Indian cement consumption expanded 6.2 per cent YoY in 2024, amounting to 444.2Mt, up from 418.1Mt in 2023. This is the slowest rate of expansion since the double-digit decline reported in 2020, during the Covid-19 pandemic. Government capital expenditure was a key post-pandemic driver of recovery.
Similarly, cement production growth reported its weakest rate of expansion since the turn of the decade. Output grew 5.4 per cent YoY in 2024, amounting to 440.5Mt, up from 481.0Mt in 2023. Cement production rose 4 per cent YoY in December, according to the latest data from the Ministry of Commerce and Industry.
Fundamentals are strong for cement demand to accelerate once again amid robust economic growth, the ongoing transition to a middle-income country and growing working age population. Furthermore, recently announced income tax cuts and robust capital expenditure plans will bolster house building and infrastructure construction.
Cement production will need to expand quicker to meet demand. The Cement Manufacturers’ Association (CMA) of India is targeting a “CAGR growth rate of more than six per cent of installed cement capacity”. With capacity utilisation rates heading towards 70 per cent, capacity expansion will be a key consideration for producers. In turn, mergers and acquisition activity will remain prevalent.
