gagandsaluja
GAGANDEEP SINGH
Indian
Cement
Industry
April - 08
Indian Cement Industry Indian Cement Industry
Indian Cement Industry on growth trajectory. . .
The Cement industry has continued its growth trajectory over the past seven years. Domestic cement
demand growth has surpassed the economic growth rate of the country for the past couple of years. Over
the past five years (FY03-07), cement demand has grown at a CAGR of 8.37% higher than the CAGR of
supply at 4.84%. Demand for cement in the country is expected to continue its buoyant ride on the back of
robust economic growth and infrastructure development in the country.
The key drivers for cement demand are real estate sector, infrastructure projects and industrial expansion
projects. Among these, real estate sector is the key driver and accounted for almost 55% of cement demand
in FY 07.
During the period FY 03 – 07, capacity additions in the country (30.6 mn tonnes) were at a slower rate
compared to demand growth leading to higher average capacity utilization rates from 81.3% in FY 03 to
93.8% in FY 07. This exerted pressure on average prices which have increased from Rs. 156 per bag in FY
03 to Rs. 216 per bag in FY 07. In December 2007, prices stood at Rs. 245 - Rs. 250 per bag.
Low capacity addition coupled with higher utilization rate also led to increase in proportion of blended
cements in product mix. Blended cement accounted for 68% of product mix in FY 07 as compared to 49% in
FY 03.
Cement is a bulky commodity and cannot be easily transported over long distances making it a regional
market place, with the nation being divided into five regions. Each region is characterised by its own
demand-supply dynamics. The Southern region dominated the cement consumption at 44.5 mn tonnes in
FY 07, accounting for about 30% of total domestic cement consumption. During FY 03-07, Southern region
has witnessed highest CAGR of cement demand at 10.4% followed by Northern and Eastern regions at
8.9% and 9%, respectively.
Over the past five years, cost of cement production has grown at a CAGR of 8.4%. The producers have
been able to pass on the hike in cost to consumers on the back of increased demand. Average realizations
have increased from Rs. 1,880 per tonne in FY 03 to Rs. 3,133 per tonne in FY 07, at a CAGR of 13.6%,
which has resulted in higher profit margins of the industry.
To reduce the cost of production, the industry is increasing its focus on captive power generation. Proportion
of cement production through captive power route has increased over the years. Also, cement movement by
rail has increased over the years.
1
Market share of top five players in the industry has increased from 42% in FY 02 to 56% in FY 07. In FY 07,
Holcim group maintained its leadership position with market share of 22.6% followed by Aditya Vikram Birla
group at 19.4%.
Domestic Cement industry is highly insulated from global cement markets. Exports have been constant at
about 6% of total cement demand for past few years. With GoI intervention, making cement duty free,
cement is being imported from neighboring countries. However, due to logistics issues and lack of port
handling capabilities, imports of cement will remain negligible and do not pose a threat to domestic industry.
Cement demand is expected to remain buoyant driven by boost in construction sector in the country. As per
estimates, investments of USD 25 bn would be required in urban housing, USD 450 bn would be required in
infrastructure related projects and industrial expansion projects would witness investments of USD 88 over
the next five years.
Estimates domestic cement demand to grow at a CAGR of approximately 10% for the next 5 years.
The current tight demand - supply situation is expected to extend upto end of calendar year 2008
owing to delays in capacity expansion programmes by various companies. Expect s prices
to remain firm till the end of CY2008 due to tight demand - supply situation and increase in input costs.
Thereafter, as new capacities come in, we may witness a softening in prices in some regions.
For in-depth analysis and view on the future of this sector, please refer to the exhaustive Report
on Indian Cement Industry, April 2008.
