Construction Industry News
Between FY 2023 and 2027, cement industries are expected to expand and add 145-155 MT of capacity. On a high basis, that equates to a compound annual growth rate of 4%-5%. According to a note from Crisil, a strong 6-7% CAGR in demand is expected over these five fiscal years, which will promote the development of supply.
Large producers are currently focusing on organic growth due to the robust demand outlook and acquisitions of the majority of smaller and financially weaker companies. In the medium term, the top 5 will be responsible for most of the incremental capacity expansion.
Strong profitability and a good recovery in demand after the pandemic helped producers reduce their debt on the balance sheet. The pandemic forced the suspension or postponement of capex plans, which resumed in the second half of fiscal 2021.
However, the agency expects capacity addition drive to slow in fiscal 2023 and stabilise at 30-32 MT, including integrated and grinding units, as higher input costs have hurt their profitability and reduced capex.
Moreover, fiscal 2024 doesn't seem impressive with just an addition of 30-32 MT. That's because general elections can lead to policy changes.
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