Pest anaylsis of cement industry

Cement Industry originated in India when the first works commenced production in 1914 in Probandar, Gujarat. The industry has since been turning at a steady gait, but in the initial phase, peculiarly during the period before Independence, the growing had been really slow. Since autochthonal production was non sufficient to run into the full domestic demand, the Government had to command its monetary value and distribution statutorily. Large measures of cement had to be imported for run intoing the shortage. The industry was partly decontrolled in 1982 and this gave drift to its gait of growing. Installed capacity more than doubled during the period 1980-90. It increased from 27 million metric tons in 1980-81 to 62 million metric tons in 1989-90.

Encouraged by the positive response of the industry to the policy liberalization in the cement industry, Government decontrolled the industry to the full on 1st March 1989. With the Industrial Policy Statement made by the Government on 24th July 1991, the cement industry stands delicensed. It has besides been listed as a precedence industry in Schedule III of the Industry Policy Statement doing it eligible for automatic blessing for foreign investing upto 51 per cent and besides for proficient coaction on normal footings of payment of royalty and lumpsum know-how fee.

Indian cement industry has therefore been one of the pioneering industries in presenting policy reforms. After the liberalization steps and globalization of Indian economic system, the cement industry has been turning quickly at an mean rate of 8 per cent except for a short period in 1991-92 when the industry faced demand recession. The state is now the 2nd largest manufacturer of cement in the universe. India has besides started exporting big measures of cement and cinder.

History OF CEMENT INDUSTRY

In the eighteenth century a large attempt started in Europe to understand why some calcium hydroxides possess hydraulic belongingss. John Smeaton frequently referred to as “ male parent of civil technology in England ” concentrated his work in this field. The Gallic Engineer Louis Vicat, inspired by the work of Smeaton and Parker, began a survey of hydraulic calcium hydroxides in 1812 ( published in 1818 as “ Recherches experimentales sur lupus erythematosuss chaux de building ” . He reported that in the absence of of course happening clayey constituents in limestone, quality hydraulic calcium hydroxides could be prepared by the calcination of fixed ratios of clay proportioned with calcium oxide.

In 1818 an English patent was granted to Maurice Leger for “ Improvement method of doing lime ” ( Leger used Vicat ‘s method ) . In 1822, the production of “ British Cement ” had been started by James Frost at Swanscombe based on a patent for “ a new cement or unreal rock ” . The innovation of Portland Cement is by and large credited to Joseph Aspedin, an English Bricklayer in 1824. It involves a dual kilning such as was described by Vicat. In 1838 a immature chemical applied scientist, Isaac Johnson, burned the cement natural stuff at high temperature until the mass was about glassy bring forthing the modern Portland Cement. The German Chemist Wilhelm Michaelis proposed the constitution of cement criterions in 1875.

The earliest kiln is one of William Aspedin ‘s bottle kilns from Robins & A ; Aspedin mill at Northfleet. The earliest bottle or dome kilns were unfastened kilns with tapering chimneyto increase the bill of exchange. They were burned in a batch instead than in a uninterrupted manner and were charged with jumping beds of natural provender and solid fuel.

The chamber kiln was an improved design developed and patented by Mr. Johnson. The burning gases from the kiln dried the natural stuff so that when the kiln was burned out a new charge of dried stuff is instantly ready for usage. The clip and heat losingss ensuing from pulling the cinder, reloading the kiln, and so heating it once more led to the design of shaft kiln with uninterrupted combustion of the stuffs, one of the chief job of the new kiln operation was the trouble of obtaining an even cinder combustion, as some of the merchandise would be greatly under-burnt and others be much more to a great extent clinkered.

In 1898 Atlas Portland cement company harmonizing to Lewis improved the design by utilizing what is called a rotary kiln, this betterment was a large revolution in the cement industry because the new kiln could bring forth 200 cement barrels per twenty-four hours compared to a shaft kiln which produced merely 40 to max 80 barrels per twenty-four hours ; in add-on to quick betterment in this new design sing the commixture, crunching equipments for natural stuff, crunching equipments for coal, belt conveyer utilizing mix sort of fuel such as natural gas ( 1904, Iola Portland cement, Iola Kansas ) . In pattern, the operation with the first coevals of rotary kiln ( Ransone kiln ) was really hard due to job of keeping a sufficient and unvarying kiln temperature with inordinate balling of natural provender and lodging on the Frederick liner.

