ANALYSIS OF DEMAND OF SYNTHETIC WOVEN SACK FOR CEMENT INDUSTRY IN INDIA

BY: NEHA ANAND IBS KOLKATA Under the guidance of Mr. Debabrata De Sr. Mgr. Business Development Group HALDIA PETROCHEMICALS LTD.

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ACKNOWLEDGEMENT
A successful project is never completed without the mention of those people who are instrumental in providing constant guidance and help throughout the project period. It is the same for me and I would like to sincerely thank the following people without whom this project would never have been as successful as it has turned out to be. Firstly, I would like to thank Mr.D.K.Chatterjee, Sr.General Manager, HPL who gave me the opportunity to undertake a significant project, that of Analysis of demand of Woven Sack for Cement Industry in India. Secondly, I would also like to thank my mentor at HPL, Mr.Debabrata De. He not only helped me learn about HPL in detail, but also intricate details about the set of processes that take place in this sector in which I worked. I would like to thank from the bottom of my heart my supervisor at HPl, Mr.Indranil Banerjee, without whose constant support this project would have been very difficult to handle. Moreover, he always helped me with any issue when I faced difficulty. I would also like to mention everyone at HPL, who made my two months experience in the organization a wonderful and unforgettable one. I would like to thank all the professors at my institution, ICFAI Business School Kolkata, who educated me in different subjects in management. I was fortunate enough to gain the knowledge and understanding in all those subjects as the same helped me in many ways during my summer internship at Haldia Petrochemicals Ltd. (HPL). Gracious thanks to my Faculty- In-Charge, Professor Anupam Ghosh for providing me techniques to approach the project and guiding me in every critical step I took. I was able to apply my theoretical as well as practical knowledge during the project execution that I achieved during my first year course of Post Graduate Program in Management (PGPM). Last but not the least, I would like to thank all those people whom I met and spoke over the phone, who were kind enough to lend out a part of their precious time and answer to the set of questionnaire.

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TABLE OF CONTENTS Topics Covered Page No.

Acknowledgement2 Executive Summary.4 1. Introduction..5 1.1 Company Profile 2. Overview of Cement..6 1.2 List of top 10 Cement companies in India 1.3 Present Scenario of Indian Cement Industry 1.4 Growth Scenario 1.5 Projection of total production in near future 1.6 Region wise break up of total production Synthetic woven sacks..12 2.1 Consumption break up of SWS 2.2 Future demand of SWS 2.3 Region wise break up of SWS Adstar Bags15 3.1 Concept 3.2 Why Adstar 3.3 Penetration of Adstar bags in Indian Cement Industry 3.4 Adstar in Eastern region 3.5 Projected consumption of Adstar Bags Upcoming Projects in Cement Industry..21 Upcoming projects in West Bengal Future Expansion in 201322 SWOT Analysis of Indian Cement Industry..23 Conclusion..24 Attachments.......25 References.26 Annexure......27

2.

3.

4. 5. 6. 7. 8. 9. 10. 11.

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Executive Summary
The objective of the project is to assess the current market demand and future potential of Synthetic Woven Sacks (SWS) for the Cement Industries in India along with the current penetration and future potential of ADSTAR Bags for the Cement Industries in India. In 2011-12 the cement sector required a total of 431 KTA of SWS which included : Major Cement plants 413 KTA which includes -18 KTA Adstar Bags =257 million bags -395 KTA SWS = 5643 million bags Mini Cement plants 18 KTA = 257 million bags Table 1: Present Status of Cement Industry in India Current Cement Capacity Cement Production during 2011-12 Present growth rate in Cement Production The capacity is expected to go up with CAGR 11%. Table 2: Projected synthetic woven sack demand in Cement Sector in India 2011-12 295 6157 431 18 2012-13 333 6829 478 25 2013-14 377 7586 531 37 2014-15 426 8414 589 50 340 Mn TPA 295 Mn TPA 14% YOY

Cement Production (MnTPA) No. of SWS required (million) SWS required (KTA) Penetration of ADSTAR bags (KTA)

Significant Findings: In 2010-11 there has been a capacity addition of 37 MnTPA in different cement plants which hiked the current cement capacity to 340 MnTPA with capacity utilization of 86%. At present there are 25 upcoming projects in Indian Cement Industry with overall capacity of 104Mln TPA in near future. In West Bengal there are 5 upcoming projects in the next year which would do a capacity addition of 7 MnTPA. Forecasted capacity addition in ER = 56MnT (59 KT SWS requirement 44KT PP)

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INTRODUCTION COMPANY PROFILE:

