Cement is one of the core industries which plays a vital
role in the growth and expansion of a nation. It is basically a mixture
of compounds, consisting mainly of silicates and aluminates of calcium,
formed out of calcium oxide, silica, aluminium oxide and iron oxide. The
demand for cement, being a derived one, depends primarily on the pace
of activities in the business, financial, real estate and infrastructure
sectors of the economy. Cement is considered preferred building material
and is used worldwide for all construction works such as housing and industrial
construction, as well as for creation of infrastructures like ports, roads,
power plants, etc. Thus, it can said to be a significant contributor to
the Government's revenue collection and a pillar of overall planned development
of an economy.
In India, the foundation of a stable Indian cement industry
was laid in 1914 when the Indian Cement Company Ltd. manufactured cement
at Porbundar in Gujarat. In the initial stages, particularly during the
period before Independence, the growth of the sector had been very slow.
The indigenous production of cement was not sufficient to meet the entire
domestic demand and accordingly, the Government had to control its price
and distribution statutorily. Also, the large quantities of cement had
to be imported for meeting the deficit in the economy. However, with liberalisation
and introduction of several policy reforms, the cement industry has been
decontrolled which gave impetus to its pace of growth. It has made rapid
strides both in capacity/ production and process technology terms. Today,
it is one of the most advanced and pioneering sectors in the country.
Cement is a basic material input which facilitates the promotional and
developmental efforts, at a fast pace, in the areas of infrastructural
set up and other construction related works. Since it is a decontrolled
commodity, its production and prices are largely governed by economic
factors, like, demand and supply, cost of raw materials and other inputs,
production as well as distribution costs.
The Indian cement industry is extremely energy intensive
and is the third largest user of coal in the country. It is modern and
uses latest technology, which is among the best in the world. Only a small
segment of industry is using old technology based on wet and semi-dry
process. Also, the industry has tremendous potential for development as
limestone of excellent quality is found almost throughout the country.
In other words, it is experiencing a boom on account of overall growth
of the Indian economy, cost control continuous technology upgradation,
etc. This has immensely helped it to conserve energy and fuel as well
as to save materials substantially.
In India, the Department
of Industrial Policy and Promotion (DIPP), under the Ministry
of Commerce and Industry, is the nodal agency for the development
of cement industries, that is, it is involved in monitoring their performance
at regular intervals and suggesting suitable policy incentives, as per
the requirement. The Department is responsible for formulation and implementation
of promotional and developmental measures for growth of entire industrial
sector in general and of some selected industries like cement, light engineering,
leather, rubber, light machine tools, etc. in particular. It is involved
in framing and administering overall industrial policy and foreign direct
investment (FDI) policy as well as promoting FDI inflow into the country.
It plays an active role in investment promotion through dissemination
of information on investment climate and opportunities in India as well
as by advising prospective investors about various policies and procedures.
Some of the rules and orders, administered by DIPP, relating
to the cement industry are:-
India is the second largest manufacturer of cement in the world. It is engaged in the production of several varieties of cement such as Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement, etc. They are produced strictly as per the Bureau of Indian Standards (BIS) specifications and their quality is comparable with the best in the world. At present, the Indian cement industry comprises 134 large cement plants with an installed capacity of 173.08 million tonnes and more than 350 operating mini cement plants with an estimated capacity of 11.10 million tonnes per annum, making a total installed capacity of 184.18 million tonnes. Cement production during the year 2007-08 is estimated at 178.79 million tonnes. During the period April - December, 2007, it has been 126.27 million tonnes registering a growth of 6.97 per cent over the corresponding period of 2006-07. During the same period, India exported 4.61 million tonnes of cement and clinker.
The industry has been actively pursuing various avenues
to improve its productivity and energy efficiency. There has been all-around
upgradation of technology in all sections of the plant like mining, process,
equipment and machinery, packaging and transportation. Adoption of modern
techniques like photogrammetry and remote sensing has enabled the industry
to discover virgin limestone. Advanced equipments like hydraulic excavators,
surface miners, large wheel loaders and mobile crushers have helped the
industry in increasing its productivity considerably. Several large and
small cement companies are also actively considering their expansion plans
in order to accelerate the growth and demand for the sector. The major
players in this area are ACC, Gujarat Ambuja Cement Limited, Grasim Industries
and Ultratech, India Cements Limited, Jaiprakash Associates, JK Cements,
etc. Improvement in cement industry has found ready markets in Bangladesh,
Indonesia, Malayasia, Nepal, Middle, East countries, Burma, Africa and
South East Asian countries.
