Cement industry in INDIA

India, world's second largest cement producer after China, is the home to a number of top cement companies. As various infrastructure projects, road networks and housing projects are coming up, many of which are backed by the government, the cement industry in India is growing at a great pace these days. With the capacity of 224 Million Tones (MT), the Indian cement industry is truly big in size and hence accommodates a number of cement companies in the market. Not only that, more growth is further expected in the coming years, which will also lead to the growth of top cement companies in India.

The overall capacity increased to 224 million tonnes (MT) as on April 30, 2010, according to the Cement Manufactuer's Association from 151 million tonnes in FY2004-05 translating into a CAGR of 11% YOY. The average capacity utilisation and cement dispatches both maintained a steady growth. Total dispatches recorded 181 million tonnes during 2008-09 against 141 million tonnes in 2005-06.


Most players, large as well as small have expanded their installed capacities in the recent past. There was a capacity addition of 13.51 million tonnes in the last fiscal despite the slowdown. More than 75% of this (9.85 million tonnes) came through Greenfield projects. The remaining 3.66 million tonnes came through Brownfield projects. South India which had consumption of 54.3 million tonnes in the previous (the highest amongst all the four regions in the country) witnessed three Greenfield projects by the Madras cement, Chettinad Cement and Rain Commodities. Each has a capacity of two million tonnes.
The Indian cement industry is largely dominated by a few companies. The top 20 cement companies account for almost 70% of the total cement production of the country. 
 
( the below mentioned text / data is under updation

The cement industry comprises of 125 large cement plants with an installed capacity of 148.28 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum)

The total cement production the country in FY09 was 210 MT. It is further expected to reach 236.16 MT in FY11 and 262.61 MT in FY12.


Let's have a look at the top 11 cement companies in India.
Name             Installed
                      Capacity
                       MTPA
ACC Limited 18.640
Gujarat Ambuja
Cements Limited  14.86
Ultratech 17.00
Grasim  14.12
India Cements 8.81
JK Cement Ltd 6.68
Jaypee Group 6.53
Century Cement 6.30
Madras Cement 5.46
Birla Corp. 5.11
JK lakshmi Cement Ltd 4.5     )

Even as analysts are sceptical of cement companies’ recent move to raise prices in the South, manufacturers of the commodity feel the hike was needed to trim losses on the back of a slump in sales in the last three months.Several cement makers increased prices by Rs15-30 per 50 kg bag this week. The price in Andhra Pradesh has gone up to Rs175 per bag. In Tamil Nadu and Karnataka, prices have been raised to Rs200-210. In Kerala, though the price hike is yet to take effect, dealers said prices will go up to Rs220-225.

Cement sales generally improve in October and continue to rise till January. With a pause till March, sales tend to improve again till June.
We estimate March-11 exit capacity of 113 mt in south India, with likely demand of 60-65 mt., thus the sustainable of price increases are difficult
It is a fact that the current month (September) always proves to be difficult for cement companies due to the rains. But, unless the companies attempt to hike the price now, it would be difficult to improve realisations during the peak sales season of October-January
The largest cement players in the south, including India Cements, UltraTech and Dalmia Cement, together have a close to 45% share in the market.

Two-fold strategy to keep sales going while maintaining realisations.
One, capacities or supplies can be cut down to sustain the price hike.
Two, a marginal roll back of the price hike is possible in the next couple of weeks to keep the effective hike at Rs10-15 per bag to time the correction with the beginning of the sales season
At present the installed capacity in the South is 91 mtpa whereas the demand is 57 mtpa for FY10.
In FY11, the demand is expected to be 62 mtpa with a capacity installation of 95mtpa. In FY12 it is expected to increase to 109 mtpa installed capacity with a consumption demand of mere 68mtpa.
We expect the utilisation to remain at same level around 60-65% till FY12,” he said. “Approximately 8-10 mtpa was being channelised from the south to both eastern and western markets, which would subside. Post the monsoons, a price hike of Rs5-10 in the West can also happen” Sankhe added.

Cement makers are also not finding the going any attractive, particularly in key markets like Andhra Pradesh, which accounts for about 15-20% of the all India cement sales. The state government, which was driving cement sales by taking up mass housing programmes, has reduced the offtake for about six months now. Similarly, monsoon too has been extremely good postponing the construction activity. The property development in general too has been sluggish in Hyderabad and also in metros like Chennai for the last one year.
As the utilisation rate is expected to be stagnant, analysts do not foresee any reason for price escalation as lower utilisation rate would make it difficult to maintain realisation rate.

source dna