mayank - cement

8/3/2019 Mayank - Cement

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A

A

Project Report

On

Cement Industries

Submitted to: Submitted by:

Dr. Meeta Joshi Mayank Bhimani



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I would also like to express my deepest sense of gratitude to Dr. S.C. REDDY

DIRECTOR OF MARWADI EDUCATION EOUNDATION S GROUP OF

INSTITUTIONS, for providing me an opportunity to undertake this project work.

I would like to thank Mrs.Meeta Joshi of the Faculty of Management.

I thank the entire faculty for their support and guidance and those who have

extended their help to me in completing this research project successfully.

Place:

Date:

( .)

Mr. Mayank Bhimani



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Table of Contents

Introduction of Cement Indusries ............................................................................................................ 6

History of Cement Industries ................................................................................................................... 8

Vision .................................................................................................................................................... 12

Mission.................................................................................................................................................. 13

Present Status ....................................................................................................................................... 16

Cement Machinery ................................................................................................................................ 19

OUR CEMENT PRODUCT ........................................................................................................................ 21

Our Cement Bags................................................................................................................................... 22

BULK TRANSPORTATION ........................................................................................................................ 24

EXPORT OF CEMENT .............................................................................................................................. 26

TARGET AND PRODUCTION ................................................................................................................... 29

QUALITY CONTROL AND ASSURANCE .................................................................................................... 33

CONSUMPTION PATTERN ...................................................................................................................... 41

Environmental ....................................................................................................................................... 43

· Porters five forces Model .............................................................................................................. 47

Cost Structure ....................................................................................................................................... 49

Major Country Players ........................................................................................................................... 53

Cost effective analytical solutions for the modern cement industry ....................................................... 56

Swot Analysis ........................................................................................................................................ 58

Strengths........................................................................................................................................... 58

Weaknesses ...................................................................................................................................... 59

Opportunities.................................................................................................................................... 59

Threats.............................................................................................................................................. 59

Bibliography .......................................................................................................................................... 62



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Introduction of Cement Indusries Cement Industry originated in India when the first plant commenced production in1914 in Probandar, Gujarat. The industry has since been growing at a steady pace,but in the initial stage, particularly during the period before Independence, thegrowth had been very slow. Since indigenous production was not sufficient to meetthe entire domestic demand, the Government had to control its price anddistribution statutorily. Large quantities of cement had to be imported for meetingthe deficit. The industry was partially decontrolled in 1982 and this gave impetusto its pace of growth. Installed capacity more than doubled during the period 1980-90. It increased from 27 million tonnes in 1980-81 to 62 million tonnes in 1989-90.

Encouraged by the positive response of the industry to the policy liberalisation inthe cement industry, Government decontrolled the industry fully on 1st March1989. With the Industrial Policy Statement made by the Government on 24 th July1991, the cement industry stands delicensed. It has also been listed as a priorityindustry in Schedule III of the Industry Policy Statement making it eligible forautomatic approval for foreign investment upto 51 per cent and also for technicalcollaboration on normal terms of payment of royalty and lumpsum know-how fee.

Indian cement industry has thus been one of the pioneering industries inintroducing policy reforms. After the liberalisation measures and globalisation of Indian economy, the cement industry has been growing rapidly at an average rateof 8 per cent except for a short period in 1991-92 when the industry faced demandrecession. The country is now the second largest producer of cement in the world.India has also started exporting large quantities of cement and clinker.



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History of Cement Industries

In the 18th century a big effort started in Europe to understand why some limespossess hydraulic properties.

John Smeaton often referred to as "father of civil engineering in England"concentrated his work in this field.

The French Engineer Louis Vicat, inspired by the work of Smeaton and Parker,began a study of hydraulic limes in 1812 (published in 1818 as "Recherchesexperimentales sur les chaux de construction". He reported that in the absence of naturally occurring argillaceous components in limestone, quality hydraulic limescould be prepared by the calcination of fixed ratios of clay proportioned withquicklime.

