newbuildingmaterial- CEMENT TILES

8/8/2019 newbuildingmaterial- CEMENT TILES

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McG 2

Contents *

Building & Construction Industry in India : An Overview

Housing Sector

Building Material Sectors : An Overview

Cement

Steel

Tiles

Paints

Lighting

Sanitaryware & Bathroom fittings

Roofing Systems

Wood & Plywood

Glass

Housing Finance

* Note : This demo pack has only a few select slides of the contents


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Building Material Sectors : An Overview

Building materials constitute 65 to 75 % of the total cost of construction

Building material usage India, largely accounted for by the domestic housing

sector, has its own unique characteristics, e.g. :

Use of Burnt bricks, with cement plastering as the primary material for

walls

Extensive use of traditional, locally available materials like timber,

bamboo, palm leaves, mud, stones, etc., in rural areas


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McG 5

Housing Sector : An Overview

Housing shortage a perpetual problem - estimated at 19.4 Mn. units

During the last decade, the useable housing stock grew to 164 Mn. units - a

growth of 23 %

Primary drivers being rapid urbanisation & developments in semi- urban &rural housing

Housing sector & urban development expected to grow steadily in the

coming years


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Cement : Industry Structure

Cement industry is considered as one of the core infrastructure industries

Cement industry in India dates back to 1914, first unit in Porbunder

Indian cement industry is the fourth largest in the world

Fragmented industry : 56 cement companies in India operating 124 large

plants & 300 mini plants

Total Capacity in cement industry

Large Plants = 137 million tonnes)

Mini Cement Plants = 11.1 million tonnes)


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McG 7

Cement : Market Size & Demand Trends

Estimated market size - Rs. 290 Bn. (2001-02)

Industry grew by 10 percent growth during 2001 - 02

Production rose from 93.6 Mn tonnes to 102.4 Mn tonnes

Attributed to a host of factors including slow progress of major

infrastructure projects

Production

Consumption

29.9

28.

12.1

12

23

2 .

29

2 .

Mn Tonnes


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McG 8

Capacity & Production

Mn. tonnes (2001-02)

Installed capacity 137.0

Production (Large Plants) 102.4

Production (Mini Plants) 6.0

Consumption 102.4

Till the mid nineties most of the excess capacity was added in North-West

India, in Maharashtra, Gujarat. Madhya Pradesh and Rajasthan.

MP, Rajashtan & AP account for 53 % of production

Today the excess capacity is a major problem - resulting in low cement

prices in most parts

Capacity utilisation : 75 %


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McG 9

Sales & Distribution

Cement in India is primarily sold through a distributor - dealer network

Total margins for the distribution channels - 17 to 1 %

Direct sales less than 2 % of total sales

Managing the distribution network & strong working relationships with

distributors, contractors etc., - critical


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McG 10

Industry has witnessed consolidation through a spate of take-overs and

mergers

Gujarat Ambuja (GACC) picked up 11.4 % stake in

ACC at Rs. 5201 / tonne from Tata group

GACC also bought out DLF Cement

Grasim Industries acquired Reliances 10 percent stake in L& T recently

Major action expected from MNCs

Lafarge acquired Tiscos cement division at Rs. 3555 / tonne

Lafarge acquired Raymond Cement at Rs. 3500 / tonne

Cement Francais Italia picked up 50 % stake in Zuari Cement at Rs. 4000/ tonne

Holderbank and Cemex may come in

All have eyes on 37.5 % stake in L&Ts cement business

Share of MNCs in Indian Cement Industry has rose to 40% while the

Indian majors incl. GACC, ACC, L&T hold the rest 60 %

Competitive Scenario : Consolidation Time


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McG 11

1940-19 1 :

Price and

Distribution controls

19 2-19 :

Partial Decontrol

19 9 :

Total Decontrol

Cement an essential

commodity

Very slow growth

Capacity in 19 0- 1 :

27.9 mt

Levy cement quota was

fixed for the units and

the balance could be

sold in the open market

Led to rapid growth

Capacity grew by 110

% to 59 mt by 19 9

Rapid growth in sales

& profits

Slow down during

recession of early

nineties

Rapid growth after

1992-93, with largecapacity additions

Government Policies


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McG 12

Tiles : Introduction

Domestic market for ceramic tiles is estimated at around Rs. 22 billion

The growth rate in the tile industry is estimated to be around 15 %

India accounts for - 1.3 % of world production

Total Capacity of the Indian industry : 1.5 Mn. TPA


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McG 13

Tiles Industry : Structure

There are around 20 players in the organised sector, and around 130 in the

unorganised sector clustered at Gujarat and Rajasthan

Industry divided broadly into Wall Tiles & Floor Tiles

Wall tiles are all basically Ceramic Glazed Tiles.

Floor tiles have different varieties, viz.

Cement Mosaic - dominates with more than % share

Ceramic (10 %)

natural stones such as Marble & Granite (2%)

Unorganised sector a major force in Wall Tiles and in Mosaic Tiles

Unorganised sector accounts for 60 % of the total tiles market by volume &

35 to 40 % value


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McG 14

703

7766717

547

4 7430

300230

0

100

200

300

400

500

600

700

00

900

1991 92 1993 94 1995 96 1996 97 1997 9 199 99 1999 00 2000 01 2001 02

Tiles Production : Organised Sector

(000 tonnes)


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Tiles Industry : Competitive Scenario

Kajaria and Somany dominate in the North

H & R Johnson, Bell and Somany are doing well in the West.

H & R Johnson has taken over EID Parry and Sun Ceramics has taken over

Madhusudan Ceramics


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Global export market for Ceramic Tiles - USD 5 billion; growing at -10% per

annum.

Indias share - 0.6%

Major destinations - Sri Lanka, Gulf Countries and Africa

Import - around 6 to 7 percent of the production - is worth of about Rs. 10

Mn.

Threat of Chinese imports a reality now

China is the worlds largest producer of vitrified tiles - 16 times India's

total production

Imports & Exports

.7

.

.1 .1 1.

0.0.0.60.1

0.1

0

1

- 5 5- 6 6- 7 - 1 -

000

000-

01

I

R

Cror

es

Exports

Imports


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McG 17

Outlook.

Growth in housing sector would be the primary demand driver

Renovation and modernisation of existing houses will also drive the demand

Excise duty on ceramic tiles reduced from 24 per cent to 16 per cent in the

Union Budget 2001-02

Floor tiles projected to grow faster, driven by the shift from Mosaic to

ceramic tiles

High growth rate of around 12 % will be sustainable, can even go upto 20 to

25 % according to some analysts

A major problem - Transportation


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H & R Johnson (India) Ltd.

y Turnover : Rs. 294 Crore (2000-01)

y Major Products : Ceramic Wall / floor tiles, Vitrified tiles

y Location : Mumbai,

Plants at Pen / Thane (Maharashtra),

Dewas (M.P) & Kunnigal (Karnataka)

y Units in U.K, Greece, South Africa, Australia & India

Foreign Collaboration : Johnson International, U K

y Started in 195 , is a part of the Rajan Raheja group of companies. has a

capacity of 16 Mn sq m per annum.

Johnson tiles has a market share of 30 % in the ceramic wall tiles market and

15 % market share in ceramic floor tiles.

Wide distribution network of 3600 dealers, very strong in the retail market.


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McG

Madras Consultancy Group

VI - 2, Habib Complex

3, Durgabai Deshmukh Road

R. A. Puram, Chennai 60002 , India

Tel : 91 (44) 24939161 / 24936321

Fax : 91 (44) 24934 62

email : [email protected]

www.indianindustryprofiles.com

www.consultmcg.com

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