ASSESSMENT OF COMPETITION IN CEMENT INDUSTRY IN INDIA

RESEARCH PROJECT REPORT SUBMITTED TO THE COMPETITION COMMISSION OF INDIA

SUBMITTED BY: SUMIT PAL SINGH MBA (2011-2013) VINOD GUPTA SCHOOL OF MANAGEMENT, IIT KHARAGPUR

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ACKNOWLEDGMENT I extend my sincere gratitude to The Competition Commission of India, for giving me an opportunity to intern at the commission. In specific, I thank Mr. Rakesh Kumar, Joint Director (Eco) for being a guiding force throughout this submission and being instrumental in the successful completion of this project. Without him every effort of mine would have been in vain. He has been kind and patient throughout, to share with me his precious time, thoughts and insights. Sumit Pal Singh Vinod Gupta School of Management, IIT Kharagpur

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DISCLAIMER This project report/dissertation has been prepared by the author as an intern under the Internship Programme of the Competition Commission of India for academic purposes only. The views expressed in the report are personal to the intern and do not reflect the view of the Commission or any of its staff or personnel and do not bind the Commission in any manner. This report is the intellectual property of the Competition Commission of India and the same or any part thereof may not be used in any manner whatsoever, without express permission of the Competition Commission of India in writing.

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...........................TABLE OF CONTENTS 1.........................2............................. 9 2.................3 CEMENT MARKET DIVISION IN INDIA ...2 CEMENT INDUSTRY STRUCTURE ............ 50 APPENDIX B ....................................................................................... 24 3.......................................... 20 2......................................................................................................... 48 APPENDIX A .................................... 8 2.........2................................................................1 HISTORICAL DEVELOPMENT ....................................................................................................................................................................................................... 5 2..... 59 iv ..................................................1 1................................................................................................................................................................................................ 27 4........... 44 5...............................................3 TOP CEMENT COMPANIES ALL INDIA DATA ........................................................................................................................ 17 2.................................................. 4 RESEARCH QUESTIONS..... 7 2....................................1 PAKISTAN CEMENT CARTEL ....................................3 GERMANY CEMENT CARTEL ........... INTRODUCTION ..............3 REPORTS ON INDIAN CEMENT INDUSTRY USE SUSPICIOUS LANGUAGE ...............................2.......................1 DEMAND DRIVERS FOR CEMENT IN INDIA ..................................................5 SOUTH ZONE...........2.............2....................... REFERENCES ............................................................................ 41 4......................... 5 2....... 22 2......................1 HISTORY OF COMPETITION ISSUES IN CEMENT INDUSTRIES IN THE WORLD............................................................4 EAST ZONE ........................................... CONCLUSION ................ 15 2..........3 CENTRAL ZONE ................ CEMENT CARTEL CASES ACROSS THE WORLD ........3................................................. 2 1..........................3 1..........................................................................................................3.............................. 18 2.............. 2 1.................................. 46 6............................................................................................. 2 1.................................................................................................................... 1 MOTIVATION FOR THE RESEARCH PAPER ........................................................................................................................................... 4 2.............................. CEMENT INDUSTRY IN INDIA .......... 1 1.......2 SOUTH AFRICA CEMENT CARTEL ..........................................................................2 CURRENT INDUSTRY OVERVIEW ............ 39 4.........................3..................1 NORTH ZONE .....2.............3......................... 12 2.. COMPETITION ISSUES IN THE CEMENT INDUSTRY ...................................................3.............. 39 4..........2 SCOPE AND OBJECTIVE OF THE RESEARCH PAPER ........2 WEST ZONE ............... 3 1...................4 RESEARCH METHODOLOGY ...............2 NEWSPAPERS DOTTED WITH SUSPICION OF CEMENT CARTEL IN INDIA ...................................

China is the fastest growing market today. which attract attention from communities near the plant. with nearly one ton of the material used annually for each person on the planet. demand supply factors with appropriate statistical data.pdf 1 . Cement is a global commodity. INTRODUCTION Concrete is second only to water as the most consumed substance on earth.fr/scp/csd/wssd/docs/further_resources/related_initiatives/WBCSD/WBCSD-cement. cement supply via land transportation is expensive. but large. market growth is slow or nil whereas in developing markets. locking together the sand and gravel constituents in an inert matrix. 1. aggregation or segregation of cement markets across India. Because of its weight. 1 http://www. manufactured at thousands of local plants.1. and generally limited to an area within 300 km of any one plant site. it is the ‘glue’ which holds together much of modern society’s infrastructure. growth rates are more rapid. Because it is both global and local.unep.1 SCOPE AND OBJECTIVE OF THE RESEARCH PAPER The scope of the research paper is to analyse the cement industry in India in terms of the industry structure. international firms account for only 30% of the worldwide market. In many developed countries. The objective of the research paper is to analyse the state of competition in the Indian cement industry and to point out any competition issues and suggest The Competition Commission of India to take corresponding steps within the purview of The Competition Act 2002. the cement industry faces a unique set of issues. and assessing the state of competition in the Indian cement industry. The industry is consolidating globally. at a national and an international level 1. Cement is the critical ingredient in concrete.

Professor of Law at King's College London since January 1991. increases the power of suppliers and decreases the power of buyers.2. “The first thing for any new competition regulator is to go out and find the cement cartel. 1. one of the first and most sought after competition issues is detection of cartel(s) in the cement industry of the country.2. it is always there. The geographical concentration of raw materials required for cement production coupled with the bulky nature of cement make the cement market concentrated in few geographical locations or divides the market in terms of geographical supply and demand of cement. The only countries in which I had been unable to find the cement cartel is where there is a national state-owned monopoly for cement”. Some cement cartel cases are discussed in Section 4. Coupling the above mentioned point with the fact that cement has practically no substitutes. “Taking on cement cartels”. Following are some examples: 1. Because my experience of this subject is. The article strongly indicates cartel type behaviour prevalent in the Indian cement market and also cries foul of nothing being done to deal with it. The Financial Express. In 2001.2 MOTIVATION FOR THE RESEARCH PAPER 1. somewhere. the Indian print media has been filled with news signalling possibility cartel in the Indian cement market. Richard Whish. 2 . thereby providing ripe conditions for cartel formation through price control and market sharing mechanisms. 6th July. famously said.2 NEWSPAPERS DOTTED WITH SUSPICION OF CEMENT CARTEL IN INDIA Over the past years.1 HISTORY OF COMPETITION ISSUES IN CEMENT INDUSTRIES IN THE WORLD For a Competition Commission or Competition Regulatory body in any country across the world. 2007.1.

5.2. 2012. “Though the demand growth remained subdued. New Delhi. the cement manufacturers have observed supply discipline involving curtailment of production by companies in order to narrow the demandsupply gap. 2 3 Business Standard. Hindustan Times. Page 60 3 . The Hindu. The self-discipline imposed by the cement manufacturers is yet to stand the test of time” 4. The news comes in on the Government saying that it will keep prices low by ensuring adequate supply 2. 1. The Economic Times. by a Director in Crisil Research. The article. New Delhi. 4. mulls on the lowering capacity utilization levels in cement industry across all the regions. 3. “Government examining SFIO report on cement makers”. overcapacity to plague cement industry”. “Brakes on cement cartelization”. 4th August. The news comes after the Commission issued a “cease and desist” order against 41 cement companies 3. 20th December. 6th May.3 REPORTS ON INDIAN CEMENT INDUSTRY USE SUSPICIOUS LANGUAGE Reports on the cement industry by renowned companies mention their views in certain manner that should be taken note of by The Competition Commission of India. 20th December. Following are a couple of examples: 1. Business Standard. 2011. “Cement cartel rigged prices for 17 years”. 2007 Hindustan Times. “Muted demand. 5th December. New Delhi. 2007. 5th December.2. New Delhi. News pours in after Serious Fraud Investigation Office’s (SFIO) report on cement industry is submitted with the Ministry of Corporate Affairs. Ernst & Young’s report on the cement industry in India states. 2007. 2007 4 Ernst & Young’s report “Cement-ing Growth”.

reliance has been placed on data from the Centre of Monitoring Indian Economy (CMIE) databases and data from the annual reports of the companies observed. where large players partially control supply for better price discipline” 5. Indian Brand Equity Foundation’s (IBEF) report on cement industry in India states. descriptive and comparative methodology for this report.4 RESEARCH QUESTIONS 1. under Inter-firm rivalry 4 . What is the structure of Indian cement industry? 2. 1. “The Indian cement market is oligopolistic in nature.3 RESEARCH METHODOLOGY The researcher has adopted analytical. The views and research reports in the public media have been studied coupled with the discipline of Competition Law. characterised by tacit collusion. Where does the Indian cement industry stand with respect to competition issues with respect to The Competition Act. Page 15. What are the economic/financial indicators of anti-competitive behaviour in an industry? 5 IBEF’s report “Cement November 2011”.2. 2003? 3. 1.

30 lakh tonnes in 1941. But severe competition amongst producers very nearly threat­ened the cement industry. The cement industry was fighting for its very existence. war clouds began gathering over Europe and recession had set in. there was widespread prejudice against the use of indigenous cement.1924-1941 During these 18 years. the indigenous production touched nearly a quarter million tonnes in the first decade. The very survival of Indian cement industry was in doubt. there was a gradual increase in indigenous production and decrease in cement imports. the total cement consumption was around 2 million tonnes: of which nearly 50 per cent consisted of imports. Severe competition among producers resulted in continuous cutting down of prices. 2. In 1924 against the capacity of half a million tonne only 0. Some of the companies went into liquidation.26 million tonne was produced.661akh tonnes in 1925 to 18.000 tonnes in 1925 to 21. Industries in India were under consid­erable strain. Beginning with a production of 1000 tonnes in the year 1914.2.cmaindia. Era of Struggle and Survival . Imports dwindled from 69. Indigenous production went up from 3. Imports contributed to less than 7 per cent of total cement consumption during 1924-1942.aspx 5 . Era of Dominant Imports – 1914-1924 During this period of 10 years. The low capacity utilisation and persistent problem of marketing affected the financial viability of the cement plants to a great extent.org/portal/static/DynamicHistory. CEMENT INDUSTRY IN INDIA 2. In 1936.1 HISTORICAL DEVELOPMENT 6 1. Moreover. 6 http://www.000 tonnes in the pre-war year 1938 and were only a few thousand tonnes in 1941.

production was stepped up from 1. Tatas. (ACC). During this period. 3. Era of Planning and Controls 1951-1982 The Five Year Plans were launched from 1951-52: cement was brought under the purview of Cement Control Order of 1956 both for price and distribution. and Concrete Association of India had played their role for the betterment of cement industry it was still far below the expectations of the cement industry.Though the Cement Marketing Co. this resulted in perpetual "Shortage" till 1986. Problems of marketing and pricing still continued to plague the industry. 4.saw considerable potential for a united cement industry. It was at this juncture that F.5 per cent of the total consumption. C. price and distribution control. One industrialist F. Imports practically dwindled to less than 2. Major portion of cement produced then was earmarked for Defence purposes and only around 10 per cent was released for private consumption.a man of great vision and foresight . In the next ten years up to 1956 Government of India exercised informal control by fixing prices from time to time. 5. Meantime there was "Growth" in cement capacity but not at the requisite pace. Khataus and Killick Nixon under one banner of Associated Cement Companies Ltd. Era of Partial Decontrol 1982-1988 6 . Dinshaw .2 million tonnes in 1951. Era of Price Controls – Pre-plan 1942-1951 During 1942-1946 cement production came under the purview of Defence of India Rules for production.C.8 million tonnes in 1942 to 3. Dinshaw brought together the cement companies belonging to his own group. The control on carnet continued till 1982 when partial decontrol policy was announced (cement was decontrolled for a brief period during the two years 1966 and 1967).

