C E M E N T I N D U S T R I E S

Batch : MFM ( 2010 – 2013)Subject : Financial Management

34 – Harish Pai | 40 – Atul Patel | 43 – Mayank Paua | 49 – Vivek Savargankar

CON

TENT

INTRODUCTION TO CEMENT INDUSTRIES

CEMENT INDUSTRIES SECTOR STASTICS

SNAP SHOT - ACC

SNAP SHOT - AMBUJA

SNAP SHOT – SHREE CEMENTS

SNAP SHOT – J K CEMENTS

COMPARATIVE ANALYSIS

MICHEAL PORTER’S MODEL

IMPACT OF BUDGET ON CEMENT INDUSTRIES.

REFERENCES

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C O N T E N T S

INTRO

DU

CTION

…. M

ANU

FACTURIN

G PRO

CESSCEMENT TYPES & MAIN INGREDIENTS

CEMENT MANUFACTURING PROCESS

CEMEN

T IND

USTRIES

CEMENT INDUSTRIES >> OVER THE YEARS.

Description 1982 1989 2008 2009

Installed Capacity 29 MTPA 56 MTPA 207 MTPA 252 MTPA

Production 21 MTPA 42 MTPA 177 MTPA 195 MTPA

Indian cement Industry with total capacity of 240 million tones (2010) is the second largest after China.

Cement industry is dominated by 20 companies who account for over 70% of the market. Individually no company accounts for over 12% of the market.

The major players like Ultratech and ACC have been quiet successful in narrowing the gap between demand and supply.

Similarly northern and southern region consume around 20%-30% cement while the central and western region are consuming only 18%-16%.

Demand has picked up in East and West, resulting in lower inventory levels and price hikes of ~INR 10/bag in the first week of January 2011

ACC >> SNAPSH

OT

>> SNAPSHOT

India's foremost manufacturer of cement

Mr N. S. SekhsariaChairman  

• Established 1936, as a result of merger of 10 Companies. • Only Company with nationwide presence –capacities in all five regions. • Production Capacity 22.63 MTPA (2009)• It has a workforce of about 9,000 persons and a countrywide distribution network of over 9,000 dealers.• Net Profit of INR 1606 Cr.• 15 Plants Across India.

ACC >> SNAPSH

OT

FINANCIAL PERFORMANCE OF ACC

ACC >> SNAPSH

OT

MDA FOR ACC

2009 & 2008 Total consolidated income for the year 2009 was Rs. 8,725 crore, an increase of 9% as compared to Rs. 7,974 crore in 2008. The expansion project of the Bargarh Plant was substantially completed during the year 1.2MT and Expansion at Wadi completed 3.2MT. Investment in building Wind Power projects : 2.5MW, Gross Generation of Power by CPP up from 1,517 Million KwH to 1733 Million KwH. Increase in Share of Power from CPP in total Power Consumption from 64% to 70% 100% equity stake in National Limestone Company Private Limited (NLCPL)Power : In 2009, gross generation of power by our CPPs was 1733 million kwh which was 14% higher than the gross generation of 1517 million kwh in 2008.

AMBU

JA CEMEN

T >> SNAPSH

OT

>> SNAPSHOT

•Ambuja Cements is a Joint Venture between the public sector Gujarat Industrial Investment Corporation (GIIC) and Narottam Sekhsaria & Associates. The company was incorporated in the year 1981 as Ambuja Cements Pvt Ltd and it was rehabilitated into a public limited company on 19th March 1983 as Gujarat Ambuja Cements Ltd.

•The Company has five integrated cement manufacturing plants and eight cement grinding units across the country. It also has 3 Bulk Cement Terminals.

•The company name was changed from Gujarat Ambuja Cements Limited to Ambuja Cements Limited on April, 2007, the word Gujarat was dropped to reflect the true geographical presence of the company.

AMBU

JA CEMEN

T >> SNAPSH

OT

FINANCIAL PERFORMANCE OF AMBUJA CEMENT.

AMBU

JA CEMEN

T >> SNAPSH

OT

MANAGEMENT DISCUSSION & ANALYSIS (AMBUJA CEMENTS)

2009

During 2009 a new bulk cement terminal started operation at Kochi, providing access to new markets in the South, and two new captive power units, each with 15 MW capacity, were commissioned at Bhatapara (Chhattisgarh) and Maratha (Maharashtra).

The Company has paid an interim dividend of 60% (Rs. 1.20 per share) during the year.

The Company has built a large network of over 6,000 dealers and 20,000 retailers across 18 states in India.

SHREE CEM

ENT >> SN

APSHO

T >> SNAPSHOT

Shree Cement Ltd is one of India`s premier cement makers and the largest in North India.

They have three brands under their portfolio, namely Shree Ultra Jung Rodhak Cement, Bangur Cement and Rockstrong Cement.

Their manufacturing units are located at Beawar, and Ras in Rajasthan.

They are also having the grinding units in Khushkhera in Rajasthan.

The company is headquartered in Kolkata, India. Shree Cement Ltd was incorporated in the year 1979. The company was promoted by Calcutta-based industrialists P D Bangur and B G Bangur.

It has more than quadrupled its capacity in the last 5 years to reach present cement capacity of 12 million tons p.a.

FINANCIAL PERFORMANCE OF SHREE CEMENTSSH

REE CEMEN

T >> SNAPSH

OT

MDA FOR SHREE CEMENTS

2009 & 2010

Company implemented Performance Management System (PMS) software to optimize its power consumption.

