Transcript Annexure 2

CEMENT
MAY 2014
For updated information, please visit www.ibef.org
1
CEMENT

Executive Summary…………………………. 3

Advantage India……………………………… 4

Market Overview and Trends………………. 5

Growth Drivers……………………………….. 25

Success Stories: Innovative Solutions, UltraTech Cement, Ambuja Cement…………. 31

Opportunities…………………………………. 34

Useful Information…………………………… 36
MAY 2014
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2
CEMENT
EXECUTIVE SUMMARY
•
With nearly 350 million tonnes of cement production capacity, India is the second largest
cement producer in the world. By 2020, cement production will reach to 550 million tonnes
•
Of the total capacity, 98 per cent lies with the private sector and the rest with public sector
Higher share of large
plants
•
188 large cement plants together account for 97 per cent of the total installed capacity,
while 365 small plants account for the rest
Large concentration in
South and West
•
Of the total 188 large cement plants in India, 77 are located in the states of Andhra
Pradesh, Rajasthan and Tamil Nadu
Second largest Cement
market
Dominated by private
players
Source: Planning Commission, Aranca Research
MAY 2014
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3
CEMENT
ADVANTAGE INDIA
Robust demand
demand
Growing
FY13
•
Production
capacity:
350 million
tonnes^
•
Long-term potential
Robust infrastructure growth
during 12th Five Year Plan to drive
growth
Oligopoly market, where large
players have partial pricing control
•
Low threat from substitutes
•
Demand is expected to be
boosted by growth in real estate
sector
FY20E
Production
capacity:
550 million
tonnes
Advantage
India
Increasing investments
•
MAY 2014
Robust investments are being
made by the existing players to
expand their capacity
•
Increasing presence of Tier II
cement players
•
Use of alternate fuels to lower
production costs and emissions
•
•
•
•
Attractive opportunities
The engineering sector is delicensed; 100
The
North-East,
which
per cent
FDI is allowed
in is
thewitnessing
sector
a construction boom, offers
attractive
investment
opportunities
Due to policy
support, there
was
cumulative FDI of USD14.0 billion into
the sector
over April
2000 – February
Large
planned
investments
in
2012,
making
up
8.6
per
cent ofistotal
FDI
infrastructure and housing
likely
to
into
the
country
in
that
period
boost demand for cement in the
coming years as well
Source: Edelweiss,
Notes: FY20E – Estimated market size for 2020
^Planning Commission estimates
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CEMENT
OVERVIEW OF THE INDIAN CEMENT INDUSTRY
Cement Industry
(FY13)
Large Cement Plants
Mini And White Cement Plants
•
Cement plants: 188
•
Cement plants: 365
•
Installed capacity: 350 mtpa^
•
Installed capacity: 11.1 mtpa
•
Cement production: 251 mt
•
Cement production: 6.0 mt*
Source: Cement Manufacturers’ Association (CMA),Planning Commission, Aranca Research
Note: mtpa - Million Tonnes Per Annum, mt – Million Tonnes
^Planning Commission estimates
MAY 2014
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CEMENT
INDIA – WORLD’S 2nd LARGEST CEMENT PLAYER
India is the 2nd largest cement producer as well as consumer in the world led by the enormous growth in the infrastructure
and construction sector for the last two decades
Top Cement Producers in 2012 (million
tonnes)
Top Cement Consumers in 2012 (million
tonnes)
2160
2220
247
74
73
69
68
60
59
242
55
53
79
69
63
59
58
55
53
51
Source: International Cement Review, Aranca Research
MAY 2014
For updated information, please visit www.ibef.org
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