You can contact us at [email protected]
2
Figures
Figure No. Particulars Figure No. Particulars
A-1 Per capita consumption
A-2 Major cement producing states
A-3 Major cement consuming states
A-4 Capacity Utilization
A-5 Trend of capacity addition
A-6 Regional statistics
A-7 Regional scenario
A-8 North - Overall scenario
A-9 North - Statewise scenario
A-10 North - Position of top players in the region
A-11 Price trend in Delhi
A-12 South - Overall scenario
A-13 South - Statewise scenario
A-14 South - Position of top players in the region
A-15 Price trend in Chennai
A-16 West - Overall scenario
A-17 West - Statewise scenario
A-18 West - Position of top players in the region
A-19 Price trend in Mumbai
A-20 East - Overall scenario
A-21 East - Statewise scenario
A-22 East - Position of top players in the region
A-23 Price trend in Kolkata
A-24 Central - Overall scenario
A-25 Central - Statewise scenario
A-26 Central - Position of top players in the region
A-27 Capacity utilisation Rate
A-28 Sectorwise Cement Demand
A-29 Growing middle class
A-30 Construction component for different sectors
th A-31 Infrastructure outlay - 11 five year plan
A-32 Bifurcation of investments planned in
industrial sector
A-33 Product mix
A-34 Regional product mix FY 07
A-35 Overall & regionwise product mix - FY 08
A-36 Average yearly retail cement price per bag
A-37 Cost per unit - Industry Average
A-38 Coal consumption & imports
A-39 Change in industrywide dispatch mix
A-40 Trend of Cement dispatch mix
A-41 Regionwise distribution of proven reserves of
limestone in the country
A-42 Market share of major players FY 07
A-43 Regional Scenario - Market share of top
five players
A-44 Industry Average
A-45 Growth rate: GDP and Cement Domestic
Consumption
Section A
6 Cement Prices
7 Cost Analysis
7.1 Power & Fuel Cost
7.2 Freight and Forwarding Cost
7.3 Raw Material Cost
8 Market Competition & Consolidation
8.1 Market share of major players
8.2 Industry Aggregates
9 Outlook
9.1 Projected Demand-Supply scenario
9.2 Projected Demand-Supply situation -
Regionwise
9.3 Industry concerns
10 SWOT Analysis
11 Company Profiles
11.1 Associated Cement Company Ltd. (ACC)
11.2 Ambuja Cements Ltd.
11.3 Grasim Industries Ltd.
11.4 UltraTech Cement Ltd.
11.5 The India Cements Ltd.
Executive Summary
1 Introduction
1.1 Overview
1.2 Industry Snapshot
2 Demand – Supply Analysis
2.1 Demand Supply scenario – Overall
2.2 Demand Supply Scenario – Regionwise
2.3 Detailed Regional Analysis
2.4 Overall & Regionwise capacity
utilisation Rate
3 Demand Drivers
3.1 Real Estate
3.2 Infrastructure
3.3 Industrial Expansion Projects
3.4 Demand Drivers - Regionwise
4 Supply Dynamics
4.1 Supply statistics
4.2 Blending dominates
4.3 Projected Planned Capacity additions -
Regionwise
5 Cement Import
Topic No. Topics Topic No. Topics
Index of Contents
3
Indian Cement Industry
Tables
Tables No. Particulars Tables No. Particulars
A-13 Projected capacity additions
A-14 Import Cost structure
A-15 Cement statistics CY 06 - Countrywise
A-16 Cost comparison of grid and captive power
A-17 Captive Power Plants announced —
Regionwise
A-18 Alternate fuel consumption
A-19 Dispatch mode for cement companies (FY 07)
A-20 Industry aggregates
A-21 Projected Capacity assuming delays
A-22 Projected Demand-Supply situation
A-23 Projected Demand-Supply situation -
Regionwise
A-1 Industry structure as on 31.03.2007
A-2 Status of top 10 players’ (capacity wise)
A-3 Cement demand statistics
A-4 Companywise exports in FY 07
A-5 North - Inter-regional Cement Movement
A-6 South - Inter-regional Cement Movement
A-7 West - Inter-regional Cement Movement
A-8 East - Inter-regional Cement Movement
A-9 Central - Inter-regional Cement Movement
A-10 Inter-regional cement movement in FY 07
A-11 Demand Drivers - Regionwise
A-12 Regionwise capacity additions
4
Section B
Tables
1 Cement Industry Basics
1.1 Types of Cement
1.2 Cement Manufacturing Process
1.3 Industry Characteristics
2 Key Statistics – Financial
Topic No. Topics
B-1 Contrywise Per Capita Consumption
B-2 Duty Structure
B-3 Net Sales
B-4 Operating Profit
B-5 Net Profit
B-6 Operating Profit Margin
B-7 APAT Margin
B-8 Interest Coverage Ratio
B-9 Regionwise/Statewise capacity & production
B-10 Regionwise/Statewise cement consumption
B-11 Statewise Surplus/Deficit scenario
B-12 Companywise Capacity
B-13 Companywise Production
B-14 Companywise Dispatch
B-15 (i) Total Export scenario (Cement)
B-15 (ii) Total Export scenario (Clinker)
B-16 Companywise Exports
B-17 Regionwise Product Mix
B-18 Companywise Product Mix
B-19 Overall Product Mix
B-20 Cement Dispatch Mode
B-21 Companywise Dispatch Mix
B-22 Average Cement prices
B-23 Duty Structure
B-24 Companywise Dispatch
B-25 Capacity Expansion Projects by major
companies
B-26 Limestone Cost
B-27 Gypsum Cost
B-28 Fly Ash Cost
B-29 Limestone consumption
B-30 Coal consumption
B-31 Power consumption
B-32 Power consumption pattern
B-33 Cost per tonne of cement produced
B-34 Industry Developments post H1 FY 07
Table No. Table No. Particulars Particulars
3 Key Statistics – Operational
4 Capacity Expansion Projects by
Major Companies
5 Raw material costs & consumption
6 Industry Developments
Topic No. Topics
Indian Cement Industry
Section A
Figures
Figure No. Particulars
B-1 Types of Cements
B-2 Cement Manufacturing Process
The report elucidates facts on the Indian Cement industry, supplemented by the latest Statistics. Emphasis
is laid on the following topics to accomplish the report:
Performance of the Cement industry over past seven years with evaluation of trends of capacity
addition, production and capacity utilisation.