Era of Total Decontrol – March 1989 Cement was totally decontrolled with effect from 1st March 1989.16 Mar-06 9.00 7.77 Mar-07 8. Consequently there was Quantum Jump in capacity and production during 1982-88. While it took 8 decades to reach the 1st 1000 Lakh tonne capacity.00 5.aspx 7 .03 91. All India Cement Capacity Utilization vs.00 2.00 1.2 CURRENT INDUSTRY OVERVIEW India ranks second in world cement producing countries.org/portal/static/DynamicFacts.52 8.00 6. 2.00 0.00 10.13 Mar-08 7. rose to 2190 Lakh tonne at the end of FY09 7.34 6.82 95 90 85 80 75 11. Government announced 0.52 9. declines during the monsoon (July-Sept) quarter and increases during Jan-March quarter. 6.76 8.00 100 9.50 Mar-11 Capacity Utilization India Cement Production % change India's GDP % change 70 Capacity Utilization % GDP Data: Central Statistics Office (CSO) Cement Production and Capacity Utilization Data: CMIE database Figure 1: All India Cement Production (Percentage change) vs.00 11. which was 29 Million tonne in 1981-82. figure 1 shows yearly cement production 7 http://www.65 85.68 88. The capacity.00 4.58 92.12 per cent post tax return on net worth to boost cement capacity: this was followed by Partial Decontrol in 1982.cmaindia.00 3.09 9.In 1977. 12.5 84.88 85.00 8. The Industry recorded an exponential growth with the introduction of partial decontrol in 1982 culminating in total decontrol in 1989. the 2nd 1000 Lakh tonne was added in just 10 years.00 9.78 Mar-09 10.64 Mar-10 4. India GDP (Percentage change) (2004-05 base) Since the demand of cement is seasonal in nature.

and Mar-10) indicate lower demand for cement. Subdued 8 Eleventh Five Year Plan. As seen in figure 1. total housing requirement.1 lakh units. the decrease in percentage increase of cement production numbers can be attributed to the global crisis. 63% Technical Group on estimation of housing shortage constituted in the context of formulation of the Eleventh Five-Year Plan.1 to see impact of real estate on Indian cement industry). most of the urban cities are faced with a humungous oversupply of office space. During the Eleventh Plan period. Mar-09.2. Lease rentals have corrected in the range of 25-50 per cent during the first half of 2008. 2. While from late 2007 to early 2009. 4% Commerci al Real estate.3 lakh units 8. housing shortage is estimated to be around 247.1 DEMAND DRIVERS FOR CEMENT IN INDIA Figure 2. demand for commercial real estate dropped sharply leading to sharp correction in lease rentals since the second half of 2008. 20% According Residential Real Estate.2. 13% Infrastruct ure. the capacity utilization has gone up to 92% which could be on the back of very less increase cement capacities on the back of declining increases in cement demand. During the economic slowdown. In 2011.percentage change. due to which commercial and housing real-estate industry saw a decrease in demand (refer to Section 2. of the Demand Break-up by Segments (FY06-FY10) Industrial. Source: Crisil Research Figure 2 illustrates that residential real estate sector contributed towards 63% of the total domestic cement demand in the country to during the report FY06-10. the capacity utilization levels also declined to 85% level signalling supply constraints exercised by cement manufacturers. With demand slowing substantially. is estimated at 265. Chapter 11 8 . lesser increases in all India cement production numbers (Mar-08. including the backlog.

Demand is expected to increase at a CAGR of 15 per cent while room availability is expected to record a CAGR of 9 per cent across premium segment 11. This nature has been consistent through the years as figure 3 (next page) and figure 4 (on page 11) show 9 Crisil Research: India Real Estate Overview Crisil Research: India Real Estate Overview 11 Crisil Research: India Real Estate Overview 12 Numbers at 2006-07 Prices. hotel industry (part of commercial real estate industry) demand is anticipated to outstrip supply growth.demand and rentals has impacted the execution adversely in addition to cancellation of many projects 9. As on January 2011. Source: Government of India. 13 ‘”Cement”-ing Growth’. The industry is expected to increase at a CAGR of 14 per cent in the short term and 19 per cent over the next 5 years 10. Eleventh Five Year Plan. The industrial sector contributed towards 4% of the total domestic demand for cement in the country.71%. This represents a compounded annual growth rate of 18. Overall the Indian cement industry is expected to grow comfortably above the GDP growth level and may even register double digit annual growth numbers in the coming years. 2056150 crores in the Eleventh Five Year Plan (2007-2012) from an anticipated investment of Rs.2 CEMENT INDUSTRY STRUCTURE The Indian cement industry is weakly oligopolistic in nature on a national level with top 11 to 12 firms among more than 100 firms capturing 70% of the cement market. between 2009-10 and 2013-14.2. 871445 crores in the Tenth Five Year Plan (2002-2007) 12. 2. Going forward. Ernst & Young report. Page 16 10 9 . 373 SEZs had been notified and the Board of Approvals had granted formal approvals to 581 SEZs and in-principle approvals to 154 13. The organised retail real estate industry in India has witnessed a slowdown in the past year after increasing at a CAGR of 28 per cent in 2005-08. Investment in infrastructure is projected to grow to Rs.

. and Kesoram Industries Ltd.. Ltd. Ultratech Cement Ltd. Lafarge India Pvt. 2011. in terms of all India cement production.number and names of firms with concentration of 70% in terms of the production of cement in March 2006 and March 2011 respectively.. Century Textiles & Inds. Ambuja Cements Ltd. Notable movers in production percentage in terms of overall Indian market are Shree Cement Ltd. Ultratech Cement Ltd. Grasim Industries Ltd. under Ultratech Cement Ltd from FY2010 onwards 14. has stopped cement business in one of its companies. The major players are ACC Ltd. of these top companies have fluctuated by small amounts in the last six years (since ACC Ltd. Binani Cement Ltd.. Jaiprakash Associates Ltd.. India Cements Ltd.. Figure 5 on the next page gives a holistic overview of the Indian cement industry using Porter’s Five Forces Model. Madras Cements Ltd. Birla Aditya Group.. The shares. and has used the cement manufacturing plants of Grasim Industries Ltd.. and Ambuja Cements Ltd. Ltd. 10 ... and Ultratech Cement Ltd.’s production share has increased as it parent company.. Birla Corporation Ltd. Shree Cement Ltd. and Kesoram Industries Ltd... were taken over by Holcim Group). 14 Annual Reports. Grasim Industries Ltd.

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Grasim Industries Ltd.. we take a look at the financial performance of top cement companies in the country alongside their production and capacity utilization numbers from March 2006 to March 2011. in Appendix A show financial data (operating profit margin and profit after tax) with the cement production data and the capacity utilization data of each of the top 13 cement producers in the country. is 75% which is far below its average over the preceding five years.. Ltd. The following years show the increases in PAT and cement production numbers with respect to March 2005 level.. Overall trend among companies: The period of 2005 to 2011 has seen increasing cement production numbers from all of the players in the Indian cement industry. The figures. On an all India level the capacity utilization levels in this period for a large numbers of top 13 firms have been on the higher side with capacity utilization crossing 100 for most part of the given period for companies like Ambuja Cement Ltd. the capacity utilization is in percentage terms. Also. figure 30 to figure 50. All the numbers in the graphs in Appendix A represent all India data The operating profit margin is in percentage terms. 12 . which is the percentage of cement produced by a company with regards to the capacity of cement production installed at its plant(s). at which each of the PAT and cement production numbers is listed at 100. Century Textiles & Inds.2. Profit after tax (PAT) and cement production numbers are indexed from March 2005 level.2. The Mar 2011 capacity utilization for Kesoram Industries Ltd.3 TOP CEMENT COMPANIES ALL INDIA DATA In this section. Lafarge India Pvt. and Kesoram Industries Ltd.. Cement production numbers for Kesoram Industries Ltd. Birla Corporation Ltd. Ltd. which gives the cost of running the core business of a company.

’s capacity utilization has never been above 90% with the March11 figure at 78% even after almost doubling their cement production in 2010-11 from 2009-10. seems to fall abruptly with a decrease in prices in 2009 and late 2010 (Mar-11 period). show a steady enough capacity utilization trend that can be mapped to the fluctuations in the demand-supply dynamics on an all India level. The cement production also fell from an index of 213 in Mar-10 to 195 in Mar-11. their capacity utilization levels have declined to 75% and 69% in Mar-10 and Mar-11 respectively..are almost same for Mar-10 and Mar-11 indicating that they have added capacity but not used it which has been reflected in a negative PAT index for Mar-11 and an operating profit margin of just 4% for Mar-11. Such a sharp fall indicates (happened previously also: from 97% in Mar-08 to 85% in Mar-09) a supply constraint being deliberately exercised in order to decrease cement supply in the market. This on the top of their highest production levels in the period of 2007-2010. show a cause for concern in terms of competition in the markets. This indicates a huge capacity build up by Ultratech Cement Ltd. Shree Cements Ltd... being at 77% in Mar-11 from 103% in Mar-10. and Jaiprakash Associates Ltd.. • Capacity utilization for Shree Cement Ltd. • As for India Cements Ltd. and Madras Cements Ltd. from being at 103% in Mar-08. • Ultratech Cement Ltd. and their increasing PAT index does not correspond to decreasing operating profit margin and capacity utilization levels. Capacity utilization numbers for Ultratech Cement Ltd. ACC Ltd. is even worse with the capacity utilization falling continuously from 2008 onwards to 56% in Mar-11.. 13 . on the back of almost same production level. India Cements Ltd. • The case for Madras Cements Ltd.

but has come back to 2005-06 levels or even below those levels for individual companies across the board. the PAT is still well above the 2005 levels (except for Kesoram Industries Ltd.. though for most of the cases. has recorded an almost non-decreasing PAT index over the base index of 100 in Mar-05 with a PAT index of 49271 in Mar-11 even though its operating profit margin has dipped considerably to 19% in Mar-11 from 31% in Mar-08. for which Mar-11 PAT index was at -627 against Mar-05 PAT index of 100). It may well be an indicator that the cost of production and operation are higher from 2009-10 onwards and though the slight decrease in selling price of cement must also contribute to the low operating profit margin levels. 14 . During 2005-06 to 2010-11.Such low utilization levels raise eyebrows on the functioning and intent of the cement manufacturers with respect to competition in the market. the operating profit margin all the companies has soared to reach new highs during Mar-2008. the Profit after Tax (PAT) for all the companies closely resembles the path of the operating margin. Also. this much amount of fluctuation in operating profit margins (around 15% for most of the companies) on an annual basis points out a strong suspicion that the price levels during the up period (2005 to 2008-09) were extraordinarily high. Only Ultratech Cement Ltd.

3 CEMENT MARKET DIVISION IN INDIA The cement industry in India is fragmented into five different regions because of the following reasons: Bulky nature of cement and limestone (a key ingredient in manufacturing cement) makes it very hard to transport over long distances. Ernst & Young report. Ernst & Young report. Over the years the operating costs of Indian cement companies has grown at a CAGR of 7. High freight costs involved in transportation of these commodities. Page 32 Data taken from ‘”Cement”-ing Growth’.2. Over the years. Page 32 15 . 1868 per tonne in FY10 15. Figure 6 Figure 7 15 16 Data taken from ‘”Cement”-ing Growth’.03% from Rs. 1330 per tonne in FY05 to Rs. the share of freight costs has increased as shown in figure 6 and figure 7 16. A cement plant is generally located near limestone deposits and cement produced in a particular region is mainly consumed in that region.

16 . combined with different industry structure in each region. there are broadly five regions in India which have mainly independent demand-supply factors and numbers. As shown in Figure 8.Figure 8 below shows the division of cement production and cement market on the map of India.

and Ambuja Cements Ltd. ACC Ltd. 10 and 11. out of a total of more than 15 companies. thus there is shuffling of companies and their cement production percentage. Over the last 6 years. refer to figures 9.. are under the Birla Aditya Group) also contributed to this shuffling.1 NORTH ZONE The top 5 companies in terms of cement production in north zone produced 77% of the total cement produced in 2011. the top 5 or 6 companies have captured over 75% production of cement. and Jaiprakash Associates Ltd..2. and Ultratech Cement Ltd..3. Grasim Industries Ltd. Major players are Shree Cement Ltd. which represents an oligopolistic market. exit from the cement market in 2010 and with its production capacities under Ultratech Cement Ltd. JK Lakshmi Cement Ltd. Zonal production data for ACC Ltd. (Grasim Industries Ltd. is not available 2010 onwards. Ambuja Cement Ltd. but the market remains oligopolistic nonetheless.. with virtually the same names appearing in the top 5 or 6. 17 . Ultratech Cement Ltd.

. Over the last 6 years.00 75.00 90.00 100. In March 2010. which is reasonable when one considers cyclical nature of the cement industry and the decrease in the demand of cement due to global effects of recession and housing crisis.00 20. Sanghi Industries Ltd.00 80. north zone recorded a capacity utilization of 91%.2 WEST ZONE The top 4 companies in terms of cement production in west zone produced 73% of the total cement produced in 2011. 14 and 15.00 120.97 101.23 98.00 60.00 40.00 85.13 105.. and Jaiprakash Associates Ltd. North Zone Cement Capacity Utilization vs. Ultratech Cement Ltd.00 140.. with virtually the same names appearing in the top 6.3..00 Capacity Utilization Capacity Utilization Price Change Cement Production change North Zone Figure 12: North Zone Cement Production vs. which represents an oligopolistic market.00 80.00 160.82 95. Century Textiles & Inds. Ltd.00 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 85.00 95. refer to figures 13. /50Kg bag). Zonal production data for Ambuja 18 . Source: CMIE data Figure 12 shows capacity utilization in north zone declined to 86% in Mar-09 after being at 101% in Mar-06. 180. 2.Figure 12 shows the cement production numbers as indexed from a base of 100 with the base 100 representing Mar-2005 numbers.00 0. Similarly it shows the price of 50 Kg bag of cement as indexed from a base of 100 with the base 100 representing Mar-2005 numbers.00 100. Delhi Retail Prices (Rs. Major players are Ambuja Cement Ltd. out of a total of 15 companies.87 90. the top 5 or 6 companies have captured around 80% production of cement.

99 94.Cements Ltd.96 105.00 80.00 40.13 83.00 20.00 100.00 160.00 85.00 95.00 100.00 140. Grasim Industries Ltd. is not available 2010 onwards.16 West Zone 97.00 75.00 90. exit from the cement market in 2010 and with its production capacities under Ultratech Cement Ltd.00 60.35 89.00 Capacity Utilization Capacity Utilization Cement Production Change Price Change Mar-08 Mar-09 Mar-10 19 .00 Mar-06 Mar-07 86. and Ultratech Cement Ltd. but the market remains oligopolistic nonetheless. are under the Birla Aditya Group) also contributed to this shuffling.00 0. (Grasim Industries Ltd.00 80. 180. thus there is shuffling of companies and their cement production percentage.00 120.

