ENVIRONMENT SCANNING REPORT ON INDIAN CEMENT INDUSTRY

INTRODUCTION
Cement is a crystalline compound of calcium silicates and other calcium compounds having hydraulic properties (Macfadyen, 2006).

History
Lime and clay have been used as cementing material on constructions through many centuries. Romans are commonly given the credit for the development of hydraulic cement, the most significant incorporation of the Romans was the use of pozzolan-lime cement by mixing volcanic ash from the Mt. Vesuvius with lime. Best know surviving example is the Pantheon in Rome.
In 1824 Joseph Aspdin from England invented the Portland cement.

Types of Cement
Hydraulic lime: Only used in specialized mortars. Made from calcination of clay-rich limestones. Natural cements: Misleadingly called Roman. It is made from argillaceous limestones or interbedded limestone and clay or shale, with few raw materials. Because they were found to be inferior to portland, most plants switched. Portland cement: Artificial cement. Made by the mixing clinker with gypsum in a 95:5 ratio. Portland-limestone cements: Large amounts (6% to 35%) of ground limestone have been added as a filler to a portland cement base. Blended cements: Mix of portland cement with one or more SCM (supplementary cemetitious materials) like pozzolanic additives.

 Pozzolan-lime cements: Original Roman cements. Only a small quantity is manufactured in the U.S. Mix of pozzolans with lime. Masonry cements: Portland cement where other materials have been added primarily to impart plasticity. Aluminous cements: Limestone and bauxite are the main raw materials. Used for refractory applications (such as cementing furnace bricks) and certain applications where rapid hardening is required. It is more expensive than Portland. There is only one producing facility in the U.S. White Cement: White cement is basically OPC - clinker using fuel oil (instead of coal) with an iron oxide content below 0.4 per cent to ensure whiteness. A special cooling technique is used in its production. It is used to enhance aesthetic value in tiles and flooring. White cement is much more expensive than grey cement. Water Proof Cement: Water Proof Cement is similar to OPC, with a small portion of calcium stearate or non- saponifibale oil to impart waterproofing properties.

INDIAN CEMENT INDUSTRY

HISTORY OF INDIAN CEMENT INDUSTRY

In 1889 a Kolkata-based company started manufacturing cement from Argillaceous. Industry started getting the organized shape in the early 1900s. In 1914, India Cement Company Ltd was established in Porbandar. with a capacity of 10,000 tons . The World War I gave the first initial thrust to the cement industry in India The industry started growing at a fast rate in terms of production, manufacturing units, and installed capacity. This stage was referred to as the Nascent Stage of Indian Cement Company. In 1927, Concrete Association of India was set up to create public awareness on the utility of cement as well as to propagate cement consumption.

ECONOMIC ENVIRONMENT

IMPORTANT FACTS
India ranks second in world cement producing countries. The capacity, which was 29 mt in 1981-82, rose to 219 mt at the end of FY09. Contributes to environmental cleanliness by consuming Hazardous wastes like : Fly Ash (around 30 mt) from Thermal Power Plants Slag (8 mt) produced by Steel manufacturing units.

STATUS OF INDUSTRY
GDP contribution : 8% % in world's market : 8% Demand growing rate : 11% Export : 6.02 million tonnes Size of industry : 130 Plants Output per annum : 217.80 Geographical Distribution: 54 major companies

STRUCTURE OF INDUSTRY
Indian cement industry: 54 major cement companies Major cement plants : 130 Plants Total installed capacity : 236 mt Production : 181.4 mt (2008-09) Excise (Large Plants): Rs.350/tonne All India reach through multiple plants Export to : Bangladesh, Nepal, Sri Lanka, UAE

Mini cement plants: 300 Plants Total capacity : 200 tonnes Estimated capacity : 11.10 mtpa Located in : Gujarat, Rajasthan & HP Excise : Rs. 200 / tonne Presence : Limited to states Technology : Vertical Kiln Technology Infrastructure : not the best

MAJOR PLAYER

Company ACC Ambuja

Production 17,902 15,094

Installed Capacity 18,640 14,860

Net Profits (Lakh) 41,550.89 31,848

Ultratech
Grasim Indian Cements JK Group Jaypee Group Century Madras Cements Birla Corp.

