09-07-2013, 04:16 PM
PERFORMANCE OF CEMENT INDUSTRY
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Introduction
Cement is the most essential raw material in any kind of construction
activity. Accordingly, cement industry plays a crucial role in the infrastructural
development of the country. Given the vast geographical size and massive
population of the country, various construction activities undertaken by the
Central Government, State Governments, Public Sector Undertaking and other
organisations, including private sector generate huge demand for cement. In
addition, provision for housing is the first and foremost requirement of every
household and, therefore, market demand of cement for private consumption is
increasing constantly.
The Ministry of Commerce and Industry, in their background note, stated
that in view of the increasing demand and the scarcity, the price and distribution
control was completely removed by the Government in the year 1989. The
cement industry was de-licensed in 1991. According to the Ministry, the
liberalization process provided the much desired boost to the cement industry
and, the growth was quite visible leading to perceptible growth in terms of 100
million tonnes capacity addition during the decade 1999 to 2009. This capacity
addition of cement during the decade could match the capacity addition built over
a period of eight decades prior to that. The first cement industry in India was set
up at Porbundar, Gujarat in 1914, with a production capacity of 1000 tonnes per
annum, thus making it about a century old industry in India.
Cement Production and Supply
Demand, Consumption and Production
As being a fast growing economy, the country has witnessed a steady
growth of cement industry. While India has become the second largest cement
producing country in the world, the gap between the largest producer viz. China
and the second largest producer is quite wide. China produces 1400 million
tonnes per year and India produces a mere 183 million tonnes.
The Committee noted that there is an interlinking relation between
cement consumption and the growth of economy. The country is on a high
growth track and the focus now is on the development of the infrastructure
facilities such as, highways, ports, canals, bridges, power-houses etc.
Infrastructural development obviously gives rise to increased demand for cement.
The Committee has been given to understand that the performance of cement
industry has been commendable even during the global economic slowdown.
The sector has survived the adverse impact as public spending on infrastructure
projects remained optimum, keeping in view its multiplier effects to spur the
economy.
Shortage of Raw Material and Substitutes
The principal raw materials for cement are lime stone, gypsum and sand.
The Committee during its visit to the cement plants was informed by the
managements that many companies had got limited reserves of lime stone which
may last only for another 15-20 yeas. Another raw material, gypsum, due to its
shortage is imported from abroad. Similarly, natural sand is obtained through
mining, which leads to soil erosion