There is a high growth potential for cement
What is the current status of the Indian cement industry?
The size of Indian cement industry is about 315 million tonne per year while capacity utilisation is about 70-80 per cent. Per capita consumption of cement in India is below 200 kg per person, which is almost half when compared with that of the developed nations. So growth potential for cement in India is double compared to developed countries. If the consumption is growing at a rate of 10 per cent per year, in the next eight years, we need to double the capacity. So there is a high growth potential for cement.
What is the current demand-supply scenario of cement?
Demand-supply scenario in India is cyclical. Every 6-8 years, there are ups and downs. When there are very good prospects, everybody enters the business and then the capacity addition is very high which ultimately results in a situation of oversupply and in 3-4 years again equilibrium is reached. So demand is expected to grow in 2016. The new government at the Centre is trying to overcome the procedural delays in project implementation. Now the issue is investment as how much investment is going in infrastructure projects and how soon, which will decide the consumption of cement. Infrastructure development is basically depends on government schemes/policies. Housing development is independent of government schemes, but dependent on interest rates of housing loans. It is also dependent on the GDP growth and the income of people. Housing sector constitutes about 60 per cent of cement consumption and the remaining 40 per cent infrastructure which depends on the government schemes. So, if the government´s priority is infrastructure, then the cement consumption will increase, which supports cement industry.
What are the technologies to bring down the pollution level?
Cement industry is not at all polluting, because when environment clearance is given by the environment ministry, they put stringent conditions on emissions. Fortunately in cement manufacturing, no toxic gases or wastes are coming out. It is only the dust particles which can come out and for that the present norms are 50 mg/Nm3 and we have already installed equipment having a filtration capacity to bring down emissions to below 30 mg/Nm3. So, we have installed technology which is much superior which can meet future norms also.
What are your expectations from the new government?
Cement is the heavily taxed commodity with very high excise and other taxes. No other commodity is taxed as much as cement. So taxes should be reduced.