Haldia Petrochemicals Limited (HPL) is state-of-the-art naphtha based integrated Petrochemical complex, located 125Km from Kolkata at Haldia, West Bengal, India. HPL manufactures over 1 million tones of world class Poly olefins Linear Low Density Polyethylene (LLDPE), High Density Polyethylene (HDPE), & Polypropylene (PP) and chemicals such as Benzene, Butadiene, C4 Caffeinate, Liquefied Petroleum Gas (LPG), Euro III compliant Motor Spirit and Cyclopentane. The arrival of Haldia Petrochemical Limited in West Bengal had started a new chapter in the plastics industry scenario in West Bengal. The Chatterjee Group and the Tata Group, the US $ 1.5Billion project had been completed in a record time of 37 months.Haldia Petrochemicals Limited was dedicated to the nation on the 2nd of April 2000 and started commercial production August 2001. It is a prestigious Joint Venture project having the Government of West Bengal, The Chatterjee Group, and the TATAs with the Indian Oil Corporation, etc. as major stakeholders with an investment of Rs 5864 crores. A symbol of industrial resurgence in West Bengal, HPL has led the economic growth of the region by propelling significant investments in downstream processing industries, which generate huge employment opportunities for skilled and unskilled workers. Through strategic market focus, innovative product application development and excellent customer support services, HPL has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers and generating more than 1,50,000 employment opportunities in the process. With dedicated efforts, HPL truly symbolizes its motto "Come Grow With Us".

BACKGROUND:
HPL had started its production in a scenario when the plastics downstream industry situation in the eastern region was way behind the same industry in other parts of India. Hence it became utmost important for HPL to gear themselves up to be equipped with well planned development strategy so that the plastic processing sector in the eastern region and the entrepreneurs community as a whole also gets favorably equipped to consume more and more virgin polymers, so that which will help the expansion as well as setting up new plastic projects within this Eastern Region. In order to exploit fully present of HPL it had established Business Development Group and the Application Research & Development Centre to augment processing capacities in the Eastern Region.

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OVERVIEW OF CEMENT
The word Cement has come from the Roman word Opus Caementicium. In general, the word cement means binder- a substance, which when gets set and hardens, binds itself independently with other substances. Joseph Aspdin, a British stonemason, invented cement way back in 1824.

INDIAN CEMENT SECTOR

The saga of Indian Cement industry began with the commissioning of the first plant of cement corporation of India in 1914 at Porbandar in Gujarat .Though today private sector s domination in cement is almost complete, it is only in the 1950s Indian private groups like Tata,Dalmia,Birla and Singhania forayed into this sector. These groups located their cement plants in limestone rich states like Rajasthan, Madhya Pradesh and Karnataka. In South India Madras cement, India cement and Chettinad cement were the early players. They limited their area of action in southern states like Tamil Nadu and Andhra Pradesh. The modern era of cement industry started with Gujarat Ambuja setting up its first plant at Kodinar in Gujarat in 1984.The 1990s saw the entry of new private companies like Jaiprakash Associates, Sanghi Industries, Prism Cement, etc. The growing demand for cement also enticed foreign major cements like Lafarge, Holcim, Italcementi, and Heidelberg Cement to venture into Indian shores in the 1990s. Most of the foreign companies adopted the takeover route to get a foothold in the Indian Cement Industry. Among the foreign groups, Holcim, after the acquisition of controlling stakes in Ambuja Cement and ACC, has emerged as one of the leading cement manufacturer in India .As of March 2010, the group enjoyed a market share of around 18.8 per cent. As a collective endeavor of the Government of India and several other private enterprises several cement plants have been established in the country in the recent past. India, world's second largest cement producer after China, is the home to a number of top cement companies. As various infrastructure projects, road networks and housing projects are coming up, many of which are backed by the government, the cement industry in India is growing at a great pace these days. With the capacity of 340 Million Tons (MT), the Indian cement industry is truly big in size and hence accommodates a number of cement companies in the market. Not only that, more growth is further expected in the coming years, which will also lead to the growth of top cement companies in India. Let's have a look at the top 10 cement companies in India. The Indian cement industry is largely dominated by a few companies. The top 20 cement companies account for almost 70% of the total cement production of the country.

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List of Top 10 Cement Companies in India

Following are the list of top 10 cement companies in India:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

ACC Limited Ambuja Cements Limited UltraTech Cement Limited India Cement Limited Shree Cement Limited Rain Cement Limited Prism Cement Limited Madras Cement Limited Birla Cement Limited JK Cement Limited

The Role of Cement Industry in India GDP is significant in the economic development of the country. The cement industry in India is one of the oldest sectors in India. The industry is driven by the immense growth in the housing sector, the infrastructure development, and construction of transportation systems.

Role of Cement Industry in India GDP-Facts

The Indian cement industry is one of the booming sectors of the Indian economy The infrastructure development of the country in the recent years is the demand driver for the cement industry The Indian Cement Industry is experiencing the entry of many foreign players in the Indian market The average monthly capacity utilization during the year 2011-12 was 86% The growth of the cement sector pertaining to the total output was 14% in FY 2011-12

Role of Cement Industry in India GDP-Production

India ranks second in the production of cement in the world The growth rate of the production of cement during the year 2011-12 is 14% The cement industry in India constitutes of around 300 small cement manufacturing units and 145 large cement manufacturing units.