13,707
14,649 8,434 6,174 6,316 6,636 4,550 5,150

17,000
14,115 8,810 6,680 6,531 6,300 5,470 5,113

97,700
1,64,800 43,218 14,234.40

49,081 9,061

ACC Ltd.
ACC was formed in 1936 when ten existing cement companies came together under one umbrella in a historic merger Country's first notable merger at a time when the term mergers and acquisitions was not even coined. STRENGTHS: People ask for ACC, as it is having a good image and brand loyalty among consumers. Service is good Perceived to be of very superior quality cement when compared to others Selling form the very first day the shop came in to being & sells easily They have same price prevailing for wholesale at dealers/stockiest retailers end.

Ambuja Cements Limited

Set up in the late 80s. A decade later, it became one of worlds most efficient cement companies . Today, Ambuja is the 3 rd largest cement company in India Producing the finest cement in the world at the lowest cost. Strengths : Good quality product Good packaging Strong distribution network Advanced technologies Eco-friendly

The India Cements Ltd

Established in 1946 The first plant was setup at Sankarnagar in Tamilnadu in 1949 . The Company is the largest producer of cement in South India. The Company is the market leader with a market share of 28% in the South . The Company has a strong distribution network with over 10,000 stockiest. Strengths: leading position in attractive Northern India grey cement market. One of the Leading white cement producer in India Proximity and access to large reserves of high quality limestone Quality of products and strong brand name Extensive marketing and distribution network

UltraTech CEMENT
It has an annual capacity of 18.2 million tones. Ultratech Cement is the countrys largest exporter of cement clinker. The export markets span countries around the Indian Ocean, Africa, Europe and the Middle East. Strengths: Continuously improve productivity through quality, technology renewal and customer focused operations. To continuously seek quality enhancement in product, processes and responses to various stakeholders. To update management practices on a continuous basis and maintain a culture of professional management. To conserve, protect and enhance quality of life for our employees and community.

PRICE TRENDS
Cement prices have risen by : 5% 2% cut in excise duties, leads to down in price in March. Price rise in: Northern, Eastern and central regions Price fallen in: South & West regions

 Reasons of Price rise: 1. Taxes 2. High fuel cost 3. Increase in Demand Reason of Price fall: 1.2% cut in excise 2.excess capacity 3. Mansoon

PRODUCTION OF CEMENT
YEAR (2001-09) 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 PRODUCTION (IN MILLION TONNES) 106.5 111.8 117 125.3 140.5 154.7 167.6 181.4

MERGER & ACQUISITION

Ultratech cement is going to absorb its sister concern Samrudhi cement to become biggest cement company in India. Worlds leading foreign funds like HSBC, ABN Amro fidelity. Emerging market fund and Assets management fund have together bought 7.5% 0f India cement (ICL) at cost of US $ 124.91 million. Cimpor, a cement company of Portugal, has bought 53.63% stake that Grasim industry had in Shree Digvijay cement.

 French cement company vicat SA bought 6.67% share of Sagar cement at a cost of US $ 14.35 million. Holcim now hold 56% stake of Ambuja cement.

GROWTH
Cement Industry volumes grew by 1.7% YoY to 18.5mt and FY11YTD (till Jan) volume growth was 4.2% to 170mt. ACC reported 17% YoY growth, benefiting from the new capacities. Ambuja reported 5% YoY growth A.V.Birla group reported 4.4% YoY growth JaiPrakash reported 32% YoY growth.

PEST ANALYSIS OF CEMENT INDUSTRY

P : POLITICAL E : ECONOMIC S : SOCIAL T : TECHNOLOGY In 2002 the world production of cement was 1800 mmt. The top 3 producers were china with 704,India with 100, US with 90mmt for a combined total of about half the world total.

POLITICAL
The price of cement depends on coal rate, power tariffs, railway tariffs,freight, royalty and cess on limestone. Government control all of these prices. Government is biggest consumer of cement in India. Government offer fiscal incentives in form of sale tax exemption. Haryana offer a freeze on power tariff for 5 years. Gujarat offers exemption from electric duty.

ECONOMICAL
Currently the is on the boom A lot of government infrastructure and housing projects under construction. Export segment of the industry is expected to grow Various outstanding cement plants coming up in near future in the country.

SOCIAL
Indian cement industry is consist of organized and unorganized sector. Organized sector: well known cement brands Unorganized sector: local cement producers Indian consumers prefer buying branded cement. Mini cement plants with low brand value are not able to survive against the cement giants. Industry will create another 25 Lakhs jobs in coming years.

TECHNOLOGY
Government plans to acquire new technology from Japan. Technology for Energy conservation & environment protection To improve efficiency of Indian cement industry. At present 93% of total capacity in industry is based on modern & eco friendly dry process technology.

