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India’s cement capacity to rise in 2020

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World Cement,

A number of companies including UltraTech, JK Cement, Dalmia Bharat and others are set to add 23 million tpy of production capacity, therefore the total installed cement capacity in India is expected to cross half a billion t in 2020.

The country’s current installed capacity is 485 million tpy and is expected to rise to 508 million tpy this year.

JK Cement will be adding 4.2 million tpy and UltraTech will be adding 4 million tpy of capacity. Dalmia Bharat is additionally set to add 3.5 million tpy. Ramco Cement will add 2.1 million tpy, and Sanghi Industries and Star Cement are each expected to commission 2 million tpy of added capacity. Birla Corporation, Wonder Cement and Ambuja Cement are to contribute the rest of the 5.2 mt capacity. Shree Cement also hopes to add new capacities.

However, due to weakened demand conditions, the average capacity utilisation level is expected to be suboptimal.

“Cement capacity always comes up in anticipation of demand. There is no reason to believe demand won't pick up in the infrastructure segment with projects beginning to roll after finance issues are being resolved by concerted intervention by the centre and investment in rural areas. Individual housing segment will also pick up with better crops in many parts of the country plus Central projects like PMAY”, Sandip Ranjan Ghose, Chief Operating Officer at Birla Corporation said.

H M Bangur, Managing Director at Shree Cement said, “The additions have to be looked into from a long-term perspective and demand is expected to improve this calendar year. There is going to be enough opportunity for cement companies to cater to the growing demand in the future and so, capacities will have to be put in place prior”.

Bangur and other industry officials have noted that government spending on infrastructure should boost demand.

“The only weak link in the chain remains large real estate projects which are mired in its own problems. But, it should be partially off-set with development of suburban and small towns - smart cities and low-cost housing”, Ghose added.

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