1. Cement industry analysis

2. An Overview Cement is one of the core industries which plays a vital role in the growth and expansion of a nation. The demand for cement, depends primarily on the pace of activities in the business, financial, real estate and infrastructure sectors of the economy.

3. Product Variants Ordinary Portland Cement (OPC) Portland Pozzolana Cement (PPC) Portland Blast Furnace Slag Cement (PBFS) Oil Well Cement Rapid Hardening Portland Cement White Cement Sulphate Resisting Portland Cement

4. Statistics - Large cement plants Companies (Members) (Nos.)46 Cement Plants (Nos.)148 Installed Capacity (Mn. t.)219.20 Cement Production (Mn. t.) 2008-09181.61 Plants with Capacity of Million tonnes and above (Nos.)95 Manpower Employed (Nos.) Approx. (One Mn.T cement generates downstream employment to 50,000 persons) 1,40,000 Turnover in 2009 (Mn. US$) around18,500

5. India in Globe - Largest cement producing country in the world, only after China - Produces about 7 percent of the world production. - Per capita cement consumption is 156 kg (2008) as against world average of 396 kg. (2006). - Cement technology and production cost comparable with the best in the world. Exports - To over 30 countries - High Govt. levies and inadequate infrastructure facilities at ports and border points make Indian cement uncompetitive in the global market.

6. Statistics - Mini & White Cement Plants Cement Plants (Nos.) Approx.- 365 Installed Capacity (Mn. t.) -219.2 Cement Production (Mn. t.)-181.61

7. Major Players in industry

8. Rural housing demand ‐ key ingredient to cement demand

9. Lower per capita cement consumption… chances of acceleration in cement demand

10. Higher Infrastructure investment to fuel the cement demand……..

11. Mergers and Acquisitions in Cement Industry in India UltraTech Cement is going to absorb its sister concern Samruddhi Cement to become biggest cement company in India. World's leading foreign funds like HSBC, ABN Amro, Fidelity, Emerging Market Fund and Asset Management Fund have together bought 7.5% of India Cements (ICL) at a cost of US$ 124.91 million. Cimpor, a Cement company of Portugal, has bought 53.63% stake that Grasim Industries had in Shree Digvijay Cement.

12. French cement company Vicat SA bought 6.67% share of Sagar Cement at a cost of US$ 14.35 million. Holcim now holds 56% stake of Ambuja Cement. Previously it held 22% of stake. The company utilized various open market transactions to increase its stakes. It invested US$ 1.8 billion for that.

13. Recent Investments in the Indian Cement Industry In a recent announcement, the second largest cement company in South India, Dalmia Cement declared that it's going to invest more than US$ 652.6 million in the next 2-3 years to add 10 MT capacity. Anil Ambani-led Reliance Infrastructure is going to build up cement plants with a total capacity of yearly 20 MT in the next 5 years. For this, the company will invest US$ 2.1 billion. India Cements is going to set up 2 thermal power plants in Andhra Pradesh and Tamil Nadu at a cost of US$ 104 billion.

14. Anil Ambani-led Reliance Cementation is also going to set up a 5 MT integrated cement plant in Maharashtra. It will invest US$ 463.2 million for that. Jaiprakash Associates Ltd has signed a MoU with Assam Mineral Development Corporation Limited to set up a 2 MT cement plant. The estimated project cost is US$ 221.36 million. Rungta Mines (RML) is also planning to invest US$ 123 million for setting up a 1 MT cement plant in Orissa.

15. Investments Total FDI in the cement sector between 2000 and October 2009 stood at US$ 1.69 billion. CompanyProject Investment (US$ mn) Grasim IndustriesLtdClinker and cement project in Kotputli, Rajasthan265.62 Ambuja Cements Ltd Cement plant in Dadri, Uttar Pradesh and Panipat, Haryana93.75 Jaiprakash Associates LtdCement plant in Solan, Himachal Pradesh416.66 ACC LtdCement plant in Wadi, Karnataka312.5

16. Impact Analysis: Union budget 2010-11 The specific rates of duty applicable to Portland cement and cement clinker to be adjusted upwards proportionate to the across-the-board increase in the excise duty from 8% to 10%. Levy of Rs 50 per ton cess on imported coal. Consequent to enhancement in the standard rate of duty from 8% to 10%, the specific rates of duty on cement and cement clinker is also being revised

17. Company NamePrice 52 wk High 52 wk LowMarket Cap(Rs. Cr)P/E Ratio UltraTechCement 1,089.151,172.20789.829,845.05 32.5 Ambuja Cements 141.95150.2585.921,643.40 15.31 ACC 1,000.001,036.9570018,794.0012.7 Shree Cements 2,074.202,542.201,475.007,225.94 14.72 Binani Cement 82.4592.462.81,674.577.68 JK Cement 169.9201.5118.951,188.066.41 HeidelbergCemen 48.9564.9536.251,109.27 10.41 JK LakshmiCemen 66.184.8551.15808.794.51 Mangalam Cement 160.25218115.9427.77 4.05 Industry P/E Ratio : 13.37

18. ”South India” story of 2009 is “nationwide” story of 2010 New capacity back-ended, utilization could reach a 7- year low of 79% in FY11E 100mn tonnes of new capacity will be commissioned from FY09-FY11E vs. Incremental demand of 45mn tonnes (11% FY10-FY12E CAGR growth) Even before entering the phase of seasonally weak demand growth of June-September, the excess capacity in the system has started exerting downward pressure on prices nationwide

19. All-India Capacity Utilization

20. Demand And Supply

21. Regional Analysis South Region West Region East Region West Region

22. Southern Region

23. Eastern Region

24. Northern Region

25. Regional wise cement capacity additions

28. Margin squeeze from declining realizations and higher costs

29. Raw Material

31. Conclusion Prices declined by rs.7/bag of 50 kg Further dip of rs.10 is likely Month-on-growth down by 7.74% Due to low selling price and increased cost High profit margin time is over Share prices are under-pressure