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India’s cement manufacturing capacity may go up to 479 million tones by the terminal year of the 12th Plan, ending 2017, despite the existing over—capacity scenario, as per projections made by a Planning Commission Working Group on the sector.
The Working Group, which has already submitted its final report to the Planning Commission for preparing the roadmap for the sector in the Plan period (2012—17), has projected 10 per cent to 11.75 per cent growth in demand, production and the installed capacity of cement during the five—year period.
The panel chaired by Department of Industrial Policy and Promotion (DIPP) Secretary P K Chaudhery, arrived at the estimate on the basis of the projected growth of the country’s economy by 9 per cent during the 12th Plan.
“The projected expansion calls for huge investment and is indeed a Herculean task. The industry hopes that the government will provide the much—needed infrastructure support, particularly the availability of main fuel, coal and logistics support in terms of railway wagons,” Vinita Singhania, the outgoing President of the Cement Manufacturers’ Association, has said.
India’s cement manufacturing capacity has already reached 323 million tonnes in the terminal year of the XI Plan, surpassing the target of 298 million tonnes fixed for the five—year period up to March 31, 2012.
However, growth in consumption has not been up to the mark. Though cement consumption grew at a healthy rate of 10.5 per cent between 2004—05 and 2009—10, in 2010—11, it grew by just 4.9 per cent. In the current fiscal so far, growth in consumption plummeted further to around 3 per cent in the first half.
The poor growth in cement demand during the last one—and—a—half years has created a severe mismatch between cement demand and capacity, resulting in under—utilisation of the cement industry’s existing facilities.
The country’s cement—making capacity stood at just 9.3 million tonnes in 1961 and went up to about 21 million tonnes in 1982. By 1988—89, the production capacity reached 44 million tonnes following partial lifting of price and distribution control.
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