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TIe cemenL IndusLry comprIses oI 1z Iurge cemenL pIunLs wILI un InsLuIIed cupucILy oI
1q8.z8 mIIIIon Lonnes und more LIun oo mInI cemenL pIunLs wILI un esLImuLed
cupucILy oI 11.1o mIIIIon Lonnes per unnum.
The Cement Corporation of India, which is a Central Public Sector Undertaking, has 10 units. There are 10 large
cement plants owned by various State Governments. The total installed capacity in the country as a whole is
159.38 million tonnes. Actual cement production in 2002-03 was 116.35 million tonnes as against a production of
106.90 million tonnes in 2001-02, registering a growth rate of 8.84%. Major players in cement production are
Ambuja cement, Aditya Cement, J K Cement and L & T cement.
Apart from meeting the entire domestic demand, the industry is also exporting cement and clinker. The export of
cement during 2001-02 and 2003-04 was 5.14 million tonnes and 6.92 million tonnes respectively. Export during
April-May, 2003 was 1.35 million tonnes. Major exporters were Gujarat Ambuja Cements Ltd. and L&T Ltd.
The Planning Commission for the formulation of X Five Year Plan constituted a 'Working Group on
Cement Industry' for the development of cement industry. The Working Group has identified following
thrust areas for improving demand for cement;
i. urther push to housing development programmes;
ii. Promotion of concrete Highways and roads; and
iii. Use of ready-mix concrete in large infrastructure projects.
urther, in order to improve global competitiveness of the Indian Cement Industry, the Department of Industrial
Policy & Promotion commissioned a study on the global competitiveness of the Indian Industry through an
organization of international repute, viz.
KPMG Consultancy Pvt. Ltd. The report submitted by the organization has made several recommendations for
making the Indian Cement Industry more competitive in the international market. The recommendations are
under consideration.
Cement industry has been decontrolled from price and distribution on 1st March 1989 and de-licensed on
25th July 1991. However, the performance of the industry and prices of cement are monitored regularly. Being a
key infrastructure industry, the constraints faced by the industry are reviewed in the Infrastructure Coordination
Committee meetings held in the Cabinet Secretariat under the Chairmanship of Secretary (Coordination). The
Committee on Infrastructure also reviews its performance.
Technological change
Continuous technological upgrading and assimilation of latest technology has been going on in the cement
industry. Presently 93 per cent of the total capacity in the industry is based on modern and environment-friendly
dry process technology and only 7 per cent of the capacity is based on old wet and semi-dry process technology.
There is tremendous scope for waste heat recovery in cement plants and thereby reduction in emission level. One
project for co-generation of power utilizing waste heat in an Indian cement plant is being implemented with
Japanese assistance under Green Aid Plan. The induction of advanced technology has helped the industry
immensely to conserve energy and fuel and to save materials substantially.
India is also producing different varieties of cement like Ordinary Portland Cement (OPC), Portland Pozzolana
Cement (PPC), Portland Blast urnace Slag Cement (PBS), Oil Well Cement, Rapid Hardening Portland Cement,
Sulphate Resisting Portland Cement, White Cement etc. Production of these varieties of cement conform to the
BIS Specifications. Also, some cement plants have set up dedicated jetties for promoting bulk transportation and
export.

Top Contributor States in Cement Production

The maj or contributor to the cement industry of ndia is the state of Madhya Pradesh. The 19 cement plants in Madhya Pradesh
contribute 26.23 million tonnes of cement to the total reservoir of cement in ndia. Andhra Pradesh has the maximum number of
cement plants (20) and it contributes 17 million tonnes of cement to ndia. Rajasthan, Gujarat and Tamil Nadu have 16, 12 and 10
plants each and they collectively contribute 35.79 million tonnes of cement.

The cement industry in ndia is growing at a tremendous rate. Because of the liberalization measures taken by the Government of
ndia in the 90's, ndia has come a long way in the production of cement. From being an importer of cement, ndia now is not only
self sufficient but also export large quantities of cement to the countries like Bangladesh, Nepal, Sri Lanka, Maldives, Mauritius,
Africa, Scychelles, Burma, UAE, Singapore owing to its numerous cement plants.

ist of PopuIar Cement PIants in India

Some of the popular cement plants in ndia are properties of:
O ndia Cement
O JK Cement Limited
O Jaypee Group
O Century Cement
O L & T Cement
O ACC Limited
O CC Cement Plants
O Gujarat Ambuj a Cement Plants
India, being the second largest cement producer in the world after China with a total capacity of 151.2 Million Tones (MT), has got
a huge Cement Company. With the government of ndia giving boost to various infrastructure proj ects, housing facilities and road
networks, the cement industry in ndia is currently growing at an enviable pace. More growth in the ndian cement industry is
expected in the coming years. t is also predicted that the cement production in ndia would rise to 236.16 MT in FY11. t's also
expected to rise to 262.61 MT in FY12.

