Description
It covers topics like Cost drivers, analysis, logistics, manufacturing process, transportation and opportunities in the cement industry sector.
Indian Cement Industry
Presented By: Ajinkya Jadhav – Roll No. 26 Siddhesh Jage – Roll No. 27 Chetan Kadam – Roll No. 28 Anil Kulkarni – Roll No. 29 Swapnil Kulkarni – Roll No. 30
Introduction
• Indian Cement Industry had a total capacity of about 300 m tonnes (MT) as of financial year ended 2010-11 as compared to 236 m tonnes (MT) as of 20092010.
• The Indian cement industry is the 2nd largest market after China.
• This sector is expected to add an additional capacity of 92.3 MT by 2013. • Total FDI in the cement sector between April 2000 and August 2010 stood at US$ 1.9 billion. • The industry has witnessed continuous modernisationand adoption of new technologies. Almost 93 per cent of the total capacity is based on eco-friendly dry process technology.
Market Overview
Indian Players
Global Scenario
• The estimated demand for cement in 2010 globally was about 2836 million tonnes.
Global Players
Cement – An Introduction
Cement is a fine grey powder which when reacted with water hardens to form a rigid chemical mineral structure which gives concrete its high strengths.
Concrete is an extremely versatile material, being used in the production of anything from nuclear radiation shields to playground structures and from bridges to yachts. A brief history of Portland cement: Portland cement was first produced commercially in New Zealand in 1886 by James Wilson and Co., and has been produced here ever since. Cement is produced here in three main grades: ordinary Portland cement, rapid hardening cement and moderate-heat cement.
Cement – An Introduction
Rapid-hardening cement is used in precast concrete, pipes and tiles.
It is finer ground so that it hydrates more quickly and has more gypsum than other cements.
Moderate-heat cement is used for the construction of hydro-electric dams, as the heat produced by ordinary cement creates uneven expansion and hence cracking when such a large volume of concrete is used.
In addition, a few special cements are manufactured for larger projects or export: these include sulphate resisting, flyash blend, blastfurnace slag and Prise Mer cement
Cement Sector-wise Demand
Portland Cement
Portland cement is made by heating raw materials rich in oxides of silicon, calcium, aluminium and iron to temperatures of around 1200 - 1400oC. The chemical reactions that occur within the partially molten mass result from the formation of the four main cement materials
Dry Portland Cement Manufacturing Process
Quarrying
Raw Material Preparation
Clinkering
Milling
Packaging
Cement Kiln
Logistics & Supply Chain Management
Logistics & Supply Chain
Modes of transport
What industry player says..
• “Cement is nothing but a logistic business. If you have a perfect transportation model, you are the best cement producer.”
Mr. A L Kapur, managing director Ambuja Cements
• “Logistics are critical for cement business. We will keep making efforts to keep a check on it,”
Mr.D D Rathi, whole-time director Grasim Industries.
• We have set up a special cell which keeps a watch on it. We are trying to reduce our logistic costs by around 5-7 per cent by optimising the distance of transport.”
Mr.Shailendra Chouksey, whole-time director, J K Lakshmi Cement
Cost break up
Current scenario of Logi. & SC
• Top 30 cement companies in India spent more than Rs 10,000 crore to carry cement to the consumer.
• Currently, for 50-kg bag of cement, the logistic cost depending on the distance.
- by road Rs 18-25 - by the railway Rs 12-15
[ Roughly (36% of by road cost ) Rs.8/- could be saved per 50-kg bag ]
• 3% of gross revenue spent on i/w logistics and 15% on o/w logistics. • Current cement movement by sea
- worldwide 70 % - in India just 1-2 %
Cement Dispatches by Rail, Road & Sea (In Million Tones)
% age Dispatches by Rail to Total 43 40 41 39 35 33 34 33 34 39
Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Rail 32.58 32.72 38.71 36.8 36.2 37.12 39.28 41.45 48.11 28.39
Road 43.99 49.11 55.29 56.64 64.06 72.25 76.45 83.55 85.61 39.9
Sea 2.11 1.7 1.5 2.14 7.87 3.65
Total 76.57 81.83 94 93.44 102.37 111.07 117.23 127.14 141.59 73.65
Bulk Cement Transportation
• The Most efficient way of transportation in terms of pilferages • Developed countries transports 70% of the cement in the form of bulk, in India only 5% & balance cement is distributed in outdated mode of 50 kg bags. • These terminals could either be based on movement by rail for land locked plants or from coast based cement plants to port based terminals through coastal shipping.
