UltraTech: Cement demand to grow by 7-8% as construction activity picks up

Business Business: UltraTech Cement in its latest annual report said cement demand is estimated to grow by 7-8 per cent in the current fiscal, helped by increased construction activity across the country. To meet this increased demand, the cement industry is expected to add 35-40 million tonnes of capacity next fiscal, with 60-65 per cent concentrated in the eastern and southern regions, the Aditya Birla Group flagship firm said. Further, this surge in demand will translate into a 72 per cent increase in the industry’s capacity utilisation in FY25, up from around 68 per cent in FY23.

“In FY24-25, cement demand is estimated to grow by 7-8 per cent driven by increased construction activity spread across the infrastructure and housing sector across the country,” UltraTech said. There has been a “united focus” on integrated and coordinated planning and implementation of infrastructure projects following the principles of PM Gati Shakti. Priority has been given to allocate expenditure for critical sectors and additionally, the effectiveness of cash management has been enhanced by timely release of resources using a single nodal agency/treasury single account system. “Given the growing demand from the infrastructure and housing sectors, the Indian cement industry is set to add new production capacity. 35-40 million tonnes of 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’s shareholders, chairman Kumar Mangalam Birla said India’s infrastructure sector is poised for “remarkable growth”, with investments expected to grow at a 15.3 per cent compound annual growth rate (CAGR) over the next five years. Citing a Morgan Stanley report, Birla said, “This growth is expected to result in a cumulative expenditure of US$1.45 trillion.” “Rapid expansion of production capacity, as well as significant strengthening of brand equity in the market, positions your company to effectively tap these long-term growth opportunities,” he said. He added that 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.” Referring to UltraTech’s potential, Birla said its “scale and capacity footprint is unparalleled” which will enable it “to meet India’s growing demand for cement across the country.”