Evaluation of Overall demand supply scenario in the country covering trend of domestic consumption
and exports.
Regional dynamics of industry depicted by detailed analysis of demand supply situation in the five
distinct regions in India.
Influence of various cement demand driving sectors like real estate, infrastructure and industrial
projects covering regionwise demand drivers.
Changing scenario of product mix - override of blended cements on OPC.
Cost analysis with emphasis on power & fuel cost, RM cost, Freight cost and evaluation of average
cost of production, average realizations and margins of the industry.
Perspective on regionwise future capacity addition, demand estimation and identification of
deficit/surplus regions in the country.
Operating & financial performance of top players in the industry alongwith future outlook.
Brief on peculiar characteristics of industry, types & applications of cement variants and cement
manufacturing process.
Comprehensive database of companywise financial & operational statistics and regionwise key
operational statistics.
For an in-depth analysis and view on the future of this sector, please refer to the exhaustive Report
on Indian Cement Industry.
Price : Domestic Customers: Rs. 20,000 per copy
Overseas Customers: USD 1,000 per copy
To subscribe to this report please click on the purchase link or write to us at
•
•
•
•
•
•
•
•
•
•
[email protected]
5
Indian Cement Industry
Cement
Industry
April - 08
Indian Cement Industry Indian Cement Industry
Indian Cement Industry on growth trajectory. . .
The Cement industry has continued its growth trajectory over the past seven years. Domestic cement
demand growth has surpassed the economic growth rate of the country for the past couple of years. Over
the past five years (FY03-07), cement demand has grown at a CAGR of 8.37% higher than the CAGR of
supply at 4.84%. Demand for cement in the country is expected to continue its buoyant ride on the back of
robust economic growth and infrastructure development in the country.
The key drivers for cement demand are real estate sector, infrastructure projects and industrial expansion
projects. Among these, real estate sector is the key driver and accounted for almost 55% of cement demand
in FY 07.
During the period FY 03 – 07, capacity additions in the country (30.6 mn tonnes) were at a slower rate
compared to demand growth leading to higher average capacity utilization rates from 81.3% in FY 03 to
93.8% in FY 07. This exerted pressure on average prices which have increased from Rs. 156 per bag in FY
03 to Rs. 216 per bag in FY 07. In December 2007, prices stood at Rs. 245 - Rs. 250 per bag.
Low capacity addition coupled with higher utilization rate also led to increase in proportion of blended
cements in product mix. Blended cement accounted for 68% of product mix in FY 07 as compared to 49% in
FY 03.
Cement is a bulky commodity and cannot be easily transported over long distances making it a regional
market place, with the nation being divided into five regions. Each region is characterised by its own
demand-supply dynamics. The Southern region dominated the cement consumption at 44.5 mn tonnes in
FY 07, accounting for about 30% of total domestic cement consumption. During FY 03-07, Southern region
has witnessed highest CAGR of cement demand at 10.4% followed by Northern and Eastern regions at
8.9% and 9%, respectively.
Over the past five years, cost of cement production has grown at a CAGR of 8.4%. The producers have
been able to pass on the hike in cost to consumers on the back of increased demand. Average realizations
have increased from Rs. 1,880 per tonne in FY 03 to Rs. 3,133 per tonne in FY 07, at a CAGR of 13.6%,
which has resulted in higher profit margins of the industry.
To reduce the cost of production, the industry is increasing its focus on captive power generation. Proportion
of cement production through captive power route has increased over the years. Also, cement movement by
rail has increased over the years.