Zonal production data for ACC Ltd. thus there is shuffling of companies and their cement production percentage. Century Textiles & Inds. is not available 2010 onwards. Over the last 6 years. (Grasim Industries Ltd. refer to figures 17. 20 . which represents an oligopolistic market.Figure 16: West Zone Cement Production vs.3 CENTRAL ZONE The top 3 companies in terms of cement production in central zone produced 70% of the total cement produced in 2011. This can be owed to production levels remaining virtually the same through years 2007-08 to 2009-10 while capacity being added up as shown by the production numbers. Similarly it shows the price of 50 Kg bag of cement as indexed from a base of 100 with the base 100 representing Mar-2005 numbers. Major players are Jaiprakash Associates Ltd. Mumbai Retail Prices (Rs. Ltd. out of a total of at-least 8 companies. 2. /50Kg bag). with virtually the same names appearing in the top 4. exit from the cement market in 2010 and with its production capacities under Ultratech Cement Ltd. and Ambuja Cements Ltd. and Ultratech Cement Ltd. but the market remains oligopolistic nonetheless... the top 4 companies have captured around 80% production of cement. Source: CMIE data Figure 16 shows the cement production numbers as indexed from a base of 100 with the base 100 representing Mar-2005 numbers. are under the Birla Aditya Group) also contributed to this shuffling. Grasim Industries Ltd.3. Figure 16 shows capacity utilization in west zone having steadily declined to 84% in Mar-10 after being at 98% in Mar-08. 18 and 19.. Such a trend is a cause for concern in terms of competitive behaviour in the market as firms might be holding back production in order to constrain supply in the western market. and Ultratech Cement Ltd. West Zone Cement Capacity Utilization vs. ACC Ltd.

00 140.11 Central Zone 110.00 100.00 40.22 95.00 80.51 90.00 20.00 92. /50Kg bag). Similarly it shows the price of 50 Kg bag of cement as indexed from a base of 100 with the base 100 representing Mar-2005 numbers.00 120.00 Cement Production Change Price Change 94.00 Capacity Utilization Figure 20: Central Zone Cement Production vs.00 Mar-06 89. Central Zone Cement Capacity Utilization vs.00 105. 21 .00 85.18 94.00 80. Source: CMIE data Figure 20 shows the cement production numbers as indexed from a base of 100 with the base 100 representing Mar-2005 numbers.180.00 60.17 105.00 100.00 Capacity Utilization Mar-07 Mar-08 Mar-09 Mar-10 75.00 0. Delhi Retail Prices (Rs.00 160.

exit from the cement market in 2010 and with its production capacities under Ultratech Cement Ltd. Figure 20 shows a reverse trend in capacity utilization of the central zone with respect to other regional zones in the country.4 EAST ZONE The top 4 companies in terms of cement production in east zone produced 81% of the total cement produced in 2011.3. is not available 2010 onwards. Ambuja Cements Ltd.. Delhi cement retail prices are considered for analysis here as no cement price data could be gathered from CMIE database for a central Indian city.. Over the last 6 years. and Ultratech Cement Ltd. the top 5 companies have captured around 75% production of cement. but the market remains oligopolistic nonetheless. and Ambuja Cements Ltd. OCL India Ltd. and Century Textiles & Inds. 22 and 23. Ltd. Page 10 22 . ACC Ltd. are under the Birla Aditya Group) also contributed to this shuffling. refer to figures 21. since the north zone is the major supplier of cement to the central zone 17. 17 IBEF’s report “Cement November 2011”. (Grasim Industries Ltd. Ltd. which represents an oligopolistic market. out of a total of 17 companies.In figure 20.. Zonal production data for ACC Ltd. Ultratech Cement Ltd.. 2. thus there is shuffling of companies and their cement production percentage. Major players are Lafarge India Pvt.. Grasim Industries Ltd. Capacity utilization has been on the increase in the last 5 years with a slight dip in Mar-09 owing to global and housing crisis pressures. with virtually the same names appearing in the top 5 to 6.

85 86.00 85.00 100. Kolkata Retail Prices (Rs.00 20.00 80.00 75. /50Kg bag). 160. Similarly it shows the price of 50 Kg bag of cement as indexed from a base of 100 with the base 100 representing Mar-2005 numbers.74 87.00 120.00 0.00 Price Change 90.Figure 24 shows the cement production numbers as indexed from a base of 100 with the base 100 representing Mar-2005 numbers.00 East Zone 105.00 60.84 85.00 100.00 Cement Producion Change Capacity Utilization Capacity Utilization Figure 24: East Zone Cement Production vs.00 40.00 84. East Zone Cement Capacity Utilization vs. Source: CMIE data 23 .16 95.39 87.00 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 80.00 140.

. Ambuja Cement Ltd. Ltd. Though increases in production and corresponding increases in retail prices of cement in the graph indicate slightly abnormal behaviour as capacity utilization should be up when the prices are rising along with the production levels of cement. with virtually the same names appearing in the top 8. The top 7 companies in terms of cement production in south zone produced 74% of the total cement produced in south zone 2011. ACC Ltd. out of a total of 25 companies. refer to figures 25.. and Ultratech Cement Ltd. the top 8 companies have captured around 75%-80% production of cement..5 SOUTH ZONE South Zone has the largest capacity of limestone in India and is the largest producer of cement in India. 2. are under the Birla Aditya Group) also contributed to this shuffling. exit from the cement market in 2010 and with its production capacities under Ultratech Cement Ltd. Such a trend is again a cause for concern in terms of competitive or collusive behaviour... Zonal production data for ACC Ltd. Ultratech Cement Ltd. Dalmia Bharat Sugar & Inds. is not available 2010 onwards. which represents an oligopolistic market.Figure 24 shows capacity utilization in east zone steadily remaining at around 85% level for the years 2005-06 to 2009-10.. 26 and 27. Ltd. and Ambuja Cements Ltd. Grasim Industries Ltd.3. and Penna Cement Inds. It has considerably larger number of companies operating than in other zones across India.. (Grasim Industries Ltd. Chettinad Cement Corpn. Over the last 6 years. but the market remains oligopolistic nonetheless. Ltd. 24 . Madras Cements Ltd. thus there is shuffling of companies and their cement production percentage. Major players are India Cements Ltd.. Kesoram Industries Ltd.

00 40.14 105.00 160.00 100.22 Mar-07 Mar-08 Mar-09 Mar-10 Figure 28: South Zone Cement Production vs.00 60.00 80. Chennai Retail Prices (Rs.00 0.00 95.40 89.180.00 90. South Zone Cement Capacity Utilization vs.00 Mar-06 88.07 South Zone 94.00 100.00 120.00 140.00 20.00 85.00 Capacity Utilization Capacity Utilization Cement Production Change Price Change 93. /50 Kg bag).03 75.00 80. Source: CMIE data 25 .00 76.

With such a low capacity utilization rate in the south.1 to section 2. The above analysis in section 2. Similarly it shows the price of 50 Kg bag of cement as indexed from a base of 100 with the base 100 representing Mar-2005 numbers. Figure 28 shows capacity utilization in south zone sharply dipping to 76% in Mar-10 after reaching the highs of 94% in Mar-08. 2007 level when capacity utilization was up and above 90% for these years.3. In Section 3.Figure 28 shows the cement production numbers as indexed from a base of 100 with the base 100 representing Mar-2005 numbers. and price level well above 2005. and increasing or slightly decreasing prices in period of large dip in capacity utilization calls for concern and deeper observation of the capacity utilization numbers of individual firms. 2006.3. the report observes competition issues and looks at detailed analysis of each company in the questionable regional cement markets in India.5 leads us to question the workings of the regional cement markets in India. The competition issues like agreeing to an anti-competitive agreement or presence of a cement cartel cannot be ignored under such workings of regional cement markets in India. 26 .

2 and Section 2. supply. 2002. distribution. Thus under the Competition Act. technical development. Under Section 3. “no enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production. COMPETITION ISSUES IN THE CEMENT INDUSTRY The Competition Act. or type of goods or services. or decision taken by. which causes or is likely to cause an appreciable adverse effect on competition within India. acquisition or control of goods or provision of services. markets. supply. investment or provision of services. 2002 under Chapter II prohibits certain agreements. The cement market in India (as a whole and on regional levels) is highly concentrated with few players controlling the production of cement.2. 2002 this research report thrives to take a deeper look into the cement industry under Section 3. “Any agreement entered into between enterprises or associations of enterprises or persons or association of persons or between any person and enterprise or practice carries on. 2002. 27 . any association of enterprises or association of persons. storage.” Also. under Section 3. subsection (1) of the Competition Act.3 raises questions over the integrity of the cement market(s) in India. subsection (3) of the Competition Act. The analysis of Section 2 as a whole and particularly Section 2. which – (a) directly or indirectly determines purchase or sale prices. especially at the geographical (zonal) level. or number of customers in the market or any other similar way. including cartels. engaged in identical or similar-trade of goods or provision of services. anti-competitive agreements. (b) limits or controls production. (c) shares the market or source of production or provision of services by way of allocation of geographical area of market.3. abuse of dominant position and regulates combinations with the power to lay charges and impose considerable fines on individual(s) and enterprise(s).

and Section 5. Here. which have been observed in detail in Section 2. “Combination” under the Competition Act. at-least under the analysis done in Section 2 and Section 3 of this research report. The regional cement markets indeed have high concentration of firms. and there have not been noticeable/suspicious combinations lately in the cement industry in India. the top 5 companies in terms of cement production in north zone produced 77% of the total cement produced in 2011.3 of this report. Figure 15 shows that the top 4 companies in terms of cement production in west zone produced 73% of the total cement produced in 2011. Competition Commission of India 28 . Figure 19 shows that the top 3 companies in terms of cement production in central zone produced 70% of the total cement produced in 2011. East. Therefore. out of a total of 15 companies. Conditions conducive for cartel formation 18: 1. December 2011. this research report tries to venture into finding any semblance of collusive behaviour or anti-competitive agreement among the cement manufacturers. Figure 23 shows that 18 First six headings (points) taken from “Provisions Related to Cartels” Competition Act. and South. out of a total of at-least 8 companies. According to figure 11 of this report. “Abuse of dominant position”. West. Advocacy series. as any regional cement market has at-least three major players. Central.(d) directly or indirectly results in bid rigging or collusive bidding. out of a total of more than 15 companies. shall be presumed to have an appreciable adverse effect on competition:” Section 4.Few players in the market The Indian cement market is divided into five regional markets: North. 2002 are not applicable to the cement industry. High concentration . 2002. we look at certain conditions that are conducive for cartel formation and observe the findings of the cement industry and its players within the framework of those conditions.

the top 4 companies in terms of cement production in east zone produced 81% of the total cement produced in 2011, out of a total of 17 companies. And figure 27 shows that the top 7 companies in terms of cement production in south zone produced 74% of the total cement produced in south zone 2011, out of a total of 25 companies. 2. Excess capacity According to the Section 2.3 of this report, the capacity utilization levels having been declining in three of the five regional markets across India. Figure 12 in section 2.3.1 shows capacity utilization in north zone declined to 86% in Mar-09 after being at 101% in Mar-06. In March 2010, north zone recorded a capacity utilization of 91%, which is reasonable when one considers cyclical nature of the cement industry and the decrease in the demand of cement due to global effects of recession and housing crisis. Figure 16 in section 2.3.2 shows capacity utilization in west zone having steadily declined to 84% in Mar-10 after being at 98% in Mar-08. This can be owed to production levels remaining virtually the same through years 2007-08 to 2009-10 while capacity being added up as shown by the production numbers. Such a trend is a cause for concern in terms of competitive behaviour in the market as firms might be holding back production in order to constrain supply in the western market. Figure 20 in section 2.3.3 shows a reverse trend in capacity utilization of the central zone , it has been on the increase in the last 5 years with a slight dip in Mar-09 owing to global and housing crisis pressures. Figure 24 in Section 2.3.4 shows capacity utilization in east zone steadily remaining at around 85% level for the years 2005-06 to 2009-10. Though increases in production and corresponding increases in retail prices of cement in the graph indicate slightly abnormal

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behaviour as capacity utilization should be up when the prices are rising along with the production levels of cement. Such a trend is again a cause for concern in terms of competitive or collusive behaviour. Figure 28 in Section 2.3.5 shows capacity utilization in south zone sharply dipping to 76% in Mar-10 after reaching the highs of 94% in Mar-08. With such a low capacity utilization rate in the south, and price level well above 2005, 2006, 2007 level when capacity utilization was up and above 90% for these years, and increasing or slightly decreasing prices in period of large dip in capacity utilization calls for concern and deeper observation of the capacity utilization numbers of individual firms. The above analysis leads us to question further the high level of prices in four out of the five zones (except the central zone), which is done in our analysis in point 9 under this section. 3. High entry and exit barriers Figure 5 clearly illustrates that the entry and exit barriers for the cement industry are high due to very high cost of cement production plants, be it cost of setting up new plants or operational costs of existing plants. To exit a losing position in the cement industry would incur huge losses for the firm(s) as 4. Similar production costs The cement manufacturers’ share in the market has remained steady at the national level and also at the regional levels for most part of six years. The similarity in the pattern of increasing (and decreasing) Operating profit and Profit after Tax of cement manufacturers shows that production costs for them in the same markets are highly similar. Shree Cements Ltd. has been noted for their high operational efficiency and thus reasoning their
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extraordinary rise in the cement market in India. Shree Cements Ltd. deployed better and technologically superior methods of production of cement in the mid-2000’s, but the operational efficiency gap between the them and the rest of the manufacturers had decreased a lot due to others adopting newer technology and production methods. 5. High dependence of consumers on the product Cement, practically, has no substitutes and thus cement industry traditionally has high degree of supplier power. Alternatives, if any, are at a nascent stage of use and do not pose a visible threat to the supremacy of cement as the sole product providing its kind of use and value to the consumers and the nations as a whole. 6. History of collusion in the industry Section 1.2.1 and Section 4 look into the history of collusion in the cement industry in various countries in the world and section 1.2.2 looks into the history of collusion India through media reports and clippings. Cement as an industry has been known to have collusive behaviour among firms operating in the same market. 7. Existence of effective trade association in the industry As seen in the Pakistan cement cartel case, the presence of a trade association in the cement industry provided the common grounds for the cement manufacturers in Pakistan to agree to marketing agreements which fixed the production percentage of each member of the trade association and control prices in collusion with each other (refer to Section 4.1). In India, most of the cement manufacturers are registered with the Cement Manufacturers’ Association, CMA, which was established in 1961. Though, in this report we do not take a look into the role of CMA in India over the years, but the presence of such an association can always fuel collusion among member firms.
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In addition to these factors, shareholding pattern data for some of the major companies also contribute to the suspicion of inherent collusion among some of the players in the cement market. 8. Shareholding pattern data Figure 29 shows the major crossholdings among companies belonging to the same parent groups but individually competing in same and/or different regional cement markets across India.

