Waiting for the light
With cement demand growth slipping below six per cent in 2012, India appears to have fallen short of expectations, in spite of remaining a high-growth market by global standards. As the NCB prepares for its 13th International Seminar on Cement and Building Materials on 19-22 November in New Delhi, ICR looks at the prospects of India’s cement sector.
Despite being an active construction phase, the start of calendar year 2013 proved very challenging for the Indian cement industry. While analysts had expected cement consumption growth to get back on track, the country’s macroeconomic situation impacted the construction industry, preventing the domestic market from returning to higher levels of demand.
On the positive side, the Indian government plans to increase its investment in infrastructure to US$1tn in the 12th Five-Year Plan (2012-17), a considerable increase compared with the previous plan’s infrastructure spend. Furthermore, infrastructure projects such as dedicated freight corridors, as well as the upgrade and construction of new airports and ports are expected to scale up economic activity, leading to a substantial increase in cement demand. Road construction and housebuilding also offer significant opportunities, and together with government policy initiatives, offer further scope to drive consumption higher.