NOVEMBER, 20249CENTRAL GOVT'S INFRASTRUCTURE INITIATIVE DRIVING GROWTH IN CEMENT SECTORSTEEL SHORTAGE TO HAMPER INDIA'S ENERGY INDEPENDENCE GOALSIndia's power sector is facing a significant 30 percent shortage of Cold-Rolled Grain-Oriented (CRGO) steel, a crucial material for transformers and electric motors, according to the Global Trade Research Initiative (GTRI). CRGO steel's grain orientation helps reduce energy losses in transformer cores, making it indispensable for efficient power distribution. However, domestic production currently meets only about 10-12 percent of the total demand, compelling India to rely on imports from countries like Japan, South Korea, China, and Russia.The shortage has been exacerbated by delayed license renewals from the Bureau of Indian Standards (BIS), which certifies foreign suppliers under a Quality Control Order. Many of these licenses are nearing expiration, causing supply uncertainty and limiting import options to approved vendors and grades.Ajay Srivastava, founder of GTRI, emphasized the need for independent auditing of the BIS process to address delays. He also highlighted the importance of prioritizing local CRGO production as a strategic goal to secure India's energy future. In FY 2024, India's demand for CRGO steel reached 400,000 tonnes, with domestic production at only 50,000 tonnes and imports filling much of the gap. Ambuja Cements specified in a press release that growth is anticipated for the cement industry in the second half of FY 2025 due to the Centre's weight on infrastructure development and demands from the housing and commercial sectors.Ambuja Cements announced in a press release, published together with their Q2FY25 earnings, "Strong infrastructure demand and ongoing needs from the housing and commercial sectors are anticipated to boost cement demand in H2 FY 2025."The cement producer stated that the enactment of the Pradhan Mantri Awas Yojana (PMAY) Urban Housing 2.0, with a budget of 11 lakh crore rupees, is projected to also positively influence the business."Strategic investments in roads, railways along with urban and commercial amenities, is poised to drive robust growth," mentioned the Adani-owned enterprise.In the second quarter ending September 2024, Ambuja Cements recorded a standalone net profit of 501 crore rupees, indicating a 22 percent cut from the 644 crore rupees earned in the corresponding quarter of the last year.In September, Ambuja Cements publicized in its report that it had inked a binding contract with Orient Cements to acquire a 46.8 percent equity stake. Additionally, the company became the first cement business globally to join the Alliance for Industry Decarbonization (AFID).After successfully concluding this contract, the company strategizes to accomplish a production capacity exceeding 100 million tonnes per year by the end of the financial year. TOP STORIES
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