• Holcim Group
Ambuja Cement India Pvt. Ltd. has 50.01% shareholding in ACC Ltd.
Century Textiles & Inds. Ltd, has 4.66% shareholding in Kesoram Inds. Ltd. and 2.95% viceversa Grasim Industries Ltd. has 60.33% shareholding in Ultratech Cements Ltd.

• Birla Aditya Group

• Birla B.K. Group

Dalmia Cement Ltd. has 45.37% shareholding in OCL India Ltd.

• Dalmia Group

Figure 29: Cross-Holdings among major Cement companies for March 2012, Source: Annual Shareholding Reports of the respective companies for the concerned quarter/year.

This, increases suspicion of collusive behaviour between firms that have crossholdings between them. Notably, ACC Ltd. and Ambuja Cement Ltd. operating across India in almost every zone, Dalmia Cement Ltd. and OCL India Ltd. with Dalmia Cement Ltd. operating in the southern zone and OCL India Ltd operating the eastern zone, Grasim Industries Ltd. and Ultratech Cement Ltd. operating across India in almost every zone (though from 2011 onwards, Grasim has pulled out of the cement market, with its
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production capacities going over to Ultratech Cement Ltd.), and Century Textiles & Inds. Ltd. and Kesoram Industries Ltd., with Kesoram Industries operating mainly in southern India and Century Textiles & Inds. Ltd. operating across most zones in India. 9. Unusually high price per unit of cement It is not straightforward to determine whether the cement prices have been fixed by the companies or not. Changes in demand-supply dynamics of each region can result in significantly different prices of different regions. To gain insight into such demand-supply dynamics, it is imperative to observe financial numbers of each of the firms with respect to capacity utilization and cement production numbers and then try to see whether the fluctuations of retail prices in corresponding geographical zones provide any depth into suspicion of collusive behaviour among firms from an economics point of view. Appendix B contains all the relevant graphs with the relevant data for major companies across each of the geographical zones. • An important point to re-consider is the operating profit margin and the PAT index of the top companies across the zones in India. As these values are company specific and on the national level, they will not change for the regional markets. Thus recapturing what has analysed about the same in section 2.3.3 of this report: During 2005-06 to 2010-11, the operating profit margin all the companies has soared to reach new highs during 2007-2008, but has come back to 2005-06 levels or even below those levels for all the companies. It may indicate that the cost of production and operation are higher from 2009-10 onwards and though the slight decrease in selling price of cement must also contribute to the low operating profit margin levels, this much amount of fluctuation in operating profit margins (around 15-20% for almost all

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remain high and low for Binani Cement Ltd. though for most of the cases. but in contrast to this. Any exceptions to the above mentioned details on operating profit margin and PAT will be captured in the following analysis. being at 77% in Mar-11 from 103% in Mar-10. Grasim Industries Ltd. the capacity utilization has decreased for ACC Ltd. Also. Shree Cement Ltd. when retail prices have been steady (decreased ever so slightly in 2008-09 due to economic crisis) if not increased in the same period. Here is zone-wise company analysis to what outlook all the data provides.. • Capacity utilization for Shree Cement Ltd. 2006 and 2007.. The production of cement has seen a healthy increase by all the major companies in the north zone. seems to fall abruptly with a decrease in prices in 2009 and late 2010 (Mar-11 period). Such a sharp fall indicates (happened previously also: from 97% in Mar-08 to 85% in Mar-09) a supply constraint being deliberately exercised in order to decrease cement supply in the market. The retail price increased rapidly in 2005. due to late entrance in the north zone market (2008-09).of the top companies in north zone) on an annual basis points out a strong suspicion that the price levels during the up period (2005 to 2008-09) were extraordinarily high. • The retail price for a 50 Kg cement bag was 1. the Profit after Tax (PAT) for all the companies closely resembles the path of the operating margin. and JK Lakshmi Cement Ltd. Capacity utilization levels for Ultratech Cement Ltd.. on the back of almost same production level. decreased ever so slightly in 2008-09 due to real estate crisis resulting in lower demand. during the period (2008-2011).. • Price increase is driven by high demand growth and high capacity utilization. north zone first.6 times more in Delhi in Mar-10 and Mar-11 than in Mar-05. 34 . the PAT is still well above the 2005 levels.

have decreased considerable over the last three years to be at a production index of 150 in Mar-11 from an index of over 200 in Mar-08. The production level for Sanghi Industries Ltd. This may indicate a huge capacity build up by Ultratech Cement 35 . Moving on to the west zone: • The retail price for a 50 Kg cement bag was 1. • Capacity utilization levels remained high for Ultratech Cement Ltd. The production of cement has seen a healthy increase by all the major companies in the west zone. Ambuja Cements Ltd. the capacity utilization has decreased for Sanghi Industries Ltd. Ltd.’s capacity utilization has never been above 85% with the March11 figure at 80% even after increasing their cement production consistently over the last six to seven years. thus signalling possible supply/production control of cement to maintain the price level. 2006 and 2007... but in contrast to this. • Ultratech Cement Ltd. Grasim Industries Ltd.53 times more in Mumbai in Mar-10 and Mar-11 than in Mar-05. seems to fall abruptly to 92% in 200910 and to 81% 2010-11. over the period. to be around 70% for the last two years from a high of 97% in Mar-08.. during the period (2008-2011). and Century Textiles & Inds. even though prices and cement production levels are relatively stable.• Capacity utilization for JK Lakshmi Cement Ltd. This is accompanied by a sharp fall in operating profit margin and PAT in 201011 only. and has stabilised to a price index of around 150 for the last four years. • Price increase is driven by high demand growth and high capacity utilization. The retail price increased rapidly in 2005. The production of cement has seen a healthy increase by all the major companies in the west zone.

35 times of Mar-05 level in Mar-11... and their increasing PAT index does not correspond to decreasing operating profit margin and capacity utilization levels. the capacity utilization has decreased for OCL India Ltd. Thus there is strong suspicion of production control in order to control price movement in the market. 2008 and 2009. The capacity utilization levels for OCL India Ltd. have been alarmingly low in the last two years (57% in Mar-10 and 64% in Mar-11). ACC Ltd. during the period (2008-2011). Grasim Industries Ltd. and Ambuja Cement Ltd. and 225 in Mar-10. 36 . The production of cement has seen a healthy increase by all the major companies in the east zone.Ltd. Moving on to the south zone: • The retail price for a 50 Kg cement bag was 1. • Capacity utilization levels remained high for Ultratech Cement Ltd.5 times more in Kolkata in Mar-10 than in Mar-05 but decreased somewhat to 1. but in contrast to this. The retail price increased rapidly in 2007. from 148 in Mar-08). and Lafarge India Pvt. 2007 and 2008. Ltd. The production of cement has seen a healthy increase by all the major companies in the south zone. Moving on to the east zone: • The retail price for a 50 Kg cement bag was 1. The retail price increased rapidly in 2006. decreased in 2010-11. Century Textiles & Inds. even though it has seen tremendous growth in production numbers (production index at 252 in Mar-11. • Price increase is driven by high demand growth and high capacity utilization. over the period.. decreased considerably in 2009-10 due to real estate crisis resulting in lower demand. Ltd..6 times more in Chennai in Mar-09 and Mar-11 than in Mar-05..

Ltd. • Capacity utilization for Kesoram Industries Ltd.. This on the top of their highest production levels in the period of 2007-2010. is even worse with the capacity utilization falling continuously from 2008 onwards to 59% in Mar-11. Kesoram Industries Ltd. • Ultratech Cement Ltd. and Penna Cement Inds. • The case for Madras Cements Ltd. Dalmia Bharat Sugar & Inds..’s capacity utilization has hardly been above 90% with the March-10 figure at 66% and Mar-11 figure at 74%. The cement production also fell from an index of 213 in Mar-10 to 195 in Mar-11. Ltd. though they still have a PAT index of 1487 in Mar-11. has dipped sharply in Mar-11 to 75% from over 90% in Mar-10. but in contrast to this. This indicates a huge capacity build up by Ultratech Cement Ltd. Only ACC Ltd. though it is still at a very healthy level indicating capacity build up by Madras Cements Ltd.. even after almost doubling their cement production in 2010-11 from 2009-10. during the period (2008-2011). the capacity utilization has decreased considerably for India Cements Ltd. Madras Cement Ltd. from being at 103% in Mar-08. seem to have appropriate capacity utilization levels along with their financial numbers. and their increasing PAT index does not correspond to decreasing operating profit margin and capacity utilization levels. Such a decline has heavily impacted their operating profit margin which is below Mar-05 levels and the company’s PAT.. Ltd.. Chettinad Cement Corpn.. Kesoram Industries Ltd. and Grasim Industries Ltd. Ultratech Cement Ltd.• Price increase is driven by high demand growth and high capacity utilization. have faced the damaged caused by their low utilization 37 .’s capacity utilization levels have declined to 77% and 72% in Mar10 and Mar-11 respectively. • India Cements Ltd. Consistent cement production levels in the last three years indicate that falling capacity utilization is due to capacity build up in order to maintain prices.

Capacity utilization was well above 100% in the rest of the previous years. • Penna Cement Inds. • Capacity utilization for Dalmia Bharat Sugar & Inds. which was at -627 for Mar-11 against Mar-05 PAT index of 100.levels as seen in their PAT index. The PAT index has taken the hit in Mar-11 with it being at 10. capacity utilization levels seem to follow in line with their production trend and prices of cement but utilization levels of 77% in Mar-09 and 62% in Mar-11 are too low for the liking in the period of production growth and steady state. Consistently increasing cement production levels in the last three years indicate that falling capacity utilization is due to capacity build up in order to maintain prices. has dipped sharply in Mar-10 and Mar-11 to 71% and 55% respectively. Another instance of excess capacity through capacity build up by a company. has seen a dramatic decrease to 50% in the last two years after being above 90% for most of the concerned period. This has been on the back of increasing production index to 361 in Mar-11 from being 262 in Mar-09. Ltd. • Capacity utilization for Chettinad Cement Corpn. The fall in capacity utilization may also have been triggered by a negative PAT index in Mar-09. 38 . Ltd. Ltd.

evidence recovered included a marketing arrangement entered into by the members of the All Pakistan Cement Manufacturers’ Association and the Association itself. 4/2/Sec.4.15) to Rupees twenty (Rs. On 20 March 2008. a news item appearing in the daily ‘Jang’ and on the website of ‘Geo News’ revealed that the price of cement was raised by Rupees fifteen (Rs. Importantly. 7. we look at three cement cartel cases around the world. 8 39 . Some of the select terms of the agreement are as follows 20: Each member’s capacity for calculating monthly quota will be on the basis of the attached annexure ‘A’. 4/2/Sec. Page 3 20 “BEFORE THE COMPETITION COMMISSION OF PAKISTAN IN THE MATTER OF SHOW CAUSE NOTICES ISSUED TO ALL PAKISTAN CEMENT MANUFACTURERS ASSOCIATION AND ITS MEMBER UNDERTAKINGS (UF. Page 5.20) per bag across the country. No. quotas with respect to production and supply of cement were fixed in order to maintain the desired and targeted price level amongst the members of the association. No. on 8 May 2003. pursuant to the Agreement 19.1 PAKISTAN CEMENT CARTEL The Competition Commission of Pakistan found the cement cartel to be operative by fixing prices across the country through the All Pakistan Cement Manufacturers’ Association. In the wake of the above news and the past trading practices in the cement industry in Pakistan.4/CCP/200UU8U)”.4/CCP/200UU8U)”. The Competition Commission of Pakistan authorized a team to search the office of All Pakistan Cement Manufacturers’ Association in Lahore. and understand the basis of the cartel formation and the fines levied by the respective competition regulatory body. 4. 19 “BEFORE THE COMPETITION COMMISSION OF PAKISTAN IN THE MATTER OF SHOW CAUSE NOTICES ISSUED TO ALL PAKISTAN CEMENT MANUFACTURERS ASSOCIATION AND ITS MEMBER UNDERTAKINGS (UF. The agreement contained such clauses/rules by virtue of which. CEMENT CARTEL CASES ACROSS THE WORLD In this section.