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Role of Cement Industry in India GDP-Mergers and Acquisitions

Heidelberg Cement-Indorama Cement Ltd

Heidelberg Cement Company entered into an agreement for a 50% joint venture with the Indorama Cement Ltd, situated in Mumbai, originally possessed by the Indorama S P Lohia Group. Heidelberg Cement Company has two manufacturing units in India

Italcementi cement-Zuari Cement Limited

Italcementi cement company has acquired share of the famous Indian cement manufacturer, the Zuari Cement Limited The acquisition was of 50% shareholding and the deal was of about 100 million It took over the plant of the Zuari Cement Limited in Andhra Pradesh

Holcim Cement-Gujarat Ambuja Cements (GACL)

Holcim Cement signed an agreement of 50 % take over with the Gujarat Ambuja Cements (GACL). Holcim Cement Company is among the leading cement manufacturing and supplying companies in the world.

Lafarge India

Lafarge India is the subsidiary of the Lafarge Cement Company of France. It was established in 1999 with the acquisition of the Tisco and the Raymond cement plants Lafarge Cement presently has four cement manufacturing units in India.

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Present Scenario of Indian Cement Industry:

Second largest producer of cement after China which produces around 2000 MnTPA Production Capacity of India is 340 MnTPA at the end of FY 2011-12 It consists of around 145 Major and 300 Mini Cement Plants. Production of Cement in FY 2011-12 is 295 MnTPA. Capacity Utilization is 86%. Present Growth Rate is 14% YOY Raffia requirement is 413 KTA (5900 million bags)

GROWTH SCENARIO
400 350 300 250 200 150 100 50 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

340
282 233 188 160 166
142 155 168 208 188 INSTALLED CAPACITY PRODUCTION CAPACITY UTILIZATION

303
258

295

89

93

89

81

74

85

86

Figure 1: The above bar chart shows the growth scenario of the installed capacity of the cement industry along with their production and capacity utilization in the last seven years i.e. from 2005-06 to 2011-12. From the above figure it is found that the installed capacity and production figures have became double. On the other hand the capacity utilization showed a growth in 2005-07 which further started decreasing and this decrease was huge i.e. about 8% in the year 2008-10. The reason behind this could be the global recession of 2008 as a result of which many industries were affected which included the Cement Industry also. Again in 2010-11 the capacity utilization increased due to growth in the economy. At present the capacity utilization is found to be on a stable position as it is almost same if compared to last year.

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PROJECTION OF TOTAL PRODUCTION IN NEAR FUTURE

The projection of total production in near future includes 3 years from now i.e. till 2014-15. On the basis of Compounded Annual Growth Rate (CAGR) the projection has been done.

CALCULATION OF CAGR:

A=P (1+r/100) ^n
Where, A= Production of current year i.e. 2011-12 P=Production of base year i.e. 2005-06 r= Rate of interest n= No. of years A= P (1+r/100) ^n 295 = 142(1+r/100) ^7 295/142 = (1+r/100) ^7 2.078 = (1+r/100) ^7 Therefore r = 11% Now as r, growth rate is found to be 11% pa. The following chart gives the projected data of the total production in coming 3 years.

Figures in MnTPA 450 400 350 300 250 200 150 100 50 0 377 295 333

426

2011-12(E)

2012-13(P)
Figure 2:

2013-14(P)

2014-15(P)

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Based on CAGR 11% this projection is done with 2005-06 being the base year and 2011-12 the present year.

REGION WISE BREAK UP OF THE TOTAL PRODUCTION TOTAL 295 MnTPA

70

64
NORTH EAST SOUTH

56 105

WEST

Figure 3: As per the pie chart it is seen that the highest producer of cement is south followed by West and the lowest production is done in Eastern region.

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SYNTHETIC WOVEN SACKS

Synthetic woven sacks(SWS) are usually made out of Polypropylene/High Density Polyethylene. These are either laminated, or supplied without lamination depending upon end application. PP woven sacks are used in India for packaging of cement. In this case, lamination is not required. Woven polypropylene bags or simply woven PP bags are considered to be the toughest packaging bags, widely used to pack materials for grain, milling and sugar industry. The PP bags have high softening point as compared to HDPE bags so as cement is packed in hot conditioner PP bags are preferred over HDPE bags for packaging of cement. Additionally, these bags also find wide application in fodder industry, chemicals and fertilizers industry besides cement industry and other applications like sand, metal parts and concrete etc.

Advantages
-Unaffected by water & atmospheric moisture. -Light in weight - Ease of handling -Resistant to chemicals, fungal growth etc. -High strength to weight ratio -Can be used to pack hot products such as cement, etc.

