Indian Cement Industry analysis

Prepared By:Abhik Tushar Das & Sudeep panicker

CEMENT INDUSTRY• India is the world’s second largest producer of cement after China with

industry capacity of over 200 million tonnes (MT).• Total installed capacity was 204.29 MT as on August 31, 2008.• Total despatches has been 100.17 MT during April–October 2008–09

100.96 MT during April–October 2008–09.• India’s cement consumption grew 9.6% yoy.• South market witnessed strong demand supporting firm pricing (up 4.7%

yoy) in the region.• The key concern dip in construction and infrastructure activities in the

country.

Mergers & Acquisition

SWOT

• STRENGTHS• Second largest in the world in terms of capacity• Low cost of production• WEAKNESS• Effect of global recession on• Real Estate and Infrastructure.• Demand-Supply gap, Overcapacity• Increasing Cost of Production• High Interest rates• OPPORTUNITIES• Strong growth of economy in the long run.• Increase in infrastructure projects• Growing middle class• Technological Changes• Increase in govt spending• THREATS• Imports from Pakistan affecting markets in Northern India.• Excess over capacity can hurt margins as well as prices

CHALLENGES•Cement industry currently has one of the highest inventory levels in recent times.•Growth rates have slowed.•Capacity additions putting pressure on prices.•As a result the cement companies are looking for cutting production