Developmental Issues in Cement Industry

The boom in the real estate and construction industry in India showed a sudden and sharp increase in the price of cement, to the extent of a price increment as high as 17 percent in a single month. This study demonstrates that the sudden surge in the price of cement is neither due to the demand-supply mismatch of cement nor a sudden increment in the cost of producing cement. Parameters studied include the firm concentration index, region-wise production and consumption, capacity utilization, and cost to sales ratio. Cement is the preferred building material and is used in household and industrial construction. Earlier, the government sector used to consume over 50 percent of the total cement sold in India, but in the last decade, its share has come down to 35 percent. The real driver of cement demand is the creation of infrastructure, so cement demand in emerging economies is much higher than in developed countries. In India too, the demand for cement will be affected by spending on infrastructure.