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Indian Cement Industry analysis

Prepared By: Abhik Tushar Das & Sudeep panicker

CEMENT INDUSTRY
India is the worlds second largest producer of cement after China with industry capacity of over 200 million tonnes (MT). Total installed capacity was 204.29 MT as on August 31, 2008. Total despatches has been 100.17 MT during AprilOctober 200809 100.96 MT during AprilOctober 200809. Indias cement consumption grew 9.6% yoy. South market witnessed strong demand supporting firm pricing (up 4.7% yoy) in the region. The key concern dip in construction and infrastructure activities in the country.

Mergers & Acquisition

SWOT
STRENGTHS Second largest in the world in terms of capacity Low cost of production WEAKNESS Effect of global recession on Real Estate and Infrastructure. Demand-Supply gap, Overcapacity Increasing Cost of Production High Interest rates OPPORTUNITIES Strong growth of economy in the long run. Increase in infrastructure projects Growing middle class Technological Changes Increase in govt spending THREATS Imports from Pakistan affecting markets in Northern India. Excess over capacity can hurt margins as well as prices

CHALLENGES

Cement industry currently has one of the highest inventory levels in recent times. Growth rates have slowed. Capacity additions putting pressure on prices. As a result the cement companies are looking for cutting production

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