Technical Specifications:
UV Protection: 200 to 1600 hours Denier : 400 & above Width: 15"- 33" Length: As specified by the customer Colors: As specified by the customer Capacity: 50 kg Printing: Up to 4 colors on one or both sides with corona treatment / manual printing

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CONSUMPTION BREAK UP OF SWS

18
Mini Cement Plants Major Cement Plants

413
Figure 4: The above pie chart shows that a total of 431 KTA of SWS is consumed by the Indian cement industry .The break up are as follows: Major Cement plants use 413 KTA which includes -18 KTA Adstar Bags =257 million bags -395 KTA SWS = 5643 million bags Mini Cement plants use 18 KTA = 257 million bags

CALCULATION OF NO. OF BAGS CONSUMED:

Here 295 Mn ton is taken which is the present total production of the large cement plants and calculation of consumption of SWS is based on the total production. 1 Ton = 20 bags 1000000 To = 20/1 *1000000 = 20000000 bags 295 Mn Ton = 20000000 * 295 = 5900 million bags Now, 5900000000*70/1000000 = 413000 (~413 KTA) From this 413 KTA of consumption of Synthetic Woven Sack (SWS) by the large cement plants, 18 KTA is Adstar bags and 395 KTA is conventional bags.

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18 KTA is used by the mini cement plants whose total production is found to be 13 MnTPA. Thus a total of 431 KTA is the consumption of SWS by the cement industries in India.

FUTURE DEMAND OF SWS Figures in KTA

700 600 500 400 431 478 531 589

300
200 100 0 2011-12(E) 2012-13(P) 2013-14(P) 2014-15(P)
Figure 5: Based on the growth of total production of cement i.e. 11% we assume that growth in total consumption of SWS should also be @ CAGR 11% (2005-06 to 2011-12).

REGION WISE BREAK UP OF CONSUMPTION OF SWS: TOTAL 413 KTA

98

89 78

NORTH EAST SOUTH WEST

147

Figure 6: From the above pie chart we can see that the consumption pattern of SWS is same as that of Production pattern if we look the pattern region wise. Here also consumption of SWS is highest in the Southern region followed by Western region and the lowest is Eastern Region. Page | 14

ADSTAR BAGS
An important innovation technology in the packaging industry was first introduced by Starlinger & Co . AD*STAR is the renowned block bottom sack made without adhesives from coated polypropylene fabric. The sack can be produced either as a one-layer block bottom valve bag or as an open mouth bag with a block bottom. It surpasses all comparable products as far as resistance to breakage is concerned, is versatile and also eco-friendly and economical. The multifunctional packaging genius

The conclusive answer to the growing powder and bulk material markets is AD*STAR!
The vision of an all-purpose sack has come true, as the AD*STAR bag can be used for all types of freeflowing goods such as cement, building materials, fertilizer, chemicals, or resin as well as flour, sugar, or animal feed. Robust, versatile, and eco-friendly, the AD*STAR sack has gained impressive market shares in different markets since its introduction. Today, the trade name AD*STAR is protected as a registered trademark around the world. Back in the year 2000, around 400 million AD*STAR bags were produced on 39 AD*STAR conversion lines. Compare that with todays global production capacity of over 2 mrd AD*STAR sacks per year! This huge quantity of bags is produced in 27 countries by 41 AD*STAR customers on 136 conversion lines from Starlinger, for many different applications.

The multiskilling champion

Filling volumes from 12 75 liters, from nearly airtight to highly air permeable, from extreme low sack weight to maximum strength, from industrial to consumer bag: AD*STAR is geared to the respective requirements of each application. The revolutionary magnetic transport system of the ad*starKON 60 opens up the opportunity to break into new markets. Since this innovative transport system does without pin holes in the fabric, the sacks can also be used for products that require a hermetically sealed sack. For filling goods that are highly aerated, the main unwind of thead*starKON 60 is set up for easy conversion to microSTAR perforation. microSTAR takes perforation to a whole new level, guaranteeing high air permeability and, at the same time, virtually zero product emission from the sacks.

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It is also possible to laminate high quality printed BOPP film to the fabric. This innovative technique puts AD*STAR on the map in the consumer bag sector a range of markets untested until recently, but with enormous potential especially in industrial countries. One sack for various products

CONCEPT
In 1993, Starlinger started the development of a new sack concept. The idea of the AD*STAR bag was to combine the advantages of the traditional sack types known by then: the brick shape and suitability for automatic handling of a paper bag the tightness and flexibility of a PE film bag the strength and resistance of a woven PP bag

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WHY ADSTAR?
The most important characteristic of packing units is the guarantee that the filling material will be kept as safe as possible from the factory to the end consumer. Strong cloth keeps the number of sacks broken or damaged during use to a minimum. Varying sack properties according to the specific filling goods from airtight to highly air-permeable for filling or breathing of the goods ensures perfect protection of your valuable packed material.

