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Northern and eastern regions to drive demand

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Northern and eastern India will be the drivers of cement demand in the country, according to recent analysis by CARE Ratings. India produced 72.67 million t in 1QFY17, down 3.9% on the previous year, as demand from the real-estate sector softened.

The eastern parts of the country will lead the way. Government investment in affordable housing, as well as national highway construction and other public infrastructure projects will “form the backbone of demand”, the ratings company said.

This positive outlook will also prompt investment in cement capacity in eastern India. Mahendra Singhi, CEO of Dalmia Bharat, the second-largest cement producer in east India, recently told the Press Trust of India that the company was targeting expansion of its production capabilities.

“We would be growing. We have a vision. We would be expanding our activities and capabilities in the east,” said Singhi. “Right now we are targeting organic growth only, but would go if there is a possibility to expand with [a] brownfield project.”

Dalmia Bharat currently has 12.9 million tpy of capacity in the region, behind LafargeHolcim, which owns 14.8 million tpy of capacity.

In the north of India, growth will be centred on the states of Punjab, Haryuna, and Uttar Pradesh, where a new state government is expected to push infrastructure development. Demand from agriculture-based rural areas is also expected to strengthen, as the economies of these areas reap the rewards of favourable monsoons.

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India cement news