Industry Analysis of Cement

INDUSTRY
ANALYSIS OF
CEMENT
SUBMITTED BY-;AJAY
ROLL NO. -1732060/17
INDEX
Serial Contents
no.
1. Introduction
2. Segments of industry
3. Key players
4. SWOT Analysis
5. PESTEL Analysis
6. Barriers to growth
7. Recent activity
8. References
INTRODUCTION
• Cement is an essential component of infrastructure development and most
important input of construction industry, particularly in the government
infrastructure and housing programs, which are necessary for the country's
socio-economic growth of the country.
• The manufacturing process cement consist of mixing , drawing and
grinding of lime stone ,clay and silica into a comps it mass the mixture is
than heated and burnt in a pre heater and to be cooled in an air cooling
system to form clinker which is the semi finished form this clinker is
cooled by air and subsequently ground with gypsum to form cement.
• There are different verity of cement based on different composition
according to specific and uses namely ORDINARY PORTLAND
CEMENT,PORTLAND POZZOLAN CEMENT ,WHITE
CEMENT ,SLAG CEMENT ,PORTLAND BLAST FURNACE AND
SPECILAZED CEMENT .the basic difference lies in the percentage
clinker use .
• During the period form 2006 to 2008 ,total cement consumption grew from
2568 million tonnes to 28,572millons tonnes, at a Compounded Annual
growth rate (CAGR) of closed to 7%.the rapid increase in global cement
consumption isled by increasing demand for infrastructure in emerging
economies , with Asia accounting for 66%of the global demand china was
the world largest consumer of cement in 2008and accounted for 48.73%of
total cement consumption .
SEGMENTS OF
INDUSTRY
NORTH SOUTH CENTRAL

REGION REGION REGION
WEST EAST
REGION REGION
• 1. NORTH REGION-; ACC, ACL, Shree, Binani, Ultratech,
Jaypee, JK Lakshmi.
• 2. SOUTH REGION-; India cements, Madras cements,
Ultratech, Dalmia, Kesoram, ACC, ACL, Chettinad.
• 3. CENTRAL REGION-; ACC, Ultratech, Jaypee, Birla corp,
Shree, JK Lakshmi, ACL.
• 4.WEST REGION-; ACL, ACC, Binani, Ultratech, JK
Lakshmi, Jaypee, Century.
• 5. EAST REGION-; ACL, Lafarge,ACC, Ultratech, Century,
Jaypee.
KEY PLAYERS
1. ACC Cement Limited,1936,MUMBAI
2. AMBUJA CEMENT,1983,MUMBAI
3. ULTRATECH CEMENT,1987,MUMBAI
4. JAYPEE CEMENT,2001,NOIDA
5. INDIA CEMENT,1946,CHENNAI
6. RAMCO CEMENT,1957,CHENNAI
7. JK CEMENT,1975,NEW DELHI
8. PRISM CEMENT,1997,MUMBAI
9. RAIN CEMENT,1986,HYDERABAD
10. BANGUR CEMENT,1979,RAJASTHAN
11. SHREE CEMENT,1970,KOLKATA
SWOT ANALYSIS
• STREGNTHS-;
• Cement is literally the building block of the construction industry. Almost
every building constructed relies on cement for its foundation. The cement
business is 10 Billion US Dollar industry, measured by annual cement
shipments. There is a also strong reputation behind the cement industry.
Cement is a solid material and consumers rarely have complaints about the
product. Regional distributions plants have also made cement widely
available to any type of buyer.
• WEAKNESSES-;
• The cement industry relies on construction jobs to create a profit but the
cement industry is cyclical in nature and heavily relies on weather. About
two-third of cement production takes place between May and October .
•
Cement producers often use the winter months to produce and stockpile
cement, to meet demand. Another weakness is the cost of transport of the
cement. The cost of transportation is high which reduces the profits over the
long distances. In other words , shipping costs more than the profit from selling
it.
OPPORTUNITIES-;
The cement industries have opportunities as well. One such opportunity is the
cement industries efficiency. The cement industry have recently streamlined its
production efforts , using dry manufacturing instead of wet, which is heavier
and more time consuming. The cement industry has also invested about 6
billion US DOLLARS in expansion efforts to meet unmet cement needs.
Projection shows that by 2012, the cement industry will have 25%more
production capabilities.
• THREATS-;
• The nature of the economy has uncovered a number of threats to the
cement industry. The cement industry greatly relies on construction. The
current economy has lessened the number of construction jobs, which in
turn hurts the cement industry. The cement industry controls the majority
of the United States market, but not all of it. About11.5 matric tonnes of
cement is imported annually to support the unmet needs. If other countries
can produce and ship for a reduced price, the US cement industry is in
danger.
PESTEL ANALYSIS
• PESTLE Analysis is a useful tool for understanding the big picture of
operating and take advantages of the opportunities .
• PESTAL Analysis includes following factors-;
• Political
• Economical
• Social
• Technology
• Environmental
• Legal
1. Political-;the price of the cement is primarily controlled by the
coal rates, power tariffs, railway tariffs, freight, royalty and cess
on limestone. Interestingly, government controls all these
prices. Government is also the one of the biggest consumers of
cement in the country.
2. ECONOMICAL-;The industry is on the boom, with a lot of

