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V Cement sector--CAGR of 8% against the world cement

industry average of 3.5%


V Second largest cement producer in world after china
V The drivers for the demand are real estate sector,
infrastructure sector and industry expansion projects,
hence posting a healthy growth rate of around 8 per cent
since 1997-98
V Cement is bulky commodity and cannot be easily
transported over long distances making it a regional
market place, with the nation being divided into five
regions
V With increase in infrastructure development activity and
global demand has led Indian cement industry to increase
their production capacity.
V =uring the slowdown in 2008-09, growth in cement
demand remained at a healthy 8.4%.
V In the year (2009-10) cement consumption has shown 12.5%
growth in consumption during first eight months.
V The all-India consumption and growth in consumption in
major cement-consuming States over last two years are
presented below:
Figures in Million
2008-09 Apr-Nov 09
Tonnes
=omestic
178 100
Consumption
Year-on-Year Growth
8.4 12.5
(%)
V huoyant real estate market
V Infrastructure spending
V Governmental schemes like National Rural Employment
Guarantee
V Low cost housing in urban/rural regions under schemes
like Jawaharlal Nehru Urban Renewal Mission and Indira
Aawas Yojana
V Fragmented - 56 cement companies operating 124 large
and 300 mini plants
V lustered  limestone reserves located in few states which
results in the industry in the form of clusters.
V ^ocalized Marketing & Distribution  =ue to high bulk
and low value, competition is localized because the cost of
transportation is very high to distant markets
V  clical - It is cyclical in nature because the market and
the consumption is closely linked to economic and climatic
cycles.
V eak - March
V lowest -August and September.
V There are 8 clusters in the country and they account
for 81% of cement capacity.
V Energy costs and freight costs are the two important elements in
cost structure of a company, which has increased over the years
V stores, overheads, and administrative expenses has declined.
V The costs on account of material, repairs and maintenance,
employee expenses and selling expenses have remained stable.
V ^MESTONE
Limestone is the main raw material for cement. The following is
the state wise distribution of limestone reserves

V p SUM
Gypsum is used to act as a retarding agent. Gypsum is a naturally
available resource in ample amounts in Rajasthan, Gujarat and
Tamil Nadu.
nput costs (Upstream)
V ower & fuel prices are revised upwards regularly.
V Shortage in coal sector could be a risk factor
V electricity prices are also witnessing pressure.
Transportation ost (Upstream & Downstream)
V Rising fuel cost resulting in higher road and rail
transportation cost
V Freight accounts for 17% of the production cost.
V Railway infrastructure is not adequate, thus industry
dependent on road transport(preferred for < 250 kms) only
even for for long distances
V Inland Water Transportation, a very active route, needs to be
developed
V hulk transport needs to pick up faster
?egional mbalance (Upstream & Downstream)
V There is regional imbalance in the distribution of
cement industry. Limestone availability in pockets has
led to uneven capacity additions. Like eastern region has
to source lime stone at higher cost
‰alue ain mprovement (nternal)
V Cement plants should increasingly move into other
value segments
V acking cost needs to be minimized
V Marketing should try for higher market penetration in
smaller radius. This would further reduce distribution
volumes.
V Ambuja Cements Limited, formerly Gujarat Ambuja
Limited
V principal activity is to manufacture and market cement for
both domestic and export markets. Innovation in utilizing
sea transport, captive power plants to constantly check the
costs.
V Total cement capacity of the company is 18.5 MT, has five
plants at
V Ambuja Nagar Gujarat (5 MT),
V =arlaghat Himachal radesh (6 MT),
V Upperwahi Maharashtra (2.5 MT),
V Rabriyawas Rajasthan (2 MT)
V Chhaattisharh West hengal (3 MT).
V  ualit 
V It is a National Quality ISO 9002 certified company, the only
cement company
V It's also the first to receive the same and also have ISO 14000
Certification for environmental systems.
V annel Efficienc 
V Undertakes bulk cement transportation, by sea, to the major
markets of Mumbai, Surat and other deficit zones on the West
Coast.
V Itǯs the first company in India to introduce the concept of bulk
cement movement by the sea transport.
V ollaboration
V Cement giants Larsen & Tubro (L&T) and Gujarat Ambuja Cements
entered a unique agreement to reduce transportation costs in
dispatching bulk cement in Gujarat
V The company has entered into a strategic partnership with Holcim,
the second largest cement manufacturer in the world
V Largest manufacturer in north India
V Second largest white cement manufacturer in India by
production capacity
V Sourcing
V The company has proximity to huge reserves of
premium quality limestone, as essential ingredient for
cement manufacturing.
V annel Efficienc 
V The company's distribution network for grey cement
consist of more than 40 feeder depots, serviced by seven
regional sales office located at =elhi, Haryana, Uttar
radesh, unjab, Gujarat, Madhya radesh and
Rajasthan  a huge distribution channel that makes
distribution easy and accessible.
V Grasim cement was incorporated in 24th August 2000
and has an annual capacity of 17 million tonnes
V  ualit Aderence
V All the plants have ISO 9001 certification, and ISO 14001
certification, two of those have received OSHAS 18001
certification.
V Economies of Scale troug Export
V The export market comprises of countries around the
Indian Ocean, Africa, Europe and the Middle East.
V ‰alue ain Advantage
V With an eye on the growing Ready Mix Concrete business,
the Company has commenced setting up Ready Mix
Concrete plants in various places in the country since the
year 2007.
V In the present scenario of hectic competition it has been
seen that the biggest player in the market remains big
and does not allow other companies to rise.
V The cement industry is expected to grow steadily in
2009-2010 and increase capacity by another 50 million
tons in spite of the recession and decrease in demand
from the housing sector.
V In 2008 all companies underperformed comparatively
due to economic downturn.
V The effect of recession in 2008 could be seen in the year
2009 where the growth of the company has been
decreased, but they are all now slowly picking up

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