CEMENT INDUSTRY IN INDIA

Presented by.
Saurabh Singh
MBA (SEM I)
 CONTENTS

 Introduction.
 Evolution of Indian cement industry.
 Bodies promoting industrial development.
 Types and manufacturing.
 Leading cement manufacturing industries in India.
 Economic status of cement industry.
 Issues concerning the cement industry.
 Effect of cement manufacturing on environment.
 PEST analysis.
 PORTAL’S five foces.
 SWOT analysis.
 Objectives of study.
 Research methodology.
 References.
 INTRODUCTION

 Cement is the glue that holds the concrete together,

and is therefore critical for meeting society's needs
of housing and basic infrastructure such as bridges,
roads, water treatment facilities, schools and
hospitals.

 Indiais the world's second largest producer of

cement after China with industry capacity of over
200 million tonnes (MT).
 EVOLUTION OF INDIAN CEMENT
INDUSTRY

• A Kolkata based company started manufacturing cement in 1889.

• In 1914, Indian Cement Company Ltd was established in Porbandar.

• In 1927, Concrete Association of India was set up to create public

awareness on the utility of cement.

• In 1956, price and distribution system of cement industry came

under government control.

• After the economic reform in 1980’s the government control on

cement industry was liberalized.

• A great increase in demand of cement, has resulted India to become

2nd largest cement producer in the world after China.
 BODIES PROMOTING INDUSTRIAL
DEVELOPMENT

 NationalCouncil for Cement and Building

Materials.

 Indian Concrete Institute.

 TYPES OF CEMENT

 Ordinary Portland Cement (OPC).

 Portland Pozzolana Cement (PPC).

 Portland Blast Furnace Slag Cement (PBFS).

 Oil Well Cement.

 Rapid Hardening.

 Sulphate Resisting Portland Cement.

 White Cement etc.

PERCENTAGE CONTENTS OF CEMENTS

1.Ordinarily Portland Cement

 Clinker - 90.50%
 Gypsum - 4.00%
 Fly ash - 5.50%
2.Portland Pozzolana Cement
 Clinker - 66%
 Gypsum- 4%
 Fly ash - 30%
3.Portland Blast Furnace Slug Cement
 Clinker - 70%
 Gypsum- 6%
 Slag - 24%
 CEMENT MANUFACTURING

 Cement is made out of limestone, shale, clay mined out of quarry

close to the plant. The raw material is crushed, and then heated at
temperature in excess of 1000 degree Celsius in rotating kiln to
become clinker. Clinker is then mixed with gypsum and ground to a
fine powder to produce final grade of cement.

 The technology is a continuous process and is highly energy

intensive.

 At present 93% of cement production in India is based on modern

and environment-friendly dry process technology and only 7% of the
capacity is based on old wet and semi-dry process technology.

 The cost of Cement is 29% energy; 27% raw materials; 32% labour
and 12% depreciation
 TYPES MANUFACTURING PROCESS

There are three types of manufacturing process is

used to produce cement:-

 Dry process (96.3% used).

 Wet process (3.5% used).

 Semi dry process (0.2% used).

FLOW CHART OF CEMENT MANUFACTURING
 MAJOR PLAYERS IN THE INDIAN
CEMENT INDUSTRY
Company Production capacity plants
(In million tonnes)
ACC 30.04 14
Ambuja 27.00 13
Ultratech 48.75 22
Lafarge India Pvt. Ltd. 7.75 04
India Cements 15.33 09
JK Group 07.47 04
Jaypee Group 24.50 14
Shree Cement Ltd. 13.50 06
Madras Cements 14.88 08
Birla Corp. 06.46 07

Source : Labour and Industrial Chronical, Survey of Cement Industry &

Directory 2012 : 3rd Edition
 KEY FEATURES OF CEMENT INDUSTRY

 India'scement production has increased at a

compound annual growth rate (CAGR) of 9.7
per cent to reach 272 million tonnes (MT) during
FY 06-13
 The government plans to spend US$ 1 trillion on
infrastructure in the 12th five year plan period
(2012-17).
 Concrete is the second most consumed material after
water, with nearly three tones used annually for each
person on the planet.
https://www.equitymaster.com
ECONOMIC STATUS OF THE CEMENT
INDUSTRY

 Growth Rate

 Investments

 Exports

 FDI and GDP

 GROWTH RATE

• India is the world’s second largest producer of

cement with total capacity of 370 million tonnes as
of financial year 2012-13.and expected to reach
550 million tonnes in 2020.

• Indian Cement Industry comprises of 185 large and

more than 365 mini cement plants.

https://www.equitymaster.com
PRODUCTION AND PRODUCTION CAPACITY OF
CEMENT IN INDIA
 INVESTMENTS

• Cement and gypsum products attracted FDI worth

US$ 2.23 billion between April 2000 and June 2014,
according to the Department of Industrial Policy and
Promotion.

• Jaypee Associates plans to invest US$ 640 million

to increase its cement capacity.

https://www.equitymaster.com
 EXPORTS

• During 2007-08, the export of cement from India

touched the 2.16 million tonnes mark. However
during 2008-09, the cement export from India stood
at 1.46 million tonnes.

