Projects like bullet train a boon for idle cement capacity: CMA
Indian cement sector is sitting on upwards of Rs 60,000 crore of “sunk investment in surplus capacities”, but expects big infrastructure projects like high speed rail corridors, bullet train and their cascading effect to spur demand, says industry body CMA.
According to the Cement Manufacturers Association (CMA), the industry has 100 mt (million tonnes) of excess capacity and so, it is in a comfortable position to supply additional demand of 35 mt every year coming from the big projects.
“Though the infrastructure projects are critical part of cement consumption and value chain but per se, the direct cement consumption in infrastructure projects is not so high. It only contributes 20 per cent or so to the total demand for cement,” CMA President Shailendra Chouksey told.
There are many other development activities that get linked to a big infrastructure project like high-speed rail corridor or the bullet train. This would lead to a lot of other activities like industrial development, trading and job creation, he added. For every kilometre to elevated or underground tunnel track, nearly about 10,000 mt of cement would be consumed, which would translate into about 6 mt of cement demand in the next 5 years, he said.
In terms of employment creation and cement demand, he said “for every 1 million new jobs being created, the cement demand would be in the range of 20 40 mt going into housing and urban infrastructure development”.