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Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Industry Value Chain & Structure

 Industry Overview

 Industry Value Chain

Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Industry Overview

 India is the second largest producer of cement in the

world after China

 Total Production capacity of 166 MNT

 CAGR of 7.6% (LAST 5 YEARS)

 Per capita consumption of 125 KG

VALUE CHAIN

Raw crushed Roller Grindin

materials press g mill
Limestone
Hematite
bauxite

Rotary Clinker Clinker

clinker
klin cooling storage
pre heater at 1200-1450 ºc

Cement packagi
storage
mill ng

Add gypsum
Dispatch to
consumers
SCOPE FOR CEMENT INDUSTRY IN INDIA

•The Per Capita

Consumption Of
INDA Is Lower
Than The World

•Contribution is
Rs. 33,677 Cr to
the GDP
approximately
0.72% of GDP

SOURCES:CMIE
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Industry Segmentation
On the Basis of Packaging

cement

Bag cement Bulk cement

97% usage 3% usage

Bulk Cement, is an alternative to bagged cement, which is

of particular advantage to large consumers of cement.
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Segmentation
On the Basis Of type of Cement
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Industry Segmentation
 52 large cement plants in
India(93% installed capacity)

 Capacity expansion of large

plants lead to increased
installed capacity

 Rapid demand from urban

housing sector, infrastructure
a major driver.

SOURCES:CMA
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Industry Segmentation
 Cement demand
dependent upon housing
sector

 Hike in real estate prices

will not hit cement
industry.

 India being a growing

economy, new projects
inevitable, hence no
effect of rise in prices.
SOURCES:CMA
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Production Capacity

TOP 5
PLAYERS
CONTRIBUTE
45% TO THE
TOTAL
PRODUCTION

SOURCES:CMA
•Production has
increased
significantly
over the years

•Low import
because of
poor condition
of port
 The demand is
greater than the
supply & cement
prices are rising
rapidly
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Michael Porter Analysis

Threat to new entrant : high to moderate
Large amount of capital and long gestation period is required to sustain in
the long run.
Goodwill is a deciding factor in the long run
Access to limestone reserve also act as a significant entry barrier

Bargaining power of suppliers: high

Licensing of coal & limestone is required.
Shortage of coal & rising fuel price remain a concern.

Competitive rivalry: high to moderate

Very little brand differentiation.
The competition is intense with players resorting to expanding reach and
achieving pan India presence.

Bargaining power of buyers: moderate

sales volumes mostly depend upon the distribution reach of the company.

Threat of substitute: low

There is no substitute product for construction.
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Industry Drivers
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Budget Impact: Cement Price

Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

Mergers & Acquisition in Cement Industry

 THE CEMENT SECTOR CONTRIBUTING TO 7 %TO THE TOTAL DEAL VALUE IN INDIA

 HOLCIM INCREASED ITS HOLDING IN AMBUJA CEMENT FORM 22 PER CENT TO 56

PER CENT FOR INVESTMENT OF US$ 1.8 BILLION.

 HOLCIM INCREASED ITS STAKE IN ACC CEMENT WITH US $ 486 MILLION

 LEADING FOREIGN FUNDS LIKE FIDELITY, ABN AMRO, HSBC, NOMURA ASSET
MANAGEMENT FUND AND EMERGING MARKET FUND HAVE BOUGHT 7.5 PER CENT
IN INDIA CEMENTS (ICL) FOR US$ 148.19 MILLION.

 CIMPOR THE PORTUGESE CEMENT MAKER PAID US$ 75.76 MILLION FOR GRASIM
INDUSTRIES
Industry Value
Market Size & Industry Issues &
Chain &
Structure
Growth Segment Indian Cement Industry Competition Growth Drivers
Concerns

ISSUES & CONCERNS

 Coal allocation  Cartelization of prices

 Import duty on coal and pet  High transportation cost

coke
 Govt. banning exports
 VAT on cement and clinker is
12.5% where as steel 4%  Infrastructure development

 High royalty charges for  High tax and excise duty

limestone mining
 Lack of port handling
 Lack of wagons and equipments capability

 Regional disequilibrium  Demand-supply mismatch

 High attrition