Cement sector eyes double-digit growth
Driven by increased demand from sectors such as roads, railways and housing, the cement industry in India is expecting a double-digit growth in the current financial year after a gap of nearly eight years.
“We are seeing traction… the momentum is building up. I think we should definitely see a double-digit this year if nothing big happens,” K.K. Maheshwari, MD, Ultratech Cements told media on the sidelines of a conference by the Cement Manufacturers Association.
In the first half of this year, the industry has seen a growth of 13%. “The industry did go through very tough times from 2010-2016, growing at less than 5%. If you look at 2017-18, the growth rate was 9%.. The last time we saw a double-digit growth was in 2010,” he said.
Stating that the industry was grappling with over capacity since all players invested in building capacities after a good run in 2006-2010, he said there were positive signs for demand, especially from roads and railways segments. The housing segment was also picking up as a result of the government’s Affordable Housing for All scheme, he said.
Mr. Maheshwari pointed out that cheaper cement imports from Pakistan were hurting the domestic industry.
“There’s been no customs duty on cement imports from Pakistan since 2007, making it competitive in comparison to the Indian product, especially in the States bordering Pakistan.”
The Cement Manufacturers Association said Pakistani cement was almost 10-15% cheaper than Indian cement.
Cement imports from Pakistan during December 2017 – March 2018 grew 24% year-on-year to 4.55 lakh tonnes.
He further added that the industry had proposed to the government that GST of 28% on cement should be reduced. “We recognise that this sector is a big contributor to government revenue… if the GST is lowered we will pass on the benefit to users.”The industry, however, has not proposed any particular slab for themselves.