In 1818 an English patent was granted to Maurice Leger for "Improvement methodof making 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 artificial stone".

The invention of Portland Cement is generally credited to Joseph Aspedin, anEnglish Bricklayer in 1824. It involves a double kilning such as was described byVicat.

In 1838 a young chemical engineer, Isaac Johnson, burned the cement raw materialat high temperature until the mass was nearly vitrified producing the modernPortland Cement.

The German Chemist Wilhelm Michaelis proposed the establishment of cementstandards in 1875.

The earliest kiln is one of William Aspedin's bottle kilns from Robins & Aspedinfactory at Northfleet.



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The earliest bottle or dome kilns were open kilns with tapered chimney to increasethe draft. They were burned in a batch rather than in a continuous fashion and werecharged with alternating layers of raw feed and solid fuel.

The chamber kiln was an improved design developed and patented by Mr.Johnson. The combustion gases from the kiln dried the raw material so that whenthe kiln was burned out a new charge of dried material is immediately ready foruse.

The time and heat losses resulting from drawing the clinker, recharging the kiln,and then heating it again led to the design of shaft kiln with continuous burning of the materials, one of the main problem of the new kiln operation was the difficulty

of obtaining an even clinker burning, as some of the product would be greatlyunder-burnt and others be much more heavily clinkered.

In 1898 Atlas Portland cement company according to Lewis improved the designby using what is called a rotary kiln, this improvement was a big revolution in thecement industry because the new kiln could produce 200 cement barrels per daycompared to a shaft kiln which produced only 40 to max 80 barrels per day; inaddition to quick improvement in this new design regarding the mixing, grindingequipments for raw material, grinding equipments for coal, belt conveyor usingmix kind of fuel such as natural gas (1904, Iola Portland cement, Iola Kansas).

In practice, the operation with the first generation of rotary kiln (Ransone kiln) wasvery difficult due to problem of maintaining a sufficient and uniform kilntemperature with excessive balling of raw feed and sticking on the Frederick lining.

In 1899 Atlas Cement Company improved the technology of the rotary kiln andfuel economy by replacing fuel oil with powdered coal dust. Furthermore,modifications to the kiln were made by addition of two auxiliary clinker coolers, in

which the first hot discharged clinker was received as it fell from the kiln and airflowing over it was heated and helped to ignite the coal dust in the rotary kiln.

The new clinker produced from the new kiln technology was different than the oldclinker especially from the setting time (much faster setting time). The Frenchchemist Pierre Giron solved this problem by adding gypsum to the cement in orderto control the setting time.



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After 1900 there was rapid growth in both rotary kiln and auxiliary equipmenttechnology in the United States. Coal grinding mills were developed and coal

burning in cement kilns became the predominant combustion process in theindustry. All the equipments related to cement production crusher, raw mill, beltconveyors, bucked elevators were improved.

Improvement in the following fields pertaining to cement manufacturing frommaterial science technology has been an ongoing process for 200 years.



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Vision

The new millennium will bring with it new challenges and greater opportunities.The 21st century will most certainly see the unfolding of a period of extraordinarypossibilities and incredible developments bringing about more fundamentalchanges in the global economy than the last 200 years. The successful corporateswill be those who equip themselves to meet the challenges and convertopportunities into winning strategies. If we are to keep pace, it is imperative thatwe learn to successfully tread the global pathway.

In this journey, clarity of vision, a readiness to cultivate a global mindset,effectiveness, harnessing of human resources to enhance job and knowledge skillsof employees, a strong accent on R & D and innovation and a move away fromselling, to innovative marketing in recognition of the fact that the Customer is

truly King, are some of the strategies that will help corporates to survive andsucceed.

However it must be remembered that it is not enough to adopt a set of values and just leave them in place. In order to move with the changing times, values andideas must be ceaselessly re-examined so as to ensure that they are in tune with theorganisation's goals.

