THE Equicom's Outlook On India's Cement Industries

Housing sector acts as the principal growth driver for cement. However, recently industrial and infrastructure sectors have also emerged as demand drivers.

indore, India (prHWY.com) November 2, 2012 - SUPPLY: The demand-supply situation is high skewed with the latter being
Significantly higher.

DEMAND: Housing sector acts as the principal growth driver for cement.

However, recently industrial and infrastructure sectors have also emerged as demand drivers.
BARRIERS TO ENTRY: High capital costs and long gestation periods. Access to limestone reserves (key input) also acts as a significant entry barrier.

BARGAINING POWER OF SUPPLIER: Licensing of coal and limestone reserves, supply of power from the state grid etc are all controlled by a single entity, which is the government. However, nowadays producers are relying more on captive power, but the shortage of coal and volatile fuel prices remain a concern.

BARGAINING POWER OF CUSTOMERS: Cement is a commodity business and sales volumes mostly depend upon the distribution reach of the company. However, things are changing and few brands have started commanding a premium on account of better quality perception.

COMPETITION: Intense competition with players expanding reach and achieving pan India presence.
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