India's cement demand is expected to reach 550-600 million tonnes per annum (mtpa) by 2025, mainly on account of rising infrastructure and housing needs propelled by rapid urbanisation, says a CII study.
Meeting the rising demand for cement will require considerable capacity addition along with a sharp rise in available resources, which could present challenges, it said.
"Cement demand is projected to grow 2.5 to 2.7 times and the current volumes and reach 550 to 600 MTPA by 2025. Per capita cement consumption is likely to increase from 185 kg currently to 385 to 415 kg in 2015," it said.
"This growth will likely be led by investments in the infrastructure sector, with sub-sectors such as roads, power and irrigation leading the charge," it added.
The study further said the residential sector will remain one of the largest consumers with 40-45 per cent of total demand in 2025, and is likely to see increased consolidation among real estate players.
The share of large and direct buyers (contractors and developers) is expected to increase from 30 per cent currently to 70 per cent by 2025.
Besides, additional capacity of 330 to 380 MTPA for cement and 240 to 270 MTPA for clinker could be required by 2025, translating to an investment of close to Rs 3 lakh crore, according to the study.
To ensure viability of new capacity addition, the study suggested measures like optimisation of the tax structure for cement and other key input materials; fast-tracking roll out of Goods & Services Tax; de-bottleneck input resources; promotion of global best practices in use and delivery of cement and enhancing energy security for the industry.