The India Cements Limited is committed to contribute its might in making the 21stcentury an "Indian Century".



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Mission

Aiming High:

We should be one of the largest Cement Companies in the Country. Our growthin size will be through continuous review of potentials of the existingmanufacturing resources, strategic acquisitions and expansions

Core Competency:

Cement will be our mainstay. However, we shall venture into related fields whichafford purposeful synergy.

Quality Quest:

Product quality, consistency and customer service will be pursued as an act of

faith throughout the organisation.

Pursuit Of Excellence:

The growing size of our business permit us to have an R & D set up of our own.We shall continuously challenge methods, systems, operating parameters. We shallconstantly review our manufacturing systems to upgrade quality and value of products.

Human Resources:

We consider people as our valuable Assets. Our HRD Systems will be totallyproactive and tuned to provide excellent working environment and transparentorganisational culture for creativity, innovation and participation.

Value Addition:



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ICL will continuously strive to enhance its value to its customers, ShareHoldersand Employees.

Community Welfare:

As the organization grows, as a good Corporate Citizen, we shall be sensitive tothe welfare and development needs of the Society around us.



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Present Status

Installed Capacity

In the cement industry there are two sectors one consisting of large plants and theother consisting of mini cement plants. A factory with an installed capacityexceeding 2,97,000 tonnes per annum (900 tonnes per day) is a large plant andwith capacity upto and including 2,97,000 tonnes is a mini cement plant. Atpresent, there are 120 large plants and about 300 mini cement plants. Since minicement plants are scattered all over the country with a number of associations

representing different types of processes, sizes etc. and some of them are even tinyunits, it has not been possible to obtain correct data of this sector. The presentinstalled capacity of large plants is 112.01 million tonnes and the estimatedcapacity of mini cement plants is 9 million tonnes. There is only one Central PublicSector Undertaking in the cement sector, i.e. Cement Corporation of India, whichhas 10 units. There are 10 large cement plants owned by various StateGovernments. The break-up of installed capacity of large and mini cement plants isgiven below: -

Public Sector Plants No. of plants Installed capacity (In

million tonnes)

Cement Corporation of India 10 3.85

Others owned by State Governments 10 5.27

Private Sector plants 100 102.89

Total 120 112.01*

Mini cement plants 300 9.00



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Grand total 121.01*

includes the capacity of 2.41 million tonnes of closed units

The cement industry is concentrated mainly in those States, where there are largedeposits of limestone, which is the main raw material for cement. Nearly 82 per cementof the capacity of large plants is located in seven States. The distribution of capacity inrespect of large cement plants among these States as on 31st March, 2000 is as under:



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Cement Machinery

Keeping pace with the growth of the cement industry, the Indian cement machineryindustry has also grown substantially during the last few years. The Indian cementindustry machinery manufacturer are now capable of manufacturing and supplyingcomplete plant for cement based on dry process and pre-calcination technology forcapacities upto 7500 TPD.

At present, there are eighteen units in the organised sector manufacturing eithercomplete plants or components of cement machinery. The major producers areM/s. L&T, M/s. Krupp Industries, M/s. Fuller India Ltd. And M/s. CIMMCO. Allthese manufacturers have technical collaboration with world leaders in cementmachinery. Many of the Indian manufactures have adopted the latest technology inthe machinery produced by them.

Leading world manufacturers have introduced advanced technologies like verticalroller mill for grinding of raw materials and coal instead of ball mills, pyro-processing systems with 5-6 stage cyclones, pre-heater and pre-calcinator, highefficient fans and separators, etc. The Industry has also adopted further automationand process control systems in the cement plants manufactured by them in order toupgrade the capability at par with other world leaders in cement industry.



