South India has emerged as an attractive choice for Indian cement companies as they compete aggressively to secure a larger market share.
Robust growth potential in the sector, driven by infrastructure spending, has prompted conglomerates, such as Adani and JSW Group, to enter the market.
Cement firms under the Adani group - Ambuja and ACC- are targeting 140 million tonnes per annum (MTPA) capacity by FY28. The Birla-owned UltraTech is looking to hit 174 MTPA and 195 MTPA by FY2025 and FY2027, respectively.
The companies have indicated that they will pursue both organic and inorganic strategies to increase their market share. Since last year, cement firms have sharpened focus on the southern markets. MC explains why.
What is the current status of south Indian cement industry?
The total installed capacity of south Indian states (Kerala, Karnataka, Tamil Nadu, Andhra Pradesh and Telangana) amount to 184 MTPA, according to data from Cement Manufacturers Association. India's total installed cement capacity is 541 MTPA.
The southern states have the largest share in cement production (33 percent), followed by North (22 percent), East (19 percent), West (13 percent), and Central (13 percent), according to ratings agency Infomerics.
UltraTech holds a significant presence in the region, with a capacity of close to 20.5 MTPA. Among the regional players, Ramco Cements is a major player, with multiple plants in Tamil Nadu, Andhra Pradesh and Karnataka. Other players include India Cements and Dalmia Bharat.
What are the latest cement acquisitions in the South?
In 2023, UltraTech announced a deal to buy Kesoram Industries, with the deal bringing about an additional 10.75 million tonne-capacity under UltraTech Cement’s fold, while also marking its entry into Telangana.
Adani group companies, too, joined the bandwagon and announced the acquisition of a grinding unit in Tamil Nadu. Its second acquisition of Penna Cement took Adani Cement's operational capacity to 89 MTPA. The deal not only expanded the group's presence in south India but also provided access to the Sri Lankan market.
Shree Cement also announced investments to expand capacity in Karnataka while Dalmia Bharat announced the setting up of a new cement mill at its existing unit in Ariyalur, Tamil Nadu. The company has invested Rs 204 crore for the unit, which would have a capacity of 1 MT.
What is the current presence of cement majors in south India?
UltraTech, with a capacity of close to 20.5 MTPA, operates several integrated cement plants and grinding units across Tamil Nadu, Andhra Pradesh, Karnataka, and Telangana.
ACC operates cement and concrete plants in Tamil Nadu, Andhra Pradesh and Karnataka.
JSW Cement has a grinding unit in Karnataka, integrated plant in Andhra Pradesh and RMC (ready mix concrete) plants in Karnataka, Telangana and Andhra Pradesh.
Why are cement companies betting high on south India?
Tamil Nadu, Karnataka, Andhra Pradesh, and Telangana are experiencing significant urban growth, with cities expanding rapidly and new residential, commercial, and industrial projects emerging.
The region is undergoing extensive infrastructure development, including highways, bridges, metro systems, and airports, which triggers substantial demand for cement.
Due to the highest number of regional players and the highest installed cement capacity, south India represents the most fragmented and competitive market within the country’s cement industry. Also, asset valuations in south India tend to be lower, compared to other regions in India, making it an attractive ground for acquisitions.
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