- Any increase or decrease in monthly quota shall be effective on prospective and not on retrospective basis.3 Billion on 20 units of the cement industry. On examining the actual dispatches of cement companies in the year 2003. at the rate of 7. By using the same capacity based allocation of quotas method.5% of their respective 21 “BEFORE THE COMPETITION COMMISSION OF PAKISTAN IN THE MATTER OF SHOW CAUSE NOTICES ISSUED TO ALL PAKISTAN CEMENT MANUFACTURERS ASSOCIATION AND ITS MEMBER UNDERTAKINGS (UF. Cartel case’s outcome The Competition Commission of Pakistan. 4/2/Sec. demonstrating the fact that the agreement was in existence and was being implemented effectively in the years under review 21. by an order dated 27-08-09. Any increase or decrease in monthly quota shall be at the sole discretion of the Chairman and binding on all members in order to maintain the desired and targeted price level. Page 54 40 . imposed a penalty of Rs 6. the year-wise cement dispatches of each member of the All Pakistan Cement Manufacturers’ Association from year 2003 to year 2008 was analysed and it was observed that the percentage share of each member in the total cement dispatches very closely matches with the percentage share of the member in the total production capacity of all the members of the Association. He may consult members on quantity of quota to be fixed each month but will have the final say in this regard. No. The Competition Commission of Pakistan took suo moto action and issued a Show Cause Notice to the All Pakistan Cement Manufacturers’ Association and all its members as The Commission sought to show that the agreement of the cement manufacturers was a ‘prohibited agreement’.4/CCP/200UU8U)”. it was observed by The Competition Commission of Pakistan that the actual dispatches closely match with the allocated quotas.- The Chairman’s decision regarding fixation of monthly quota shall be binding on all members.

No money has been received from such companies/members of the supposed cartel as yet as they have seemed to obtained stay orders 23. Abdur Razzaq Thaplawala http://www. 2003. The penalty was imposed on the assumption of an alleged document signed by the members of cement industry in May. The official newsletter of the Competition Commission of South Africa. The research paper sought the increase in the cost of the inputs as the reason behind the cement price hike on March 20. retrieved on 6th June. The complaint initiation which triggered the raids was largely based on findings of the Commission’s economic research report into inputs used in the government and State Owned Enterprises’ (SOE) infrastructure programme.net/news/shownews. it was a snapshot study conducted in March. inter alia. during the year 2007-08. December 2009 41 . Lafarge Industries South Africa (Pty) Ltd. 2008 22. 2008. with a view of 22 23 “Cement cartel . During 2003-2004. prepared by its own member (Research and Advocacy) on 11th April. on the 2nd June 2008 against all four cement producers active in South Africa and a cement extender company known as Slagment (Pty) Ltd. 2008.a CCP study”. 2008. concluded that there was no cartel in the cement industry: According to the research paper available on CCP's website. the CCP ordinance was not in force.turnover.asp?id=9533 . The ordinance came into force on 2nd October. Afrisam South Africa (Pty) Ltd and NPC-Cimpor (Pty) Ltd. Edition 33. The research was conducted. 4. discovered by CCP on a raid to the office of the APCMA on 24th April. 2007.cementchina. which was previously jointly owned by all cement companies. 2012 24 Most of the section contains direct references from “Competition News”. This was against the backdrop of a complaint pro-actively initiated by Commissioner. the Competition Commission in South Africa conducted a highly successfully search and seizure operation (commonly known as ‘raids’) on the premises of Pretoria Portland Cement Company Ltd (PPC). The CCP choose to impose the penalty in spite of the fact that in a research paper.2 SOUTH AFRICA CEMENT CARTEL 24 On the June 24 2008.

The research focused on key products which form inputs to the infrastructure programme such as cement. aggregates. whilst the cement producers enjoy abundant supplies of cement extenders. thus giving rise to concerns that the price increases could be a result of collusion/coordinated behaviour by the cement producers. The review concluded that anti-competitive behaviour in some of these products and markets could be substantially increasing not only the costs of the infrastructure programme but also other projects that rely on these key inputs and as such raising costs in the economy more widely. being a leading cement producer in the South African market with estimated market share of over 35%. information gathered from the market indicated that independent downstream market participants are struggling to procure sufficient quantities of cement extenders such as blast furnace slag.identifying possible anti-competitive behaviour in the construction industry. with low levels of competition between them. The Commissioner accordingly based the investigation on possible contraventions of section 4(1) (b). 42 . the economic analysis essentially concluded that even though the legally sanctioned cement cartel was disbanded in 1996. Cement prices had doubled since 2001. 5(1) and 8(c) of the Competition Act. with pricing movements in ‘steps’ every six months. It also appeared that PPC. could have abused its position of dominance in the market by treating its customers differently in terms of price. Following information gathering and consultations with industry informants and experts. In addition. giving rise to a genuine concern that the high cement prices could be attributable to collusion. bricks and steel. The cement producers tend to increase cement prices around the same time (January and July each year) and the magnitude of such price increases appeared to be similar overall. This therefore gave rise to a concern that the cement producers in cahoots with cement extender companies could be limiting the amount of cement extenders available in the market in order inhibit competition from independents. With respect to cement. the four cement producers still operated in same historic locations.

According to this information. PPC applied for leniency and confirmed the existence of a cartel among the four cement producers. in cement cartels uncovered in other countries (in which several of the multinational producers in South Africa had been implicated) it appeared that there were only irregular meetings. codes and fictitious names are used to conceal its true nature. Effect of the raids by the South African Competition Commission Subsequently. and where information is stored electronically. In essence. physical records were not kept of cartel arrangements. In its application for leniency PPC confirmed the existence of a cartel to divide markets among the four cement producers. These teams involved a substantial number of Commission staff. or were destroyed. it was resolved to make use of the Commission’s search and seizure powers to obtain information that we may not otherwise have obtained given the cement cartel’s modus operandi.and other competition authorities. The four cement producers are the main members of C&CI. In 43 . no party has challenged the raids in court. The agreement was implemented up until this year through highly disaggregated sales information each producer submitted to the Cement and Concrete Institute of South Africa (“C&CI”) through an audit firm appointed by C&CI. In contrast with the previous cement raids. Five locations were searched by teams from the Commission. the four cement producers agreed to divide the cement market amongst themselves in order to maintain the market shares that each producer held prior to 1996 when a lawful cement cartel existed and was regulated by exemptions to the competition legislation. together with IT specialists and police officers to assist with the execution of the search warrants and access to the buildings.

in which Lafarge admits that it took part in the cement cartel in South Africa. PPC has since been granted conditional leniency after confirming the existence of a cartel to divide the markets among the four cement producers. 11 November 2011. Competition commission of South Africa. The Commission also entered into a settlement agreement with Afrisam in November 2011. there was an agreement that PPC would not compete in the Northern Natal market in exchange for Lafarge not competing with PPC in the Botswana market 25. Competition commission of South Africa. “Bundeskartellamt imposes fines totalling 660 million Euro on companies in the cement sector on account of cartel agreements” 44 . The geographic markets affected were the four regional cement markets eastern Germany.addition. and continued to do so until 2002. Competition Commission of South Africa. in which the company admitted that it took part in a cement cartel. 14 April 2003. 4. the competition authority in Germany. “PPC confesses to being part of a cement cartel and gets conditional leniency” 26 Media Release. “Commission settles with Afrisam on cement cartel” 27 Media Release. The Competition Commission also reached a settlement with Lafarge Industries South Africa Limited on 8 March 2012. Readymix AG and Schwenk Zement KG. some of them since the 1970s.3 GERMANY CEMENT CARTEL 28 Bundeskartellamt.00 representing 3% of its 2010 cement annual turnover in the Southern African Customs Union 26. Lafarge Zement GmbH. Lafarge agreed to pay a penalty of R148 724 400 which represents 6% of its 2010 annual turnover in South Africa Customs Union region 27. Dyckerhoff AG. The accused companies operated anti-competitive market allocation and quota agreements. Afrisam agreed to pay a penalty of R124 878 870. northern Germany and southern Germany. 25 Press Release. Westphalia. 1 November 2011. 660 million Euros in its cartel proceedings against six largest German cement manufacturers. imposed fines totaling approx. HeidelbergCement AG. Alsen AG. 8 March 2012. “Lafarge settles its cement cartel case with a R149 million fine” 28 Bundeskartellamt news.

confirmed the existing suspicions. This was followed in January 2003 by further searches of eight small and medium-sized cement manufacturers in the southern German area. The President of the Bundeskartellamt in Bonn. some of which fully confessed. attributed the successful breaking up of the cartel mainly to the leniency programme published in 2000 and the establishment in 2002 of the Bundeskartellamt’s Special Unit for Combating Cartels.Following information obtained from the construction industry. The evidence seized during the searches and the confessions by the large manufacturers. the Bundeskartellamt carried out a nation-wide search of 30 cement companies in July 2002. 45 . Ulf Böge.

.... Madras Cements Ltd. and Sanghi Industries Ltd should be under the scanner of the Commission.. CONCLUSION On the back of the analysis in section 3 and section 2. The south zone provided the highest amount of suspicion with as many as seven players controlling production. suspicion hovers above Ultratech Cement Ltd.. and ACC Ltd. Grasim Industries Ltd.5.2.. there is a strong suspicion of the presence of price control and market sharing in the zonal markets. whereas in the west zone. While in the north zone. Ltd. strong suspicion hovers over ACC Ltd. Chettinad Cement Corpn. Ultratech Cement Ltd. Ambuja Cement Ltd.. 46 . With the findings of the data analysed in the report.. In the east zone. Ltd. and Madras Cements Ltd. India Cement Ltd. and JK Lakshmi Cement Ltd. Ultratech Cement Ltd. Shree Cement Ltd. show signs of collusion. On the all India level. Signs of collusion are there especially on the zonal level with capacity utilization and production levels of companies in zones moving in tandem with each other (as shown in graphs in Appendix B) and operating profit margins of almost all the companies being highly volatile. especially in an industry like cement industry with high amount of crossholding of shares between some of the companies. there is a suspicion of a functioning cement cartel in the zonal markets in India except for the central zone market.. ACC Ltd.. and Penna Cement Inds. and that of market sharing is fuelled by the near constant market shares of individual companies over the last six years. The suspicion is well placed since most of the conditions for cartel formation are strongly satisfied in the cement markets in India. Kesoram Industries Ltd. Shree Cement Ltd.. Dalmia Bharat Sugar Inds. Ltd. The players are India Cements Ltd.3 of this report. OCL India Ltd. The suspicion of price control is evident from 2007-08 onwards till the period Mar-2011.

The CCI can take the following steps to ascertain the presence of the cement cartel or make progress into unlocking the cement cartel: • Look at plant level cement production and capacity utilization data. As done by competition regulatory authorities in cement cartel cases in Pakistan. The German Competition Commission acknowledged the pivotal role of the improved leniency programme in busting up the German cement cartel. 2002 can be made to be on the lines of European Competition Law in order to voluntarily cause break-up in cartels. the CCI should look to raid important offices of companies in question and also offices of Cement Manufacturers’ Association in order to find any circumstantial evidence of an agreement among any of the cement manufacturers. especially for firms over which considerable suspicion is already there. 47 . • • Look into the timing of the capacity additions done by various players in the market. South Africa and Germany. • Leniency policy in the Competition Act.

2012. 5th December. 2. 1 November 2011. 9. 5. 3. New Delhi. REFERENCES I. “BEFORE THE COMPETITION COMMISSION OF PAKISTAN IN THE MATTER OF SHOW CAUSE NOTICES ISSUED TO ALL PAKISTAN CEMENT MANUFACTURERS ASSOCIATION AND ITS MEMBER UNDERTAKINGS (UF. Hindustan Times.4/CCP/200UU8U)”. 2007. 11. 4/2/Sec. “Competition News”. 8. New Delhi. The official newsletter of the Competition Commission of South Africa. Business Standard. “Bundeskartellamt imposes fines totalling 660 million Euro on companies in the cement sector on account of cartel agreements”. Bundeskartellamt news. December 2009. 6th May. 10. 2007. “Cement cartel rigged prices for 17 years”. Competition commission of South Africa. Edition 33. 11 November 2011.6. Press Release. Media Release. The Hindu. II. overcapacity to plague cement industry”. 2011. Competition Commission of South Africa. “PPC confesses to being part of a cement cartel and gets conditional leniency”. “Government examining SFIO report on cement makers”.No. The Competition Act. "Brakes on cement cartelization”. Competition commission of South Africa. The Financial Express. 2007. 6th July. 2002 Press Releases and news items 1. 8 March 2012. “Lafarge settles its cement cartel case with a R149 million fine”. “Commission settles with Afrisam on cement cartel”. 4th August. 20th December. The Economic Times. Media Release. "Taking on cement cartels”. 7. 4. “Muted demand. 48 . 14 April 2003. 6.

unep. Centre for Monitoring Indian Economy Pvt. 8. “Cement cartel . http://www. CMIE: Prowess database and Industry Analysis Service database.III. “Provisions Related to Cartels” Competition Act. http://www.cmaindia. Industry and government reports 1. used for gathering financial data 5. 5.a CCP study”. http://www.pdf 4.cmaindia. Advocacy series.aspx 2. IV.cementchina.. 6. http://www. Ltd. Eleventh Five Year Plan. 7. December 2011. Competition Commission of India. Crisil Research: India Real Estate Overview.org/portal/static/DynamicHistory. IBEF’s report “Cement November 2011”.aspx 3. Last available shareholding pattern reports of all companies observed in the research report.com . 3. V.net/news/shownews. 2012 49 . retrieved on 6th June.org/portal/static/DynamicFacts. Industrial Databases 1. Abdur Razzaq Thaplawala Websites 1. Ernst & Young report. 2.asp?id=9533 .fr/scp/csd/wssd/docs/further_resources/related_initiatives/WBCSD/W BCSD-cement. ‘”Cement”-ing Growth’. Government of India. 4. Annual Reports all companies observed in in the research report. 2002. http://moneycontrol.