government infrastructure and housing projects under
construction. The export segment of the industry is expected to
grow again on account of various infrastructure projects that are
being taken up all over the world and numerous outstanding
cement plants coming up in near future in the country.
3. SOCIAL-; The cement industry in India consists of the both the
organized sector and the unorganized sector. Organized sector
comprises of the well known cement manufacturing companies while
the main players of the unorganized sector are the regional and the
local cement producing units in the various states of the country.
4. TECHNOLOGY-; The government of India plans to study and
possibly acquire the new technologies from the cement industry of
the world. The government is discussing technology transfer in the
field of energy conversation and environment protection to help for
improved efficiency of the Indian cement industry. At present 93% of
the total capacity in the industry is based on the modern and
environment-friendly dry process technology.
• 5. ENVIRONMENTAL-;Climate change would render some
products useless. Those companies which produce large
amount of waste may be required by law to manage their
environmental habits. Various weather conditions change may
significantly impact the transportation of raw materials and
finished products.
• 6. LEGAL-; discrimination laws are placed by the government
to protect the employees and ensure that everyone is treated
properly and given the same opportunities. Intellectual
property laws and other data protection laws are placed in
order to protect the ideas and patents of companies.
BARRIERS TO GROWTH
1. Bargaining power of suppliers-HIGH -;
• GOI exercises excessive control on coal and Power prices and
supply. Government authorities also control the transportation
sector.
2. Bargaining power of buyers-LOW -;
In recent past the cement industry is witnessing the major
change in purchase quantity. Now the share of retail purchase has
been rising as compared to bulk. Now with the industry operating
at 90% level increases the bargaining power of manufacture.
• 3. Rivalry among the firms-HIGH -;
• Large number of players capacity, high degree of product
homogeneity, high storage cost and exist barriers, creates
intensive rivalry among the firms.
• 4.Threat of substitute-LOW -;
• Use of bitumen in road construction and engineering plastic in
building creates some concern for the industry.
• 5. Barriers to entry-MEDIUM TO HIGH-;
• High capital investment distribution network and oversupplied
market deters new entrants. However technology and
manpower are easily available.
RECENT ACTIVITY
• There are some recent activities which get performed under
cement industry-;
1)Wonder cement invests 450 crore in Maharashtra clinker
grinding unit.
2) Shree cement gets coal linkage from Batapara plant.
3) Udaipur cement works approves capex of 37.50 cr.
4) ACC to invest Rs33 bn for capacity expansion.
5)JK Lakshmi announced major expansion with investment
worth Rs. 145 crores.
6) Shree cement commissions clinker grinding unit at suratgarh.
REFERENCES
THANK
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INDUSTRY

NORTH SOUTH CENTRAL

2. ECONOMICAL-;The industry is on the boom, with a lot of

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