However, the industry still faces a number of constraints
in terms of high cost of power; high railway tariff; high incidence of
State and Central levies and duties; lack of private and public investment
in infrastructure projects; low quality coal and inadequate growth of
related infrastructure like sea and rail transport, ports and bulk terminals.
In order to overcome such obstacles and utilize excess capacity available
with the cement industry, the Government has identified the following
thrust areas for increasing its demand, namely:- (i) Housing development
programmes; (ii) Promotion of concrete highways and roads; (iii) Use of
ready-mix concrete in large infrastructure projects; and (iv) Construction
of concrete roads in rural areas under Prime Ministers Gram Sadak Yojana.
The Department has been undertaking several measures like
setting up of institutes/ councils for enhanced development of the industry.
For instance, the National
Council for Cement and Building Materials (NCB) has been constituted as an apex body dedicated to continuous research, technology development and transfer, education as well as scientific, technological and industrial services for the cement, related building materials and construction industries. It acts as a preferred technology partner to such sectors in the sustainable development of a better infrastructure and housing. NCB carries on its activities through its units located at Ballabhgarh, Hyderabad, Ahmedabad and Bhubaneswar. NCB's activities are channelised through its following six programme centres:
- Cement Research and Independent Testing
- Mining, Environment, Plant Engineering and Operation
- Construction Development and Research
- Industrial Information Services
- Continuing Education Services
- Quality Management, Standards and Calibration Services
Another important being, the setting up of a 'Development
Council for Cement Industry' under the Industries
(Development & Regulation) Act, 1951. The Council promotes the
development of the cement industry in India, through various measures,
by providing funds for developmental projects. The source of funding the
activities of the Council is the cess collected by it from the cement
manufacturers in terms of Cement
Cess Rules, 1993. The various projects of this Council are:-
- Base Level activities of NCB and R&D projects initiated by it for the development of the cement industry.
- Projects for improvement of the productivity of the industry by reducing cost.
- Projects for optimum utilisation of raw materials.
- Projects for modernisation of cement plants.
- Projects for improvement of environment.
- Projects for standardisation and quality control programmes.
- Projects for development of bulk supply and distribution of cement.
- Projects for training and upgradation of the skill of the personnel in the cement industry.
During 2007-08, the Council has received an allocation of Rs. 3.50 crore for making expenditure on the above activities.
Besides, in order to improve and supplement the industry's performance, the Department has constituted a 'Working Group on Cement Industry' for the formulation of the 11th Plan. The report of this working group emphasizes the importance of bulk cement transportation, use of ready mix concrete and reduction of taxes and levies on cement. It also seeks regulatory support for creating framework for co-processing of wastes, co-generation of power and enhanced support to R&D activities to align the technology regime with the best of the world. As per the working group report on the industry, the cement demand is likely to grow at 11.5 per cent per annum during the 11th Plan and cement production and capacity by the end of the 11th Plan are estimated to be 269 million tonnes and 298 million tonnes, respectively, with capacity utilisation of 90 per cent. To attain the targeted capacity addition, an investment of Rs. 52,400 crore would be required during the 11th Plan. Achievement of such targets is crucially dependent on factors like adequate availability of limestone, coal, power and facilities for transport of limestone.
Thus, the Indian cement industry has strong capacity base
and produces quality cement which meets the global standards. It has achieved
a tremendous success in technological upgradation and assimilation of
latest technology. There is also great scope for increase in export of
cement. More importantly, the gap between its demand and supply has been
reduced to a very large extent and the sector is likely to witness higher
growth in the coming years. All this indicates that the cement industry
has an important role to play in the Indian economy. Owing to booming
housing sector, global demand and increased activity in infrastructure
development such as State and National highways, there exists ample investment
opportunities in the industry. It has been attracting the top cement companies
from all over the world and promoting more mergers and acquisitions for
its overall growth.