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OUR CEMENT PRODUCT

CN currently produces four types of Cement. These types of cement are conforming to Lebanese,

European and American Norms and Standards as shown in the correlation table below

Product

Conform to

Remarks NL 53(Lebanese Norms)

EN 197(European Norms)

ASTM(American Standards)

PA-S 42.5Show me "TypicalAnalysis Report"

PA-S 42.5 CEM II/A-STYPE I (SM)

(ASTM C 595)The four types of

cement arecertified according

to NL53 by IRIP 42.5

Show me "TypicalAnalysis Report"

P 42.5 CEM I 42.5 NType I

(ASTM C 150)

P 42.5 BTNa, RMSShow me "TypicalAnalysis Report"

P 42.5 BTNa,RMS

CEM I 42.5 N

Type II

(ASTM C 150)The Portland

Cement CEM I42.5 N & CEM I

52.5 N are certifiedaccording to EN197 by VDZ -

Germany.

Type V

(ASTM C 150)

P 52.5 BTNa, RMSShow me "TypicalAnalysis Report"

P 52.5 BTNa,RMS

CEM I 52.5 N

Type II

(ASTM C 150)

Type V

(ASTM C 150)

PA-L 42.5Show me "TypicalAnalysis Report"

PA-L 42.5 CEM II/A-L --- ---

http://www.cimnat.com.lb/Product/Typical%20Analysis%20PA-S%2042.5.doc


http://www.cimnat.com.lb/Product/Typical%20Analysis%2042.5.doc


http://www.cimnat.com.lb/Product/Typical%20Analysis%20P42.5%20RMSBTNa.doc


http://www.cimnat.com.lb/Product/Typical%20Analysis%2052.5%20RMS%20BTNa.doc


http://www.cimnat.com.lb/Product/Typical%20Analysis%20PA-L%2042.5.doc














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Our Cement Bags

We are printing on our bags some information that help using and handling our product.Our cement bags are designed according to the region where our product is sold to enable itstraceability and follow-up. The table below shows difference in cement bags:

Product Region Lebanon Syria Iraq

PA-S 42.5 Show me the bag N/A Show me the bag

P 42.5 N/A Show me the bag N/A

P 42.5 BTNa RMS N/A N/A Show me the bag

P 52.5 BTNa RMS Show me the bag N/A N/A

PA-L 42.5 Show me the bag N/A Show me the bag

http://www.cimnat.com.lb/Product/PA-S42.5_Lebanon.gif


http://www.cimnat.com.lb/Product/Product.asp


http://www.cimnat.com.lb/Product/P42.5-BTNa_Iraq.gif


http://www.cimnat.com.lb/Product/PA-L42.5.gif

http://www.cimnat.com.lb/Product/PA-L42.5.gif

http://www.cimnat.com.lb/Product/P52.5-BTNa_Lebanon.gif


http://www.cimnat.com.lb/Product/P42.5_Syria.gif





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BULK TRANSPORTATION

In all the advanced countries and even in many developing countries bulk transportation of cement is very popular. In advanced countries, transportation of bulk and Ready-Mixed Concrete accounts for about 90% of the total production. InIndia a beginning has been made by setting up a pilot project for bulk transportation and distribution of cement at Kalamboli, Bombay. The project isbeing established with the assistance of the World Bank. This has beencommissioned in November 1997. A technical study has been conducted forsimilar projects in large consumption centres like Calcutta and Delhi to cater to theplants located in Bilaspur cluster of Madhya Pradesh for Calcutta and Rajasthanplants for Delhi. There is also very good scope for bulk transportation for coastalshipping in the Western and Eastern Regions. One cement plant located in Gujarathas already been engaged in bulk transportation through bulk carriers acquired bythem for supply in the Western Region. Other cement plants are also proposing toenter bulk transportation for both exports as well as for distribution within thecountry. There is good scope for foreign investment in the country for developmentof bulk transportation.



