The total cement manufacturing capacity inched up to 520.52 million tpa by March 2018, following the addition of 18.49 million tpa during 2017-18. Against this, the industry produced 297.56 million tpa. Overall, the total installed capacity in the cement industry during last six years from 2012-13 to 2017-18 registered a growth of 60.18 percent. The total installed capacity grew from 324.94 million tpa in the year 2012-13 to 520.52 million tpa in the year 2017-18.
During this period, the capacity utilisation was maximum in the year 2014-15, following which it started declining because there was an addition of 123.35 million tonne between 2014-15 and 2015-16. As a result, the capacity was very high and production was less as compared to capacity addition.
Due to this, the industry started showing a downward trend for the next three years — 2014-15, 2015-16 and 2016-17. In March 2014 there were 284 projects from which only 64 projects were under execution and the remaining 220 were in planning stage. A year later, in March 2015, 20.20 percent of the total projects were under execution.
Reflecting a falling demand, the pace of projects under execution has also gone down.
In March 2017, the number of cement projects under execution were 17.42 percent of the total projects. The trend further fell to 15.85 percent in March 2018. In all, over the last five financial years, the number of projects under execution has seen a steady downfall.
Moreover, fresh announcements also came down in the cement industry in recent years. As of March 2017, there were 241 cement projects. Though it climbed up to reach 246 cement projects by March 2018, both were low in terms of numbers when compared with the figures of the earlier years.
The high debt repayment issues induced most of the thermal power project companies to abandon their plans to set up cement units. The other reasons for the fall in cement projects are unavailable land, high input costs, high tax rates, and so on.
The projects sponsored by thermal power project companies were abandoned by promoters following the reference of the companies to National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy code (IBC).