Consolidation in the Indian Cement Industry |
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Introduction Contd...Holcim entered India by investing in Kalyanpur Cements in 1990, Lafarge commenced its Indian operations by acquiring Tisco's cement plants in 1999, while Italcementi entered India through a joint venture with the KK Birla Group to acquire a 50% stake in Zuari Cement in 2000. With the government increasing its planned expenditure in infrastructure5, the cement industry in India is expected to consolidate some more in the future (Refer Exhibit III for the highlights of Indian cement industry in 2004). Industry Background
The industry was decontrolled in 1989. This led to an increase in production. In 1991-92, manufacturing capacity stood at 65 million tonnes with capacity utilization of 82%. But post-1995, demand did not grow fast enough, and plants worked at a capacity utilisation of 80 % (Refer Exhibit IV for production and despatch details of cement between 1996-97 and 2003-04). Though growth plateaued from 1996-1998, the year 1999 saw cement consumption surging 15% to 93 MT, up from 81 MT in 1998.
5] There has been more than a doubling of planned
expenditure for the roads and highway sector from Rs 5898 crore in 2004-05
to 19085 crore in 2005-06.
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