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EXPORT OF CEMENT

The country had been facing acute shortage of cement till a few years back and ithad to importcement till the middle of 1980 s for meeting the gap in demand and

supply. However, after a number of liberalisation measures taken by Government,the position was totally reversed and the country started exporting cement. Theexport of cement and clinker are mainly to Bangladesh, Nepal, Sri Lanka,Maldives, Mauritius, Africa, Scychelles, Burma, UAE, Singapore etc. Export of cement and clinker from 1991-92 onwards is as follows:



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Year Total export of Cement &Clinker (In Million Tonnes)

1991-92 0.36

1992-93 1.18

1993-94 2.85

1994-95 3.17

1995-96 2.38

1996-97 2.7

1997-98 4.40

1998-99 3.51

1999-2000 3.14



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TARGET AND PRODUCTION

During the 8th Plan period (1992-97), cement industry has recorded an averagegrowth rate of 7.4per cent. In 1996-97, actual production was 76.22 million tonnesagainst a target of 76 million tonnes. The growth rate achieved was 9.46 per cent.In 1997-98, the target set was 81 million tonnes. The industry has been able tomeet its target with a production of 83.16 million tonnes with a growth rate of 9.11%. In 1998-99 the industry has achieved production of 87.91 million tonneswith a growth rate of 5.70%, inspite of a sluggish market throughout the year. In1999-2000, actual production was 100.45 million tonnes against a target of 94million tonnes. The growth rate achieved was 15%. A statement showing the

growth of the cement industry, both in terms of capacity and production during thevarious Five Year Plan is given below:

(Million Tonnes)

Installed capacity Cement Production

FiveYearPlan

At theend oftheyear

Target Achievement* Target Achievement* Avg. annualgrowth thrPlans (%)

Pre-Plan

1950-51

- 3.28 - 2.20

I Plan(1951-56)

1955-56

5.31 5.02 4.80 4.60

II Plan(1956-61)

1960-61

16.00 9.30 13.00 7.97 14.70

III Plan(1961-66)

1965-66

15.00 12.00 13.00 10.97 7.53

There were Annual Plans for 1966-67, 67-68 and 68-69



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IV Plan(1969-74)

1973-74

Notfixed

19.76 18.00 14.66 4.70

V Plan(1974-79)

1978-79

23.50 22.58 20.80 19.42 6.50

VI Plan(1979-85)

1984-85

43.00 42.00 32.50 30.13 11.00

VIIPlan

(1985-90)

1989-90

62.00 61.55 45.00 45.41 10.10

AnnualPlans

1990-91

64.36 49.00 48.90 7.70

1991-92

66.56 55.00 53.61 9.60

VIIIPlan

1992-93

70.19 56.00 54.08 0.90

1993-94

76.96 59.00 57.96 7.20

1994-95

83.79 61.50 62.35 7.60

1995-96

95.76 68.00 69.63 11.60

1996-97

105.25 76.00 76.22 9.46

IX Plan 1997-98

110.51 81.00 83.16 9.11

1998-99

118.97 90.00 87.91 5.70



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1999-2000

121.01 94.00 100.45 15.33

Includes mini cement plants

In the Northern region, the major consumer is Uttar Pradesh with a highest growthrate of 31%. In the Eastern region, the major consumer is West Bengal, but thehighest growth rate of 38% has been achieved by North Eastern States. In the

Western region, although Madhya Pradesh is the highest producer of cement, thetotal consumption is highest in Maharashtra with a consumption of 12.29 milliontonnes during the year 1999-2000 with the growth rate of 19%. In the Southernregion, while the highest consumption takes place in Tamil Nadu followed byAndhra Pradesh, Karnataka and Kerala, the growth rate in consumption hasincreased by 21% in Andhra Pradesh, 17% in Kerala, 14% and 11% in Karnatakaand Tamil Nadu respectively.



