Trade estimates suggest that in Bihar, Jharkhand and West Bengal, demand went up by 10-15 per cent. And, the demand in Odisha rose by 8-10 per cent.
“Demand in the east has been primarily driven by individual house builders and infrastructure to some extent,” said Kunal Shah, analyst at YES Securities.
As much as 17 million tonne per annum (mtpa) of fresh capacity is expected to be added in the region in the next two years.
Dalmia Bharat is expected to commission two 2.2 mtpa grinding units in West Bengal and Odisha, respectively, in the next fiscal year while its 2.5 mtpa unit in Bihar is set to be operational in 2021-2022.
is expected to commission its 3 mtpa grinding unit in Odisha while Ramco Cement is readying its 1 mtpa capacity in Odisha also.
Besides ACC Cement, UltraTech, JK Lakshmi Cement, Sagar Cement and Nuvoco Vistas are adding grinding capacities. This will take the total installed capacity in the east to around 105 mtpa by 2022.
On the other hand, acquisitions are also paving the way for consolidation in the market. After this, the market will be dominated by a few players only.
After the recent acquisition of Emami Cement by Nuvoco Vistas for an enterprise value of Rs 5,500 crore, the latter suddenly became the third largest cement maker in the region, overtaking Shree Cement.
Under the changed market scenario, the top six companies
in the east – Dalmia Bharat, UltraTech Cement, Shree Cement, Nuvoco, ACC and Ambuja Cement – account for over 80 per cent of the total 92 mtpa capacity. '
Dalmia Bharat leads with 19 per cent market share, followed by UltraTech at 17 per cent. Nuvoco and Shree account for 15 per cent and 14 per cent, respectively.
“Consolidation in the market will help the industry and aid in restoring a level-playing field. Previously, there used to be 4-5 major players, each having 18-20 per cent market share. Now, the industry is again headed back that way,” said Ghose, adding it will also help bring in further stability.
is of the view that although demand has been tepid nationally, it will eventually pick up as there is a 100 per cent headroom to increase the current consumption level of 350 kg per person per year.
“The next phase of development in cement is poised to happen in the east, which will see huge capacity addition owing to consumer demand,” said H M Bangur, managing director of Shree Cement.