In 1899 Atlas Cement Company improved the engineering of the rotary kiln and fuel economic system by replacing fuel oil with powdery coal dust. Furthermore, alterations to the kiln were made by add-on of two subsidiary cinder ice chests, in which the first hot discharged cinder was received as it fell from the kiln and air fluxing over it was heated and helped to light the coal dust in the rotary kiln. The new cinder produced from the new kiln engineering was different than the old cinder particularly from the scene clip ( much faster puting clip ) . The Gallic chemist Pierre Giron solved this job by adding gypsum to the cement in order to command the scene clip.

After 1900 there was rapid growing in both rotary kiln and subsidiary equipment engineering in the United States. Coal crunching Millss were developed and coal combustion in cement kilns became the prevailing burning procedure in the industry. All the equipments related to cement production crusher, natural factory, belt conveyers, bucked lifts were improved. Improvement in the undermentioned Fieldss refering to cement fabrication from stuff scientific discipline engineering has been an on-going procedure for 200 old ages.

Present STATUS

INSTALLED Capacity: In the cement industry there are two sectors – one consisting of big workss and the other consisting of mini cement workss. A mill with an installed capacity transcending 2,97,000 metric tons per annum ( 900 metric tons per twenty-four hours ) is a big works and with capacity upto and including 2,97,000 metric tons is a mini cement works. At present, there are 120 big workss and about 300 mini cement workss. Since mini cement workss are scattered all over the state with a figure of associations stand foring different types of procedures, sizes etc. and some of them are even bantam units, it has non been possible to obtain right informations of this sector. The present installed capacity of big workss is 112.01 million metric tons and the estimated capacity of mini cement workss is 9 million metric tons. There is merely one Central Public Sector Undertaking in the cement sector, i.e. Cement Corporation of India, which has 10 units. There are 10 big cement workss owned by assorted State Governments. The break-up of installed capacity of big and mini cement workss is given below:

A

Public Sector Plants

A

No. of workss

A

Installed capacity ( In million metric tons )

Cement Corporation of India

10

3.85

Others owned by State Governments

10

5.27

Private Sector workss

100

102.89

Entire

120

112.01*

Mini cement workss

300

9.00

Grand sum

A

121.01*

Now comes PEST ANALYSIS on cement industry.

Political impact

Firsly, we will discourse the political impact of cement industry. The 212-million metric ton cement industry ‘s demands seem to hold no terminal. After a healthy one-fourth ( January-March 2009 ) -due to robust demand from the substructure section, good despatchs and growing in profit-the industry seems to be desiring for more. With election consequences being declared in favor of the UPA and the state traveling on its manner to organize the new authorities, the cement industry is anticipating excise benefits and prohibition on imports to hike the cement demand which has taken a hit due to lag in the existent estate sector.

Says Sumit Banerjee, MD of ACC Ltd, “ We need directional stairss to rectify anomalousnesss in excise revenue enhancements, the mode in which these are levied on our industry. We would besides desire a imposts responsibility rationalization that would rectify the current imperfectness, whereby the inputs are taxed but non the direct import of cement. ”

Harmonizing to Vinod Juneja, MD of Binani Cement, “ We are looking at decrease in excise responsibility to 4 % and a complete prohibition on import of cement, from the new authorities. ” Meanwhile, taking into consideration the crisis the cement industry is traveling through, the authorities had, in its stimulus bundle, imposed a 4 % cut in excise responsibility to 8 % along with cut in excise responsibility on bulk cement from 14 % to 8 % . HM Bangur, president of Cement Manufacturers Association ( CMA ) and CMD of Shree Cement nevertheless, declined to notice on the industry outlooks from the new authorities.