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QUALITY CONTROL AND ASSURANCE

In order to ensure quality, effective control has to be exercised throughout theprocess of production. The control procedures cover all aspects of cementmanufacture from quarry operation, handling, mixing and grinding to packing. Inorder to achieve quality assurance, most of the cement plants have establishedfacilities for sophisticated controls. Some of the important controls introduced inthe cement industry as follows: -

· Computerised mine planning and deposit evaluation to enable optimum useof raw material

· Online X-ray fluorescence spectrometer for raw material control and rawmix design.

· Better aided instrumentation and process measurements using X-rayanalysis, gas anaysers, temperature and pressure measuring devices, etc.

· Centralised kiln control system in conjunction with expert control systemsfor process and operation control.

· Continuous monitoring of quality in production by plants as well as by thecertifying agency, namely, Bureau of Indian Standards (BIS) under

compulsory Certification Scheme.

BIS certification is compulsory for all varieties and grades of cement under theCement (Quality Control) Order, 1962 issued under the Essential CommoditiesAct, 1955. Since the Indian cement industry recognises that ISO-9000 qualitysystem is extremely important for quality assurance, reliability andcompetitiveness, about 45 cement plants have already secured ISO-9000Certification. The Total Quality Management (TQM) concept has also beenadopted by more than 70 cement plants. Besides, some leading companies haveacquired TPM (Total Productive Maintenance) accreditation. Some manufacturers

are going ahead for world class rating, e.g. WCM (World Class Manufacturing) orERP (Enterprise Resource Planning) to be at par with Best Practices anywhere inthe world.

India produces different varieties and grades of cement, namely, Ordinary PortlandCement (OPC) (33,43,53 grades), Portland Pozzolana Cement (PPC), Portland



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Blast Furnace Slag Cement (PBFSC) and many other varieties. Some of thesevarieties are used for special applications, e.g. blended cement helps in resistingcertain chemical agents, sulphate resisting cement can be used in places where

concentration of sulphate is more, a low heat cement is used for mass concretingwork like dams, barrages and deep foundations. All these varieties of cement havebeen covered by Indian Standard Specifications. These are given below: -



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Indian Standard Specifications

Ordinary Portland Cement (OPC) 33 Grade IS:269

Portland Cements 43 Grade

53 Grade

IS:8112

IS:12269

Portland Pozzolana Cement (PPC) IS:1489

Portland Blast Furnace Slag Cement (PBFS) IS:455

High Alumina Cement for Structural Use IS:6452

Rapid Hardening Portland Cement

High Strength Ordinary Oil Well Cement IS:8229

Sulphate Resistant Portland Cement IS:12330

Low Heat Portland Cement IS:12600

White Portland Cement IS:8042

Hydrophobic Cement IS:8043

Masonary Cement IS:3466

Super Sulphate Cement IS:6909

Foreign specifications to which cement can be supplied BS-12

ASTM-150, 595

ISO-9002

ImportersSpecifications

Railway Concrete Sleepers IRST-40



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CN laboratory is ISO 9001:2000 certified

It is divided into four sections:

1. Quality control

2. Chemical laboratory

3. Physical laboratory

4. Concrete laboratory

1. Quality control:Our quality control laboratory is operating 24 hours a day with three rotatingshifts. Its main mission is to control the raw material, raw meal, kiln feed,clinker and cement production on hourly basis and report directly to theproduction departments in order to minimize the standard deviation of theresults during production, which leads to minimize the percentage of thenon-conforming product.

2. Chemical laboratory:CN has the most advanced technology for research and analysis such asXRF & XRD (with a Claiss machine) from ARL, microscope with all theaccessories (sample preparation, polish, software) etc... In addition thelaboratory is equipped to perform the wet analysis for the ASTM C114 andEN 196-2. An oven up to 2000 °C was also installed to control theburnability of the raw material and to evaluate the raw mix variation.