NO SPILLAGE
As a result, the ADSTAR sack survives even rough local handling conditions. Practically no sacks are broken during filling, conveying, loading and transport.

WATER RESSISTANT
Withstanding water and humidity, the sack keeps its full strength in all conditions even when lying on damp ground, exposed to rain or to high air humidity. Made from water-resistant polypropylene, the sack is not affected by any form of moisture, unlike paper. This does not mean that an AD*STAR sack is always completely watertight. In some applications the sack has to be produced with micro perforations to give it the necessary air permeability.

BRICK SHAPE
The block bottom gives the sack a brick shape which makes the AD*STAR sack suitable for all manual and fully automatic handling methods. Usually the sack is produced as a valve sack, which means that its shape is exactly the same as that of a pasted paper or film sack.

VALVE
The self-closing feature of the valve allows the filling of various materials; for special requirements the valve can be adapted to the filling goods. As an option the valve can be designed suitable for automatic or manual valve sealing after filling.

OPEN MOUTH
The AD*STAR sack can also be produced with a block bottom and an open mouth on the top. After filling the sack can be closed by sewing .The block bottom still gives better storage shape than a standard pillow-shape sewn sack.

AIR PERMEABILITY
For specific requirements during filling and storage, air permeability can be varied. This allows filling of goods like cement, which need a lot of air for transportation, but also the breathing of certain food products. Without perforation the AD*STAR sack can be produced nearly tight. Page | 17

TWO LAYERS
For highest performance and special filling goods the AD*STAR can be produced in a two-layer version, with valve or open mouth. Reduces the emission of dust, makes the sack stiffer and gives special protection to the filled goods. The liner can be made from paper, ethylene film or similar.

STACKING
The brick shape of the sack makes for perfectly shaped pallets Combined with the high strength of the AD*STAR sack, this advantage makes it possible to store up to 5 pallets on top of each other, dramatic call reducing the floor space required for storage.

APPEARANCE
Perfect printing, made possible by surface lamination, gives the filled AD*STAR sack a shining image. The sack can be produced in any color and the possibility of printed bottom patches opens all opportunities to your marketing ideas.

MONETARY BENEFIT OF ADSTAR BAGS

Price delta of ADSTAR bags over Conventional Bags = Rs 4

Selling Price (SP) of Cement packed in Adstar bag is Rs 6 higher than conventional bags. Being price delta Rs 4 and SP Rs 6 higher than conventional bags manufactures saves (6-4 ) Rs 2

1 bag contains 50 kg of cement. Price of a 50 kg Cement Bag = Rs 300 Thus price of 1 kg cement = Rs 6

Usage of ADSTAR bag saves the wastage of around 400gm cement per bag worth Rs 2 this consumer saves this part.
Accordingly usage of ADSTAR Bag gives a net gain of Rs 2 respectively to the consumer and the manufacturers.

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PENETRATION OF ADSTAR BAGS IN INDIAN CEMENT INDUSTRY

Table 3: COMPANY CONSUMPTION OF SWS IN NOS.(million bags) 172 PERCENTAGE CONSUMPTION OF ADSTAR 1.50 NO.OF ADSTAR BAGS(million) 2 CONSUMPTION OF ADSTAR BAGS(MTA) 160

BIRLA CORPORATION LTD. PANYAM CEMENTS LAFARGE INDIA LTD. JAYPEE CEMENTS SANGHI INDUSTRIES LTD. J K CEMENTS TOTAL

24 139 751 64 120 1270

15 21 25 2 2

3 29 187 1 2 224

288 2352 15020 102 192 18114

From this table it is seen that Pan Yam Cements, Lafarge India Ltd. and Jaypee Cements are the highest consumer of Adstar bags at present. Consumption of Adstar bags is around 18 KTA out of the total consumption of SWS i.e. 413 KTA which turns out to be 4% of the total consumption of SWS by our Cement Industry. Adstar bags are only consumed by the large cement plants.

ADSTAR BAGS IN THE EASTERN REGION

Total 4469 MTA 69 Birla Corporation Ltd. Lafarge India Ltd.

2048

2352
Jaypee Cements

Figure 7: In the Eastern region only three cement companies consumes Adstar bags for their cement packaging namely Birla Corporation Ltd., Lafarge India Ltd and Jaypee Cements. Out of which Lafarge India Ltd. is Page | 19

the highest consumer followed by Jaypee Cements. Birla Corporation Ltd. has just started using Adstar bags so its consumption is so less as compared to others but it would certainly increase in near future as per the feedback of the company officials. The figures of eastern region consumption show that it consumes around 25% of the total consumption of Adstar bags (i.e. 18114 MTA) in rest part of the country.

PROJECTED CONSUMPTION OF ADSTAR BAGS

Figures in KTA
60 50 40 30 20 10 0 50 37 18 25

2011-12(E)

2012-13(P)
Figure 8:

2013-14(P)

2014-15(P)

On the basis of the feedback of the cement manufacturers penetration in the consumption of adstar will increase as 6%, 9&, 12% and so on with current usage of 4% in the cement industry.

