1.

IN TRO

DUC TIO

N
The cement

industr y is one of the

main benefic iaries

of the infrastr ucture

boom. With robust

demand and

adequat e

supply, the industr

y has bright future.

The IndianC ement

Industr y with total

capacit y of 165

million tones is the

second largest afterCh

ina. Cement industr

y is domina ted by

20 compan ies who

account for over 70%

of the market. Individ

ually no compan y

account s for over

12% of the market.

Themaj or players

like L&T and

ACC have been

quiet success ful in

narrowi ng the gapbet

ween demand and

supply. Private housing

sector is the major

consum er of ceme

nt (53%) followe

d by the govern ment

infrastr ucture sector.

Similarl y norther

nand souther n

region consum e

around 20%30%

cement while the

central andwes tern

region are consum

ing only 18%-

16%.In dia is the 2nd

largest cement produce

r in world after

china .Right from

layingc oncrete bricks

of econom y to

waving fly overs

cement industr y has

shown andsho ws a

great future. The

overall outlook for the

industr y shows signific

ant growth on the

back of robust demand

from housing constru

ction, PhaseII of

NHDP (Nation alHigh

way Develo pment

Project) and other

infrastr ucture develop

ment projects .Domes

tic demand for

cement has been

increasi ng at a fast

pace in India. Cement

consum ption in India is

forecast ed to grow

by over 22% by 2009-

10 from 200708.Am

ong the states, Mahara

shtra has the highest

share in consum ption

at12.18 %,follo wed by

Uttar Pradesh , In

product ion terms,

Andhra Pradesh is

leading with 14.72%

of total product ion

followe d by Rajasth

an. Cement product

ion grew atthe

rate of 9.1 per cent

during 200607 over

the previou s

fiscal's total product

ion of 147. 8 mt

(millio n tons). Due to

rising demand of

cement the sales

volume of ceme nt

compan ies are also

increasi ng & compan

ies reportin g

higher product ion,hig

her sales and

higher profits. The net

profit growth rate of

cement firms was

85%.Ce ment industr

y has contrib uted

around 8% to the

econom ic develop

ment of India.O utsiders

(foreign players) eyeing

India as a major market

to invest in the

form of eithe r

merger or FDI (Foreig

n Direct Investm ent).

Cement industr y has a

long way togo as

Indian econom y is

poised to grow because

of being on

verge of develop

ment. T he compan

y continu es to

emphas ize on reducti

on of costs through

enhanc edprod uctivity

, reducti on in

energy costs and

logistic s expense

s. The cement sector

isexpec ted to witness

growth in line with the

econom ic growth

because of the strongc

orelation with

GDP. Future drivers

of cement demand

growth in India would

be theroad and

housing projects . As per

the Workin g

Group report on

Cement Industr y forthe

formula tion of the 11th

Plan, the cement

demand is likely to grow

at 11.5 percent per

annum during the

11th Plan and

cement product ion and

capacit y by theend

of the 11th Plan

are estimat ed to be

269 million tones

and 298 million

tones,re spectiv ely,

with capacit y

utilizati on of

90 per cent.