3. Physical laboratory:

The physical laboratory is divided into 2 sections. One section is forEuropean tests, and the second is for the American (ASTM) tests. Theenvironmental condition of both sections is controlled with continuousmeasurement to fulfill the requirements of both standards.

4. Concrete laboratory:



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This laboratory is well equipped to control the quality of the aggregates andsand and to detect the influence of the concrete component on the concretequality. In addition this concrete laboratory is available to support CN

customers and other interested parties.



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Quality Management System

CN is certified ISO 9001:2000. This Certification has been awarded since 2003 bythe "German Research Institute of the Cement Industry (VDZ)" - www.vdz-online.de the leader in certification, research and development in the Europeancement industry.

CN certified Quality Management System is applied all over the organization'soperations and locations, starting with the production line and ending up by thesupport activities, the sales office and the head office.

QMS is a set of interrelated or interacting elements which direct and control anorganization with regard to quality.

Our full scope Quality Management System was built according to the ISO

9001:2000 Standards. We have established our QMS elements by:

Identifying all main operations and their interactions

Setting and documenting the proper methodologies according to relatedNorms and Standards

Setting objectives, indicators and targets at all levels

The aim of establishing a Quality Management System in our organization is tomanage the activities in a systematic approach and to continually improve its

effectiveness in accordance with the requirements of international standards takinginto consideration our customers needs.Our QMS helps our Employees to:

Better understanding of what to do and how to do

Ability to meet work requirements

Ability to adjust processes when results are not meeting requirements

http://www.vdz-online.de/







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Our Quality Policy takes into consideration the compliance with international

Norms and Standards with high focus on our customer satisfaction by preservingour consistency in the produced cement quality on a timely manner at competitiveprices.

For this purpose we:

Continuously identify our customer requirements; Aim to fully comply with these customer requirements; Continuously improve the effectiveness of our Quality Management Systembuilt according to ISO9001:2008 Standard; Continuously provide a consistent cement quality according to National &International Norms & Standards by implementing the Quality Control Planfor sampling, testing

Furthermore, We have set our Quality Objectives as being the following:

Minimize product non-conformities,

Rapidly respond to customer complaints, and eliminate repetitive acceptedcomplaintsCarry out improvement actions whenever needed,Reduce the number of accidents by ameliorating the work condition andimproving Employee awareness and implementing a Safety ManagementSystem in the Organization



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CONSUMPTION PATTERN

Although India is one of the leading manufacturers of cement, its per capitaconsumption is one of the lowest in the world. In 1997 the per capita consumptionin India, was 82 kg as against the world average of 256 kg. Paradoxically, theconsumption was even less than that of Sri Lanka where India is exporting cement.The per capita consumption in Sri Lanka was 97 kg in 1997. In China, theconsumption was 390 kg. Statements showing per capita cement consumption inIndia and the world as under: -

Year India World

1995 72 252

1996 78 256

1997 82 256

Keeping in view the projected GDP growth rate of 7 per cent in the Ninth Five

Year Plan (1997-2002) and emphasis of Government on improving the ruralhousing facilities and stepping up infrastructure development, the per capitaconsumption is likely to grow considerably in the coming years.



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Environmental

We at CN hold our environmental performance as a key indicator in the company'sdevelopment and continuing success.

The company recognizes the need for continual improvement in all aspects of itsbusiness, but in particular in its environmental performance.

As with any other international companies in this sector, sustainability is a must forour survival.

With this in mind, Cimenterie Nationale SAL commits itself to the followingobjectives:

v Comply with relevant National Environmental Standards and Legislation as

a minimum

v Commit to use the State of the Art Technology for cleaner production and

emissions reduction v Redefine and implement a coherent CSR Policy and communicate it

appropriately

v Conservation of natural resources through production optimizaiton, increase

the use of additives and maximize recycling and minimize wastes where

applicable and rehabilitaiton of exploited areas.

v Continuously improve the effectiveness of our Environmental Management

System built according to ISO 14001 standards.

v Commit to raise the environmental awareness of employees by theirparticipation in the Environmental Management System.