Advantages of Bulk Cement Transportation
• Seepage / wastage avoided to the great extent • Significantly reduce dust emissions @ railway yards, cement handling godowns, transportation by trucks • No plastic bags used for packing • Easy availability in large volumes and consistent quality • The shelf life of cement is increased when transported in bulk. • Need for storage space is considerably reduced - savings in multiple handling and storage costs
Bulk Cement terminals in India
• 1st Rail Bulk Cement Terminal was set up in 1995-96 in Kalamboli, near Mumbai • Since then, only one more rail bulk terminal has been set up near Bangalore • 3 port-based bulk cement terminals using specialized bulk cement carriers for transporting cement through coastal shipping have been set up at Navi Mumbai, Mangalore and Surat. • So far no terminals have been set up to take advantage of viable sea routes
Cost Drivers of the Cement Industry
Fragmented Markets
Volatile Prices & Margins
Cyclical Nature
High Energy Costs
Difficulty to Import
Taxes
Constraints Faced
Poor Quality Coal Poor Quality of Power Gaseous Pollutants Noise Pollution
CEMENT INDUSTRY CHALLENGES • Reduction of energy consumption per ton of cement. • Availability of equipment for a minimum of 330 to 340 days in a year. • Reduce the annual shutdown period to 20 days per annum
Opportunities – Cement Industry
In the last 10 years, this sector has recorded a CAGR (Compound Annual Growth Rate) of 8% against the world cement industry average of 3.5% & China’s cement industry growth rate of 7.2%.
The GoI plans to increase its investment in infrastructure to US$ 1 trillion in the Twelfth Five Year Plan (2012–17) The growing population and increased urbanization in the country has increased the need for more civil facilities. Union budget 2010–11 plans a total outlay of US$ 6.4 billion on rural housing, roads and bridges. The per capita consumption of cement in India is 143 kg, as compared with other countries such as China (1,014 kg) and Japan (524 kg), which indicates significant potential for growth.
Thank You !!!
doc_973657208.pptx
It covers topics like Cost drivers, analysis, logistics, manufacturing process, transportation and opportunities in the cement industry sector.
Indian Cement Industry
Presented By: Ajinkya Jadhav – Roll No. 26 Siddhesh Jage – Roll No. 27 Chetan Kadam – Roll No. 28 Anil Kulkarni – Roll No. 29 Swapnil Kulkarni – Roll No. 30
Introduction
• Indian Cement Industry had a total capacity of about 300 m tonnes (MT) as of financial year ended 2010-11 as compared to 236 m tonnes (MT) as of 20092010.
• The Indian cement industry is the 2nd largest market after China.
• This sector is expected to add an additional capacity of 92.3 MT by 2013. • Total FDI in the cement sector between April 2000 and August 2010 stood at US$ 1.9 billion. • The industry has witnessed continuous modernisationand adoption of new technologies. Almost 93 per cent of the total capacity is based on eco-friendly dry process technology.
Market Overview
Indian Players
Global Scenario
• The estimated demand for cement in 2010 globally was about 2836 million tonnes.
Global Players
Cement – An Introduction
Cement is a fine grey powder which when reacted with water hardens to form a rigid chemical mineral structure which gives concrete its high strengths.
Concrete is an extremely versatile material, being used in the production of anything from nuclear radiation shields to playground structures and from bridges to yachts. A brief history of Portland cement: Portland cement was first produced commercially in New Zealand in 1886 by James Wilson and Co., and has been produced here ever since. Cement is produced here in three main grades: ordinary Portland cement, rapid hardening cement and moderate-heat cement.
Cement – An Introduction
Rapid-hardening cement is used in precast concrete, pipes and tiles.
It is finer ground so that it hydrates more quickly and has more gypsum than other cements.
Moderate-heat cement is used for the construction of hydro-electric dams, as the heat produced by ordinary cement creates uneven expansion and hence cracking when such a large volume of concrete is used.
