The state of the cement sector in India and Pakistan

It is well known that cement consumption in India in 2012 held up well compared with the general slowdown in the economy. In spite of the talk of excess capacity, the industry is expected to add 30 – 40 million t of capacity this year. According to Business Line, at the end of 2012 cement capacity had reached about 32 million tpa, with the industry operating at 75 – 80%. An analyst at Nirmal Bang suggests that the Indian cement industry had gradually geared up for the cyclical upturn based on improving fundamentals, such as narrowing the demand-supply gap utilisation. The southern and central regions will witness much of the new capacity additions. Stable raw material prices, such as coal and limestone, will also improve cement manufacturers’ profit margins. Earlier this year HeidelbergCement successfully completed the expansion of its clinker and grinding plants in central India. The company notes that demand in the country has been growing consistently at about 6 – 8% for the last two years. It is understood that the Indian government will be investing US$1 trillion in infrastructure projects over the next five years.

The cement industry in Pakistan has been experiencing mixed fortunes. The All Pakistan Cement Manufacturers Association pointed out that healthy increases in exports in February and March of this year were accompanied with only marginal growth in domestic despatches. During nine months of the fiscal year the overall increase in domestic consumption was 6.05%, while the overall decline in exports was 1.19%. It seems that the government is not doing enough to boost cement consumption. There had also been major increases in the prices of fuel and electricity, while natural gas is now virtually unavailable to the
industry.

Written by Paul Maxwell-Cook. This is an abridged version of the full article, which appeared in the July 2013 issue of World Cement. Subscribers can view the full article by logging in.

Read the article online at: https://www.worldcement.com/asia-pacific-rim/05072013/cement_sector_overview_pakistan_india_19/