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Capacity Share of Top-Five Cement Players to Jump From 55 to 65 % in One Year

Chennai: Owing to the heightened consolidation in the market, aggregate production capacity of top-five cement manufacturers is expected to move up from 55 per cent this fiscal to 65 per cent next year. With the presence of several small to medium players, south India offers high potential for further inorganic growth.

The cement industry has seen a significant rise in inorganic expansions over the past one and half years with almost 10 deals comprising around 60 million tonnes capacity announced, mostly by the market leaders. The Indian cement industry had witnessed its largest merger and acquisition deal in FY23 with 67.5 mnt of domestic cement capacity changing hands from Holcim to the Adani Group. The industry has seen around 25 deals since 2016 with over 200mnt of capacity changing ownership over the period.

This would help the capacity share of top-five players, which stood at 53 per cent in FY20, cross 55 per cent in FY25 and once the announced deals get completed, the share is set to jump to 65 per cent, according to India Ratings.

Given the demand potential emanating from the likely development in infrastructure and housing, significant investments have been planned over the next five years and the leading players are aiming at increasing capacities by 50-200 per cent over FY23-FY30. This would see their capacity share increase to 68 per cent by FY30.

Meanwhile, the capacity share of top-six to top-10 players will remain stagnant at around 17-18 per cent and that of the smaller players, which stood at 31 per cent in FY20 will fall to 14 per cent by FY30.

The southern market has seen heightened M&A activity in recent times. Given the high fragmentation and presence of several small-to-mid-sized players, this market still offers high potential for inorganic expansion, followed by the West.

( Source : Deccan Chronicle )
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