Released on: October 3, 2008, 10:07 pm

Press Release Author: bharatbook

Industry: Construction

Press Release Summary: Bharatbook.com launches a latest report "Indian Cement
Industry" which covers a brief picture of cement industry in India

Press Release Body: Bharatbook.com added a new report on "Indian Cement Industry"
(http://www.bharatbook.com/detail.asp?id=40518)

The Cement industry has continued its growth trajectory over the past seven years.
Domestic cement demand growth has surpassed the economic growth rate of the country
for the past couple of years. Over the past five years (FY03-07), cement demand has
grown at a CAGR of 8.37% higher than the CAGR of supply at 4.84%. Demand for cement
in the country is expected to continue its buoyant ride on the back of robust
economic growth and infrastructure development in the country.

The key drivers for cement demand are real estate sector, infrastructure projects
and industrial expansion projects. Among these, real estate sector is the key driver
and accounted for almost 55% of cement demand in FY 07.

During the period FY 03 – 07, capacity additions in the country (30.6 mn tonnes)
were at a slower rate compared to demand growth leading to higher average capacity
utilization rates from 81.3% in FY 03 to 93.8% in FY 07. This exerted pressure on
average prices which have increased from Rs. 156 per bag in FY 03 to Rs. 216 per bag
in FY 07. In December 2007, prices stood at Rs. 245 - Rs. 250 per bag.

Low capacity addition coupled with higher utilization rate also led to increase in
proportion of blended cements in product mix. Blended cement accounted for 68% of
product mix in FY 07 as compared to 49% in FY 03.

Cement is a bulky commodity and cannot be easily transported over long distances
making it a regional market place, with the nation being divided into five regions.
Each region is characterised by its own demand-supply dynamics. The Southern region
dominated the cement consumption at 44.5 mn tonnes in FY 07, accounting for about
30% of total domestic cement consumption. During FY 03-07, Southern region has
witnessed highest CAGR of cement demand at 10.4% followed by Northern and Eastern
regions at 8.9% and 9%, respectively.

Over the past five years, cost of cement production has grown at a CAGR of 8.4%. The
producers have been able to pass on the hike in cost to consumers on the back of
increased demand. Average realizations have increased from Rs. 1,880 per tonne in FY
03 to Rs. 3,133 per tonne in FY 07, at a CAGR of 13.6%, which has resulted in higher
profit margins of the industry.

To reduce the cost of production, the industry is increasing its focus on captive
power generation. Proportion of cement production through captive power route has
increased over the years. Also, cement movement by rail has increased over the
years.


For more information, kindly visit - http://www.bharatbook.com/detail.asp?id=40518

contact Information

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Phone : +91 22 2757 8668 / 2757 9438
Fax : +91 22 2757 9131
E-mail : info@bharatbook.com
Website : www.bharatbook.com



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Contact Details: contact Information

Bharat Book Bureau
207, Hermes Atrium, Sector 11, PO Box.54, CBD Belapur, Navi Mumbai - 400 614, India.
Phone : +91 22 2757 8668 / 2757 9438
Fax : +91 22 2757 9131
E-mail : info@bharatbook.com
Website : www.bharatbook.com