1
Market share of top five players in the industry has increased from 42% in FY 02 to 56% in FY 07. In FY 07,
Holcim group maintained its leadership position with market share of 22.6% followed by Aditya Vikram Birla
group at 19.4%.
Domestic Cement industry is highly insulated from global cement markets. Exports have been constant at
about 6% of total cement demand for past few years. With GoI intervention, making cement duty free,
cement is being imported from neighboring countries. However, due to logistics issues and lack of port
handling capabilities, imports of cement will remain negligible and do not pose a threat to domestic industry.
Cement demand is expected to remain buoyant driven by boost in construction sector in the country. As per
estimates, investments of USD 25 bn would be required in urban housing, USD 450 bn would be required in
infrastructure related projects and industrial expansion projects would witness investments of USD 88 over
the next five years.
Estimates domestic cement demand to grow at a CAGR of approximately 10% for the next 5 years.
The current tight demand - supply situation is expected to extend upto end of calendar year 2008
owing to delays in capacity expansion programmes by various companies. Expect s prices
to remain firm till the end of CY2008 due to tight demand - supply situation and increase in input costs.
Thereafter, as new capacities come in, we may witness a softening in prices in some regions.
For in-depth analysis and view on the future of this sector, please refer to the exhaustive Report
on Indian Cement Industry, April 2008.
You can contact us at [email protected]
