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Indian Cement Industry

    Riding the High Tide
Industry Overview
• Era of Total Decontrol – March 1989

• Capacity - 29 Million tonne in 1981-82, rose to 2190 Lakh
  tonne at the end of FY09

• India ranks second in world cement producing countries

• Demand of Cement
   – Seasonal
   – Inelastic in nature


• More than 100 firms in this segment with few dominant
  players
            Source: http://www.cmaindia.org/portal/static/DynamicFacts.aspx
Cement
Market
Division
Demand Drivers




   Source: Crisil Research
Cement Industry Structure




  Source: The Centre for Monitoring Indian Economy (CMIE)
Cement Industry Structure




  Source: The Centre for Monitoring Indian Economy (CMIE)
Oligopolistic Nature
• Small Number of Large Firms

• Price Setters

• Group Behavior

• Mutually Interdependent

• Barriers to Entry
Cement Industry: A Cartel
• High Concentration Ratios

• Production Capacity

• Similar Production Costs

• High Dependence of the Consumers

• Shareholding Pattern Data (Crossholdings)
Competition Commission of India levied a penalty of over Rs 6,300 crore for price
                        cartelization - 21 June 2012
• http://www.scribd.com/doc/37444142/Ceme
  nt-Industry-Analysis

• http://www.scribd.com/doc/9777716/Econo
  mic-Reviev-of-Indian-Cement-Industry4

• http://indiacorplaw.blogspot.in/2012/06/sum
  mary-of-ccis-order-against-cement.html

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Indian cement industry

  • 1. Indian Cement Industry Riding the High Tide
  • 2. Industry Overview • Era of Total Decontrol – March 1989 • Capacity - 29 Million tonne in 1981-82, rose to 2190 Lakh tonne at the end of FY09 • India ranks second in world cement producing countries • Demand of Cement – Seasonal – Inelastic in nature • More than 100 firms in this segment with few dominant players Source: http://www.cmaindia.org/portal/static/DynamicFacts.aspx
  • 4. Demand Drivers Source: Crisil Research
  • 5. Cement Industry Structure Source: The Centre for Monitoring Indian Economy (CMIE)
  • 6. Cement Industry Structure Source: The Centre for Monitoring Indian Economy (CMIE)
  • 7. Oligopolistic Nature • Small Number of Large Firms • Price Setters • Group Behavior • Mutually Interdependent • Barriers to Entry
  • 8. Cement Industry: A Cartel • High Concentration Ratios • Production Capacity • Similar Production Costs • High Dependence of the Consumers • Shareholding Pattern Data (Crossholdings)
  • 9. Competition Commission of India levied a penalty of over Rs 6,300 crore for price cartelization - 21 June 2012
  • 10.
  • 11.
  • 12. • http://www.scribd.com/doc/37444142/Ceme nt-Industry-Analysis • http://www.scribd.com/doc/9777716/Econo mic-Reviev-of-Indian-Cement-Industry4 • http://indiacorplaw.blogspot.in/2012/06/sum mary-of-ccis-order-against-cement.html