|
|
 |
|
Viewing report
|
|
|
|
Indian Cement Industry 2008
Credit Analysis & Research Limited, April 2008, Pages: 102
Indian Cement Industry on Growth Trajectory…….
The Cement industry has continued its growth trajectory over the past seven years. Domestic cement demand growth has surpassed the economic growth rate of the country for the past couple of years. The growth rate of cement demand over the past five years at 8.37 % was higher than the rate of growth of supply at 4.84% as also the rate of growth of capacity addition during the same period. Demand for cement in the country is expected to continue its buoyant ride on the back of robust economic growth and infrastructure development in the country.
The key drivers for cement demand are real estate sector, infrastructure projects and industrial expansion projects. Among these, real estate sector is the key driver and accounted for almost 55% in FY 07.
During the period FY 03 – 07, capacity additions in the country (30.6 mn tonnes) were at a slower rate compared to demand growth leading to higher average capacity utilization rates from 81.3% to 93.8% during the same period. This has exerted pressure on average prices which have increased from Rs. 156 per bag in FY 03 to Rs. 216 per bag in FY 07. In December 2007, prices stood at Rs. 245 - Rs. 250 per bag.
Low capacity addition coupled with higher utilization rate also led to increase in proportion of production of blended cements in product mix. Blended cement accounted for 68% of product mix in FY 07 as compared to 49% in FY 03.
Cement is a bulky commodity and cannot be easily transported over long distances making it a regional market place, with the nation being divided into five regions. Each region is characterised by its own demand-supply dynamics. The Southern region dominated the cement consumption at 44.5 mn tonnes in FY 07, accounting for about 30% of total domestic cement consumption. During FY 03-07, Southern region has witnessed highest CAGR of cement demand growth at 10.4% followed by Northern and Eastern regions at 8.9% and 9%, respectively.
Over the past five years, cost of cement production has grown at a CAGR of 8.4%. Also, the producers have been able to pass on the hike in cost to consumers on the back of increased demand. Average realizations have increased from Rs. 1,880 per tonne in FY 03 to Rs. 3,133 per tonne in FY 07, at a CAGR of 13.6%, which has been reflected in higher profit margins of the industry.
To reduce the cost of production, the industry has focused on captive power generation. Proportion of cement production through captive power route has increased over the years. Also, cement movement by rail has increased over the years.
Market share of top five players in the industry has increased from 42% in FY 02 to 56% in FY 07. In FY 07, Holcim group captured a leadership position with market share of 22.6% followed by Aditya Vikram Birla group at 19.4%.
Domestic Cement industry is highly insulated from global cement markets. Exports have been constant at about 6% of total cement demand for past few years. With GoI intervention, making cement duty free, cement is being imported from neighbouring countries. However, due to logistics issues and lack of port handling capabilities, imports of cement will remain negligible and do not pose a threat to domestic industry.
Cement demand is expected to remain buoyant driven by boost in construction sector in the country. As per estimates, investment of USD 25 bn is required in urban housing, USD 450 bn will be required in infrastructure related projects and industrial expansion projects would witness investments of USD 88 over the next five years.
We estimate domestic cement demand to grow at a CAGR of approximately 10% for the next 5 years. The current tight demand - supply situation is expected to extend up to end of calendar year 2008 owing to delays in capacity expansion programmes by various companies. We expect prices to remain firm till the end of CY2008 due to tight demand - supply situation and increase in input costs. Thereafter as new capacities come in, we may witness a softening in prices in some regions.
The report elucidates facts on the Indian Cement industry, supplemented by the latest Statistics. Emphasis is laid on the following topics to accomplish the report:
-Performance of the Cement industry over past five years with evaluation of trends of capacity addition, production and capacity utilisation.
-Evaluation of Overall demand – supply scenario in the country covering trend of domestic consumption and exports.
-Regional dynamics of industry depicted by detailed analysis of demand – supply situation in the five distinct regions in India.
-Influence of various cement demand driving sectors like real estate, infrastructure and industrial projects covering region-wide demand drivers.
-Changing scenario of product mix – override of blended cements on OPC.
-Cost analysis with emphasis on power & fuel cost, RM cost, Freight cost and evaluation of average cost of production, average realizations and margins of the industry.
-Our perspective on region-wide future capacity addition, demand estimation and identification of deficit/surplus regions in the country.
-Operating & financial performance of top players in the industry along with future outlook.
-Brief on peculiar characteristics of industry, types & applications of cement variants and cement manufacturing process.
-Comprehensive database of company-wide financial & operational statistics and region-wide key operational statistics.
Customers who bought this item also bought
Indian Cement Industry 2009
India: Cement
Indian Cement Industry Forecast to 2012
Cement - Global Strategic Business Report
Cement - A Global Market Perspective
Chinese Markets for Cement, Concrete and Aggregates
Chinese Markets for Cement and Concrete Additives
The Cement Industry in Europe and the Middle East: A Market / Technology Report
2007 Research Report On China's Cement Industry
The World Market for Portland Cement, Aluminous Cement, Slag Cement, Supersulfate Cement, and Similar Hydraulic Cements: A 2009 Global Trade Perspective
China Cement Industry Report, 2007
China Cement Industry Report 2007
|
|
|
|
