[Author name]

CEMENT INDUSTRY
[DOCUMENT TITLE]
FACTOR ENDOWMENTS
 Availability of raw material: Procurement of local raw materials forms the basis for the
manufacture of cement and represents an essential component of industrial value creation
chain. The most important base materials in cement include limestone and clay 
 Modern technology: With the successful adaption of the modern innovative technologies the
industry can reduce the cast and improve productivity. advanced process of automation
ensures that cement plants perform in a better way, which will be resulting in increased
stability and higher profitability.
 Low salary: In developing nation such has India and China the cost of labour is low, and the
industry can benefit from this.
 Legal, regulatory, and environmental scenario – The cement industry is affected by
regulatory norms. This is prominent in developed countries where environmental issues are
more stringent. This adds to the companies’ costs.
DEMAND CONDITIONS
 Boom in the housing sector world-wide: In developing nation such as India and China the
income of the people is increasing, and this has led to the boom in the housing sector. India's
real estate market is expected to reach US$ 180 billion by 2020 from US$ 93.8 billion in
2014. Emergence of nuclear families, rapid urbanisation and rising household income are
likely to remain the key drivers for growth
 Increased government spending on infrastructure and construction sector: The
development of physical infrastructure in India and, consequently, the construction sector has
been in focus during the last decade. It is well established that the influence of the construction
industry spans across several sub-sectors of the economy.
FIRM STRATEGY, STRUCTURE AND RIVALRY
 Second-largest cement producer in the world: With 502 million tons per year of cement
production capacity as of 2018, India is the second-largest cement producer in the world. The
cement production capacity is estimated to touch 550 MT by 2020. Of the total capacity, 98
percent lies with the private sector and the rest with the public sector.
 Top 20 companies account for around 70% of the total production: The Indian cement
industry is dominated by a few companies. The top 20 cement companies account for almost
70 per cent of the total cement production of the country. A total of 210 large cement plants
account for a cumulative installed capacity of over 410 million tonnes, with 350 small plants
accounting for the rest. 
 High entry barrier: The entry barriers to cement industry include high capital costs and long
gestation periods. Access to limestone reserves also acts as a significant entry barrier.
Licensing of coal and limestone reserves, supply of power from the state grid is all controlled
by the Government. Most of the Cement companies rely more on captive power for the need
of electricity.

RELATED AND SUPPORTING INDUSTRIES

 Limestone mining industry: Limestone is the pre-requisite to make Clinker. Limestone is
extracted from Mines. A company that has its own mines is at an advantageous position than
the one which doesn’t have mines.
 Coal Industry: Coal is one of the important related industry, Coal is used in large quantity to
achieve the required heat. Coal is generally procured from open market and company which
has is successful in getting coal at low cost has an advantage. Cheaper coal can be obtained
through Government tendering – government rations a quota of cheap coal to each industry