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UPCOMING PROJECTS IN CEMENT INDUSTRY

FIGURES IN MnTPA

8.3 NORTH EAST SOUTH WEST

31.03
49.5

15.5

Figure 9: At present there are 25 upcoming projects in Cement industry which would do a capacity addition of 104 MnTPA in near future.

UPCOMING PROJECTS IN WEST BENGAL CAPACITY(MnTPA) 0.27 1.5 Reliance Cementation Ltd. Birla Corporation Ltd. 3

UltraTech Cement Ltd.

Emami Cements Ltd.

0.7

Fast Concrete Cement Pvt. Ltd.

Figure 10: The Upcoming projects in West Bengal are 5 in number which would do a capacity addition of 7MnTPA in near future once they are completed .At present they are under planning stage.

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FUTURE EXPANSION IN 2013:

Table 4: COMPANY Chettinad Cement Corporation Ltd. Sanghi Industries Ltd. Century Cement The KCP Ltd. ACC Panyam Cements TOTAL CAPACITY(MnTPA) 1 3.2 5 1.42 10 1 22.3 REGION SOUTH (Tamil Nadu) WEST( Gujarat) EAST(Chhattishgarh) WEST( Maharashtra) SOUTH(Andhra Pradesh) All Regions SOUTH(Andhra Pradesh)

FUTURE EXPANSION IN ER IN 2013

Table 5: COMPANY Century Cements CAPACITY(MnTPA) 2.5

Birla Corporation Ltd.

0.7

ACC Cements

2.5

TOTAL

5.7

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SWOT ANALYSIS OF INDIAN CEMENT INDUSTRY STRENGTHS

Second largest in the world in terms of capacity Low cost of production due to easy availability of raw materials and cheap labor.

WEAKNESS
High oil prices, significantly increasing production and transportation cost. High interest rates .

OPPOURTUNITIES
Growing middle class Vibrant increase in infrastructure projects and overall GNP Possible entry of multinational companies, increasing efficiency and opening new export routes.

THREATS
Several capacity upgrades are planned, raising the possibility of oversupply situation. Increased competition in local markets. Further hikes in oil prices could negatively affect companies profitability if they cannot pass increase in production costs.

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CONCLUSION
The Cement sector seems to grow in near future due to the vibrant growth in infrastructure projects in India and overall Gross National Product(GNP).Huge expansion plans in the cement industry are coming soon .Growth rate is expected to be 11% in the next 3 years. Substantial number of projects in cement are lined up which would enhance the overall capacity. In near future the consumption of ADSTAR bags will increase creating a fall in the consumption of conventional bags. As the production will grow simultaneously the consumption of synthetic woven sacks will also increase.

Prospects for the industry remain bright over the coming years, given Indias dominance of global markets and relatively low cost of production. Also, the overall economic prosperity of the country, with a burgeoning middle class, growing infrastructure demand, significant technological change and increasing government spending all bode well for the future. On the flip side, some caution has to be maintained due to the current demand- supply gap leading to over capacity and falling margins and prices. Also, given the close linkages between them, the effect of a slowdown in global real estate and infrastructure demand or hike in interest rates should also be evaluated.

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ATTACHMENTS QUESTIONNAIRE

1. 2.

Name of the company: Details of the existing plants: Name plant of the Location State production

3. 4.

Consumption of woven sacks pm: Usage of the ADSTAR bag in your industry(if yes): ---Reason for use: ---In what percentage: Usage of conventional bag in your industry(if yes): ---Reason for use: ---In what percentage: Price delta of ADSTAR bags in comparison to conventional bags: Current demand of ADSTAR bags

5. 6. 7.

8. Projected demand of ADSTAR bags 9. What is the your perception about the growth in cement sector: 10. Future expansion plans(if any):
---Completion date: ---Capacity addition ---Region of expansion

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REFERANCES
Company Annual Reports Company Publications Reports of other sources (www.cemweek.com) HPL internal reports Online database services ----http://www.ril.com/html/business/polymers_wovensacks.html ----www.indiamart.com ---- www.mapsofindia.com -----http://www.cofisac.com/site/en/article.php?id_article=53 --http://www.scribd.com/doc/59880820/SWOT-Analysis-on-Cement-Industry --www.indiastat.com ---www.cmaindia.org ----www.projectstoday.com

ANNEXURE

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LIST OF UPCOMING PROJECTS NORTHERN REGION

Table 6: SNO. COMPANY J K United Cements Pvt. Ltd. Ultra Tech Cement Ltd. LOCATION Chamba , HP Jhunjhunun, Rajasthan CAPACITY (MnTPA) 5.3 3 8.3 COMPLETION DATE UNDER PLANNING STAGE UNDER PLANNING STAGE