The following years show the increases in PAT and cement production numbers with respect to March 2005 level. Operating Profit Margin. the capacity utilization is in percentage terms. All the numbers in the graphs in Appendix A represent all India data. Also. Figure 30: ACC Ltd. Profit after tax (PAT) and cement production numbers are indexed from March 2005 level. which is the percentage of cement produced by a company with regards to the capacity of cement production installed at its plant(s). other: CMIE data 50 ..APPENDIX A The following figures. Capacity Utilization vs. at which each of the PAT and cement production numbers is listed at 100. Change in PAT vs. Change in Production vs. Source: Financial data: moneycontrol.com. The operating profit margin is in percentage terms. figure 30 to figure 50. show financial data (operating profit margin and profit after tax) with the cement production data and the capacity utilization data of each of the top 13 cement producers in the country. which gives the cost of running the core business of a company.

Figure 31: Ambuja Cement Ltd. Change in Production vs.com. Operating Profit Margin. Capacity Utilization vs.. other: CMIE data 51 .com. other: CMIE data Figure 32: Grasim Industries Ltd. Source: Financial data: moneycontrol. Change in Production vs. Change in PAT vs. Operating Profit Margin. Source: Financial data: moneycontrol.. Change in PAT vs. Capacity Utilization vs.

Source: Financial data: moneycontrol. Capacity Utilization vs. Ltd. Source: Financial data: moneycontrol. Capacity Utilization vs. Operating Profit Margin. Change in PAT vs.com. other: CMIE data 52 .Figure 33: Century Textiles & Inds. Change in PAT vs.com. Change in Production vs. Ltd. Operating Profit Margin. other: CMIE data Figure 34: Lafarge India Pvt.. Change in Production vs..

Capacity Utilization vs.com. other: CMIE data 53 . Change in Production vs. Capacity Utilization vs.com Figure 37: Jaiprakash Associates Ltd.. Source: Financial data: moneycontrol.Figure 35: Ultratech Cement Ltd. Operating Profit Margin. Source: Financial data: moneycontrol. Source: moneycontrol. Operating Profit Margin... other: CMIE data Figure 36: Ultratech Cement Ltd. Change in Production vs. Change in PAT.com.

Figure 38: Jaiprakash Associates Ltd. Source: moneycontrol.com Figure 39: India Cements Ltd.com. Change in PAT. Change in PAT. Source: Financial data: moneycontrol.. Change in Production vs.. Operating Profit Margin. other: CMIE data Figure 40: India Cements Ltd.com 54 . Source: moneycontrol.. Capacity Utilization vs.

Figure 41: Shree Cement Ltd. Capacity Utilization vs. Change in Production vs.. Operating Profit Margin. Source: moneycontrol.com.. other: CMIE data Figure 42: Shree Cement Ltd. Change in PAT. Source: Financial data: moneycontrol.com 55 .

. Source: Financial data: moneycontrol. Change in Production vs.com Figure 45: Birla Corporation Ltd. Capacity Utilization vs. Change in Production vs. Change in PAT.. Operating Profit Margin.com. Source: Financial data: moneycontrol. other: CMIE data Figure 44: Madras Cements Ltd.com..Figure 43: Madras Cements Ltd. Capacity Utilization vs. Operating Profit Margin. other: CMIE data 56 . Source: moneycontrol.

Operating Profit Margin. Capacity Utilization vs. other: CMIE data 57 .. Source: Financial data: moneycontrol.com Figure 47: Binani Cement Ltd.com. Source: moneycontrol. Change in PAT. Change in Production vs..Figure 46: Birla Corporation Ltd.

Source: Financial data: moneycontrol. Operating Profit Margin.com Figure 49: Kesoram Industries Ltd. other: CMIE data Figure 50: Kesoram Industries Ltd..com. Change in PAT. Change in PAT. Source: moneycontrol. Source: moneycontrol..Figure 48: Binani Cement Ltd.com 58 .. Change in Production vs. Capacity Utilization vs.

at which each of the PAT. Shree Cement Ltd. Whereas cement production. Grasim Industries Ltd. which gives the cost of running the core business of a company. of 50 Kg cement bag in each of the zones is also considered in the graphs. Following are the graphs of companies in the north zone: 59 .APPENDIX B The following figures. retail price of 50 Kg cement bag and cement production numbers with respect to March 2005 level. PAT and operating profit numbers in the graphs for each company in Appendix B represent all India data. the capacity utilization is in percentage terms.. show financial data (operating profit margin and profit after tax) with the cement production data and the capacity utilization data of each of the top cement producers in the North. which is the percentage of cement produced by a company with regards to the capacity of cement production installed at its plant(s). retail price of 50 Kg cement bag and cement production numbers is listed at 100. and Binani Cement Ltd. Ambuja Cement Ltd. West. East and South Zones of the country. capacity utilization and retail price numbers in the graphs in Appendix B represent zonal data. The companies in the north zone that have been analysed are ACC Ltd. figure 51 to figure 103. Also. The operating profit margin is in percentage terms.... retail price of 50 Kg cement bag and cement production numbers are indexed from March 2005 level. Along-with this data.. Profit after tax (PAT). The following years show the increases in PAT. JK Lakshmi Cement Ltd. retail price in Rs. There are two graphs for each of the companies with respect to each of the zones.

Capacity Utilization vs. North Zone Change in PAT Figure 52: ACC Ltd.180 160 140 120 100 80 60 40 20 0 100 Mar-05 114 Mar-06 120 Mar-07 138 Mar-08 112 100 19 120 117 ACC Ltd. other: CMIE data 60 .. Source: Financial data: moneycontrol. is given up to March 2009 in CMIE database. Capacity Utilization vs. other: CMIE data Cement production and capacity utilization data for ACC Ltd.. North Zone 30 141 29 152 26 88 33 151 35 159 159 30 23 25 20 20 15 10 5 Price Change Capacity Utilization 88 90 Change in Production 144 Mar-09 Mar-10 Mar-11 Operating Profit Margin Margin 0 Operating Profit Figure 51: ACC Ltd.com. Change in Production vs. 350 300 250 200 150 100 50 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 100 30 19 29 26 33 23 20 112 226 88 117 295 265 223 88 90 206 80 60 40 20 0 Capacity Utilization & Operating Profit Margin Capacity Utilization Operating Profit Margin 244 140 120 100 ACC Ltd. Source: Financial data: moneycontrol. Operating Profit Margin.com. Change in Price vs. Operating Profit Margin. Change in PAT vs.

.com. North Zone 36 31 100 95 120 103 38 141 152 29 99 96 151 28 95 159 159 40 35 30 26 23 25 20 15 10 5 Price Change Capacity Utilization Change in Production Operating Profit Margin Margin 100 Mar-05 115 Mar-06 118 Mar-07 125 Mar-08 130 Mar-09 Mar-10 Mar-11 0 Operating Profit Figure 53: Ambuja Cement Ltd. Source: Financial data: moneycontrol. Operating Profit Margin. Capacity Utilization vs. other: CMIE data Cement production and capacity utilization data for Ambuja Cement Ltd. Change in Production vs. other: CMIE data 61 .180 160 140 120 100 80 60 40 20 0 Ambuja Cement Ltd. Source: Financial data: moneycontrol.. Change in Price vs.com. 400 350 300 250 200 150 100 50 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 100 31 36 38 29 28 26 23 95 321 103 120 300 96 100 270 263 80 60 40 20 0 378 99 95 260 Ambuja Cement Ltd. Capacity Utilization vs. Operating Profit Margin. Change in PAT vs. is given up to March 2009 in CMIE database. North Zone Change in PAT Capacity Utilization Operating Profit Margin Capacity Utilization & Operating Profit Margin Figure 54: Ambuja Cement Ltd.

350 300 250 Shree Cement Ltd.. North Zone Change in PAT 2000 103 100 80 77 60 1000 32 63 Mar-06 896 609 42 29 100 41 41 721 25 Capacity Utilization Operating Profit Margin 500 35 40 20 0 0 Mar-05 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Capacity Utilization & Operating Profit Margin Figure 56: Shree Cement Ltd. Capacity Utilization vs. Change in PAT vs. other: CMIE data 62 . Source: Financial data: moneycontrol. Operating Profit Margin. Capacity Utilization vs.. Change in Production vs. North Zone 42 41 35 41 45 40 35 30 Capacity Utilization Change in Production Operating Profit Margin Margin Price Change 29 200 150 100 50 0 100 Mar-05 32 152 97 151 159 103 77 159 25 25 20 15 10 5 141 116 100 120 100 107 85 107 Mar-06 159 Mar-07 210 Mar-08 258 Mar-09 311 Mar-10 313 Mar-11 0 Operating Profit Figure 55: Shree Cement Ltd. Change in Price vs. other: CMIE data 2500 116 100 107 97 1500 85 1988 2326 140 120 Shree Cement Ltd.com. Source: Financial data: moneycontrol.com. Operating Profit Margin.

Capacity Utilization vs.com. stopped producing cement from 2010 onwards. Capacity Utilization vs.. Birla Aditya Group. Change in Price vs. other: CMIE data Grasim Industries Ltd. North Zone 30 28 26 152 111 81 24 151 159 33 35 32 Price Change 30 25 20 Capacity Utilization Change in Production Operating Profit Margin Margin 200 159 150 100 83 21 120 100 141 106 100 91 15 10 50 100 Mar-05 121 Mar-06 128 Mar-07 142 Mar-08 161 Mar-09 240 Mar-10 Mar-11 5 0 0 Operating Profit Figure 57: Grasim Industries Ltd. other: CMIE data 63 .250 Grasim Industries Ltd. 250 120 100 91 81 133 100 97 33 24 32 20 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 60 40 50 26 21 28 30 Capacity Utilization Operating Profit Margin 80 106 231 111 186 236 Grasim Industries Ltd. Its parent group. North Zone Change in PAT 200 83 150 100 173 100 0 Capacity Utilization & Operating Profit Margin Figure 58: Grasim Industries Ltd. Change in PAT vs. Operating Profit Margin. transferred the cement production capacities to Ultratech Cement Ltd. Source: Financial data: moneycontrol. Operating Profit Margin. Change in Production vs.com.. Source: Financial data: moneycontrol.

Capacity Utilization vs. Operating Profit Margin. Change in Price vs. Source: Financial data: moneycontrol. other: CMIE data 64 . North Zone 30 141 110 100 120 119 21 128 32 152 35 151 25 108 92 81 14 20 15 10 5 Operating Profit Margin Margin Change in Production 159 30 159 30 25 Capacity Utilization Price Change 101 14 100 Mar-05 109 Mar-06 116 Mar-07 140 Mar-08 150 Mar-09 147 Mar-10 140 Mar-11 0 Operating Profit Figure 59: JK Lakshmi Cement Ltd.180 160 140 120 100 80 60 40 20 0 JK Lakshmi Cement Ltd..com. 120 North Zone 92 81 100 80 60 227 40 20 0 Capacity Utilization & Operating Profit Margin Capacity Utilization Operating Profit Margin Change in PAT 101 30 32 25 30 14 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Figure 60: JK Lakshmi Cement Ltd. Change in PAT vs. Operating Profit Margin. Change in Production vs. Capacity Utilization vs. other: CMIE data 1000 900 800 700 600 500 400 300 200 100 0 Mar-05 Mar-06 100 213 14 21 119 110 128 859 684 108 686 926 140 JK Lakshmi Cement Ltd.com. Source: Financial data: moneycontrol..

5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 100 24 27 1482 34 35 1685 31 21 1403 2726 72 4371 87 87 100 90 80 70 60 50 40 30 16 20 Capacity Utilization Operating Profit Margin Change in PAT Binani Cement Ltd.. other: CMIE data Capacity Utilization Data for Binani Cement Ltd. Change in PAT vs. Operating Profit Margin.com.250 Binani Cement Ltd. in north zone is available from April 2008 onwards. Source: Financial data: moneycontrol.. North Zone 821 10 Capacity Utilization 0 & Operating Profit Margin Figure 62: Binani Cement Ltd. Capacity Utilization vs. Change in Price vs.com. Change in Production vs. Capacity Utilization vs. Source: Financial data: moneycontrol. North Zone 34 40 35 31 35 30 159 159 25 16 72 87 87 20 15 10 5 Price Change 200 27 150 100 14 120 100 141 152 151 21 Capacity Utilization Change in Production Operating Profit Margin Margin 50 100 Mar-05 103 Mar-06 108 Mar-07 132 Mar-08 192 Mar-09 236 Mar-10 244 Mar-11 0 0 Operating Profit Figure 61: Binani Cement Ltd. Operating Profit Margin. other: CMIE data 65 .

