Simultaneously, there will be further phasing out of inefficient, smaller sized producers unable to ride out the prolonged loss-making phase. Industry consolidation began in a meaningful way coinciding with the country’s 13th five-year plan (2016-20) and by now well over 60% of clinker capacity is owned by ten largest cement groups. But China will still have to do a lot of catchup to come to the consolidation level found in Europe and the US, there still being in operation a large number of independent small cement companies in the world’s second largest economy.

Incidentally, China hosts the world’s two largest cement groups in CNBN with capacity of 530m tonnes and Anhui Conch with capacity of 353m tonnes. Both the companies have overseas production centres. Holcim of Switzerland is the world’s third largest cement group with capacity of 253.6m tonnes. The Swiss company, which in pursuance of ‘NextGen Growth 2030’ strategy is expanding the portfolio of high-value building solutions such as building systems and high-performance concrete to ensure half the net sales come from building solutions. In the meantime, Holcim has been engaged in streamlining operations that saw it exiting bulk cement business in Indonesia, India and Nigeria (to be divested in favour of China’s Huaxin Cement) to step up presence in high-growth regions and in solutions instead of commodity cement. Germany based multinational Heidelberg Materials, which besides offering solutions makes cement, aggregates and ready-mix concrete, is the global industry’s fourth largest.

In India and other emerging and developing economies, cement will be needed in growing quantities to support infrastructure building and urban and rural housing. In contrast, China, which already has a fairly robust urban infrastructure, developed over the years, will continue to experience cement demand fall, calling for sectoral reforms by way of another far-reaching round of capacity consolidation. In any case, small and medium Chinese cement groups having conceded pricing initiative to industry giants and experiencing growing pressure on margins will not demur selling out. The US and Europe have highly developed infrastructure and cement will be needed there for infrastructure renewal and maintenance. At the same time, the US, the UK and some other European countries are in need of new houses to accommodate growing population, including immigrants creating demand for cement.

The world’s fourth largest producer the US saw a marginal fall in production to 86m tonnes in 2024 and total shipments contracted by 6% year-over-year to 103m tonnes. Economic slowdown and high interest rates impacting residential construction restricted cement consumption to 110m tonnes. While new house starts outlook remains subdued what with Trump-Powell differences over interest rates, expected rises in infrastructure investment will generate cement demand. Europe, which is increasingly geared to make green cement to support sustainable and ecofriendly construction, had a cement market for 315.8m tonnes in 2024 with Germany leading the pack followed by Spain and Poland. European cement demand will be driven by “renovation, remodelling and reconstruction of infrastructure projects and filling the gaps in housing.”

The three years preceding 2024-25 (April to March) Indian cement makers had the benefit of strong demand growth, fuelled by good showing of infrastructure, housing and industrial and commercial segments. But thanks to holding of general elections when workers en masse returned home to participate in the dance of democracy, an extended monsoon well spread across the country affecting construction work, weak government spending in the first half and a slow real estate market moderated cement demand growth last fiscal to “4.5 to 5.5%,” says Crisil Intelligence. Demand improvement seen since the second half of 2024-25, continues to gain pace in the current year when consumption is to rise in the range of 6.5-7.5%, according to Crisil. The main two triggers for demand growth are the “10% rise in budgetary allocation for core infrastructure ministries and on expectation that an above normal monsoon will boost agricultural profitability, in turn lifting rural housing demand.”

Infrastructure and rural housing, both prioritised by New Delhi for funding have more than 30% share each of the country’s cement use. In the meantime, a good tide for cement demand is urban housing benefiting from interest rates falling. Another rating agency ICRA has forecast a healthy Indian cement volume growth of 6 to 7% fuelled by improvement in demand from housing and infrastructure sectors. Encouragingly too, Indian cement prices have started improving after a 10% fall in average realisation in last year’s first half. In spite of some demand blip in 2024 under the weight of some adverse, but temporary in nature, developments, the Indian industry continues to create new capacity along with continuing progress in consolidation of capacity.

ICRA official Abhishek Lahoti says: “Backed by healthy demand, we foresee capacity addition of 43-45m tonnes in 2026 financial year. This follows estimated capacity addition of 32-35m tonnes last year. Large cement groups operating at optimal utilisation levels are principal movers in fresh capacity building in order to maintain their market share.” He further says, the industry’s capacity utilisation in the current year will remain “stable at 70% on an expanded base.” Besides India, a star performer is Vietnam where the cement market is expected to record a CAGR (compound annual growth rate) of 7.98% between 2025 and 2033.

Growing demand for urban housing as high levels of migration from rural centres to cities happen, commercial buildings and infrastructure will support building of new cement capacity at an accelerated rate. Government support by way of investment incentives and streamlining of regulatory processes continues to encourage investment in the sector. Expanding domestic use led to a 3.5% rise in production to 184.2m tonnes. Vietnam is also a regular exporter of cement, overseas shipments being 20.29m tonnes in 2024.

MENA (Middle East and North Africa) region holds encouraging prospects for cement. The market for the bulk commodity in the region is driven by construction of industrial projects and office and residential buildings. Rapid urbanisation and people from outside coming to MENA to work and as tourists are prompting major investment in building infrastructure, resulting in demand generation for cement. A market survey says the region that attained a production volume of 756.12m tonnes in 2024 is forecast to record a CAGR of 5.5% to reach nearly 1,224.23m tonnes by 2034. While Egypt, Saudi Arabia and UAE are among the major producers and users of cement in MENA, foreign groups such as CEMEX, Heidelberg and CNBM have cut major production profile there. (IPA Service)