In India, Market Share of Ready Mix Concrete is Abysmally Low at 4-5% as Compared with Developed Nations.

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c55817) has announced the addition of "Indian Cement Industry" to their offering.

THE INDIAN CEMENT INDUSTRY ON A GROWTH TRAJECTORY

Driven by frenzied infrastructure development and booming housing sector, the cement industry in India is on a roll. In the past five years, the growth rate of cement demand has surpassed the rate of economic growth. Globally, India has positioned itself as the largest producer of cement (142 mn tonnes in FY06) after China (1060 mn tonnes in CY05).

Over a 5 year period, cement demand in India has grown at a rate, almost twofold as compared to that of rate of capacity addition in the sector. Consequently, capacity utilisations have enhanced from 75% to 88% over the same period. The impact of high demand growth is evident with the continuous northward movement of prices in the past 5 years. Blending has opened new horizons for players to increment their existing capacities. Ordinary Portland cement, which hitherto dominated the product mix, has now been overtaken by blended cement. Blended cement has captured substantial proportion (beyond 60% in FY06) of the total cement market. CARE believes that this proportion would increase to about 80-85% in next two to three years.

Industry is also focusing on promoting value added products such as Ready Mix Concrete (RMC). In India, market share of RMC is abysmally low at 4-5% as compared with developed nations. CARE feels that this share would rise substantially to about 20-25% in the medium term with expansion of RMC capacity by top players and impetus to RMC use by policy makers.

On the technology front, the Indian industry is not far behind. Domestic players are also increasingly focusing on conservation of energy, fuel and raw materials. Cement is a polluting industry due to emissions in the form of dust, gases, etc. However, it is also providing environmental benefits by using wastes from certain other industries, including slag from steel manufacture and fly ash from coal burning.

Enthused by the current buoyant demand-supply situation, domestic players are ramping up production capacities. The nation could witness augmentation of capacity surpassing the 200 mn tonnes mark by early FY09 (160.2 mn tonnes as on 31.03.06).

Organic growth coupled with mergers & acquisitions have paved the way for players to grab a larger pie of cement market. Realising the growth potential, top international cement companies like Lafarge(France), Holcim (Switzerland), Italcementi (Italy) and Heidelberg (Germany) have entered the Indian market in a big way.

Due to the on-going mergers and acquisitions and ingress of global players, domestic industry is witnessing a consolidation phase. This consolidation has brought larger domestic players such as ACC & GACL under the fold of a global major viz Holcim. Top two groups in the industry, Aditya Vikram Birla Group and Holcim Group, now control more than 40% of total capacity in the country. Further, more than a quarter pie of total capacity is now being controlled by global majors. With sustained demand for housing and focus on infrastructure development by the Government, confidence of the global majors in country's growth potential has been boosted. Will future see further global participation through M&A and investments?

Areas covered:

- Glimpse of Industry
- Demand - supply dynamics
- Cost structure and cement price trends
- Market Scenario
- CARE's Outlook on industry
- Analysis of top players in the industry

Companies mentioned:

- ACC Ltd.
- Gujarat Ambuja Cement Limited
- Grasim Industries Limited
- Ultratech Cement Limited
- The India Cements Ltd.

For more information visit http://www.researchandmarkets.com/reports/c55817