Bihar Dalmia Cement Plant Capacity Expansion Approved

Dalmia Cement (Bharat) Ltd has secured regulatory approval to expand production at its integrated cement works in Banjari, Rohtas district, in western Bihar, in a move that could strengthen regional construction supply chains and stimulate local industrial growth. The state Industries Department authorised a 50 per cent increase in daily production capacity, raising it from 1 million tonnes per day (MTPD) to 1.5 MTPD under the Bihar Industrial Investment Promotion Rules, 2016. A capital outlay of approximately ₹107.32 crore — deploying private investment — underpins the project. 

The expansion is a strategic inflection point for the cement sector in eastern India, where infrastructure demand is on an upward trajectory but manufacturing density has historically lagged behind the national average. Industry insiders note that augmenting installed capacity in growth corridors not only reduces logistics bottlenecks but also strengthens resilience against regional price volatility. Cement, a foundational input for housing and infrastructure, directly affects project viability and urban delivery timelines. From an economic perspective, the Banjari expansion dovetails with broader efforts to decentralise industrial activity beyond traditional manufacturing hubs. Enhanced production is expected to generate direct employment for nearly 600 workers in both skilled and unskilled roles, a welcome outcome in a region where industrial jobs have been sparse. Local policymakers have framed the decision as a catalyst for ancillary economic activity, from materials handling to transport services. 

For Dalmia Cement, the increase complements an already aggressive capacity expansion strategy pursued over several years. The company has been systematically enlarging its footprint across multiple states, with other recent additions to grinding and clinker units in the south and east. Sector analysts observe that this broader push aligns with the company’s long-term targets of enhancing production scale to capture market share in both traditional and emerging demand centres. However, the timing of the capacity boost comes amid a challenging pricing environment for the cement industry. Cement producers nationwide have faced fluctuating realisations due to shifts in end-market demand and regulatory changes, including tax revisions that have influenced retail prices. The ability to translate higher capacity into resilient profitability will depend on how effectively producers manage input costs such as energy and logistics — typically major contributors to unit production cost. 

Urban and infrastructure planners emphasise that expanded capacity should be matched with demand flows from housing and public works projects. The eastern and central states are set to receive elevated capital allocation in upcoming public budgets, particularly in transport infrastructure and affordable housing — segments that are traditionally cement-intensive. Synchronising production scale with these pipelines can reduce supply-side bottlenecks and support sustainable city expansion. Yet, long-term performance will hinge on market absorption and price stability. As the company and peers ramp up capacity, competitive pricing dynamics may intensify, exerting pressure on margins if demand growth does not keep pace. Industry observers suggest that aligning capacity additions with sustainable demand — especially for green building practices and low-carbon materials — will be essential to future competitiveness.

Looking ahead, Dalmia Cement’s expanded production base in Bihar positions it favourably for the next phase of India’s infrastructure evolution, but the interplay between capacity, pricing, and sustainable demand will shape how effectively these gains are realised.

Also Read: India Cement Industry Sees Weaker Pricing Trends

Bihar Dalmia Cement Plant Capacity Expansion Approved