“ The election consequences are positive but it is excessively early for me to notice on the industry ‘s outlooks before the new authorities is formed, ” he said. Meanwhile, Vinita Singhania, MD of JK Lakshmi Cement Ltd and frailty president of CMA, expects that the substructure development would hold to be pursued with much more vigour to take India closer to its purpose of being a ace economic power. This would imply edifice of modern ports, new super express main roads, concretisation of roads, accent on canal liner etc.

“ We would besides anticipate the new authorities to hold a re-look at the high incidence of revenue enhancement on the cement industry so that cement becomes more low-cost to all subdivisions of the society and carry through the dream of common people to hold a place of their ain, ” Singhania adds.

ROLE OF CEMENT INDUSTRY IN INDIA GDP

The Role of Cement Industry in India GDP is important in the economic development of the state. The cement industry in India is one of the oldest sectors in India.

The industry is driven by the huge growing in the lodging sector, the substructure development, and building of transit systems.

Role of Cement Industry in India GDP-Facts

The Indian cement industry is one of the flourishing sectors of the Indian economic system

The substructure development of the state in the recent old ages is the demand driver for the cement industry

The Indian Cement Industry is sing the entry of many foreign participants in the Indian market

The mean monthly capacity use during the twelvemonth 2006-07 was 94 %

The cement despatchs in the twelvemonth 2006-07 was 155 million metric tons

The growing of the cement sector refering to the entire end product was 10 % in 2006-07

Role of Cement Industry in India GDP-Production

India ranks 2nd in the production of cement in the universe

The growing rate of the production of cement during the twelvemonth 2006-07 was 9.1 %

The export of the cement in the twelvemonth 2006-07 was 9.3 million metric tons

The cement industry in India constitutes of 365 little cement fabricating units and 130 big cement fabricating units

The sum installed capableness of the cement fabrication is 165 million metric tons per twelvemonth

The big fabricating units histories for 94 % of the entire end product of cement

Role of Cement Industry in India GDP-Mergers and Acquisitions

Heidelberg Cement-Indorama Cement Ltd

Heidelberg Cement Company entered into an understanding for a 50 % joint venture with the Indorama Cement Ltd, situated in Mumbai, originally possessed by the Indorama S P Lohia Group.

Heidelberg Cement Company has two fabricating units in India

Italcementi cement-Zuari Cement Limited

Italcementi cement company has acquired portion of the celebrated Indian cement maker, the Zuari Cement Limited

The acquisition was of 50 % shareholding and the trade was of about 100 million

It took over the works of the Zuari Cement Limited in Andhra Pradesh

Holcim Cement-Gujarat Ambuja Cements ( GACL )

Holcim Cement signed an understanding of 14.8 % return over with the Gujarat Ambuja Cements ( GACL ) .

Holcim Cement Company is among the taking cement fabrication and providing companies in the universe.

Lafarge India

Lafarge India is the subordinate of the Lafarge Cement Company of France.

It was established in 1999 with the acquisition of the Tisco and the Raymond cement workss

Lafarge Cement soon has three cement fabricating units in India one of them is in Jharkhand and two other in Chhattisgarh

Government Enterprises

Government enterprises in the substructure sector, coupled with the lodging sector roar and urban development, continue being the chief drivers of growing for the Indian cement industry.

Increased substructure disbursement has been a cardinal focal point country over the last five old ages bespeaking good times in front for cement makers.

The authorities has increased budgetary allotment for roads under National Highways Development Project ( NHDP ) .

Appointing a coal regulator is looked upon as a positive move as it will ease seasonably and proper allotment of coal ( a key natural stuff ) blocks to the nucleus sectors, cement being one of them.

