CEMENT INDUSTRY

SOJITRA JIGNESHKOTADIYA VISHALKAKADIYA PINALSHINGALA NAGJICHAVDA MITALAMBALAM SARANYA

AMBUJACEMENT

Cement in India

A Cyclical Business of Supply

Not Demand

Cement Industry - A Paradigm Shift

• No new cement plants in next two years• Demand supply gap likely to be over in

the next couple of months • Consolidation is well on its way to bring

stability in pricing• Future Demand to be much higher on

account of building of Roads, Ports & other infrastructure

• Housing becoming a major activity in the economy

• Due to ……

• Low Interest Rates

• Availability of mortgage finance due to ample liquidity

• Increasing disposable Income

During Calendar year 2011 Cement demand supply will balance – A situation not seen in past several years

GEOLOGY (RAW MATERIALS)

The fundamental chemical compounds to produce cement clinker are: Lime (CaO) Silica (SiO2)Alumina (Al2O3) Iron Oxide (Fe2O3)

Fly ash: by-product of burning finely grounded coal either for industrial application or in the production of electricity

Raw materials used in the production of clinker cement

THE CEMENT MANUFACTURING PROCESS

1. BLASTING : The raw materials that are used to manufacture cement (mainly limestone and clay) are blasted from the quarry.

Quarry face

1. BLASTING 2. TRANSPORT

3. CRUSHING AND TRANSPORTATION : The raw materials, after crushing, are transported to the plant by conveyor. The plant stores the materials before they are homogenized.

quarry

3. CRUSHING & TRANSPORTATION

2. TRANSPORT : The raw materials are loaded into a dumper.

crushing

conveyor

dumper

storage at the plant

loader

THE CEMENT MANUFACTURING PROCESS

1. RAW GRINDING : The raw materials are very finely ground in order to produce the raw mix.

1. RAW GRINDING

Raw grinding and burning

2. BURNING

2. BURNING : The raw mix is preheated before it goes into the kiln, which is heated by a flame that can be as hot as 2000 °C. The raw mix burns at 1500 °C producing clinker which, when it leaves the kiln, is rapidly cooled with air fans. So, the raw mix is burnt to produce clinker : the basic material needed to make cement.

conveyor Raw mix

kiln

cooling

preheating

clinker

storage at the plant

Raw mill

THE CEMENT MANUFACTURING PROCESS

1.GRINDING : The clinker and the gypsum are very finely ground giving a “pure cement”. Other secondary additives and cementitious materials can also be added to make a blended cement.

1. GRINDING

Grinding, storage, packing, dispatch

2. STORAGE, PACKING, DISPATCH

2. STORAGE, PACKING, DISPATCH :The cement is stored in silos before being dispatched either in bulk or in bags to its final destination.

clinker storage

Gypsum and the secondary additives are added to the clinker.

silos

dispatch

bags

Finish grinding

Our Business Model

• Own Infrastructure -Logistics Management

• Strong brand & efficient distribution

• Presence in prime markets

• Lowest cost cement producer

Own Infrastructure

• 7 Owned Cement Ships for transporting Cement by Sea

• Large port in Gujarat to handle export of Cement ( 2 mn tonnes this year) & Import of Coal / Oil

• 3 Cement receiving terminals • 190 MW of Captive Power Plants at

various Cement Plants to give reliable and cheap power

Strong Brand• India - A bagged market• Individual home builder - key driver of

demand

• Our focus • Best quality cement• Good packaging• Logistic management - strong distribution

network • Customer service

Uses

Main use is in the fabrication of concrete and mortars

Modern uses Building (floors, beams, columns, roofing, piles, bricks,

mortar, panels, plaster)Transport (roads, pathways, crossings, bridges,

viaducts, tunnels, parking, etc.)Water (pipes, drains, canals, dams, tanks, pools, etc.)Civil (piers, docks, retaining walls, silos, warehousing,

poles, pylons, fencing) Agriculture (buildings, processing, housing, irrigation)

USES

Sea terminalsCement factories

HP

Gujarat

Rajasthan

Maharashtra

Punjab

Ambuja Cement

Gujarat 5.0

North India 6.0

Maharashtra 3.0

Total Capacity 14.0

Mn. tonnes

1986 - 0.7 Mn. Tonnes Today - 14 Mn. Tonnes

A growth of 18 times since inception

FACILITY LOCATION

• Availability of transportations facility.

• Availability of market.

• Availability of services

But

Cement Industry

Not without challenges

Challenges

• Cement is energy intensive industry

• Coal, Power & Oil constitute major costs

• Increasing cost of fuel

• Better realisation only in few markets

Growth in Profits for only those

who can meet these Challenges

Our Strategy

• Presence in the growing markets of North & West

• Retail Focus – Premium pricing

• Largest Exporter of cement – 15% of Production

• 35% Cement transport by sea - Cheapest Mode

• And ... Lowest Cost Cement Producer