India: The Cement Manufacturers Association (CMA) says that the local cement industry has 100Mt/yr of excess production capacity out of a total 425Mt/yr. The sector is sitting on over US$9.4bn of ‘sunk investment in surplus capacities’ but the CMA expects infrastructure schemes including railway projects to increase demand, according to the Press Trust of India. CMA President Shailendra Chouksey added that initiatives such as the Mumbai-Ahmedabad bullet train could raise cement consumption by 3 – 5Mt/yr.
In separate comments M P Rawal, the company administrator of JK Cements, confirmed the CMA’s assessment of the sector by saying that a slowdown in the construction industry in 2016 had led to a 70% utilisation rate of the country’s cement plants. He expected the same situation to persist in 2017. However, he warned that one bullet train project was unlikely to have a big impact on the situation.