to the Green Initiative, it has also installed a 800 KW solar rooftop power project — a significant step toward sustainability and lowering its carbon footprint.

Narayan Saboo, Chairman, Bigbloc Construction said “The AAC block industry is set to play a pivotal role in India’s construction sector, and our company is ready for a significant leap forward. The proposed expansion in Indore, Madhya Pradesh aligns with our growth strategy, focusing on geographic expansion, R&D investments, product diversification, and strategic branding and marketing initiatives to enhance visibility, increase market share, and strengthen stakeholder trust.”

Bigbloc Construction has recently expanded into construction chemicals with Block Jointing Mortar, Ready Mix Plaster, and Tile Adhesives, tapping into high-demand segments. The company introduced NXTGRIP Tile Adhesives alongside its trusted NXTFIX and NXTPLAST brands, ensuring superior bonding, strength, and performance.

In May 2024, the board of directors approved fund-raising through SME IPO or Preferential issue to support expansion plans of Starbigboc Building Material subject to requisite approvals and market conditions, Starbigboc Building Material aims to expand its production capacity from current 250,000 cubic meters per annum to over 1.2 million cubic meters per annum in the next 4-5 years. Company is targeting revenues of Rs 4.28 billion by FY27-28, with an expected EBITDA of Rs 1.25 billion and net profit of Rs 800 million. In FY23-24, the company reported revenues of Rs 940.18 million, achieving a revenue CAGR of over 21 per cent in the last four years.

Incorporated in 2015, BigBloc Construction is one of the largest and only listed AAC block manufacturer in India, with a 1.3 million cbm annual capacity across plants in Gujarat (Kheda, Umargaon, Kapadvanj) and Maharashtra (Wada). The company, which markets its products under the ‘NXTBLOC’ brand, is one of the few in the AAC industry to generate carbon credits. With over 2,000 completed projects and 1,500+ in the pipeline, The company’s clients include Lodha, Adani Realty, IndiaBulls Real Estate, DB Realty, Prestige, Piramal, Oberoi Realty, Tata Projects, Shirke Group, Shapoorji Pallonji Group, Raheja, PSP Projects, L&T, Sunteck, Dosti Group, Purvankara Ltd, DY Patil, Taj Hotels, Godrej Properties, Torrent Pharma, GAIL among others.