1 2 TOTAL

SOUTHERN REGION
Table 7: SNO. COMPANY Reliance Cementation Ltd. 1 2 3 TOTAL Sagar Cements Ltd. Jaiprakash Associates Ltd. LOCATION Chitradurga, Karnataka Gulbarga, Karnataka 5.5 Krishna , AP 5 15.5 31 Mar,2012 CAPACITY (MnTPA) 5 31 Dec, 2014 COMPLETION DATE UNDER PLANNING STAGE

WESTERN REGION
Table 8: SNO. 1 2 3 4 5 6 TOTAL COMPANY Reliance Cementation Ltd. Sparta Cements and Infra Ltd UltraTech Cement Ltd Dalmia Bharat Sugar & Industries Ltd Aalidhra Textiles Engineers Ltd Jai Bhole Cement Combine Pvt. Ltd LOCATION Yavatmal , Maharashtra Kachchh , GUJARAT Neemuch , WMP Kachchh , GUJARAT Kachchh , GUJARAT Yavatmal , MAHARASHTRA CAPACITY (MnTPA) 5 8.2 6.33 4 6 1.5 31 COMPLETION DATE 31st Dec,2012 UNDER PLANNING STAGE UNDER PLANNING STAGE UNDER PLANNING STAGE UNDER PLANNING STAGE UNDER PLANNING STAGE

EASTERN REGION
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Table 9: SNO. COMPANY Bhushan Steel Ltd. 1 2 3 4 5 6 7 ABG Cement Ltd. Surya Global Cement Ltd. Reliance Cementation Ltd. Kasturi Cement Ltd. Sanghi Energy Ltd. Essar Cements Ltd. Katni ,EMP Satna ,EMP Satna ,EMP Raipur , Chattishgarh Katni , EMP Satna ,EMP 5 5 5 5 7 5 UNDER PLANNING STAGE UNDER PLANNING STAGE 31 May, 2013 31 Dec, 2015 UNDER PLANNING STAGE UNDER PLANNING STAGE LOCATION Damoh ,EMP CAPACITY (MnTPA) 5 COMPLETION DATE UNDER PLANNING STAGE

8 9 10 11 12 13 14 TOTAL

Emami Cements Ltd Emami Cements Ltd Reliance Cementation Ltd. Birla Corporation Ltd. Ultratech Cement Ltd. Emami Cements Ltd. Fast Concrete Cement Pvt.Ltd.

Satna ,EMP Raipur , Chattishgarh Purulia,WB Durgapur ,WB Dankuni,WB Bankura ,WB Jhargram , WB

3 2.5 3 0.7 2 1.5 0.27 50

UNDER PLANNING STAGE UNDER PLANNING STAGE UNDER PLANNING STAGE UNDER EXECUTION UNDER PLANNING STAGE UNDER PLANNING STAGE UNDER EXECUTION

Present Capacity of Cement Plants in India (Million MTA)

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EASTERN REGION
Table 10:

COMPANY
Ambuja Eastern Birla Corporation Ltd. ACC Lafarge India Ltd. TOTAL Ambuja Eastern ACC Lafarge India Ltd. Ultra tech Century Cements TOTAL Birla Corporation Ltd. Jaypee Cements ACC Indorama Cements Ltd. Heidelberg Cement India Ltd. Ultra tech Prism Cement Ltd. Century Cements TOTAL Jaypee Cements ACC Lafarge India Ltd. TOTAL CCI TOTAL

STATE
West Bengal West Bengal West Bengal West Bengal

PRODUCTION(MnTPA) CONSUMPTION(KTA)
4.6 2.3 1.3 1.75 9.95 6.44 3.22 1.82 2.45 13.93 6.44 3.22 4.9 14.56 2.52 31.64 1.4 6.72 0.62 0.31 0.42

Chhattisgarh Chhattisgarh Chhattisgarh Chhattisgarh Chhattisgarh

4.6 2.3 3.5 10.4 1.8 22.6

EMP EMP EMP EMP EMP

1 4.8 0.44 0.22 0.3

EMP EMP EMP

2.6 1.58 1.2 12.14

3.64 2.21 1.68 17 2.94 3.64 2.45 10 0.28 0.28

Jharkhand Jharkhand Jharkhand

2.1 2.6 1.75 7.15

Assam

0.2 0.2

Page | 29

Kalyanpur Cements Ltd. TOTAL ACC Prism Cement Ltd. TOTAL TOTAL

Bihar

1 1

1.4 1.4 1.82 2.21 4.08 78.4

Orissa Orissa

1.3 1.58 2.88 56

WESTERN REGION
Table 11:

COMPANY
Sanghi Industries Ltd. Saurashtra Cement Ltd. Shree Digvijay Cement Corp Ltd. Jaypee Cements Ultra tech Gujarat Ambuja TOTAL Orient Cements Century Cements Ultra tech India Cements Indorama Cements Ltd. ACC TOTAL Birla Corporation Ltd. Jaypee Cements

