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Cement Segment
Cement Segment
SURVEY
ANALYSIS
INTRODUCTION
The Indian cement industry with a total capacity of about190 m tonnes in financial year-2008 is the
second largest market after China. Despite the fact that the Indian cement industry has clocked
production of more than 100 m tonnes for the last five years, registering an average growth of
nearly 9%, the per capita consumption of around 150 kgs compares poorly with the world average
of over 260 kgs and more than 450 kgs in China. .
Although consolidation has taken place in the Indian cement industry with the top five players controlling
almost 50% of the capacity, the balance capacity still remains pretty fragmented. This has resulted in
cement being largely a regional play with the industry divided into five main regions viz. north, south, west,
east and the central region. While the southern region always had excess capacity in the past owing to
abundant availability of limestone, the western and northern region are the most lucrative markets on
account of higher income levels. However, with capacity addition taking place at a slower rate as
compared to growth in demand, the demand supply parity has been restored to some extent in the
Southern region for the medium term. Considering the pace at which infrastructural activity is taking place
in different regions, the players have lined up expansion plans accordingly.
The cement industry in India is estimated at rs. 24-25 billion in value terms and 114 million tonnes by
volume. the domestic cement industry is highly fragmented, with over 50 cement players and more than
120 manufacturing plants.
• Cement sector is characterized by the following:
Historically, the sustainable capacity utilisation in the cement industry has been
80-85%. This implies FY09 and FY10 are unlikely to be years of overcapacity in
the traditional sense
• CEMENT BRANDS :
• ACC CEMENT
• BIRLA WHITE CEMENT
• BIRLA SUPER CEMENT
• BIRLA SUPREME
• BIRLA COASTAL
• JK LAXSHMI CEMENT
• GUJRAT AMBUJA CEMENT
• MANIKGADH CEMENT
• KAMDHENU CEMENT
• COROMANDEL CEMENT
• BIRLA STAR
• ULTRATECH CEMENT
• BIRLA GOLD
• BIRLA EVEREST CEMENT
• VIKRAM CEMENT
• VASODATTA CEMENT
• BINANI CEMENT
• SPAN CEMENT
• ORIENT CEMENT
• DALMIA CEMENT
• CHETTINAD CEMENT
• DHANDAPANI CEMENT
Current Price Trend for Grade A Cement
• Companies invariably hire C&F agents or transport cements to own or government warehouses
either via roadway or railways.
• Incase of exports, cement reaches the nearest port via roadways or railways and is then
transferred to the importing country.
• Domestically, from C&F agents or warehouses the cement is transported to the
dealers/distributors and in turn to sub dealers who finally sell it to the end users. There may or
may not be physical ownership of goods.
• In the second case, dealers and sub dealers take order from buyers and place it to the
companies, co ordinate and monitor the timely dispatch of said orders, transportation of goods
and final delivery.
• Distributor network in cement industry is highly dominating and companies are compelled to
hire as they do not really have that rapport and touch with the end consumer of their product.
Apart, from this, the distributors have storage facilities as well which help control well in the
entire supply chain as they are the ones who bring orders and therefore are directly responsible
MAIN
DISTRIBUT WARE HOUSE-
PUNE
ION DHAKKA,KHADKI
DHAKKA,LONI
CENTRE DHAKKA.
Tertiary
DISTRIBUTORS distribution
End users
DEALERS
End users
OBSERVATIONS
• SHOP ANALYSIS
Weight of one bag: 50 kgs.
cost of one bag: 265 rs
Margin earned by dealers: 3- 4%
• OPERATING COST STRUCTURE OF LTV
CEMENT GODOWNS
KEY FINDINGS :
• There are three types of players in market: large seller, medium scale seller, small
scale seller.
• There are two types of cement category available in the market OPC (ordinary
Portland cement ) and PPC (pozzalana Portland cement ) which is graded as-
GRADE A and GRADE B.The main difference is between the concreting hours -
CEMENT GRADED CONCRETING CAPACITY COMPOSITION
CATEGORY
• EXPENSES
Distributor Margin earned per bag is 3 – 4%.
Electricity Rs.500
& incase of shortage 7-10 %.
Telephone expense Rs. 1000
Helper Rs.1000
• Loading/unloading charges is Rs.1 per bag. Total 8500
Note: promotional activity are optional
• CHARGING PATTERN:
Note : free deliver is given to those who are regular customers or to those who buy in
large bulks.
Charge as per bag For 3 -7 km Rs.4-5 per bag Rs.5 per bag