FUTURE PROJECTIONS
India is the second largest producer of cement in the world after China. Cement consumption is forecasted to grow by 22%. Expected increase in capacity by 50 mt in spite of recession Experts projects 9-10% growth for current financial year. The housing sector accounts for 50% of demands and this trend is expected to continue in near future.

FINANCIAL RATIOS
RATIOS CURRENT RATIO 2007 1.36 2008 1.14 2009 1.23 2010 1.23

QUICK RATIO
CASH RATIO INTERVAL MEASURE RATIO DABT RATIO

0.09
0.36 93.6 0.33

0.58
0.62 90 0.28

0.60
0.58 99.28 0.29

0.60
0.62 79.2 0.28

DEBT- EQUITY RATIO

CAPITAL EMPLOYED TO NETWORTH RATIO INTEREST COVERAGE RATIO INVENTORY TURNOVER RATIO DEBTOR TURNOVER RATIO AVG. COLLECTION PERIOD NET ASSETS TURNOVER RATIO

0.75
1.70 9.85 8.87 11.24 32.02 0.86

0.61
1.40 12.37 8.04 9.60 37.47 1.13

0.59
1.41 9.07 7.56 8.92 40.33 1.02

0.53
1.40 9.83 7.51 9.20 38.92 0.90

EMPLOYMENT IN CEMENT INDUSTRY

Indian cement industry employs a large number of workforce which is over 1.5 lakhs persons. Supports another 12 lakh persons indirectly. According to the recent surveys, one metric ton of cement generates job opportunities for around 14 lakh people. In the year few years, more than 25 lakh people will be employed in the cement companies.

TECHNOLOGICAL ENVIRONMENT

CEMENT MANUFACTURING
"Cement manufacturing is the basic processing of selected and prepared mineral raw materials to produce the synthetic mineral mixture (clinker) that can be ground to a powder having the specific chemical composition and physical properties of cement."

RAW MATERIALS
The most common raw rock types used in cement production are: Limestone (supplies the bulk of the lime) Clay, marl or shale (supplies the bulk of the silica, alumina and ferric oxide) Other supplementary materials such as sand, pulverized fuel ash (PFA), or ironstone to achieve the desired bulk composition

NEW CEMENT BURNING TECHNIQUES

High efficiency in fuel choices. Better thermal efficiency. Low environment impact. Superior changeover productivity. Economical advantages.

PERCEIVED BENEFITS OF TECHNOLOGY UPGRADATION

It is envisaged that the technology upgradation measures for the Pre-1990 era cement plants would result in : Increase in capacity : 25-30 MTPA Reduction in thermal energy consumption : 15-20 kcal/kg clinker Reduction in electrical energy consumption : 5-10 units/t

 Reduction in cost of production of cement by 5-10% because of above initiatives reduction in energy costs through coprocessing by 1015% Reduction in the CO2 emissions : 20% (through blended cements & energy conservation)

FUTURE MODERNIZATION NEEDS OF THE INDIAN CEMENT INDUSTRY

Appropriate pre-blending facilities for raw materials Fully automatic process control and monitoring facilities including auto samplers and controls. Appropriate co-processing technologies for use of hazardous and non hazardous wastes Interactive standard software expert packages for process and operation control with technical consultancy back-up Energy efficient equipment for auxiliary/minor operations

 Mechanized cement loading operations, palletization/shrink wrapping Standards for making composite cement so that all the fly ash and other industrial wastes viz. slag are fully used. Co-generation of power through cost-effective waste heat recovery system (only one demonstration unit in operation) Horizontal roller mills (Horo Mills) for raw material and cement grinding Advanced computerized kiln control system based on artificial intelligence

FUEL REQUIREMENT AND ALTERNATIVE SOURCE OF ENERGY

Fuel Coal continues to be the main fuel for the Indian cement industry and will remain so in the near future as well. The industry is mainly using coal from various coalfields in the country. It is also procuring coal through open market and direct imports. Lignite from deposits in Gujarat and Rajasthan is also being used by cement plants. Pet coke has also been successfully utilized by some cement plants, mainly in Gujarat, Rajasthan and MP, thereby substituting main fossil and conventional fuel coal upto 100% in some plants

USE OF INDUSTRIAL WASTES

i) Cement plants in India utilized about 19% of flyash generated by power plants and 100% of granulated slag generated by steel plants, as compared to almost 100% flyash and 84% of granulated slag in the Japanese cement industry. ii) Recycling of Industrial wastes in manufacture of cement is highest in Japan followed by India.

