Bengaluru May 22 2024: India’s JSW Cement, opens new tab said on Tuesday it will invest around 30 billion rupees ($360.2 million) to set up a cement factory in the northern state of Rajasthan, which borders Pakistan, in a bid to meet surging demand for the key construction material.
Indian cement makers are ramping up production amid higher government spending in infrastructure and a healthy real estate market.
Pakistani producers suffer from overcapacity, but have established themselves as an important force in the global export market. They continue to locate new markets, including the UK in January 2024. Lucky Cement was among leading exporters overall, with a large share of its orders originating from Africa.
In the 2024 financial year so far, Pakistan’s total cement dispatches have risen by 2.5% to 37.5Mt, driven by a 65.4% increase in export dispatches to 5.72Mt compared to April 2023. However, domestic sales have declined by 4.1% to 31.7Mt. The north-based plants dispatched 26.2Mt domestically, a 3.6% year-on-year decrease, while south-based plants dispatched 5.55Mt, down by 6.5% from April 2023.
India’s market leader UltraTech Cement, said last month it will set aside $3.9 billion for ongoing capital expenditure over the next three years.
JSW Cement’s proposed unit will supply cement to Rajasthan, Haryana, Punjab and the national capital region, marking the firm’s entry into the country’s northern market, which is dominated by Shree Cement, opens new tab and UltraTech.
“JSW Cement’s investment in Rajasthan is a move that will give it access to rich limestone reserves in the state as well as put a lid on freight costs, aiding its core profit margins,” said Ashutosh Murarka, research analyst at Choice Broking.
“The company is still a new kid on the block and larger incumbents can derive comfort from that,” Murarka added.
According to its latest annual report, opens new tab, JSW Cement conducts its business in the eastern, southern and western regions of the country.
The new cement facility will include a clinkerization unit with capacity of up to 3.30 million tonnes per annum (MTPA) and a grinding unit with a capacity of up to 2.50 MTPA, the company said in a statement.
JSW Cement will fund the investment through a mix of equity and long-term debt, and expects to create 1,000 direct and indirect jobs, it added.