The cement industry in ndia is dominated by around 20 companies, which account for almost 70% of the total cement production
in ndia. n the present year, the ndian cement companies have produced 11 MT cement during April-September 2009. t took the
total cement production in FY09 to 231 MT.

Industry Background

The history of the cement industry in ndia dates back to the 1889 when a Kolkata-based company started manufacturing cement
from Argillaceous. But the industry started getting the organized shape in the early 1900s. n 1914, ndia Cement Company Ltd
was established in Porbandar with a capacity of 10,000 tons and production of 1000 installed. The World War gave the first initial
thrust to the cement industry in ndia and the industry started growing at a fast rate in terms of production, manufacturing units, and
installed capacity. This stage was referred to as the Nascent Stage of ndian Cement Company. n 1927, Concrete Association of
ndia was set up to create public awareness on the utility of cement as well as to propagate cement consumption.

The cement industry in ndia saw the price and distribution control system in the year 1956, established to ensure fair price model
for consumers as well as manufacturers. Later in 1977, government authorized new manufacturing units (as well as existing units
going for capacity enhancement) to put a higher price tag for their products. A couple of years later, government introduced a three-
tier pricing system with different pricing on cement produced in high, medium and low cost plants.

Cement Company, in any country, plays a major role in the growth of the nation. Cement industry in ndia was under full control
and supervision of the government. However, it got relief at a large extent after the economic reform. But government interference,
especially in the pricing, is still evident in ndia. n spite of being the second largest cement producer in the world, ndia falls in the
list of lowest per capita consumption of cement with 125 kg. The reason behind this is the poor rural people who mostly live in mud
huts and cannot afford to have the commodity. Despite the fact, the demand and supply of cement in ndia has grown up. n a fast
developing economy like ndia, there is always large possibility of expansion of cement industry.

Cement Production and Growth

Domestic demand plays a maj or role in the fast growth of cement industry in ndia. n fact the domestic demand of cement has
surpassed the economic growth rate of ndia. The cement consumption is expected to rise more than 22% by 2009-10 from 2007-
08. n cement consumption, the state of Maharashtra leads the table with 12.18% consumption, followed by Uttar Pradesh. n terms
of cement production, Andhra Pradesh leads the list with 14.72% of production, while Raj asthan remains at second position.

The production of cement in ndia grew at a rate of 9.1% during 2006-07 against the total production of 147.8 MT in the previous
fiscal year. During April to October 2008-09, the production of cement in ndia was 101.04 MT comparing to 95.05 MT during the
same period in the previous year. During October 2009, the total cement production in ndia was 12.37 MT compared to a
production of 11.61 MT in the same month in the previous year. The cement companies are also increasing their productions due to
the high market demand. The cement companies have seen a net profit growth rate of 85%. With this huge success, the cement
industry in ndia has contributed almost 8% to ndia's economic development.

TechnoIogy Up-gradation

Cement industry in ndia is currently going through a technological change as a lot of upgradation and assimilation is taking place.
Currently, almost 93% of the total capacity is based entirely on the modern dry process, which is considered as more environment-
friendly. Only the rest 7% uses old wet and semi-dry process technology. There is also a huge scope of waste heat recovery in the
cement plants, which lead to reduction in the emission level and hence improves the environment.

Cement Despatches

Cement industry in ndia has successfully maintained almost total capacity utilization levels, which resulted in maintaining a 10%
growth rate. n 2006-07, the total despatch was 155 MT, which rose up to 170 MT in 2007-08. The month of October 2009 saw a
cement despatch of 12.22 MT, which was almost 9% higher than the total cement despatch of 11.21 MT in the same month in the
previous year.

- (Apr-Oct) (in MT) - (Apr-Oct) in MT

Production 101.04 95.05
Despatches (Excluding Export) 100.24 94.33
Export 1.46 2.16
Capacity Utilization (%) 85 93

Major PIayers in Indian Cement Industry

There are a number of players prevailing in the cement industry in ndia. However, there are around 20 big names that account for
more than 70% of the total cement production in ndia. The total installed capacity is distributed over around 129 plants, owned by
54 major companies across the nation.