Keeping in head the planetary meltdown which is impacting the cement companies in India, the authorities re-imposed the counter-veiling responsibility ( CVD ) and particular CVD on imported cement in January. This is likely to supply a flat playing field to domestic companies

Economic impact:

Now we will discourse the economic impact of cement industry.India is the 2nd largest industry after china.A assortment of surveies on productiveness growing and technological alteration in Indian industries has been carried out so far. Originally these surveies were driven by an involvement in understanding the capital disappearing phenomena in the Indian industry between 1950 and 1980. During that clip, labour productiveness every bit good as capital handiness and usage increased well, while the overall growing rate of the economic system stagnated at low degrees ( see Ahluwalia, 1991 ) . Concerned about the efficiency of resource usage research workers started look intoing productiveness growing and input factor permutations for aggregative fabrication every bit good as assorted industries. The consequences of these analyses differed well depending on the methodological analysis, statistical specification employed every bit good as on the implicit in beginnings of informations, degrees of collection and clip periods considered.Over clip more sophisticated and refined methodological analysiss in connexion with longer clip series were employed to analyze productiveness alteration. The part of entire factor productiveness to end product growing was of primary involvement to explicate the continously low economic development.

Partial factor productiveness was investigated to better understand the importance of each factor of production and to measure permutation possibilities. In this context, the function of energy within the production procedure received increasing attending and accordingly, besides the primary factors of production ( capital and labour ) , energy and stuffs were added as secondary input factors into the analyses.Total factor productiveness growing ( TFPG ) measures the growing in gross value added ( GVA ) in surplus of the growing of a leaden combination of the two inputs capital and labour. For mensurating end product in signifier of gross value added all intermediate inputs are deducted. Therefore, gross value added merely provides the value that is really added in the production procedure by utilizing the two primary inputs of production: capital and labour. Entire Productivity Growth, in contrast, relates gross value of end product ( VO ) to the four input factors capital, labour, energy and stuffs. Since it accounts for intermediate inputs every bit good as primary inputs, value of end product provides the more appropriate end product step if interested in analysing energy and stuff every bit good as capital and labor.Commonly, three major growing accounting attacks are considered for gauging entire factor productiveness every bit good as entire productiveness growing: the Translog Index, the Solow Index and the Kendrick Index. The three indices differ in their complexness and the 13 implicit in economic premises. A elaborate derivation of the three indices is provided in a study study by Mongia and Sathaye ( 1998a ) .

The Kendrick index is easy to understanding utilizing an arithmetic collection strategy for the inputs. It is restrictive in that it is based on the premise of a additive production map and in delegating changeless ( basal twelvemonth ) portions in GVA ( VO severally ) to the inputs. The Solow index is somewhat more general in presuming a neo-classical, Cobb-Douglas, specification of the production map with changeless returns to scale, perfect competition in the market and factors being rewarded their fringy merchandises. The translog step is based on a more complex production map associated with merely a minimal Numberss of premises. It is hence of more general nature and provides the preferably used step for productiveness growth.Partial factor productiveness ( PP ) indices are reported for all input factors. They are obtained by merely spliting the value figure for each factor by the gross value of end product or by the gross value added severally. Partial factor productiveness growing indicates how much end product alterations in relation to a fixed sum of each individual input. It measures how ” productive ” a factor is. The opposite means how much of a factor has to be used to bring forth a specific sum of end product – it measures the factor strength of production.

Technological alteration

Continuous technological upgrading and assimilation of latest engineering has been traveling on in the cement industry. Soon 93 per cent of the entire capacity in the industry is based on modern and environment-friendly dry procedure engineering and merely 7 per cent of the capacity is based on old moisture and semi-dry procedure engineering. There is enormous range for waste heat recovery in cement workss and thereby decrease in emanation degree. One undertaking for co-generation of power utilizing waste heat in an Indian cement works is being implemented with Nipponese aid under Green Aid Plan. The initiation of advanced engineering has helped the industry vastly to conserve energy and fuel and to salvage stuffs well.

India is besides bring forthing different assortments of cement like Ordinary Portland cement ( OPC ) , Portland Pozzolana Cement ( PPC ) , Portland Blast Furnace Slag Cement ( PBFS ) , Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement etc. Production of these assortments of cement conform to the BIS Specifications. Besides, some cement workss have set up dedicated breakwaters for advancing bulk transit and export.