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Cement Industry to Grow About At 6% – 7% in FY17

The cement industry is expected to grow at 6-7 per cent in the current fiscal with government’s focus on infrastructure development being a key driver of demand, says HeidelbergCement India.

A subsidiary of HeidelbergCement Group, Germany, said that while prospects of a normal monsoon augur well for the industry, oversupply may restrict the ability to pass on any input cost increases. Cement demand growth expectations for 2017-18 is 6-7 per cent, HeidelbergCement India said in an investor presentation. It cited prospects of normal monsoons, increased focus and outlay for agriculture, infrastructure as well as affordable housing and thrust on construction of cement concrete roads as demand boosters.

Besides, the launch of smart cities and urban infrastructure development along with implementation of GST will also bring opportunities for growth for the sector. According to the Cement Manufacturers Association (CMA), the industry had a decline of 1 per cent last fiscal although the CAGR growth of the industry of last five years was around 4 per cent.

The industry has a total capacity of 435 million tonnes (MT) per annum, while it is utilising only 280 MT for meeting domestic demand and 5 MT for exports.

For 2016-17 fiscal, HeidelbergCement’s total income stood at Rs 2,025.54crore, up 4.49 per cent, compared to Rs 1,938.36crore in the previous year.

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