Note:  This report is still under development.

CURRENT INDUSTRY CAPACITY

200M Tons.  Running at almost 90% capacity.

Recently there has been reports of plants running below 80% capacity due to huge capacity additions creating over supply.

CAPACITY ADDITION in 09-10

According to ICRA Industry Monitor, the installed capacity is expected to increase to 241 MTPA by FY 2010-end.

DEMAND

Housing Sector : 55%

Infrastructure ( Roads/ports/dams) : 20-25%

Commercial ( malls/multiplexes etc ): 10-15%

Railways : 3-5%

Gap or oversupply

Assuming a 8% demand growth total demand will be around 218 MT in 09. While capacity will be at 232 MT . That brings to oversupply of around 14 MT.

Key Players

The cement industry currently enjoys a good time with remunerative
prices driven by a buoyant demand in the short term. The indicators and
drivers of the economy are also showing the right directions with a
positive 7-8% growth in GDP with firm outlook on housing,
infrastructure projects and irrigation projects which augur well for
the industry.

CONCLUSION

While demand continue to grow at 8-10% , there has been huge capacity addition by industry in recent month . 2009 and 10 will add another 30-40 MT of capacity . That will bring capacity utilization  down and of course some pricing pressure due to increased competition.

In long run Indian cement industry is very well positioned . India is still far from creating world class infrastructure and new projects will keep continue . Housing sector has lots of room to grow. In medium term Indian cement industry is going to enjoy fruit of economic expansion and construction boom.