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Presented By:Pawan Kumar Shrivas

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2nd largest market after China. Total capacity of about 300 (MT) 2010-11. Top 5 players alone controlling almost 50% of the capacity. Indian Cement Industry is engaged in the production of

several varieties of cement such as Ordinary PortlandCement (OPC), Portland Pozzolana Cement (PPC), PortlandBlast Furnace Slag Cement (PBFS), Oil Well Cement, RapidHardening Portland Cement, White Cement, etc.

www.ibef.org

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The installed capacity in the Indian cement marketwas 236 MT in 20092010.

Installed capacity has increased at a compound

annual growth rate (CAGR) of 8.8 per cent between200405 and 20092010.

The production of cement in 20092010 was 200.7MT.

The turnover of the cement industry US$ 15.7billion in 20092010.

The Cement Manufacturers Association of India(CMA) estimates the industry manpower at about140,000 as on 31 March 2009.

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ACC10%

Ambuja10%

Ultratech18%

India5%

Japee7%

Others50%

MSP

www.ibef.org

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Ra

nkCompany PAT Net Sales

1. UltraTech 1367.35 13,205.64

2. ACC 1013.47 7,647.77

3. Ambuja 1165.19 7,371.52

4. Shree Cement 209.7 3,498.52

5. India Cement 65.3 3,413.29

6. Prism Cement 104.95 3,364.27

7. Madras 210.98 2,620.71

8. JK Cement 64.05 2,361.37

9. Birla Corp 320.21 2,146.37

10. JK Laksmi

502.44 /

5023.64

1,317.26 /

46946.72Moneycontrol.com

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Profitability in % =PAT / NET SALES= 5023.64 / 46946.72*100

= 10.7007 %

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Key Consuming Sectors

http://www.cfriindia.nic.in/coalsampling/paper3.html

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Industry cost Breakup

http://www.cfriindia.nic.in/coalsampling/paper3.html

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Capacity Distribution

http://www.cfriindia.nic.in/coalsampling/paper3.html

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POLITICAL Coal rates, power tariffs, railway tariffs all of these prices

controlled by government.

Government is also one of the biggest consumers of thecement , in the country.

Most state governments, in order to attract investments intheir respective states, offer fiscal incentives in the form of

sales tax exemptions/deferrals. States like Haryana offer a freeze on power tariff for 5 years,while Gujarat offers exemption from electric duty.

(India Info line Ltd )

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ECONOMICCurrently, the industry is on the boom, with a lot of

government infrastructure and housing projects underconstruction. In spite of seeing a fall during 2008-09, theexport segment of the industry is expected to grow again onaccount of various infrastructure projects that are being takenup all over the world and numerous outstanding cementplants coming up in near future in the country .

(Mapsofindia.com 2010)6

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SOCIALDue to population more demand of cement because people

move joint family to nuclear family thats why they demandmore house , then more demand of cement.

TECHNOLOGY

From mining to production the entire process depends ontechnology.

The Government of India plans to study and possiblyacquire new technologies from the cement industry of

Japan.At present 93% of the total capacity in the industry is basedon modern and environment-friendly dry process technology.

(mapsofindia.com 2010)

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Threat of substitutes - limited

Bargaining

power ofsuppliers-very High

Bargainingpower ofBuyersLimited

Threat of new EntrantsLimited

Inter Firm Rivalry Intense

Large no of players , highstorage costs , High Exitbarrier ,marginal product

differentiation

Porters Five Force Model

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Firm Rivalry :-High capital costs, Large no of players , highstorage costs , High Exit barrier ,marginal product differentiation.

Threat of substitutes :-Threat of substitutes limited only bitumenin road , and engineering plastics in building offer some elementof competition , otherwise No close substitutes are popular inIndia

Threat of new EntrantsLimitedHigh capital Investment , broad distribution network andoversupplied market deter new entrants . HoweverTechnology and manpower are easily available

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Bargaining power of SuppliersVery High

Monopolistic control of external cost element {Coal ,Power , Transportations & Taxes } results in highBargaining power Buyers with the Goi.

Bargaining power of Buyerslimited

Rising share of retail Buyers , declining share of bulkpurchase by Goi. Has taken away the bargaining power ofcustomers.

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The housing segment accounts for a major portion of the totaldomestic demand for cement in India.

According to the Eleventh Five Year Plan (20072012),housing demand is estimated to increase from more than 24

million units in 2007 to more than 26 million units at the end ofthe Plan period.

Growing urbanization, an increasing number of householdsand higher employment are primarily driving the demand for

housing.

Housing

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InfrastructureThe GoI is strongly focusing on infrastructure development to

boost the growth in the economy. It plans to increase investmentin infrastructure to US$ 1 trillion in the Twelfth Five Year Plan(20122017), as compared with US$ 514 billion under theEleventh Five Year Plan (20072012).

The GoI intends to expand the capacity of the railways and the

facilities for handling and storage to ease the transportation ofcement and further reduce its transportation costs.

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SWOT ANALYSIS

Strength:1.Second largest in the world in terms of capacity: In India there are approximately 124 large and 300 mini plantswith installed capacity of 200 million tones

2. Low cost of production: due to the easy availability of raw materials and cheap labor

Weakness:1.Effect of global recession on real estate.2.Demand-Supply gap, overcapacity: The capacity additions distort the demand-supply equilibrium in the industrythereby affecting profitability.3.Increasing cost of production due to increase in coal prices.4.High Interest rates on housing:

Opportunity:1. With growth in infrastructural activity cement demand expected to rise

2. We expect government to cut cement duties in the long run to boost infrastructure

development.

3. Huge government spending on infrastructure. Rs 1,30, 000 cr in the Eleventh

Five year plan likely to boost cement demand.

Threat:1. Decline in housing and infrastructure growth to slow down cement demand.

2. Capacity overhang expected by FY10.

3. Rise in input costs like coal and petroleum to add pressure to margin.

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WHAT DO CUSTOMERS WANT? COMPETITION KEY SUCCESSFACTORS

Low price

Product consistency

Reliability of supply

Credit

Nearest

Brand

Strong price

competition .

ThinDifferentiation.

Availability

Customer

relationship

Advertisement

Key Success Factors

18

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ThankYou