STATE
Gujarat Gujarat

PRODUCTION(MnTPA) CONSUMPTION(KTA)
3 2.4 4.2 3.36

Gujarat

1.4

Gujarat Gujarat Gujarat

12.4 9.4 3.6 31.8

17.36 13.16 5.04 44.52 4.2 6.3 6.58 4.34 1.54

Maharashtra Maharashtra Maharashtra Maharashtra Maharashtra

3 4.5 4.7 3.1 1.1

Maharashtra

1.3 17.7

1.82 24.78 2.954 10.78

WMP WMP

2.11 7.7

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ACC Indorama Cements Ltd. Heidelberg Cements India Ltd. Ultra tech Prism Cement Ltd. Century Cements TOTAL TOTAL WR

WMP WMP

0.88 0.44

1.232 0.616

WMP

0.6

0.84

WMP WMP WMP

3.1 3.17 2.3 20.3 70

4.34 4.44 3.22 28.42 98

NORTHERN REGION
Table 12:

COMPANY
JK Cement Gujarat Ambuja Birla Corporation Ltd. ACC JK Lakshmi Cement Mangalam Cement Shree Cement Ultra tech Binani Cement TOTAL Gujarat Ambuja Jaypee Cements CCI ACC

STATE
Rajasthan Rajasthan Rajasthan

PRODUCTION(MnTPA) CONSUMPTION(KTA)
6 2.6 2.5 8.4 3.64 3.5

Rajasthan Rajasthan Rajasthan Rajasthan Rajasthan Rajasthan

1.3 3.2 1 12 6.4 6.25 41.25

1.82 4.48 1.4 16.8 8.96 8.75 57.75 3.64 3.5 0.28 1.82 Page | 31

Himachal Pradesh Himachal Pradesh Himachal Pradesh Himachal Pradesh

2.6 2.5 0.2 1.3

TOTAL Gujarat Ambuja TOTAL Birla Corporation Ltd. Jaypee Cements ACC Indorama Cements Ltd. TOTAL Jaypee Cements TOTAL Jaypee Cements TOTAL TOTAL NR Uttrakhand Haryana Uttar Pradesh Uttar Pradesh Uttar Pradesh Uttar Pradesh Punjab

6.6 4.2 4.2 0.63

9.24 5.88 5.88 0.88

5.35 1.3 0.66

7.49 1.82 0.92

7.94 1.5 1.5 2.5 2.5 64

11.17 2.1 2.1 3.5 3.5 89.6

SOUTHERN REGION
Table 13:

COMPANY
CCI India Cements Ultra tech Dalmia Cement (Bharat) Ltd. Panyam Cement & Mineral Industries Penna Cement & Industries Ltd.

STATE
Andhra Pradesh Andhra Pradesh Andhra Pradesh Andhra Pradesh

PRODUCTION(MnTPA) CONSUMPTION(KTA)
1.4 7.09 6.7 3.6 1.96 9.9 9.38 5.04

Andhra Pradesh

3.2

4.48

Andhra Pradesh

8.8

12.32

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My Home Cement Industries Ltd. The KCP Ltd. Madras Cements Ltd. Zuari Cements Orient Cement Rain Commodities Sagar Cements TOTAL ACC India Cements Ultra tech Dalmia Cement (Bharat) Ltd. Chettinad Cement Corporation Ltd. Madras Cements Ltd. TOTAL ACC Indorama Cements Ltd. Heidelberg Cement India Ltd. Ultra tech Vasvadatta Cements TOTAL Indorama Cements Ltd. TOTAL TOTAL SR

Andhra Pradesh

10

14

Andhra Pradesh Andhra Pradesh Andhra Pradesh Andhra Pradesh Andhra Pradesh Andhra Pradesh

2 3.25 5 3 4 2 60.04

2.8 4.55 7 4.2 5.6 2.8 84.04 4.2 8.2 6.58 5.04

Tamil Nadu Tamil Nadu Tamil Nadu Tamil Nadu

3 5.86 4.7 3.6

Tamil Nadu

1.2

1.68

Tamil Nadu

7.15 25.51

10.01 35.71 7.28 0.92 0.84

Karnataka Karnataka Karnataka

5.2 0.66 0.6

Karnataka Karnataka

3.7 9 19.16

5.18 12.6 26.82 0.92 0.92 147

Kerela

0.66 0.66 105

Large Cement Companies: By Installed Capacity As on March 2011-12

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Table 14:

Companies ACC Ambuja Cements UltraTech Jaypee Group India Cements J.K. Group Madras Cement Shree Cement Dalmia Cement Century Textiles Kesoram Industries Lafarge Other Companies Total Mini cement plants Grand Total

Capacity (Mn MTA) 20 25 52 38 16 10.2 10.4 12.00 7.2 7.5 9 7 80.7 295 13 308

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Page | 35