India: infrastructure boost to reduce supply-demand gap

A significant increase in infrastructure investment under India’s new government is expected to raise cement demand and reduce the current oversupply in the country’s cement market. India’s present cement capacity stands at around 375Mt, but demand is currently lagging behind considerably at 300Mta.

“However, this gap is likely to shrink as focus on revival of stalled infrastructure projects results in higher demand growth over next few years,” Alok Sanghi, director of Sanghi Cement Ltd, said.

Cement companies are expected to benefit from the proposed increase in long-term funding availability for infrastructure projects. “Only through infrastructure spending, India can raise its per capita consumption, which is far lower at around 190 kg compared to over 350 kg in Brazil and 1500 kg in China,” he added.