Rise in construction activities to propel India's cement demand by 7-8% in FY25: UltraTech

Demand for cement is projected to grow 7-8 per cent in the current financial year, helped by an increase in construction activities throughout the country, UltraTech Cement said in its latest annual report. To meet this increased demand, the cement industry is expected to add 35 - 40 million tonne capacity in the next fiscal, with 60-65 per cent concentrated in the eastern and southern regions, said the Aditya Birla group flagship firm.

Besides, this demand surge will translate into an increase in capacity utilisation of the industry to 72 per cent in FY25, which was around 68 per cent in FY23.

"In FY 2024-25, cement demand is projected to grow 7-8 per cent driven by an increase in construction activities throughout the country, spread across the infrastructure and housing sector," said UltraTech.

There has been a "concerted focus" on the integrated and coordinated planning and implementation of infrastructure projects, adhering to the principles of PM Gati Shakti. Priority has been given to allocating expenditure towards vital sectors and additionally, the effectiveness of cash management has been enhanced through the timely release of resources using the Single Nodal Agency/Treasury Single Account system, it added.

"Responding to the increasing demand from the infrastructure and housing sectors, the Indian cement industry is poised to add new production capacities. As much as 35-40 million tonne capacity is expected to be commissioned in the next fiscal, with 60-65 per cent concentrated in the eastern and southern regions," it said.

Addressing the company' shareholders, Chairman Kumar Mangalam Birla said India's infrastructure sector is poised for "remarkable growth", with an estimated 15.3 per cent compound annual growth rate (CAGR) in investments, projected over the next five years. Citing a Morgan Stanley report, Birla said, "This growth is expected to result in a cumulative expenditure of USD 1.45 trillion."

"The rapid expansion of production capacity, coupled with the significant strengthening of brand equity in the marketplace, positions your company to harness these long-term growth opportunities effectively," he said adding UltraTech's growth trajectory mirrors India's growth story.

UltraTech is aggressively expanding its capacity and Birla said "our growth momentum has accelerated, enabling us to be at the forefront of India's infrastructure development."

While mentioning the capacity of UltraTech, Birla said its “scale and capacity footprint is unparalleled" which will further enable it “to service India's growing demand for cement across the country."

Last month, UltraTech announced acquiring a majority stake in South-based India Cements Ltd (ICL) and also over Rs 3,000 crore open offer to acquire 26 per cent shares of the company. In FY24, UltraTech recorded net sales of Rs 69,810 crore and crossed the historic milestone of 150 MTPA (million tonne per annum) capacity.

"From the first cement unit that we commissioned in the early 1980s with one MTPA capacity to now the world's third largest cement company, outside of China, UltraTech's journey has been marked by scorching growth, ambitious bets and flawless execution," said Birla.