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Overview: Cement Industry


The cement industry is experiencing a boom on account of the overall growth of the
Indian economy. The demand for cement, being a derived demand, depends
primarily on the industrial activity, real estate business, construction activity, and
investment in the infrastructure sector. India is experiencing growth on all these
fronts and hence the cement market is flourishing like never before. Indian cement
industry is globally competitive because the industry has witnessed healthy trends
such as cost control and continuous technology up gradation. Global rating agency,
Fitch Ratings, has commented that cement demand in India is expected to grow at
10% annually in the medium term buoyed by housing, infrastructure and corporate
capital expenditures.
Cement Industry originated in India when the first plant commenced production in
1914 in Porbandar, Gujarat. The industry has since been growing at a steady pace,
but in the initial stage, particularly during the period before Independence, the growth
had been very slow. Since indigenous production was not sufficient to meet the
entire domestic demand, the Government had to control its price and distribution
statutorily. Large quantities of cement had to be imported for meeting the deficit. The
industry was partially decontrolled in 1982 and this gave impetus to its pace of
growth. Installed capacity more than doubled during the period 1980-90. It increased
from 27 million tonnes in 1980-81 to 62 million tonnes in 1989-90.
Encouraged by the positive response of the industry to the policy liberalization in the
cement industry, Government decontrolled the industry fully on 1st March 1989. With
the Industrial Policy Statement made by the Government in 1991, the cement
industry stands delicensed. It has also been listed as a priority industry in Schedule
III of the Industry Policy Statement making it eligible for automatic approval for
foreign investment up to 51 per cent and also for technical collaboration on normal
terms of payment of royalty and lump sum know-how fee.

Indian cement industry has thus been one of the pioneering industries in introducing
policy reforms. After the liberalization measures and globalization of Indian
economy, the cement industry has been growing rapidly at an average rate of 8 per
cent except for a short period in 1991- 92 when the industry faced demand
recession. The country is now the second largest producer of cement in the world.
India has also started exporting large quantities of cement and clinker.

Company Overview
ACC was formed in 1936 when ten existing cement companies came together under
one umbrella in a historic merger - the country's first notable merger at a time when
the term mergers and acquisitions was not even coined. The history of ACC spans a
wide canvas beginning with the lonely struggle of its pioneer F E Dinshaw and other
Indian entrepreneurs like him who founded the Indian cement industry. Their efforts
to face competition for survival in a small but aggressive market mingled with the
stirring of a country's nationalist pride that touched all walks of life - including trade,
commerce and business.
The first success came in a move towards cooperation in the country's young
cement industry and culminated in the historic merger of ten companies to form a
cement giant. These companies belonged to four prominent business groups -
Tatas, Khataus, Killick Nixon and F E Dinshaw groups. ACC was formally
established on August 1, 1936. Sadly, F E Dinshaw, the man recognized as the
founder of ACC, died in January 1936; just months before his dream could be
realized.

F. E. Dinshaw – the
founder of ACC
ACC stands out as the most unique and successful merger in Indian business
history, in which the distinct identities of the constituent companies were melded into
a new cohesive organization - one that has survived and retained its position of
leadership in industry. In a sense, the formation of ACC represents a quest for the
synergy of good business practices, values and shared objectives. The use of the
plural in ACC's original name, The Associated Cement Companies Limited, itself
indicated the company's origins from a merger. Many years later, some stockbrokers
in the country's leading stock exchanges continued to refer to this company simply
as 'The Merger'.

ACC Limited (ACC), an Indian based company is engaged in the manufacturing and marketing of cement
and concrete products. The operations of the company includes 14 modern cement factories, more than 30
Ready mix concrete plants, 20 sales offices, and several zonal offices. The company also has a distribution
network of over 9,000 dealers in India. The product portfolio

of
the company includes cement, blended cement,
bulk cement and concrete mix. The company has
four subsidiaries including ACC Concrete, Lucky
Minmat Private Limited, Bulk Cement Corporation
(India) Limited and Cement Marketing Company
of India Limited. The company is headquartered in Mumbai

ACC Limited Key Recent Developments

Apr 23, 2010: ACC reports marginal increase in first quarter net profit
Apr 12, 2010: ACC to build new wind farm in Maharashtra, India
Apr 09, 2010: ACC Commissions 2.5MW Wind Farm In Maharashtra, India
Jan 29, 2010: ACC acquires Encore Cement and Additives
Dec 13, 2009: ACC builds new cement plant in Karnataka, India

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