The National Council for Cement and Building Materials (NCB), under the Ministry of Commerce & Industry, has signed two landmark Memorandums of Understanding (MoUs) to advance decarbonisation and technological innovation in the Indian cement industry. The MoUs were signed during the 18th NCB International Conference and Exhibition on Cement and Concrete, held at Yashobhoomi, IICC Dwarka.

One MoU was signed between NCB and the Global Cement and Concrete Association (GCCA) India to promote research on decarbonization efforts within India’s cement sector, aiming for a “Net Zero” industry by 2070.

The second MoU, signed with AIC-Plasmatech Innovation Foundation, focuses on exploring the application of Thermal Plasma Torch Technology in cement production, which could enhance the sustainability and efficiency of the manufacturing process.

In response to worsening air quality, the Maharashtra Pollution Control Board (MPCB) has announced a ban on the establishment of new ready-mix concrete (RMC) plants within the municipal corporation limits of the Mumbai Metropolitan Region (MMR). Existing plants are required to implement anti-dust measures and conduct water sprinkling on vehicle tyres over the next three months.

Failure to comply with these new regulations could result in the seizure of bank guarantee deposits and potential plant closures, MPCB officials warned.

MPCB’s directives also stipulate that new captive RMC plants outside municipal areas must allocate at least 10% of their land for plant construction and enclose the site with tin or similar materials. Non-compliance will be met with a bank guarantee of Rs 10 lakh.

New commercial RMC plants must maintain a 500-meter buffer zone from populated areas and ensure compliance with environmental standards. All plants must also monitor air quality at their boundaries.

MPCB has stressed the importance of collaborating with civic authorities in MMR to curb pollution and maintain air quality standards.

India’s cement industry is set to expand by 70-75 million metric tonnes (MT) over the next two years, according to ICRA. Of this, 33-37 million MT will come from clinker capacity, while grinding capacity will account for the remainder.

In FY2025, 33-35 million MT of capacity is expected to be added, with 37-39 million MT projected for FY2026. The eastern and southern regions will lead this growth, contributing 38-40 million MT collectively over the two fiscal years. Despite this expansion, capacity utilisation is forecasted to remain moderate, improving slightly to 71% in FY2025 from 70% in FY2024, driven by increased cement production.

ICRA revised its growth outlook for cement volumes in FY2025, lowering the expected year-on-year growth to 4-5% (445-450 million MT), down from the earlier estimate of 7-8%. This adjustment is attributed to a slowdown in construction activities in the housing and infrastructure sectors, following the General Elections.

However, the second half of FY2025 (H2 FY2025) is expected to see recovery, driven by strong rural consumption due to healthy monsoons, robust kharif crop output, and high reservoir levels supporting rabi sowing. Urban housing demand is also likely to support cement volumes.

Despite these positive trends, the operating profit per tonne (OPBITDA/MT) of cement companies is projected to decline by 12-15% year-on-year in FY2025, to Rs 820-850 per tonne, according to Tushar Bharambe, Assistant Vice President and Sector Head, Corporate Ratings at ICRA.

Increased government spending on infrastructure projects is anticipated to boost construction activity in H2 FY2025, offering further support to the cement sector. However, overall profitability is expected to remain under pressure for the fiscal year. (ET)