Following are some of the major names in the ndian cement industry:

Company Production InstaIIed Capacity

ACC 17,902 18,640
Gujarat Ambuj a 15,094 14,860
Ultratech 13,707 17,000
Grasim 14,649 14,115
ndia Cements 8,434 8,810
JK Group 6,174 6,680
Jaypee Group 6,316 6,531
Century 6,636 6,300
Madras Cements 4,550 5,470
Birla Corp. 5,150 5,113

Mergers and Acquisitions in Cement Industry in India

O UltraTech Cement is going to absorb its sister concern Samruddhi Cement to become biggest cement company
in ndia.
O World's leading foreign funds like HSBC, ABN Amro, Fidelity, Emerging Market Fund and Asset Management
Fund have together bought 7.5% of ndia Cements (CL) at a cost of US$ 124.91 million.
O Cimpor, a Cement company of Portugal, has bought 53.63% stake that Grasim ndustries had in Shree Digvijay
Cement.
O French cement company Vicat SA bought 6.67% share of Sagar Cement at a cost of US$ 14.35 million.
O Holcim now holds 56% stake of Ambuja Cement. Previously it held 22% of stake. The company utilized various
open market transactions to increase its stakes. t invested US$ 1.8 billion for that.

#ecent Investments in the Indian Cement Industry

O n a recent announcement, the second largest cement company in South ndia, Dalmia Cement declared that
it's going to invest more than US$ 652.6 million in the next 2-3 years to add 10 MT capacity.
O Anil Ambani-led Reliance nfrastructure is going to build up cement plants with a total capacity of yearly 20 MT
in the next 5 years. For this, the company will invest US$ 2.1 billion.
O ndia Cements is going to set up 2 thermal power plants in Andhra Pradesh and Tamil Nadu at a cost of US$
104 billion.
O Anil Ambani-led Reliance Cementation is also going to set up a 5 MT integrated cement plant in Maharashtra. t
will invest US$ 463.2 million for that.
O Jaiprakash Associates Ltd has signed a MoU with Assam Mineral Development Corporation Limited to set up a
2 MT cement plant. The estimated project cost is US$ 221.36 million.
O Rungta Mines (RML) is also planning to invest US$ 123 million for setting up a 1 MT cement plant in Orissa.
Cement Industry in India
The cement industry in ndia has been on a robust growth trajectory for more than a decade, led by buoyancy in
sectors like real estate and construction. The ndian cement industry is very energy intensive and is the third largest
user of coal in the country. t is modern and deploys latest technology, which is among the best in the world.
Additionally, the industry has great potential for development as limestone of excellent quality is found almost
throughout the country.
ndia is the second major cement producing country following China with 137 large and 365 mini cement plants. The
large plants have employed approximately 120,000 people, according to a recent report on the ndian cement industry
published by Cement Manufacturers Association (CMA).
ndia produces variety of cement based on different compositions such as Ordinary Portland cement, Portland
Pozzolana, Portland Blast Furnace Slag cement, white cement and specialised cement. Cement in ndia is produced
as per the Bureau of ndian Standards (BS) specifications and the quality is comparable with the best in the world.
Some of the major players in the cement industry include Ultratech Cement, Gujarat Ambuja Cement Limited , JK
Cements, ACC Cement, Century Cements, Madras Cements, Holcim and Lafarge to name a few.
Market Size
The ndian cement industry can be divided into five geographical zones North, South, East, West and Central
based on localised differentiation in the consumer profile and supply-demand scenario.
Demand in the cement industry has seen tremendous growth on the back of infrastructure, residential and commercial
projects. Cement production in ndia is anticipated to swell to 315-320 million tonne (MT) by end of this fiscal year
from the current 300 MT. "The target was 290 MT by the end of this year, which we have already achieved. So, we
expect the capacity to increase up to 320 MT by the year end, according to N A Viswanathan, Secretary General,
Cement Manufacturers Association (CMA). CMA is targeting to achieve 550 MT capacity by 2020.
The industry has seen constant modernisation and implementation of latest technologies during past few years. About
93 per cent of the total capacity is based on eco-friendly dry process technology. The demand for office space in ndia
is being driven by the entry of multinational companies and the growth of the services sector, particularly the T-BPO
industry. Progressive liberalization and easing of foreign direct investments (FD) norms in various sectors paved the
way for growth in FD, which led to growing demand for office space from multinational companies (MNCs) and other
foreign investors. Total FD in the cement sector between April 2000 and August 2010 stood at US$ 1.9 billion.

