business · 2026-08-27
Cement Can't Travel Far
Photo: Dr Ajay Balachandran / Wikimedia (CC BY-SA 3.0)
A bag of cement almost never travels more than about 300 kilometres from the plant that made it. Past that, the lorry costs more than the margin on the cement.
Why does freight decide where cement sells?
Cement is heavy and cheap, so moving it eats the money made on it. Freight and handling run 18-20% of what it costs to run a cement company. Road is cheaper up to roughly 300 km and rail takes over past that, but either way the margin runs out long before the country does.
So India has no national cement market?
Not really one. It has regional markets that barely compete, because a plant in the south cannot profitably serve the north. Roads carry 71-72% of India's cement, rail 25% and waterways the rest, and the road share is exactly the short-haul traffic that the radius allows.
How do cement companies grow, then?
They buy somebody else's plant near the demand rather than expanding their own. Adding a kiln at an existing site makes more cement but does not extend the radius it can be sold into, so growth is a map problem before it is a manufacturing one. Watch acquisitions rather than capacity announcements.