Century Textiles & Inds. Operating Profit Margin. Capacity Utilization vs. Source: Financial data: moneycontrol. other: CMIE data 60000 78 50000 69 40000 30000 20000 10000 0 100 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 8062 17 27448 35355 34281 76 90 49271 80 80 38359 80 70 60 50 40 31 29 27 28 19 30 20 10 0 Capacity Utilization & Operating Profit Margin Change in PAT 82 77 Ultratech Cement Ltd.The companies in the west zone that have been analysed are Ultratech Cement Ltd. Ltd.. Capacity Utilization vs.. Change in PAT vs.com.. Change in Price vs. Operating Profit Margin. Source: Financial data: moneycontrol. West Zone 29 142 117 100 14 69 200 180 160 140 120 100 80 60 40 20 0 31 150 149 27 28 149 153 19 35 Price Change 30 25 20 15 10 5 Operating Profit Margin Margin Change in Production Capacity Utilization 17 76 78 82 77 80 80 100 Mar-05 110 Mar-06 114 Mar-07 119 Mar-08 121 Mar-09 127 Mar-10 142 Mar-11 0 Operating Profit Figure 63: Ultratech Cement Ltd. Ambuja Cement Ltd. Sanghi Industries Ltd.. West Zone Capacity Utilization Operating Profit Margin 14 Figure 64: Ultratech Cement Ltd. Following are the graphs of companies in the west zone: Ultratech Cement Ltd. and Grasim Industries Ltd.com. Change in Production vs.. other: CMIE data 66 ..

Change in Production vs. Change in PAT vs. other: CMIE data 3000 2500 2000 1500 1000 500 0 Mar-05 -500 -1000 Mar-06 21 100 47 29 1609 70 2816 93 97 2099 86 1756 71 37 1036 32 26 26 17 Mar-10 Mar-11 72 120 100 80 60 40 20 0 Operating Profit Margin Capacity Utilization Sanghi Industries Ltd. Source: Financial data: moneycontrol. Capacity Utilization vs. West Zone Change in PAT Mar-07 Mar-08 Mar-09 -20 -583 Capacity Utilization -40 & Operating Profit Margin Figure 66: Sanghi Industries Ltd. Change in Price vs.200 180 160 140 120 100 80 60 40 20 0 Sanghi Industries Ltd. Source: Financial data: moneycontrol.com. Capacity Utilization vs.. Operating Profit Margin..com. other: CMIE data 67 . Operating Profit Margin. West Zone 37 32 153 40 35 30 25 17 71 72 20 15 10 5 Price Change 29 117 142 149 150 26 149 26 Capacity Utilization Change in Production Operating Profit Margin 100 14 93 70 97 86 47 100 Mar-05 149 Mar-06 196 Mar-07 205 Mar-08 181 Mar-09 150 Mar-10 152 Mar-11 0 Operating Profit Margin Figure 65: Sanghi Industries Ltd.

other: CMIE data 350 300 250 200 150 100 50 0 Mar-05 108 96 96 257 107 277 89 242 325 93 97 120 100 80 219 60 40 Century Textiles & Inds. Ltd.com.. Ltd.160 140 120 100 80 60 40 20 0 Century Textiles & Inds. Operating Profit Margin.. Capacity Utilization vs. Change in Price vs. Ltd. West Zone 142 18 108 96 12 149 20 107 150 149 20 153 25 Price Change 20 117 100 96 11 17 89 15 93 97 15 Capacity Utilization Change in Production Operating Profit Margin 10 5 100 Mar-05 113 Mar-06 100 Mar-07 114 Mar-08 118 Mar-09 123 Mar-10 128 Mar-11 0 Operating Profit Margin Figure 67: Century Textiles & Inds. Operating Profit Margin. other: CMIE data 68 .com. Capacity Utilization vs. Change in PAT vs. West Zone Change in PAT Capacity Utilization Operating Profit Margin 100 11 99 12 18 20 17 20 15 20 0 -20 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Capacity Utilization -40 & Operating Profit Margin Figure 68: Century Textiles & Inds. Ltd. Source: Financial data: moneycontrol. Source: Financial data: moneycontrol. Change in Production vs.

Source: Financial data: moneycontrol. Operating Profit Margin. West Zone 14 36 38 40 149 29 115 153 35 30 25 23 20 15 10 5 Price Change 142 105 117 103 115 150 28 104 149 26 Capacity Utilization Change in Production Operating Profit Margin 100 100 Mar-05 98 Mar-06 110 Mar-07 113 Mar-08 113 Mar-09 Mar-10 Mar-11 0 Operating Profit Margin Figure 69: Ambuja Cement Ltd.200 180 160 140 120 100 80 60 40 20 0 Ambuja Cement Ltd. West Zone Change in PAT Capacity Utilization Operating Profit Margin Capacity Utilization -40 & Operating Profit Margin Figure 70: Ambuja Cement Ltd. Change in Price vs.. 400 350 300 250 200 150 100 50 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 31 100 36 38 105 321 103 378 115 140 115 300 260 104 270 263 120 100 80 60 29 28 26 23 40 20 0 -20 Ambuja Cement Ltd. other: CMIE data 69 . Change in Production vs. Source: Financial data: moneycontrol. Capacity Utilization vs. Change in PAT vs.com. Operating Profit Margin.com. is given up to March 2009 in CMIE database. other: CMIE data Cement production and capacity utilization data for Ambuja Cement Ltd. Capacity Utilization vs..

Change in PAT vs... Change in Price vs. Capacity Utilization vs.com. Its parent group. other: CMIE data 70 . Change in Production vs. Source: Financial data: moneycontrol. other: CMIE data Grasim Industries Ltd. stopped producing cement from 2010 onwards. Source: Financial data: moneycontrol. Capacity Utilization vs. Operating Profit Margin. Birla Aditya Group. Operating Profit Margin. transferred the cement production capacities to Ultratech Cement Ltd. West Zone 142 117 21 100 90 98 28 149 30 104 150 24 103 104 99 149 33 153 32 35 Price Change 30 25 20 15 10 5 Operating Profit Margin Change in Production Capacity Utilization 26 100 Mar-05 108 Mar-06 114 Mar-07 112 Mar-08 84 Mar-09 79 Mar-10 Mar-11 0 Operating Profit Margin Figure 71: Grasim Industries Ltd. West Zone 100 80 60 133 Change in PAT 30 24 33 40 32 20 0 -20 100 Capacity Utilization Operating Profit Margin 50 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Capacity Utilization -40 & Operating Profit Margin Figure 72: Grasim Industries Ltd. 250 103 200 90 98 173 150 26 100 97 21 28 231 104 104 186 236 99 120 Grasim Industries Ltd.com.180 160 140 120 100 80 60 40 20 0 Grasim Industries Ltd.

.. Change in Price vs. Operating Profit Margin. Lafarge India Pvt. Following are the graphs of companies in the east zone: Ultratech Cement Ltd. OCL India Ltd. East Zone 29 200 180 160 140 120 100 80 60 40 20 0 31 27 122 105 128 96 104 28 148 135 19 100 35 Price Change 30 25 20 15 10 5 Operating Profit Margin Margin Change in Production Capacity Utilization 114 100 89 14 97 96 17 109 100 Mar-05 108 Mar-06 122 Mar-07 121 Mar-08 130 Mar-09 142 Mar-10 198 Mar-11 0 Operating Profit Figure 73: Ultratech Cement Ltd. Source: Financial data: moneycontrol... ACC Ltd. Source: Financial data: moneycontrol. Ltd.. other: CMIE data 71 . other: CMIE data 60000 50000 40000 30000 20000 10000 0 100 14 8062 17 89 96 109 120 105 96 35355 34281 104 49271 100 38359 100 80 60 40 27 28 19 20 0 Ultratech Cement Ltd.com. Capacity Utilization vs. Change in Production vs. Capacity Utilization vs.com. East Zone Change in PAT 27448 Capacity Utilization Operating Profit Margin 29 31 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Capacity Utilization & Operating Profit Margin Figure 74: Ultratech Cement Ltd. Change in PAT vs. Ambuja Cement Ltd.. Ltd.The companies in the east zone that have been analysed are Ultratech Cement Ltd. Operating Profit Margin... and Grasim Industries Ltd. Century Textiles & Inds.

700 600 500 400 300 200 100 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 100 91 88 471 471 94 97 97 641 103 105 104 100 95 Lafarge India Pvt. East Zone Change in PAT 90 85 80 75 Capacity Utilization Capacity Utilization Figure 76: Lafarge India Pvt.. Capacity Utilization vs. Ltd. Ltd.com.moneycontrol. though the CMIE database gave PAT data upto March 2008. Ltd. Source: CMIE data 72 . Operating Profit Margin. Source: CMIE data There was no operating profit margin data for Lafarge India Pvt.. Capacity Utilization vs. Ltd. on www. Change in PAT vs. Change in Price vs.160 140 120 100 80 60 40 20 0 Lafarge India Pvt. Change in Production vs. East Zone 122 114 100 88 97 91 94 97 103 128 148 135 104 97 Capacity Utilization Price Change Change in Production 100 Mar-05 104 Mar-06 106 Mar-07 114 Mar-08 121 Mar-09 145 Mar-10 154 Mar-11 Figure 75: Lafarge India Pvt. Operating Profit Margin. Ltd.

. other: CMIE data 73 . Change in Price vs. Ltd..com. Capacity Utilization vs. Source: Financial data: moneycontrol. East Zone Change in PAT Capacity Utilization Operating Profit Margin 100 11 99 20 15 20 0 -20 Mar-10 Mar-11 Capacity Utilization -40 & Operating Profit Margin Figure 78: Century Textiles & Inds. Operating Profit Margin. East Zone 20 18 100 104 11 114 97 95 12 100 122 102 93 128 17 98 148 20 135 95 25 Price Change 20 Capacity Utilization Change in Production Operating Profit Margin 15 15 10 5 100 Mar-05 100 Mar-06 105 Mar-07 112 Mar-08 114 Mar-09 120 Mar-10 116 Mar-11 0 Operating Profit Margin Figure 77: Century Textiles & Inds. Change in PAT vs.com. Change in Production vs. Ltd. other: CMIE data 350 300 250 200 150 100 50 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 18 12 20 17 104 95 100 257 102 277 242 93 325 98 95 219 120 100 80 60 40 Century Textiles & Inds. Ltd. Capacity Utilization vs.160 140 120 100 80 60 40 20 0 Century Textiles & Inds. Source: Financial data: moneycontrol. Operating Profit Margin. Ltd.

Operating Profit Margin. Operating Profit Margin. East Zone Change in PAT 124 57 26 28 Capacity Utilization Operating Profit Margin 24 Capacity Utilization & Operating Profit Margin Figure 80: OCL India Ltd. other: CMIE data 700 600 500 400 300 200 100 0 100 14 Mar-05 134 14 Mar-06 20 275 106 104 581 111 105 412 411 406 140 120 100 80 64 60 40 21 20 0 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 OCL India Ltd.. Change in PAT vs.250 OCL India Ltd. Source: Financial data: moneycontrol.com. Change in Production vs. Change in Price vs.com. other: CMIE data 74 . Source: Financial data: moneycontrol. Capacity Utilization vs. Capacity Utilization vs.. East Zone 26 24 28 30 Price Change 25 21 20 15 10 5 Operating Profit Margin Margin Capacity Utilization Change in Production 200 20 148 14 124 97 14 114 104 122 111 128 105 135 150 100 106 100 50 100 Mar-05 117 Mar-06 139 Mar-07 148 Mar-08 204 Mar-09 57 64 0 225 Mar-10 252 Mar-11 0 Operating Profit Figure 79: OCL India Ltd.

160 140 120 100 80 60 40 20 0 Ambuja Cement Ltd.com. Capacity Utilization vs. other: CMIE data Cement production and capacity utilization data for Ambuja Cement Ltd.com. Change in Production vs. is given up to March 2009 in CMIE database. East Zone Change in PAT Capacity Utilization Operating Profit Margin Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Capacity Utilization & Operating Profit Margin Figure 82: Ambuja Cement Ltd. Source: Financial data: moneycontrol. Operating Profit Margin.. East Zone 31 100 92 97 36 38 122 128 29 28 93 81 148 135 40 35 30 26 23 25 20 15 10 5 Price Change 114 108 91 Capacity Utilization Change in Production Operating Profit Margin Margin 100 Mar-05 99 Mar-06 117 Mar-07 129 Mar-08 151 Mar-09 Mar-10 Mar-11 0 Operating Profit Figure 81: Ambuja Cement Ltd. Change in Price vs. Operating Profit Margin. other: CMIE data 75 . Capacity Utilization vs. 400 350 300 250 200 150 100 50 0 Mar-05 Mar-06 100 31 36 92 91 321 378 108 300 81 93 260 270 263 120 100 80 60 38 29 28 26 23 40 20 0 Ambuja Cement Ltd. Source: Financial data: moneycontrol. Change in PAT vs..

