Cementing the difference
Schubert Fernandes
22 August 2002
Mumbai: China has been the leading cement producer since 1985 and has produced nearly 36 per cent of the worlds total cement in the year 2000. The other three big producers the US, India and Japan put together contribute to about 20 per cent of the worlds total cement produce.
China now consumes about 35 per cent of the worlds cement and the figure is expected to rise to about 40 per cent by the year 2010. With an economy relatively insulated from international events, including a refusal to devalue its currency, China has been able to avoid many of the effects of the economic crisis. However, its domestic demand has remained suppressed and the growth in consumption has been affected.
| China | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 |
| Dispatches (million tonnes) | 468 | 480 | 501 | 511 | 557 | 560 | 570 |
| % Increase | -- | 2.6 | 4.4 | 6.0 | 8.3 | 0.5 | 1.8 |
| India | |||||||
| Dispatches (million tonnes) | 65 | 70 | 77 | 82 | 94 | 93 | 102 |
Forty per cent of Chinas cement is used for basic infrastructure construction, 25 per cent is used for maintenance and 33 per cent in rural areas, which is also the case in India. Thus, consumption of cement in both the countries is clearly linked with economic growth.
Where both the countries differ is in the road network and transportation sector China uses only cement concrete in road construction, which is not the case with India. The industry, though, is trying to highlight the positive factors of using cement in road construction instead of bitumen and save crores of rupees for the Indian government.
Cement prices
Since 1997, deflation and increased competition throughout China have pushed down cement prices. Despite the increase in consumption of cement prices fell to US $36 for high-grade bulk cement and $38 for bagged cement. In India, the current prices of bagged cement have been around Rs 150 a difference of Rs 1,702.
Prospects and future developments
China is expected to maintain its moderate growth in cement production and the trade balance is expected to remain positive. Foreign investment is expected to play a key role in the growth of the cement industry. Bulk cement is expected to become a larger proportion of Chinese cement output reaching 182 million tonnes by 2005.
