You are here: Home » Economy & Policy » News
Business Standard

Six states to drive next phase of cement capacity ramp-ups: CARE Ratings

Rajasthan, Karnataka, Madhya Pradesh, Tamil Nadu, Andhra Pradesh and Telangana are among the leading states in terms of installed capacity

BS Reporter  |  Bhubaneswar 

Cement
Cement

According to report by CARE Ratings, six states will drive the next phase of capacity expansion in the next phase.

“Telangana, Andhra Pradesh, Odisha, Rajasthan, West Bengal and Uttar Pradesh are among the key states expected to witness the next-phase of tentative capacity addition of around 120 mtpa (million tonnes per annum) over the next decade”, said the report on the sector.

Rajasthan, Karnataka, Madhya Pradesh, Tamil Nadu, Andhra Pradesh and Telangana are among the leading states in terms of installed capacity.

Regionwise, the Southern region led with the highest installed capacity with a share of 33 per cent of all-India capacity, followed by North, East, West and Central regions. Similarly, Rajasthan, Karnataka, Telangana, Madhya Pradesh and Maharashtra are among the states with the highest proven deposits of limestone, the basic raw material required for manufacturing

India is the second largest cement producer after China with an installed production capacity of about 480 mtpa as of FY19. However,India continues to have the lowest per capita consumption at about 210 kg against the world average of 575 kg. In terms of market share and competition in the sector, the top five companies in India accounted for about 48 per cent of the market by installed capacity and about 47 per cent in terms of production in FY19.

“We expect cement production to remain steady with total output expected to grow by 5-7 per cent during FY20. Prices are expected to remain stable. Retail segment demand would be the key to further strengthening of cement prices," the ratings agency said.

Similarly, increased government spending and incentives to housing, especially in the affordable segment (both rural and urban), should lead to steady growth rates for the sector from FY20 onwards. Roads, urban infrastructure and commercial realty, too, would continue to be key demand drivers for cement.

“Among regions, southern and eastern segments would continue to be major regional demand drivers followed by western region," the rating agency said.

First Published: Tue, August 06 2019. 19:35 IST
RECOMMENDED FOR YOU