USE OF ALTERNATE FUELS

i) Use of hazardous and refuse derived combustibles and Municipal Solid Waste (MSW) as fuel is common in countries like Canada, EU, Japan and Korea, but regulations do not yet permit in India. ii) CPCB is actively engaged in plant level trials in respect of wastes viz. used tyres, refinery sludge, paint sludge, Effluent Treatment Plant (ETP) sludge and Toluene Di-Isocyanite (TDI) tar waste from petroleum industries and in formulation of guidelines for use of these wastes as fuel by cement industry.

ENERGY MANAGEMENT
The improvements in energy performance of cement plants in the recent past have been possible largely due to : Retrofitting and adoption of energy efficient equipment Better operational control and Optimization Upgradation of process control and instrumentation facilities Better monitoring and Management Information System Active participation of employees and their continued exposure in energy conservation efforts etc.

EMERGING TRENDS IN TECHNOLOGY

High degree of mechanization and capacity to handle large volumes has lowered the run-of-mine costs. Detailed geological explorations and technological advances. A clearer understanding of structure and working of limestones. Balancing the economics. Deploying large eathmoving equipment. Technology has opened vistas for mining engineers.

Cont.
Technical and operational excellence for survival. Cement plants in our country have mostly changed from the wet process to the energy efficient dry process. Out of 157 kilns, 117 are dry process based, 32 are based on wet process and 8 on semi dry

OPPORTUNITIES
The cement industry is going through its boom period with full capacity utilization. Powered by the GDP growth of 8-9%, the annual demand for cement in the country continues to grow at 8- 10%. As per NCAER study, under high growth scenario, the demand for cement (including exports) is expected to increase to 244.82 million tonnes by 2010-11.

POLITICAL ENVIRONMENT

MEANING
The term is derived from the Greek terms polis (city or state) and oikonomos (one who manages a household). Political environment consist of government policies and taxation policies which affects the business.

GOVERNMENT POLICIES
Government policies have affected the growth of cement plants in India in various stages. The control on cement for a long time and then partial decontrol and then total decontrol have contributed to the gradual opening up of the market for cement producers.

STAGES OF GROWTH
Price and Distribution Controls (1940-1981) Partial Decontrol (1982-1988) Total Decontrol (1989)

GOVERNMENT CONTROL
The prices that primarily control the price of cement are : Coal Power tariffs Railway Freight Royalty and cess on limestone. All of these prices are controlled by government

ENVIRONMENT AGENCY REGULATION

Reduce consumption of natural resources Reduce the amount of cement process waste residues disposed Reduce emissions from cement manufacturing Reduce emissions of greenhouse gases Optimize the sustainable use of wastes from other industries Develop site restoration plans and biodiversity action plans Work to risk-based regulatory and environmental management systems

RULES & ORDERS

Cement Control Order, 1967 Cement Cess Rule, 1993 Cement (Quality Control) Order,1995 Cement (Quality Control) Order, 2003

THRUST AREA FOR CEMENT DEMAND

The Government has identified the following thrust areas for increasing its demand, namely: Housing development programmers Promotion of concrete highways and roads Use of ready-mix concrete in large infrastructure projects Construction of concrete roads in rural areas under Prime Ministers Gram Sadak Yojana.

SOCIO CULTURAL ENVIRONMENT

Positive aspects of cement industry

Health Controlling dust Lorry emissions Keeping it quit Using energy efficiently Effective investment Use of alternative fuels Cement in concrete Use of natural resources

NEGATIVE ASPECTS OF CEMENT INDUSTRY

Runny eye ,excess mucous in nose ,and throat ,coughing Shortness of breath , difficulty breathing with or without exertion Lower work capacity ,tiredness , muscle soreness Lung cancer Pulmonary tuberculosis infection Right heart enlargement and /or failure ,cardiac arrest, Kidney cancer

Impact on health
Skin contact Eye contact Inhalation

SUMMARY
Cement is an essential component of infrastructure development. Origin : 1914 in Porbandar with capacity of 1000tonnes. 2nd largest cement producer Total capacity 151.2 million tonnes 130 large & 300 small cement plants at present Contribute 8% to Indias total GDP Export : 6.02 million tonnes

PRESENTED BY:AMIT GUPTA ASHISH CHAUHAN ACHLA

THANK YOU..