India´s cement industry will see addition of 50 million tonnes (MT) of capacity in the current financial year, despite profitability expected to go down by 20 per cent in last fiscal.

According to the Cement Manufacturers’ Association (CMA), the industry, which is expected to grow at about 1.2 times of the country’s GDP growth this fiscal, is estimated to have sales growth of 8-9 per cent in 2008-09, but profit margins are likely to dropped by 20 per cent for the same year.

“In 2009-10, about 50 MT of capacity will be added to the country’s total cement production,” CMA president H M Bangur told reporters here.

In the last fiscal, the 30 MT of capacity were added and the additional production of 50 MT this year would fulfill India’s overall requirement, he said.

As on March 31, the country had an installed capacity of 210 million tonnes, while production stood at 181 MT in FY’09, he added.

Bangur, however, said the industry’s overall profit margin was expected to be lower by 20 per cent in 2008-09 due to rising input costs.

“Profit is falling due to cost structure… earlier most of the manufacturers used to get coal by linkage, but now over 50 per cent of this fuel is purchased from the open market or imported,” he added.