Operating Profit Margin.160 140 120 100 80 60 40 20 0 100 Mar-05 110 Mar-06 120 Mar-07 127 Mar-08 100 92 19 97 91 ACC Ltd. Source: Financial data: moneycontrol. Change in PAT vs. 350 300 250 200 150 100 50 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 100 19 30 29 26 33 23 20 80 226 86 91 265 223 89 100 91 244 206 90 80 70 60 50 40 30 20 10 Capacity Utilization 0 & Operating Profit Margin Operating Profit Margin 295 ACC Ltd. Source: Financial data: moneycontrol.com. East Zone 30 29 114 108 122 26 33 128 148 135 35 30 25 20 20 15 10 5 Price Change 23 93 Capacity Utilization 81 Change in Production 129 Mar-09 Mar-10 Mar-11 Operating Profit Margin Margin 0 Operating Profit Figure 83: ACC Ltd. other: CMIE data 76 . Change in Price vs. Operating Profit Margin.com. Capacity Utilization vs. Change in Production vs. East Zone Change in PAT Capacity Utilization Figure 84: ACC Ltd.. other: CMIE data Cement production and capacity utilization data for ACC Ltd. is given up to March 2009 in CMIE database.. Capacity Utilization vs.

Change in Production vs.. Capacity Utilization vs.. Source: Financial data: moneycontrol. Change in PAT vs. stopped producing cement from 2010 onwards. 250 96 200 84 150 100 97 33 24 97 173 120 Grasim Industries Ltd. Capacity Utilization vs. East Zone 100 91 84 133 60 40 32 20 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Capacity Utilization Operating Profit Margin 80 Change in PAT 231 97 186 236 100 50 26 21 28 30 0 Capacity Utilization & Operating Profit Margin Figure 86: Grasim Industries Ltd.com. Its parent group. other: CMIE data 77 . Change in Price vs. East Zone 30 28 26 100 84 97 97 21 114 96 122 97 128 24 84 148 33 135 35 32 Price Change 30 25 Capacity Utilization Change in Production Operating Profit Margin Margin 91 20 15 10 5 100 Mar-05 115 Mar-06 114 Mar-07 118 Mar-08 122 Mar-09 132 Mar-10 Mar-11 0 Operating Profit Figure 85: Grasim Industries Ltd. transferred the cement production capacities to Ultratech Cement Ltd. Source: Financial data: moneycontrol.160 140 120 100 80 60 40 20 0 Grasim Industries Ltd. Operating Profit Margin. Birla Aditya Group. Operating Profit Margin. other: CMIE data Grasim Industries Ltd.com.

. Kesoram Industries Ltd. Operating Profit Margin.The companies in the south zone that have been analysed are India Cements Ltd... ACC Ltd. Change in Price vs. Operating Profit Margin.com. Following are the graphs of companies in the south zone: India Cements Ltd. other: CMIE data 16000 14000 12000 10000 8000 6000 4000 2000 0 12 100 Mar-05 33 17 989 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 36 28 21 1487 10 Mar-11 74 96 10455 99 120 100 77 7737 72 80 60 40 20 13920 103 88 9436 India Cements Ltd. Ltd.. other: CMIE data 78 . Chettinad Cement Corpn.com. and Grasim Industries Ltd.. Source: Financial data: moneycontrol. South Zone 33 150 126 100 74 12 95 96 17 99 103 88 77 72 200 180 160 140 120 100 80 60 40 20 0 36 160 139 28 21 163 40 35 30 25 20 15 10 5 Price Change Capacity Utilization Change in Production Operating Profit Margin Margin 10 130 Mar-06 135 Mar-07 142 Mar-08 140 Mar-09 154 Mar-10 144 Mar-11 100 Mar-05 0 Operating Profit Figure 87: India Cements Ltd. Dalmia Bharat Sugar & Inds. Change in Production vs.. Capacity Utilization vs.. Ltd. Source: Financial data: moneycontrol. Penna Cement Inds. Change in PAT vs. Madras Cements Ltd. Ltd. Ultratech Cement Ltd. South Zone Change in PAT Capacity Utilization Operating Profit Margin 0 Capacity Utilization & Operating Profit Margin Figure 88: India Cements Ltd... Capacity Utilization vs..

.com. Source: Financial data: moneycontrol. South Zone 35 37 31 160 139 88 80 31 163 24 40 35 30 25 20 15 59 10 5 Price Change 200 150 21 100 67 50 100 Mar-05 124 Mar-06 148 Mar-07 153 Mar-08 21 95 126 99 83 93 150 Capacity Utilization Change in Production Operating Profit Margin Margin 100 0 171 Mar-09 212 Mar-10 189 Mar-11 0 Operating Profit Figure 89: Madras Cements Ltd.250 Madras Cements Ltd. Change in Price vs..com. other: CMIE data 79 . Operating Profit Margin. other: CMIE data 800 700 600 500 400 300 200 100 0 Mar-05 Mar-06 Mar-07 21 100 141 67 83 99 730 93 650 88 632 80 377 59 35 37 31 31 24 120 100 80 60 40 20 0 Madras Cements Ltd. Capacity Utilization vs. Change in PAT vs. Operating Profit Margin. Source: Financial data: moneycontrol. South Zone Change in PAT 551 Capacity Utilization Operating Profit Margin 21 Mar-08 Mar-09 Mar-10 Mar-11 Capacity Utilization & Operating Profit Margin Figure 90: Madras Cements Ltd. Capacity Utilization vs. Change in Production vs.

. Change in Production vs.200 180 160 140 120 100 80 60 40 20 0 Kesoram Industries Ltd. Operating Profit Margin.com. South Zone 22 160 150 16 139 14 98 100 93 75 163 25 Price Change 20 Capacity Utilization Change in Production Operating Profit Margin Margin 148 126 100 108 95 19 122 15 10 7 8 5 4 100 100 Mar-06 113 Mar-07 144 Mar-08 175 Mar-09 179 Mar-10 174 Mar-11 Mar-05 0 Operating Profit Figure 91: Kesoram Industries Ltd. Source: Financial data: moneycontrol. Operating Profit Margin. other: CMIE data 80 . South Zone 150 100 50 0 -50 -100 Operating Profit Margin Change in PAT Capacity Utilization Mar-06 Mar-08 16 Mar-09 Mar-10 Capacity Utilization & Operating Profit Margin Figure 92: Kesoram Industries Ltd. Capacity Utilization vs. Source: Financial data: moneycontrol.. Capacity Utilization vs.com. Change in PAT vs. Change in Price vs. other: CMIE data 1400 1200 1000 800 600 400 200 0 -200 -400 -600 -800 -627 100 7 Mar-05 136 8 19 Mar-07 108 148 122 793 98 100 708 93 75 22 14 4 Mar-11 1144 1130 Kesoram Industries Ltd.

South Zone 26 32 29 22 35 Price Change 30 25 20 Capacity Utilization Change in Production Operating Profit Margin Margin 14 100 105 15 126 95 126 78 150 94 160 92 139 163 10 15 10 5 47 100 Mar-05 120 Mar-06 212 Mar-07 255 Mar-08 262 Mar-09 315 Mar-10 52 361 Mar-11 0 Operating Profit Figure 93: Dalmia Bharat Sugar & Inds.com.. Operating Profit Margin. other: CMIE data 81 . Ltd. Ltd. South Zone Change in PAT Capacity Utilization Operating Profit Margin Capacity Utilization -100 & Operating Profit Margin Figure 94: Dalmia Bharat Sugar & Inds. Source: Financial data: moneycontrol. Change in Price vs.400 350 300 250 200 150 100 50 0 Dalmia Bharat Sugar & Inds. other: CMIE data 1200 1000 800 600 400 200 0 Mar-05 Mar-06 Mar-07 1125 150 105 126 742 78 14 15 275 -50 100 Mar-08 Mar-09 Mar-10 10 Mar-11 26 32 514 94 92 47 29 22 444 100 52 10 0 50 Dalmia Bharat Sugar & Inds. Source: Financial data: moneycontrol.Ltd. Change in Production vs.Ltd.com. Capacity Utilization vs. Operating Profit Margin. Change in PAT vs. Capacity Utilization vs..

Change in PAT vs. South Zone 29 31 28 27 35 Price Change 30 25 163 20 15 66 74 10 5 Operating Profit Margin Margin Change in Production Capacity Utilization 17 150 100 50 0 100 Mar-05 95 Mar-06 103 Mar-07 100 84 14 95 79 126 86 150 90 160 139 19 91 106 Mar-08 120 Mar-09 154 Mar-10 290 Mar-11 0 Operating Profit Figure 95: Ultratech Cement Ltd..com. Operating Profit Margin.com.. other: CMIE data 82 . Capacity Utilization vs. South Zone Change in PAT 30000 20000 31 10000 8062 14 100 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 17 29 27 28 19 40 30 20 Capacity Utilization Operating Profit Margin 0 10 Capacity Utilization 0 & Operating Profit Margin Figure 96: Ultratech Cement Ltd. Operating Profit Margin. other: CMIE data 50000 84 40000 79 27448 86 49271 90 91 38359 35355 34281 66 74 100 90 80 70 60 50 Ultratech Cement Ltd. Change in Production vs. Change in Price vs.300 250 200 Ultratech Cement Ltd. Source: Financial data: moneycontrol. Capacity Utilization vs. Source: Financial data: moneycontrol.

Source: Financial data: moneycontrol. other: CMIE data Cement production and capacity utilization data for ACC Ltd.com. Change in PAT vs. Change in Production vs. Operating Profit Margin. Source: Financial data: moneycontrol. Capacity Utilization vs..200 180 160 140 120 100 80 60 40 20 0 ACC Ltd.. 350 300 250 200 150 100 50 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 100 19 30 29 26 33 23 20 89 91 265 226 223 206 100 90 244 90 80 70 60 50 40 30 20 Capacity Utilization Operating Profit Margin Change in PAT 89 83 295 ACC Ltd. South Zone 10 Capacity Utilization 0 & Operating Profit Margin Figure 98: ACC Ltd. is given up to March 2009 in CMIE database. Operating Profit Margin. other: CMIE data 83 . Capacity Utilization vs. Change in Price vs.com. South Zone 29 30 19 100 89 95 91 126 89 150 26 33 160 139 23 83 90 20 163 35 Price Change 30 25 20 15 10 5 Operating Profit Margin Margin Change in Production Capacity Utilization 100 Mar-05 102 Mar-06 96 Mar-07 96 Mar-08 104 Mar-09 Mar-10 Mar-11 0 Operating Profit Figure 97: ACC Ltd.

. South Zone 30 28 26 100 99 95 114 21 126 160 150 116 96 24 33 163 139 35 32 30 25 20 15 10 5 Operating Profit Margin Margin Change in Production Capacity Utilization Price Change 119 94 100 Mar-05 115 Mar-06 120 Mar-07 120 Mar-08 123 Mar-09 120 Mar-10 Mar-11 0 Operating Profit Figure 99: Grasim Industries Ltd.. stopped producing cement from 2010 onwards.com. transferred the cement production capacities to Ultratech Cement Ltd. other: CMIE data 84 . Operating Profit Margin. Change in Production vs. South Zone Change in PAT 100 33 Figure 100: Grasim Industries Ltd. Operating Profit Margin. Capacity Utilization vs. Change in Price vs.200 180 160 140 120 100 80 60 40 20 0 Grasim Industries Ltd. Capacity Utilization vs. Its parent group. other: CMIE data Grasim Industries Ltd. 250 114 200 99 150 100 26 50 21 97 28 30 24 173 119 140 120 96 94 100 80 133 60 32 40 20 0 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Capacity Utilization -20 & Operating Profit Margin Capacity Utilization Operating Profit Margin 231 116 186 236 Grasim Industries Ltd.com. Change in PAT vs. Source: Financial data: moneycontrol. Source: Financial data: moneycontrol. Birla Aditya Group.

. other: CMIE data 600 500 400 300 200 100 0 -100 100 22 Mar-05 Mar-06 Mar-07 123 131 149 410 586 161 159 180 160 140 346 269 71 120 100 80 60 37 55 30 Mar-09 -15 Mar-10 Mar-11 40 20 0 Chettinad Cemeent Corpn. Capacity Utilization vs. Change in Production vs. Operating Profit Margin. South Zone Change in PAT 143 24 33 37 Mar-08 Capacity Utilization Operating Profit Margin 41 Capacity Utilization -20 & Operating Profit Margin Figure 102: Chettinad Cement Corpn. Source: Financial data: moneycontrol. South Zone 33 41 37 161 159 139 37 163 30 160 45 40 35 30 25 20 71 55 15 10 5 Operating Profit Margin Margin Change in Production Capacity Utilization Price Change 200 150 123 100 100 22 95 131 24 149 126 150 50 100 Mar-05 107 Mar-06 121 Mar-07 131 Mar-08 142 Mar-09 181 Mar-10 208 Mar-11 0 0 Operating Profit Figure 101: Chettinad Cement Corpn. other: CMIE data 85 . Ltd.250 Chettinad Cement Corpn. Capacity Utilization vs. Change in Price vs.com.com. Ltd. Operating Profit Margin. Source: Financial data: moneycontrol.. Ltd. Ltd. Change in PAT vs.

86 . Ltd. Change in Production vs. South Zone 150 126 100 100 95 93 107 150 105 Price Change Capacity Utilization 0 Change in Production Figure 103: Penna Cement Inds.. Ltd. Ltd.com. Change in Price vs. Capacity Utilization Source: CMIE data Financial data for Penna Cement Inds.moneycontrol. is not available on www.250 201 160 163 139 91 77 62 50 100 Mar-05 116 Mar-06 133 Mar-07 139 Mar-08 171 Mar-09 203 Mar-10 199 Mar-11 200 Penna Cement Inds.

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