The Hindu Business Line : 'Cement industry to grow at 8-9 pc in medium term'

THE cement industry will continue to grow at a CAGR of 8- 9 per cent in the medium term on account of big investments planned in infrastructure and housing sector, says an Assocham eco pulse study.

The initiatives taken under the National Highway Development Programme for promotion of concrete highways and roads, the Pradhan Mantri Gram Sadak Yojana for construction of concrete roads in the rural areas, and Bharat Nirman for promoting irrigation, water supply, roads, housing, electrification and telephone connectivity are likely to be the major drivers of cement demand, says the chamber.

India's per capita cement consumption is still behind the world average. This points to the huge opportunities that lie ahead for the domestic cement industry.

However, certain steps need to be taken to support the industry, which still has excess capacity to the extent of 20 per cent, according to the chamber.

The Chamber suggests that the cement firms should have captive coal mines so that they do not face any shortage of coal. Though the country has 80 billion tonnes of coal reserves, there are certain bottlenecks in production management that restricts supply, says the chamber. The Government should allocate coal blocks to cement companies.

The Government duties on cement, which are as high as 82 per cent of the ex-factory prices in some cases, should be brought down, says the chamber.

For the growth of the cement industry, adequate infrastructure is indispensable, argues the chamber. Coal and limestone are available only at certain places but the cement factories are located throughout the country. Hence, in order to transport coal and limestone to the plants and, thereafter, cement to the different regions across the country, rail is the only mode of transport to depend upon.

Hence, it is imperative to have an efficient rail network, says the chamber.

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