The Indian cement industry is undergoing rapid consolidation, with a minimum economic size now at ten million tonnes. Smaller companies with capacities of three to five million tonnes are finding it more viable to sell their operations to larger players. HM Bangur, Chairman of Shree Cement, highlights that no cement company in India has ever defaulted on bank loans or taken a haircut, indicating a robust market with ample buyers.
Shree Cement has achieved significant growth through organic expansion, focusing on building new capacities rather than acquiring existing ones. This approach has proven to be cost-effective and beneficial for local communities. Despite the real estate boom and increasing demand for space, the cement industry’s capacity creation is outpacing demand, maintaining a healthy 75% to 85% capacity utilization over the past two decades.
Competition remains fierce, but companies like Shree Cement prioritize fiscal discipline and strategic growth, aiming to grow slightly above the industry average, which is tied to India’s GDP growth. The company’s successful track record and prudent expansion strategy position it well for continued success in the coming decade.