Investments
UltraTech Cement, an Aditya Birla Group company, signed a memorandum of understanding (MoU) with Rajasthan
State ndustrial Development & nvestment Corporation Ltd (RCO) for implementing a railway project in Sikar and
Jhunjhunu districts.
Government Initiatives
With an objective of accelerating and sustaining growth in the cement industry the government has taken various
steps in the Union budget 2011-12. The infrastructure sector has received an impetus in the form of improved funds
and tax related incentives offered to attract investors for tapping the infrastructure opportunities around the country.
ntroduction of tax free bonds, formation of infrastructure debt funds and formulating a comprehensive policy for
developing public private partnership projects (PPPs) are some of the steps that will provide required stimulus for
growth of cement industry in ndia.
Steps taken in the Union Budget 2011-12 include:
O Allocation of Rs 2, 14,000 crore (US$ 46.5 billion) for infrastructure in 2011-12. This is an increase of 23.3 per
cent over 2010-11.
O Government to come up with a policy for developing PPP projects.
O FCL to achieve cumulative disbursement target of Rs 20,000 crore (US$ 4.3 billion) by March 31, 2011 and
Rs 25,000 crore (US$ 5.4 billion) by March 31, 2012.
O Under take out financing scheme, seven projects sanctioned with debt of Rs 1,500 crore (US$ 325.6 million).
Another Rs 5,000 crore (US$ 1.1 billion) will be sanctioned during 2011-12.
O To boost infrastructure development, tax free bonds of Rs 30,000 crore (US$ 6.5 billion) proposed to be
issued by Government undertakings during 2011-12.
#oad Ahead
Growth in domestic cement demand is likely to remain strong, given the revival in the housing markets, constant
government spending on the rural sector, and due to rise in the number of infrastructure projects being implemented
by the private sector. Furthermore, it is expected that the industry players will continue to increase their annual cement
output in coming years and ndia's cement production will grow at a compound annual growth rate (CAGR) of around
12 per cent during 2011-12 - 2013-14 to reach 303 Million Metric Tons, according to ndian Cement ndustry Forecast
to 2012. A large number of foreign players are also expected to enter this industry in the coming years as 100 per cent
FD is permitted in the cement industry.
India holds the pride of being the second largest producer of cement next to China and the country is acting as a
home for a number of top cement companies. Cement industry in India is growing at a faster pace nowadays with
the increasing number of construction projects taking place in different parts of the country.
Above all, the country is expecting further growth in this industry in the coming years due to the growth of the top
companies in this sector. The list of top players in the cement industry in India is given below:
List of Top players in the cement industry in India:
- ACC Limited
- Gujarat Ambuja Cements Limited
- Ultratech
- Grasim
- India Cements
- JK Cement Limited
- Jaypee Group
- Century Cement
Some of the details regarding these top players in the cement industry in India is given below:
ACC Limited:
ACC Limited is the one of the prominent manufacturers of cement and concrete in India and they have several
zonal officer, 19 sales officer, 19 ready mix concrete plants and 14 modern cement factories in different parts of
India. They have more than 65 years of experience in cement and concrete production.
Gujarat Ambuja Cements Limited:
This company came into existence in the year 1986 it has seen very good growth during the past decade. They are
presently producing nearly 160 lakhs tons of cement and they are owning some of the state-of-the-art
manufacturing facilities with advanced technological instruments.
Ultratech:
UltraTech is a popular name in the cement industry in India and they have production facilities spread over eleven
integrated plants and most of their plants have received ISP 14001 and 9001 certifications and OHSAS 18001
certifications as well. Some of their products include:
- Portland Pozzolana cement
- Portland Blast furnace slag cement
- Ordinary Portland cement
Grasim:
Grasim Industries in the cement sector in India is a flagship of Aditya Birla Group, who are leaders in different
sectors in India. As most of us know Grasim is a popular name in the textile industry in India as well. This
company is operating 10 ready mix concrete units, 4 bulk terminals and 11 composite plants.
India Cements:
India cement is not only a leader in the cement industry in India, but they have also made their mark in the real
estate and infrastructure sector in India. They are one among the preferred cement companies mainly because of
their quality product offered at affordable cost.
JK Cement Limited:
JK Cement Limited began their operations in the year 1975 and they are leaders in the cement production in the
Northern part of the country. Initially, the company began its operations with a production capacity of 0.3 million
tons of cement and now they have a production capacity of 2.8 million tons of cement. As far as the manufacture
of white cement is concerned, they are the second largest company in India.
Jaypee Group:
Jaypee Group has their largest cement production unit in the state of Uttar Pradesh and some of their popular
products include Portland Pozzolana Cement and ordinary Portland cement. In the near future, the company is
planning to expand its cement capabilities through green field additions and acquisition.
Century Cement:
This company is a flagship of the popular BK Birla Group, who has made their presence felt in different industries
like chemicals, rayons, textiles, etc.in India. One of their popular brand Birla Gold has acquire a very good name
in the construction industry in India.
Therefore, the cement industry in India is growing considerably with the help of the heavy contributions made by
these top players and this industry is expected to grow further, which in turn can improve employment
opportunities in the country as well.