The RMC segment is witnessing a robust upswing in demand.

Prashant Jha

Chief Ready-Mix Concrete (RMX) and Modern Building Materials (MBM) Officer, Nuvoco Vistas Corp

How do you assess the cement demand in the current construction scenario?

The present construction landscape in India implies a promising outlook for cement demand, marked by several positive signs pointing toward substantial growth. Projections hint at a noteworthy surge in cement production for FY24, estimated to increase by 7-8%. This optimistic outlook is attributed to substantial investments in infrastructure projects and the burgeoning development of mass residential initiatives.

Forecasts predict an upsurge in cement demand, potentially escalating from the current 390 million tonnes to an estimated 450.78 million tonnes. Additionally, the real estate sector is set to play a pivotal role, projecting an increase in GDP contribution from 7.3% to an anticipated 13%. The construction sector ranks as the third-largest recipient of Foreign Direct Investment (FDI) inflows, highlighting the industry's confidence and growth potential.

Projections further indicate a sustained growth trajectory for the cement industry, with a projected Compound Annual Growth Rate (CAGR) of 4-5% until FY27. This indicates continued demand for construction materials and cement, affirming a positive outlook for the industry in the foreseeable future.

What is the demand-supply scenario of cement? Which are the major demand drivers?

The demand-supply dynamics within India's cement industry are intricately influenced by several key drivers. Notably, the housing and real estate sectors emerge as formidable forces propelling demand. Projections indicate that the real estate market could attain a substantial valuation of US$ 1 trillion by 2023, underscoring the significance of these sectors in shaping the demand landscape.

Public infrastructure development is another pivotal factor, exemplified by a substantial budget allocation exceeding Rs 10 lakh crore (US$ 120 billion) for the fiscal year 2023-24, notably for the Ministry of Road Transport and Highways. The National Infrastructure Pipeline has remarkably expanded to include 9,305 projects, reflecting a robust trajectory for infrastructure growth, further impacting the demand for cement.

Additionally, the anticipation of industrial development, fuelled by robust economic growth, is expected to further drive demand for cement in the long term. The industry's structure highlights a significant private sector presence, accounting for 98% of total capacity, with the top 20 companies contributing approximately 70% of total production, portraying a concentrated yet competitive industry landscape.

What are the evolving trends in cement grades and applications? Which are your latest products in this space?

The cement industry is undergoing transformative shifts in response to emerging trends in cement grades and applications, aligning with diverse construction demands. Our latest product offerings strategically align with these trends, emphasizing performance excellence and adaptability to evolving construction requirements.

In response to the demand for specialized solutions, we have introduced advanced cement grades designed for specific purposes, ensuring optimal performance across varied applications. In the domain of Ready-Mix Concrete (RMC), we are focusing on offering Ultra High-Performance Concrete (UHPC) that will provide exceptional strength and durability for demanding applications.

Our Instamix range represents another stride in simplifying construction processes. With offerings like Column Concrete and Bag Concrete, we streamline and optimize usage for specific construction needs, enhancing efficiency and convenience for our clients.

Furthermore, our Lightweight Concrete and Thermal Concrete versions cater to specific requirements, aiming to create lighter structures and enhance insulation properties. These products need and commitment to leading technological advancements, addressing evolving industry needs, and maintaining a diverse range to suit various construction requirements.

How is the demand trend evolving in RMC segment?

The Ready-Mix Concrete (RMC) segment is witnessing a robust upswing in demand, primarily fuelled by the government's emphasis on bolstering infrastructure development. Urbanization plays a pivotal role in this surge, with projections indicating a rise in India's urban population to 542.7 million by 2025, reflecting a notable uptick from 518 million in 2023.

The Indian real estate market is poised for substantial expansion, with estimates foreseeing an impressive growth rate of 19.5% CAGR between 2017 and 2028. This trajectory is expected to culminate in a remarkable US$ 1 trillion valuation by FY30.

Segments like luxury homes and organized retail real estate are witnessing noteworthy increases, with major cities such as Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Pune, and the National Capital Region (NCR) contributing significantly to this growth. Government initiatives like 'Housing for All' are expected to attract substantial investments, while policy measures like 100% FDI in townships within Special Economic Zones (SEZs), Real Estate Investment Trusts (REITs), and Real Estate
Bonds are stimulating demand. Moreover, initiatives like GatiShakti Terminals and the projected expansion of flexible spaces highlight a diverse growth path for the RMC segment, supported by urbanization, evolving family structures, and increasing travel demands, potentially reaching a significant US$ 7.7 billion by FY2030.

How are sustainability and green initiatives gaining pace in the cement industry? What are your major contributions to this?

Sustainability and green initiatives are gaining significant traction within the cement industry, and our company is deeply committed to playing a substantial role in this movement. We have consistently demonstrated our dedication to advancing sustainability by aligning our initiatives with industry-wide endeavors focused on reducing the environmental impact of cement production.

Working closely with our cement function, we've embarked on a journey implementing several key strategies to enhance sustainability across our operations. These strategies encompass embracing alternative raw materials like fly ash and slag to diminish our reliance on conventional resources. Moreover, we're vigorously implementing energy-efficient technologies to reduce energy consumption while actively exploring innovative methods for carbon capture and utilization to mitigate emissions. These collective efforts signify our unwavering dedication to sustainability, aiming not just to meet but exceed industry standards.

How do you visualize the cement and concrete market in the next five years? What are your future plans?

In the next five years, we anticipate a dynamic landscape for both the cement and concrete markets. The cement sector is projected to experience a Compound Annual Growth Rate (CAGR) of 5%, while the Ready-Mix Concrete (RMC) market is poised for even more significant growth at a CAGR of 8.2%. Notably, India is undergoing a transition from manual and site-mix practices to ready-mix concrete, which has consistency in product quality and supply. The consumption of cement through RMC is going to increase in the coming years due to an increase in high-rise residential projects and Projects of National Importance.

Looking ahead, we envision a strong emphasis on technology integration to enhance operational efficiency, geographic expansion into untapped markets to capitalize on emerging opportunities, and sustainability initiatives, aligned with environmental goals, to ensure our operations align with the evolving market trends and position ourselves as a leader in driving positive transformations within the cement and concrete industry.