In addition, a few special cements are manufactured for larger projects or export: these include sulphate resisting, flyash blend, blastfurnace slag and Prise Mer cement
Cement Sector-wise Demand
Portland Cement
Portland cement is made by heating raw materials rich in oxides of silicon, calcium, aluminium and iron to temperatures of around 1200 - 1400oC. The chemical reactions that occur within the partially molten mass result from the formation of the four main cement materials
Dry Portland Cement Manufacturing Process
Quarrying
Raw Material Preparation
Clinkering
Milling
Packaging
Cement Kiln
Logistics & Supply Chain Management
Logistics & Supply Chain
Modes of transport
What industry player says..
• “Cement is nothing but a logistic business. If you have a perfect transportation model, you are the best cement producer.”
Mr. A L Kapur, managing director Ambuja Cements
• “Logistics are critical for cement business. We will keep making efforts to keep a check on it,”
Mr.D D Rathi, whole-time director Grasim Industries.
• We have set up a special cell which keeps a watch on it. We are trying to reduce our logistic costs by around 5-7 per cent by optimising the distance of transport.”
Mr.Shailendra Chouksey, whole-time director, J K Lakshmi Cement
Cost break up
Current scenario of Logi. & SC
• Top 30 cement companies in India spent more than Rs 10,000 crore to carry cement to the consumer.
• Currently, for 50-kg bag of cement, the logistic cost depending on the distance.
- by road Rs 18-25 - by the railway Rs 12-15
[ Roughly (36% of by road cost ) Rs.8/- could be saved per 50-kg bag ]
• 3% of gross revenue spent on i/w logistics and 15% on o/w logistics. • Current cement movement by sea
- worldwide 70 % - in India just 1-2 %
Cement Dispatches by Rail, Road & Sea (In Million Tones)
% age Dispatches by Rail to Total 43 40 41 39 35 33 34 33 34 39
Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Rail 32.58 32.72 38.71 36.8 36.2 37.12 39.28 41.45 48.11 28.39
Road 43.99 49.11 55.29 56.64 64.06 72.25 76.45 83.55 85.61 39.9
Sea 2.11 1.7 1.5 2.14 7.87 3.65
Total 76.57 81.83 94 93.44 102.37 111.07 117.23 127.14 141.59 73.65
Bulk Cement Transportation
• The Most efficient way of transportation in terms of pilferages • Developed countries transports 70% of the cement in the form of bulk, in India only 5% & balance cement is distributed in outdated mode of 50 kg bags. • These terminals could either be based on movement by rail for land locked plants or from coast based cement plants to port based terminals through coastal shipping.
Advantages of Bulk Cement Transportation
• Seepage / wastage avoided to the great extent • Significantly reduce dust emissions @ railway yards, cement handling godowns, transportation by trucks • No plastic bags used for packing • Easy availability in large volumes and consistent quality • The shelf life of cement is increased when transported in bulk. • Need for storage space is considerably reduced - savings in multiple handling and storage costs
Bulk Cement terminals in India
• 1st Rail Bulk Cement Terminal was set up in 1995-96 in Kalamboli, near Mumbai • Since then, only one more rail bulk terminal has been set up near Bangalore • 3 port-based bulk cement terminals using specialized bulk cement carriers for transporting cement through coastal shipping have been set up at Navi Mumbai, Mangalore and Surat. • So far no terminals have been set up to take advantage of viable sea routes
Cost Drivers of the Cement Industry
Fragmented Markets
Volatile Prices & Margins
Cyclical Nature
High Energy Costs
Difficulty to Import
Taxes
Constraints Faced
Poor Quality Coal Poor Quality of Power Gaseous Pollutants Noise Pollution
CEMENT INDUSTRY CHALLENGES • Reduction of energy consumption per ton of cement. • Availability of equipment for a minimum of 330 to 340 days in a year. • Reduce the annual shutdown period to 20 days per annum
Opportunities – Cement Industry
In the last 10 years, this sector has recorded a CAGR (Compound Annual Growth Rate) of 8% against the world cement industry average of 3.5% & China’s cement industry growth rate of 7.2%.
The GoI plans to increase its investment in infrastructure to US$ 1 trillion in the Twelfth Five Year Plan (2012–17) The growing population and increased urbanization in the country has increased the need for more civil facilities. Union budget 2010–11 plans a total outlay of US$ 6.4 billion on rural housing, roads and bridges. The per capita consumption of cement in India is 143 kg, as compared with other countries such as China (1,014 kg) and Japan (524 kg), which indicates significant potential for growth.
Thank You !!!
doc_973657208.pptx