Switzerland-based cement maker Holcim, one of the top players in the global cement industry, expects the Indian construction market to more than double by 2020.
Holcim, which entered India in the middle of the last decade, has its presence in the country through two established brands — ACC and Ambuja Cements. Collectively, these companies have the largest market share in India.
According to one of the company's presentations earlier this year, the Indian construction market will replace Japan as the third largest, after China and the US, by 2020, during which, emerging markets will outweigh mature markets.
At $360 billion, India accounted for five per cent of the $7.2-trillion global construction market in 2010.
However, by 2020, India is likely to capture a seven per cent market share, at $840 billion, of the $12-trillion global market.
Holcim, currently has a capacity of close to 57 million tonnes per annum, and is ahead of domestic giant Aditya Birla Group's UltraTech Cement (52 million tonnes).
Both have plans to augment capacities. UltraTech has plans to take its overall capacity to 75 million tonnes by 2015. Holcim’s Ambuja Cements will pump in Rs 1,800 crore by 2013 to add more capacities.
According to India's 12th five year Plan (2012-17) document, the two segments most important to construction activity are infrastructure and housing. Since infrastructure spending is expected to go up to nine per cent of gross domestic product (GDP) or $1trillion for the Plan period (2012-17), this should translate into double-digit growth for the demand segment.
In India, cement demand emanates from four key segments — housing, accounting for 67 per cent; infrastructure (13 per cent), commercial construction (11 per cent) and industrial (nine per cent).
Industry officials say cement demand from the residential sector in coming years will be driven by increasing per capita income, nuclear families, urbanisation rate and government stimulus to various rural and affordable housing schemes.
The Indian cement sector is the world's second largest, after China. During the current Plan (2007-12), cement players invested Rs 50,000 crore to add fresh capacities of 150 million tonnes.
According to the 12th Plan documents on the industry, the sector would need to up capacities to 470 million tonnes by 2017.