• In spite of seeing fall during 2008-09, the export

segment of the industry is expected to grow again
on account of various infrastructure projects that
are being taken up all over the world. India has an
immense potential to tap markets of Middle East
and South East Asia

https://www.equitymaster.com
 FDI AND CONTRIBUTION TO THE GDP

• The industry occupies an important place in the

national economy because of its strong linkages to
other sectors such as construction, transportation ,
coal and power.

• 100% FDI is permitted in the cement industry.

• It contributes approximately 1.3% of GDP and the

industry is employing over 0.14 million people in
2013.

https://www.equitymaster.com
 ISSUES CONCERNING THE CEMENT
INDUSTRY

•High Transportation Cost is affecting the competitiveness

of the cement industry Road is the preferred mode for
transportation or distances less than 250km. However,
industry is heavily dependant on roads for longer distances
too as the railway infrastructure is not adequate.

•Cement industry is highly capital intensive industry and

nearly 55-60% of the inputs are controlled by the
government.

•Coal availability and quality is also affecting the

production.
 OVERVIEW OF INDIAN CEMENT
INDUSTRIES

Large Cement Plants Mini And White Cement Plants

 Cement plants: 185  Cement plants: 365

 Installed capacity: 339.5  Installed capacity: 11.1
mtpa mtpa
 Cement production: 168.3  Cement production: 6.0
mtpa* mtpa
MAJOR CEMENT DEMAND DRIVERS

6%

13% housing sector

infrastructure

commercial
17%
&institutional
64% industrial

http://www.ibef.org/industry/cement-india.aspx
 CONSUMER IN THE WORLD LED BY THE ENORMOUS GROWTH IN THE
INFRASTRUCTURE AND CONSTRUCTION SECTOR FOR THE LAST TWO
DECADES

Top Cement Consumers in Top Cement Producer in 2013

2013 (million tonnes) (million tonnes)

2013 2013
2500 2500
2048 2058
2000 2000

1500 1500

1000 2013 1000 2013

500 300 500 373
72 65 66 64
0 0

http://www.ibef.org/industry/cement-india.aspx
 EFFECT OF CEMENT MANUFACTURING ON
ENVIRONMENT

Carbon di oxide emmision:-

 limestone scrubber:

CaCO3 + SO3 +2H2O —> CaSO4 + 2H2O + CO2 ↑

lime scrubber:
Ca(OH)2 + SO3 + H2O —> CaSO4 + 2H2O

CO2 Emissions from Calcination:

CaCO3 + heat (to about 9508ᵒC)──> CaO + CO2
NITROGEN OXIDE EMISSIONS FROM CLINKER
MANUFACTURING:-

High-temperature combustion of fuels in the kiln line releases

nitrogen oxides (NOx), with the nitrogen being mainly
derived from the atmosphere but also to some degree from the
fuels themselves; a minor contribution also comes from some
types of raw materials

 O + N2 ──> NO + N and

 O2 + N ──> NO + O (unstable)
 PEST ANALYSIS

• Coal rates, power tariffs, railway freight plays a very important

factor in the price determination, interestingly, government
POLITICAL control all of these prices
• Govt is one of the biggest consumers of the cement

• Future of cement industry is very strong

ECONOMIC • A lot government infrastructure and housing projects are
under construction

• Indian consumers prefer buying branded cement like

SOCIAL LAFARGE, JAYPEE,BIRLA etc
• Industry will create 25 lakhs jobs in coming years

• Govt is acquiring new technology from Japan

• Emphasis is on creating highly energy efficient and
TECHNOLOGY environment friendly technology to produce cement
PORTER’S FIVE FORCES FRAMEWORK
 SWOT ANALYSIS
Strengths:

 Second largest in the world in terms of capacity

 Low cost of production: due to the easy availability of
raw materials and cheap labour
 Growth at approx. CAGR of 9% in last 5 years

 Growing Domestic cement consumption at approx.

CAGR of 8% in last 3 years
 Highly Capital Incentive so difficult for small entrant

 Not much restriction by govt.

WEAKNESS:-

 High Oil Prices, Cost of Power increase production cost.

 Supply exceeds Production lead to competition in price.

 Low Quality as compared to international standard but

improving.
OPPORTUNITIES:
 High Mortgage Penetration -Low Interest Rates
 Easy loan availability for housing finance

 Increased investments in Infrastructure

 Increased govt. outlay on BHARATNIRMAN,

GOLDEN QUADRILATERAL, and BRTS etc.
THREATS:-
 Further Hike in Oil Prices.
 Use of plastic engineering in construction.

 Subprime market loss may affect.

 OBJECTIVES OF STUDY

 To study the process of manufacturing and effect of

introducing of new technology.
 REFERENCES

 Building material and construction- B.C.PUNAMIA

 Websites.

 www.google.com .

 http://www.ibef.org.

 http://en.wikipedia.org/wiki/Cement.s

 https://www.equitymaster.com
THANK YOU….