Cement sector to touch double digit growth from next fiscal

Mumbai : Domestic cement industry of 197-million tonne is likely to touch double digit growth from the next fiscal with demand surpassing even the 57- mt capacity addition expected by FY 2014, says an industry report. The Rs 77,800-crore (as of March, 2010) domestic cement market, already one of the fastest growing ones globally and the second largest among the emerging markets after China-- is on course to a double-digit growth path, it says.

“From FY13, the domestic demand is expected to exceed supply... From FY12 through FY14, the domestic cement industry will add at least 54 mt new capacity,” says Ernst & Young India partner Nitin Gupta in a report titled ‘Cementing India.’ But he notes that this additional 57 mt capacity is unlikely to be absorbed by domestic demand this fiscal and it sees capacity utilization level remaining at around 80 per cent during this fiscal. However, the report adds that from FY13 onwards demand will surpass supply and this higher demand is expected to continue in the medium to long-term.