2
Figures
Figure No. Particulars Figure No. Particulars
A-1 Per capita consumption
A-2 Major cement producing states
A-3 Major cement consuming states
A-4 Capacity Utilization
A-5 Trend of capacity addition
A-6 Regional statistics
A-7 Regional scenario
A-8 North - Overall scenario
A-9 North - Statewise scenario
A-10 North - Position of top players in the region
A-11 Price trend in Delhi
A-12 South - Overall scenario
A-13 South - Statewise scenario
A-14 South - Position of top players in the region
A-15 Price trend in Chennai
A-16 West - Overall scenario
A-17 West - Statewise scenario
A-18 West - Position of top players in the region
A-19 Price trend in Mumbai
A-20 East - Overall scenario
A-21 East - Statewise scenario
A-22 East - Position of top players in the region
A-23 Price trend in Kolkata
A-24 Central - Overall scenario
A-25 Central - Statewise scenario
A-26 Central - Position of top players in the region
A-27 Capacity utilisation Rate
A-28 Sectorwise Cement Demand
A-29 Growing middle class
A-30 Construction component for different sectors
th A-31 Infrastructure outlay - 11 five year plan
A-32 Bifurcation of investments planned in
industrial sector
A-33 Product mix
A-34 Regional product mix FY 07
A-35 Overall & regionwise product mix - FY 08
A-36 Average yearly retail cement price per bag
A-37 Cost per unit - Industry Average
A-38 Coal consumption & imports
A-39 Change in industrywide dispatch mix
A-40 Trend of Cement dispatch mix
A-41 Regionwise distribution of proven reserves of
limestone in the country
A-42 Market share of major players FY 07
A-43 Regional Scenario - Market share of top
five players
A-44 Industry Average
A-45 Growth rate: GDP and Cement Domestic
Consumption
Section A
6 Cement Prices
7 Cost Analysis
7.1 Power & Fuel Cost
7.2 Freight and Forwarding Cost
7.3 Raw Material Cost
8 Market Competition & Consolidation
8.1 Market share of major players
8.2 Industry Aggregates
9 Outlook
9.1 Projected Demand-Supply scenario
9.2 Projected Demand-Supply situation -
Regionwise
9.3 Industry concerns
10 SWOT Analysis
11 Company Profiles
11.1 Associated Cement Company Ltd. (ACC)
11.2 Ambuja Cements Ltd.
11.3 Grasim Industries Ltd.
11.4 UltraTech Cement Ltd.
11.5 The India Cements Ltd.
Executive Summary
1 Introduction
1.1 Overview
1.2 Industry Snapshot
2 Demand – Supply Analysis
2.1 Demand Supply scenario – Overall
2.2 Demand Supply Scenario – Regionwise
2.3 Detailed Regional Analysis
2.4 Overall & Regionwise capacity
utilisation Rate
3 Demand Drivers
3.1 Real Estate
3.2 Infrastructure
3.3 Industrial Expansion Projects
3.4 Demand Drivers - Regionwise
4 Supply Dynamics
4.1 Supply statistics
4.2 Blending dominates
4.3 Projected Planned Capacity additions -
Regionwise
5 Cement Import
Topic No. Topics Topic No. Topics
Index of Contents
3
Indian Cement Industry
Tables
Tables No. Particulars Tables No. Particulars
A-13 Projected capacity additions
A-14 Import Cost structure
A-15 Cement statistics CY 06 - Countrywise
A-16 Cost comparison of grid and captive power
A-17 Captive Power Plants announced —
Regionwise
A-18 Alternate fuel consumption
A-19 Dispatch mode for cement companies (FY 07)
A-20 Industry aggregates
A-21 Projected Capacity assuming delays
A-22 Projected Demand-Supply situation
A-23 Projected Demand-Supply situation -
Regionwise
A-1 Industry structure as on 31.03.2007
A-2 Status of top 10 players’ (capacity wise)
A-3 Cement demand statistics
A-4 Companywise exports in FY 07
A-5 North - Inter-regional Cement Movement
A-6 South - Inter-regional Cement Movement
A-7 West - Inter-regional Cement Movement
A-8 East - Inter-regional Cement Movement
A-9 Central - Inter-regional Cement Movement
A-10 Inter-regional cement movement in FY 07
A-11 Demand Drivers - Regionwise
A-12 Regionwise capacity additions
4
Section B
Tables
1 Cement Industry Basics
1.1 Types of Cement
1.2 Cement Manufacturing Process
1.3 Industry Characteristics
2 Key Statistics – Financial
Topic No. Topics
B-1 Contrywise Per Capita Consumption
B-2 Duty Structure
B-3 Net Sales
B-4 Operating Profit
B-5 Net Profit
B-6 Operating Profit Margin
B-7 APAT Margin
B-8 Interest Coverage Ratio
B-9 Regionwise/Statewise capacity & production
B-10 Regionwise/Statewise cement consumption
B-11 Statewise Surplus/Deficit scenario
B-12 Companywise Capacity
B-13 Companywise Production
B-14 Companywise Dispatch
B-15 (i) Total Export scenario (Cement)
B-15 (ii) Total Export scenario (Clinker)
B-16 Companywise Exports
B-17 Regionwise Product Mix
B-18 Companywise Product Mix
B-19 Overall Product Mix
B-20 Cement Dispatch Mode
B-21 Companywise Dispatch Mix
B-22 Average Cement prices
B-23 Duty Structure
B-24 Companywise Dispatch
B-25 Capacity Expansion Projects by major
companies
B-26 Limestone Cost
B-27 Gypsum Cost
B-28 Fly Ash Cost
B-29 Limestone consumption
B-30 Coal consumption
B-31 Power consumption
B-32 Power consumption pattern
B-33 Cost per tonne of cement produced
B-34 Industry Developments post H1 FY 07
Table No. Table No. Particulars Particulars
3 Key Statistics – Operational
4 Capacity Expansion Projects by
Major Companies
5 Raw material costs & consumption
6 Industry Developments
Topic No. Topics
Indian Cement Industry
Section A
Figures
Figure No. Particulars
B-1 Types of Cements
B-2 Cement Manufacturing Process
The report elucidates facts on the Indian Cement industry, supplemented by the latest Statistics. Emphasis
is laid on the following topics to accomplish the report:
Performance of the Cement industry over past seven years with evaluation of trends of capacity
addition, production and capacity utilisation.
Evaluation of Overall demand supply scenario in the country covering trend of domestic consumption
and exports.
Regional dynamics of industry depicted by detailed analysis of demand supply situation in the five
distinct regions in India.
Influence of various cement demand driving sectors like real estate, infrastructure and industrial
projects covering regionwise demand drivers.
Changing scenario of product mix - override of blended cements on OPC.
Cost analysis with emphasis on power & fuel cost, RM cost, Freight cost and evaluation of average
cost of production, average realizations and margins of the industry.
Perspective on regionwise future capacity addition, demand estimation and identification of
deficit/surplus regions in the country.
Operating & financial performance of top players in the industry alongwith future outlook.
Brief on peculiar characteristics of industry, types & applications of cement variants and cement
manufacturing process.
Comprehensive database of companywise financial & operational statistics and regionwise key
operational statistics.
For an in-depth analysis and view on the future of this sector, please refer to the exhaustive Report
on Indian Cement Industry.
Price : Domestic Customers: Rs. 20,000 per copy
Overseas Customers: USD 1,000 per copy
To subscribe to this report please click on the purchase link or write to us at
•
•
•
•
•
•
•
•
•
•
[email protected]
5
Indian Cement Industry
