History of Cement Industry in India - General Knowledge Today

History of Cement Industry in India

Cement Industry is one of the largest industries of the world and occupies predominant place as one of the basic industries for development and its employment generation capacity. Cement ranks next to steel in construction material and so is the basisIn a futures market, basis is defined as the cash price (or spot price) of whatever is being traded minus its futures price for the ..... of all modern construction.

  • John Smeaton, who is also known as "father of civil engineering" and credited for design of many bridges, canals, harbors etc. was the first proclaimed civil engineer and pioneered the use of 'hydraulic lime', which led to discovery of modern cement.
  • The common cement or Portland cement was prepared and Patented by Joseph Aspdin in 1824.
  • In the later part of 19th century, cement production was taken up by many countries many decades after the first patent was taken by Aspdin in England.
  • India entered into the Cement Era in 1914, when the Indian Cement Company Ltd. started manufacturing Cement in Porbundar in Gujarat.

However, even before that a small cement factory was established in Madras in 1904 by a company named South India Industrial Ltd.

Indian Cement Company Ltd produced only one type of cement which was designed by the British standard committee as "Artificial Portland Cement". This company marketed its product in Mumbai, Karachi, Madras and other parts and became a financial success.

At that time India had to import cement from England. The price of the imported cement was higher. Some other factors such as increase in domestic demand, reduction in supply from abroad (due to war), availability of Indian Capital, ample raw material, Cheap labour, support of the government etc. made it a leading industry in India in a short period of time.

  • In January 1915, a cement unit was started at Katni in Madhya Pradesh
  • In December 1916, another unit at Lakheri in Rajasthan was started.

During the First World War period, cement production in these three important factories was taken under control of the government and later the control was lifted once the war was over. After the war, 6 more units were launched in India.

In 1924, India's cement production was 267000 tons. However, initially this increased production could not reduce the imports and the industry suffered a rate war. This led to closure of many indigenous units. The Indian companies which were away from ports or commercial centers faced the locational disadvantage.

The above incidents led to the industry stakeholderAny individual or group who has an interest in a firm; in addition to shareholders and bondholders, includes labor, consumers, suppliers, the local community and ..... approach to the government for some kind of protection. The British government constituted a Tariff board and this board recommended protection of the indigenous industry against the dumpingIn the securities market the offering of large amounts of stock without regard for the effect on prices on the market. In the international trade, ..... of the imported cement. It recommended raising of the customs duty to 41% which was around 15% at that time, but this recommendation was not accepted by the government.

  • In 1925, first association of the cement manufacturers was formed as "Cement Manufacturers Association".
  • It was followed by "Concrete Association of India" in 1927.
  • In 1930 "Cement Marketing Company of India" was started and this was followed by a quota system on the basis of installed capacity of the factories.
  • In 1936, all the cement companies except one i.e. Sonevalley Portland Cement Company agreed and formed Associated Cement Companies Ltd. (ACC). This was the most important even in the history of cement industry in India. Many more companies were established in the following years.
  • Before partition India had 24 factories, out of which India retained 19 factories, which annual production of 2.1 million tons. Pakistan faced a problem at the supply side as it had problem of disposal of the cement produced and India faced a problem in demand side as production fell to 2.1 million tons from 2.7 million tons.
  • After Independence, the partition of the country had a bad impact on the cement industry.
  • In 1948, the government adopted the Cement Expansion Scheme which envisaged new factories to increase the production. New factories were established at Bagalkot, Jaipur, Orissa, Travancore etc.
  • In 1950-51, there were 22 operating units with an installed capacity of 3.3 million tons.
  • Cement industry was given a great importance in all the initial five year plans. The target of the first five year planFirst Five Year Plan (1951-1956)1. The first Indian Prime Minister, Jawaharlal Nehru presented the first five-year plan to the Parliament of India on December 8, ..... was to raise the installed capacity to 5.4 million tons which was achieved. The industry has grown to manifold since then.
Last Updated: November 22, 2013

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