Satish Chander
Chief Manufacturing Officer, Shree Cement
How is the cement industry doing in India? What is the current demand-supply scenario?
India’s cement industry is on a robust growth path, supported by government-led infrastructure initiatives and affordable housing schemes under PM Awas Yojana. While short-term challenges from elections and seasonal factors exist, the long-term outlook remains positive. India’s per capita cement consumption is still below the global average, which signifies further growth potential.
With consolidation efforts like restructuring and recent acquisitions, larger players are increasing market share for operational efficiency and enhanced service offerings. Shree Cement is scaling up its capacity to over 80 million tons by FY28 through a balanced mix of organic growth and strategic acquisitions. This expansion strategy is backed by investments in renewable energy, new projects and product diversification, including ready-mix concrete.
In essence, the Indian cement industry is steadily growing, propelled by expansion, consolidation and sustainability efforts.
What are the key challenges faced by the industry currently in terms of raw materials, production and sales?
The cement industry is currently navigating a few challenges that are impacting both operational efficiency and cost structures. Among the most pressing ones are the rising fuel costs and a shortage of skilled labour, both of which are influencing production and overall business performance.
The sharp increase in fuel prices, particularly petcoke, has been a critical concern. Over the past two years, petcoke costs have surged by 60-70%, with fuel now constituting nearly 70% of total power and fuel expenses. This escalation has placed immense pressure on production costs and profit margins, with further price hikes likely to put more pressure on the industry.
Additionally, the industry is grappling with a shortage of skilled labour. As operations expand, the demand for experienced technicians and fitters has outpaced supply. In response, Shree Cement, for instance, has established in-house training centres at its plants to train local community members and develop a skilled workforce. Programs like the Apprenticeship Program provide hands-on factory training, with trainees closely mentored for potential full-time roles. Initiatives like these address immediate labour shortages and also support long-term talent development.
Despite these hurdles, the cement industry is adopting proactive solutions. Companies are prioritizing energy efficiency, investing in workforce development and embracing innovative practices. With a focus on sustainability and resilience, the industry is well-positioned to overcome these obstacles and continue contributing to economic growth and infrastructure development.
How is the cement demand growing in India? Do you see a sustainable growth in demand?
India’s cement demand is steadily increasing, projected to grow at a CAGR of 8% till FY28. This demand is primarily driven by the government’s focus on infrastructure, supported by Union Budget’s Rs 11 lakh crore capital outlay and upcoming government projects. India’s low per capita cement consumption relative to the global average indicates ample scope for growth as infrastructure expands.
Shree Cement is well-positioned to sustainably meet this rising demand. With plans to enhance production capacity by FY28, Shree Cement is focused on expanding through organic growth, ensuring high quality and efficiency. Its investment in renewable energy—covering solar, wind and ready-mix concrete—reduces carbon emissions and enhances operational efficiency, ensuring a sustainable approach to growth.
Shree Cement’s commitment to responsible expansion aligns with India’s infrastructure needs, positioning the company as a key player in meeting the sector’s demands while supporting environmental goals.
What are the expansion plans of the company to meet the growing demand?
To support India’s infrastructure and urban development goals, Shree Cement has mapped out an ambitious expansion strategy. The company is investing in both greenfield and brownfield projects across strategically selected states, aiming to grow its market presence and geographical reach. Additionally, Shree Cement has diversified into the Ready-Mix Concrete (RMC) segment to meet the growing demand for customized construction materials. Over the next three years, approximately 100 RMC plants will be established in 50 cities nationwide, enhancing its product portfolio and meeting varied construction needs.
These expansion efforts are financially backed by Shree Cement’s strong cash flows and zero-net debt status, enabling the company to fund growth internally without compromising on profitability. Through these strategic moves, Shree Cement is well-prepared to support India’s infrastructure demands while delivering sustainable, self-reliant growth.
What are the energy efficiency initiatives in your cement production?
Shree Cement leads in sustainability initiatives, with a strong focus on energy efficiency and reducing its carbon footprint. Currently, it has around 520 MW of green power capacity, spanning Waste Heat Recovery Systems (WHRS), solar and wind sources. As of FY24, green power makes up 55.9% of Shree Cement’s energy consumption, placing it among industry leaders in renewable energy adoption.
As part of the RE100 initiative, Shree Cement has committed to transitioning to 100% renewable energy by 2050. The company has also integrated energy-efficient measures, such as advanced waste heat recovery systems, to capture and reuse operational energy, reducing reliance on conventional power. Moreover, Shree Cement is exploring alternative fuels like biomass and agro-waste, which support both emission reductions and circular economy principles by utilizing local waste resources.
These initiatives underscore Shree Cement’s commitment to minimizing environmental impact while enhancing resilience against rising energy costs and emission regulations. By combining innovative technology with sustainable practices, Shree Cement sets a high industry benchmark in green energy use and carbon reduction.
How do you visualise the future market trends for cement? What are your future plans?
India’s cement market shows promising growth, largely due to government-backed infrastructure projects including highways, railways and housing schemes. With India’s per capita cement consumption still lower than global averages, there is ample room for expansion, especially with ongoing urbanization and infrastructure investments under the National Infrastructure Pipeline.
Shree Cement is capitalizing on these trends by expanding production capacity and investing in Ready-Mix Concrete to address a diverse range of construction needs. Additionally, the company has introduced premium products like Bangur Magna to meet consumer demand for quality and durability. Strengthening its brand portfolio and expanding into new markets, Shree Cement aims to capture a larger share in both residential and commercial sectors.
Shree Cement’s “Build Smart” philosophy reflects its dedication to sustainable growth, focusing on innovation, efficiency and customer-centred solutions. Investments have been made in digital tools, such as real-time logistics and sales platforms to enhance operational efficiency and customer experience. Through its sustainable practices and zero-waste commitment, Shree Cement is aligned with the national objectives of fostering a greener economy.
