cement industry (1)

8/9/2019 Cement Industry (1)

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A REPORT ON THE DEMAND &SUPPLY OF C EMENT IN INDIA (2005-

2008)


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INTRODUCTION W HAT IS C EMENT ?

Cement is a mixture of Limestone, Clay, Silica andGypsum. It is a fine powder which when mixedwith water sets to a hard mass as a result of

hydration of the constituent compounds.Cement is manufactured by burning a mixture ofLimestone and Clay at high temperatures in a kiln,and then finely grinding the resulting clinker alongwith Gypsum. The end product thus obtained iscalled Ordinary Portland Cement (OPC).


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INTRODUCTION ( CONTD ..) The Indian Cement Industry with a total capacity of 165million tones is the second largest after China.Cement industry has contributed around 8% to theeconomic development of India.

Private housing sector is the major consumer of cement(53%) followed by the government infrastructure sector.Northern and Southern regions consume around 20%-30%cement while the Central and Western regions areconsuming only 18%-16%.

Among the states, Maharashtra has the highest share inconsumption at 12.18%, followed by Uttar Pradesh.In production terms, Andhra Pradesh is leading with14.72% of total production, followed by Rajasthan.


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D OMESTIC PLAYERS

Associated Cement Companies Ltd (ACCL) manufactures ordinaryPortland cement, composite cement and special cement. It has twelvemanufacturing plants located throughout the country with exports toSAARC nations.

B irla Corp has an installed capacity of 4.78 million metric tones andproduced 4.77 million metric tones of cement in 2003-04. The companyhas two plants in Madhya Pradesh and Rajasthan and one each in WestBengal and Uttar Pradesh.

Century Textiles and Industries Ltd (CTIL) has an installed capacityof 4.7 million tones with a total cement production of 5.43 million tonesin 2003-04. CTIL has four plants that manufacture cement, one inChattisgarh, two in Madhya Pradesh and one in Maharashtra.


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D OMESTIC PLAYERS ( CONTD ..) G ujarat Ambuja Cements Ltd ( G ACL) has clinkermanufacturing facilities at Himachal Pradesh, G ujarat,Maharashtra, Chattisgarh, Punjab and Rajasthan, with a capacityof 12.6 million tonne in 2003-04.

India Cements is the largest cement producer in Southern Indiawith a total capacity of 8.81 million tonne and plants in AndhraPradesh and Tamil Nadu.

G rasim- UltraTech Cemco - With the acquisition of UltraTech,L&T's cement division in early 2004, Grasim has now become theworld's seventh largest cement producer with a combined capacityof 31 million tones. It has plants in Madhya Pradesh, Chattisgarh,Punjab, Rajasthan, Tamil Nadu and Gujarat among others.


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MAJOR P LAYERS IN I NDIA


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CURRENT SCENARIO (2007- 08)

The cement industry comprises 130 large cement plants andmore than 300 mini cement plants.The industry's capacity at the end of the year 2007-08reached 188.97 million tons which was 166.73 million tons atthe end of the year 2006-07.

Cement production during April to March 2007-08 was 168.31million tons as compared to 155.66 million tons during thesame period for the year 2006-07.Despatches were 167.67 million tons during April to March2007-08 whereas 155.26 during the same period for the year2006-07.

During April-March 2007-08, cement export was 3.65 milliontons as compared to 5.89 during the same period for theyear 2006-07.


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REGION WISE CAPACITTY


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R EGION WISE CEMENT DISPATCHES


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DEMAND DRIVERS The demand from the housingsector is ~53% of the total Indiancement demand.

During April-November 2007,cement demand grew by 10 percent year-on-year (y-o-y)propelled by the growthwitnessed in end user segmentssuch as housing, infrastructureetc.


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E XHIBIT 1: A LL-INDIA CE MENT DISPATCHE S & YOY G ROWTH


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C APACITY U TILISATION


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D EMAND -S UPPLY S CENARIO y Cement demand is expected to outstrip supply for the next year

and a half as no major capacities are coming on-stream, thusproviding enough flexibility to cement manufacturers to furtherhike the prices.


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11 TH F IVE Y EAR P LAN


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CONCLUSION

The rise in the price of cement is because of the gap of demand &supply in the market. The demand for cement is much higher thanits actual supply. But with the production maximization, which canbe encountered in next few years, this gap may narrow down, that

may ensure the market to be in equilibrium.

In spite of high price of the product, the demand is high because ofthe increasing rate of infrastructural development.

Major Demand was from the housing sector, which may shift toinfrastructure as lots of infrastructural development processes arealready being taken up & due to the increased price, housingsegment started showing a slowdown.


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THANK YOU !!!

cement industry (1)

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