Over the last decade or so, India has not only managed to become the world’s second largest cement producer and consumer but is also aggressively pushing itself to emerge as a global player on parameters like green cement, sustainability, technology absorption and most importantly, decarbonisation of the sector. The cumulative impact of this is now turning the cement sector into an important constituent of the new India or India 3.0, the first two referring to the country after Independence and after the economic liberalisation of the 1990s.
The economic robustness of India of the 21st century, among other things, is witnessed in the massive construction activities across the country, mainly as infrastructure and housing projects, both largely funded by taxpayers. The $1.9 trillion National Infrastructure Pipeline, the most expensive and extensive in the nation’s history that commenced in 2019 and is expected to be completed in 2025, is a good case in point to understand the growing demand for cement. Between FY12 and FY23, the installed capacity of the Indian cement sector grew by more than 75% to 600 million tonnes and is expected to cross 800 million tonnes by FY28. It is estimated that by the end of the current financial year, we are likely to add around 40 million tonnes capacity, making it fastest addition in the last decade or so.
Despite its size, India’s per capita cement consumption of around 260-275 kg is approximately half the average global consumption and 1/5th of China’s, signifying the huge untapped potential. The frenzied construction activities across Indian cities and towns are being given shape by the cement sector, along with other core sectors like steel and energy, making it one of the most vital industrial sectors in the country.
While the future of the Indian cement sector looks promising, it also presents a few challenges. As an energy- and natural resource-intensive sector, cement accounts for around 8% of the global CO2 emissions. Large cement manufacturers in the country are now investing an unprecedented amount of time, money and resources in decarbonising the sector. Most of them expect to become Net Zero, or carbon neutral by the middle of this century, which will be essential for the Indian economy to become Net Zero by 2070. From increasing the adoption of renewable energy, like solar and wind, to recycling industrial and municipal wastes to process heat into energy to bringing in carbon capturing technologies and digital process automation, the industry is leaving no stone unturned in its quest to becoming more environmentally sustainable. By all standards, we are seeing progress and are likely to meet the Net Zero target on time, if not earlier.
CEO – Cement Business
Adani Group
Because the sector is water-intensive, cement manufacturers are also turning to achieving water-positivity in their operations, by promoting conservation projects, optimising processes to reduce usage, avoiding excessive freshwater consumption and investing in harvesting and recycling projects.
As a much-localised industry, driven by the need to be near raw material sources, cement manufacturers share a close bond with local communities that goes beyond job creation. As one of the largest CSR spenders in the Indian industrial landscape, the cement sector has become a force for good through social projects in key areas like education, health, skills and livelihood, women empowerment, environment, and biodiversity and conservation. The sector is also setting new standards for professional management of CSR and other community-oriented projects that goes far beyond cheque book-philanthropy.
Over the last century or so, the Indian cement sector has played a critical role in meeting the needs of the country and has grown into one of the most critical and successful sectors. While evolving from a commodity to branded products, key players have understood the larger responsibility and role they play in the country’s progress and its future. The Indian cement sector is turning out to be a fine example of how a legacy sector can transform itself into one that is not just world-class, but also a socio-economic powerhouse.
