Professional Documents
Culture Documents
By
AR Ravishankar
Click to edit Master subtitle style
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Introduction
Indian cement industry is the second largest with a total production of 165 million tonnes Net profit growth rate of 85% Contributed 8% to Indian economic development
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policies Growing Requirements Housing facilities & real estate( contributes 53%) Government giving boost in various infrastructure projects Export
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Industry structure
56
cement companies Leading 6 companies contributes 60 %. Fairly high concentration ratio Highly Competitive. It shows few features of oligopoly
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Market structure
Free
entry / exit is difficult Highly fragmented Demand supply gap High Product differentiation It shows few feature monopolistic market
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Cartel Formation
11
Created Pushed
Rs.6,307
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Competitive Dimension
Moderate
rivalry within cement industry Lack of substitutes Minimal effect of buyer bargaining power Suppliers have high bargaining power Barrier to entry and exit
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Challenges
Global
Economic Slow down which led to Highest inventory levels Growth rates have slowed Capacity addition putting pressure on prices As a result companies are looking for cutting production
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Cost Structure
Very
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Pricing
Product No No
Differentiation
Growing
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Government Regulations Period of restriction(19691982) restrained through both direct and Severely
indirect means Authorized higher prices for cement manufactured by new units in 1972 3 tier price system introduced in 1979 Sluggish growth..Installed capacity reached only 27.9MT
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Partial decontrol(19821989)
Quota
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Post liberalization
Industry
was de licensed in 1991 Accelerated growth and investment by major players Focus on exports
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Tax Structure
One
of the highest taxed industry Price level of 200 per bag In feb 2007 tax was increased further Finally it was reduced in may 2007
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Q & A!!!
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