India: cement companies to add 31Mt capacity in second half

India: cement companies to add 31Mt capacity in second half
Published: 20 October 2009

Additional cement capacities of nearly 31Mt (across 33 projects) are expected to be commissioned in the second half of this fiscal at an investment of INR7963 crore (US$172.5m).

These projections have been made by ProjectToday, which tracks ongoing investment activities in diverse sectors.

Mr Shashikant Hegde, Chief Executive Officer, ProjectsToday, said the first half had seen investments of INR2080 crore for an additional 10.99Mta.

Of the 45 projects scheduled for commissioning this fiscal, 21 have a capacity of over 1Mta. These include those planned by Andhra Cements, Kesoram Industries, JK Lakshmi Cement and UltraTech Cement.

During 2010-11, 42.57Mta will be added with an aggregate investment of INR13,030 crore. “Of the 36 projects expected to commence operations, eight with capacities ranging from two to four mtpa are being set up by Jaiprakash Associates, ABG Cement, Abhijit Cement, Emami Cements, Chettinad Cements, Penna Cement and Prism Cements,” he said.

Other prominent cement projects expected to materialise in FY’11 include those of Calcom Cement, ACC, Shree Cement and Zuari Cements.

“The flooding in Andhra Pradesh and parts of Karnataka may delay some projects as movement of equipment will pose a big challenge. However, companies will make everything possible to stick to the deadline as any delay may lead to jump in project cost,” said a cement company official.

AP, biggest gainer
Andhra Pradesh has emerged the biggest gainer in the current boom involving investments in cement-related projects. It may double capacity to 65.18Mta by 2012 and, in the process, become India’s largest cement producer contributing about 21 per cent of capacity. It is at present the second largest with a total capacity of 32.36Mta.

Some of the large projects being commissioned in the State are those of JSW, UltraTech Cement, Orient Paper and Zuari Cements.

Rajasthan is the leader of the pack with a total capacity of 32.99Mta with an additional 8 Mta scheduled by 2012, said Mr Hegde. “The new capacity may create a glut up to 2012 but the situation may reverse once private investment in real-estate picks up in Tier II and III cities,” he added.