India is the second
largest producer of cement in the world after China.
The cement industry comprises of 125 large cement plants
with an installed capacity of 148.28 million tonnes
and more than 300 mini cement plants. According to the
Cement Manufacturers Association, the overall cement
production rose by 8.11 % during 2007-08 to 168.29 million
tonnes (mt) as against 155.66 mt in 2006-07. Due to
the government's boost to infrastructure, the consumption
is expected to go up even further.
According to a report by the ICRA Industry
Monitor, the installed capacity is expected to increase
to 186 mt per annum (mtpa) by FY08-end, and 219 mtpa
by end of FY09, and further up to 241 mtpa by FY10-end.
As a result, India's cement industry will record an
annual growth at 10 % in the coming years with higher
domestic demand resulting in increased capacity utilization.
100% Foreign Direct Investment (FDI)
is permitted in this sector. 100% FDI is also permitted
for cement companies for setting up captive power plants
as well as coal and lignite mines for captive consumption.
As per industry estimates there is a 40
million ton shortfall between demand and supply, which
would require an investment of over USD 2 billion.