R&D cell made a breakthrough by undertaking a unique initiative of producing synthetic gypsum which will help reduce usage of natural gypsum which is a limitednatural resource. A patent has been applied for this unique achievement

Implemented the Waste Heat Recovery Project. The project serves the dual purpose of reducing the emission of waste gases into the atmosphere as well as conserves the natural resources.

Installed air cooled condensers at its Beawar Power plants toconserve water consumption..

SHREE CEM

ENT >> SN

APSHO

T

J K CEMEN

T >> SNAPSH

OT

>> SNAPSHOT

LEADING CEMENT PRODUCER WITH DOMINANT PRESENCE IN NORTH INDIA

Cement operations since 1975 Amongst top ten Grey Cement Producer Second Largest Producer of White Cement Capacity of 7.5 MTPA, across 4 cement plants 105 Mw installed power capacity Net Profit 224.55 Crores 2009-10 4 Cement Plants 2000 employees Mudhol Plant Commissioned

J K CEMEN

T >> SNAPSH

OT

FINANCIAL PERFORMANCE OF J K CEMENT

J K CEMEN

T >> SNAPSH

OT

MDA FOR J K CEMENT

MDA 2008-2010

Grey cement capacity has grown from 3.55 MT to 7.5 MT in just 5 years

Increase in installed power capacity to 105 Mw, 7 times increase in 5 years

Gross Sales in 2009-2010 Rs. 2248 Crores

The Greenfield Grey Cement Plant at Karnataka with installed capacity of 3 MTPA

was commissioned in September 2009 and commercial dispatches started from

October 2009.

50 M.W Coal Based Captive power plant has also been commissioned at

Karnataka plant.

Grey cement production increased to 4.28 MT from 3.79 MT

Dividend Payout of Rs. 6 per share – highest ever so far.

BUD

GET IM

PACTBUDGET IMPACT (2011-12)

The basic customs duty on two critical raw materials for this industry viz. petcoke and gypsum has been reduced to 2.5% from 5%.

ImpactThis would result in lower input cost and pressure on operating profit margin could marginally ease.

The FII limit for investment in corporate bonds , with residual maturity of over five years issued by companies in infrastructure sector, is being raised by an additional limit of US Dollar 20 billion taking the limit to US Dollar 25 billion.

For Infrastructure development in 2011-12 INR 2,14,000 crore is being made for this sector, which is 23.3 per cent higher than current year.

Capital goods imported for the expansion of existing mega or ultra mega Power projects enjoy a concessional basic customs duty of 2.5 per cent and full exemption from CVD.

PORTER’S FIVE FO

RCE MO

DEL

MICHAEL PORTER’ S FIVE FORCE MODEL

• THREAT OF SUBSTITUTES – LOW

• ONLY BITUMEN IN ROADS AND ENGINEERING PLASTICS IN BUILDING, OTHERWISE NO SUBSTITUTE

• THREAT OF SUBSTITUTES – LOW

• ONLY BITUMEN IN ROADS AND ENGINEERING PLASTICS IN BUILDING, OTHERWISE NO SUBSTITUTE

SUPPLIER POWERBARGAINING POWER – HIGHMONOPOLISTIC CONTROL OF

EXTERNAL COST ELEMENTS ( COAL, POWER,

TRANSPORTATION AND TAXES)

SUPPLIER POWERBARGAINING POWER – HIGHMONOPOLISTIC CONTROL OF

EXTERNAL COST ELEMENTS ( COAL, POWER,

TRANSPORTATION AND TAXES)

ENTRY BARRIER – LOWHIGH CAPITAL INVESTIMENT,

BROAD DISTRIBUTION NETWORK,

ECONOMIES OF SCALE, SUPPLY > DEMAND

DETER NEW ENTRANTS

ENTRY BARRIER – LOWHIGH CAPITAL INVESTIMENT,

BROAD DISTRIBUTION NETWORK,

ECONOMIES OF SCALE, SUPPLY > DEMAND

DETER NEW ENTRANTS

BARGAINING POWER OF CONSUMER – LOW

RISING SHARE OF RETAIL PURCHASE, DECLINING SHARE OF BULK PURCHASE BY GOVT, HAS TAKEN AWAY BPC.

BARGAINING POWER OF CONSUMER – LOW

RISING SHARE OF RETAIL PURCHASE, DECLINING SHARE OF BULK PURCHASE BY GOVT, HAS TAKEN AWAY BPC.

DEGREE OF RIVALRYCOMPETITION – HIGH

LARGE NO OF PLAYERSINTERMITTENT OVER CAPACITYMARGINAL PRODUCT DIFFERENTIATIONHIGH EXIT BARRIER IN FORM OF

SIGNIFICANT CAPITAL INVESTMENT

DEGREE OF RIVALRYCOMPETITION – HIGH

LARGE NO OF PLAYERSINTERMITTENT OVER CAPACITYMARGINAL PRODUCT DIFFERENTIATIONHIGH EXIT BARRIER IN FORM OF

SIGNIFICANT CAPITAL INVESTMENT

RIVALRY

COM

PARATIVE STATISTICSCOMPARATIVE STATISTICS

COM

PARATIVE STATISTICSPLANTS IN INDIA.

ACCJ K Cement

AmbujaShree Cement

THANK YOU.

References :

Websites:

-www.acclimited.com-www.shreecement.in-www.jkcement.com-www.ambujacement.com-www.moneycontrol.com-www.nseindia.com-www.indiabudget.nic.in-www.edielwiess.in