11

CEMENT

MAY 2014 For updated information, please visit www.ibef.org

22For updated information, please visit www.ibef.org

Executive Summary…………………………. 3

Advantage India……………………………… 4

Market Overview and Trends………………. 5

Growth Drivers……………………………….. 25

Success Stories: Innovative Solutions, UltraTech Cement, Ambuja Cement…………. 31

Opportunities…………………………………. 34

Useful Information…………………………… 36

CEMENT

MAY 2014

33For updated information, please visit www.ibef.org

EXECUTIVE SUMMARY

Second largest Cement market

• With nearly 350 million tonnes of cement production capacity, India is the second largest cement producer in the world. By 2020, cement production will reach to 550 million tonnes

Dominated by private players

• Of the total capacity, 98 per cent lies with the private sector and the rest with public sector

Higher share of large plants

• 188 large cement plants together account for 97 per cent of the total installed capacity, while 365 small plants account for the rest

Large concentration in South and West

• Of the total 188 large cement plants in India, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu

Source: Planning Commission, Aranca Research

CEMENT

MAY 2014

44

• The engineering sector is delicensed; 100 per cent FDI is allowed in the sector

• Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period

Growing demand

For updated information, please visit www.ibef.org

ADVANTAGE INDIA

Source: Edelweiss,Notes: FY20E – Estimated market size for 2020

^Planning Commission estimates

Robust demand• Robust infrastructure growth

during 12th Five Year Plan to drive growth

• Demand is expected to be boosted by growth in real estate sector

Long-term potential• Oligopoly market, where large

players have partial pricing control

• Low threat from substitutes

Attractive opportunities• The North-East, which is witnessing

a construction boom, offers attractive investment opportunities

• Large planned investments in infrastructure and housing is likely to boost demand for cement in the coming years as well

Increasing investments• Robust investments are being

made by the existing players to expand their capacity

• Increasing presence of Tier II cement players

• Use of alternate fuels to lower production costs and emissions

FY13

Production capacity:

350 million tonnes^

FY20E

Production capacity:

550 million tonnes

AdvantageIndia

CEMENT

MAY 2014

55For updated information, please visit www.ibef.org

OVERVIEW OF THE INDIAN CEMENT INDUSTRY

Source: Cement Manufacturers’ Association (CMA),Planning Commission, Aranca ResearchNote: mtpa - Million Tonnes Per Annum, mt – Million Tonnes

^Planning Commission estimates

CEMENT

Cement Industry (FY13)

Mini And White Cement Plants Large Cement Plants

• Cement plants: 188

• Installed capacity: 350 mtpa^

• Cement production: 251 mt

• Cement plants: 365

• Installed capacity: 11.1 mtpa

• Cement production: 6.0 mt*

MAY 2014

66For updated information, please visit www.ibef.org

INDIA – WORLD’S 2nd LARGEST CEMENT PLAYER

Top Cement Producers in 2012 (million tonnes)

Source: International Cement Review, Aranca Research

India is the 2nd largest cement producer as well as consumer in the world led by the enormous growth in the infrastructure and construction sector for the last two decades

Top Cement Consumers in 2012 (million tonnes)

CEMENT

MAY 2014

China

Indi

aUSA

Iran

Turk

ey

Brazil

Russia

Japa

n

Egypt

Indo

nesia

2220

24774 73 69 68 60 59 55 53

China

Indi

aUSA

Brazil

Russia Ira

n

Turk

ey

Indo

nesia

Saudi

Ara

bia

Egypt

2160

24279 69 63 59 58 55 53 51