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Cement

Industry Summary

  • China, the world’s largest producer and consumer of cement is currently relying on imports from other countries such as Vietnam, UAE to meet their demand for cement due to the deficit they are facing. The environmental impacts of producing cement triggered new laws that do not permit production of cement beyond a certain point.
  • India is the second largest producer of cement producing 294.4 million tonnes in FY 21 which accounted for more than 7% of the world’s total output. The consumption is lower than the production and the surplus is used for exports.
  • Current capacity is 545 million tonnes (FY20), a CAGR of 5% is expected from FY20-FY25 due to the increasing demand in domestic and international markets.
  • The cyclical supply is owed to the seasonal demand of cement. This is due to the reduced construction work in the monsoons.

Value Chain

Step 1

Raw material

Step 2

Suppliers

Step 3

Inbound logistics

Step 4

Production

Production of cement from limestone

Step 5

Distribution

Distribution through warehouse network

Step 6

Sales and Marketing

Cost Drivers

  • Raw materials (limestone)
  • Transport
  • Fuel
  • Power
  • Freight

Revenue Drivers

  • Cement Sale

Growth Drivers

  • Government policies to ensure affordable housing
  • Big infrastructure projects such as National Infrastructure Pipeline expanded under the Union Budget 2021

Key Customers

  • Housing and other infrastructure
  • government
  • industrial construction

Key Players

  • UltraTech Cement Limited
  • Ambuja Cements Limited
  • JK Lakshmi Cement
  • Ramco Cements Limited
  • ACC

Channels

  • Warehouse networks
  • Direct to dealers or consumers for bulk orders