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In this regard, we work with the local community and are sensitive to theirenvironmental needs in order to be recognized as good neighbours; furthermore,we closely work with regulatory authorities to promote and implement relevant

national and international initiatives.

Top management is highly committed in this respect since more than 10 yearsduring which about 20 million US$ were invested for improving and amelioratingthe environmental work conditions in the plant and in the surroundings. Getting theEMS ISO 14001 in the year 2005, gave an added value to what we have beendoing environmentally.

Continual environmental awareness of all CN staff at different levels was mainly

the first challenge we took when building our EMS due to the importance of theirinvolvement in complying with the environmental policy and related

procedures/processes within the Environmental Management System. The

provided staff training are mainly conducted internally by our qualified personnel,

or externally conducted by professional trainers in specialized local or foreign

companies.



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Porter's

Five

Forces

Analysis



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Porters five forces Model of Competition are as follows:· Rivalry among competing sellers· Potential newentrants

· Substitute products

· Competitive pressures from supplier - seller relations: Bargainingpower

· Competitive pressures from seller ± buyer relations: Bargainingpower.

High capital costs (Rs.3500/tonne), long gestation periods, establisheddistribution network and access to lime reserves act as high entry barriers

Bitumen in road and plastic in engineering offer some competition

Threat of New Entrants

Threat of Substitutes



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Licensing of coal and limestone reserves, supply of power and transport

are under monopolistic control leading to high bargaining power

Large no of players, little product differentiation, overcapacity, frequent

cost reductions

Not much bargaining power with buyers as cement purchase depends on

distribution network. With increase in retail cement share, branded

products command a premium

Bargaining power of Suppliers

Inter Firm rivalry

Bargaining power of Buyers



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Cost Structure



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Raw material cost

The basic raw material required for manufacturing cement is limestone. Cement

manufacturing units are primarily located near limestone reserves to avoid high

transportation costs. The major clusters of cement manufacturing in India are Satna

and Bilaspur in Madhya Pradesh, Chandrapur in Maharashtra, Gulbarga in

Karnataka, Yerraguntla and Nalgonda in Andhra Pradesh, and Chandoria in MP

and Rajasthan. Thus, it becomes very important for companies to plan their new

capacities near limestone reserves to save upon the transportation costs.

Power and fuel cost

The cement industry is one of the most energy-intensive sector within the Indian

economy. Clinker production is the most energy intensive step, accounting for

Cost Structure

Other operating cost

Raw materials

Other manufacturing

Power and fuel

Employee cost

Outward freight



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nearly 75% of the energy used in cement production. In India, an estimated 90-

94% of the thermal energy requirement in cement manufacturing is met by coal.

The remaining is met by fuel oil and high-speed diesel oil. For each kg. of clinker,

the cement industry on an average requires 800 K. Cal of coal for dry process and

1350 K. Cal. of coal for wet process. Over the years, there has been deterioration in

the quality of coal. In particular, the ash content has increased implying lower

calorific values for coal, and improper and inefficient burning, etc. Coal

consumption thus increased resulting in higher fuel and transportation costs. In

order to reduce these problems, the cement industry started implementing coalwasheries which reduce the ash content of the coal at the mine itself. Generally, the

cement industry in India on an average requires 90-105 units of power in the wet

process, and 100-110 units of power in the dry process to produce one tonne of

cement.

Freight cost

Freight cost would normally depend on the mix of transportation through roads and

railways. Increase and decrease in freight costs also depends on the petrol and

diesel prices prevalent in the market. With the recent Supreme Court ruling on

overloading of trucks, companies have increased the proportion of transportation

from roads to railways. In order to control the freight costs, companies strategically

try to locate plants close to both raw materials as well as markets. Companies have

gone ahead with the split location units by setting up the grinding units closer to

the markets,

whereas the clinker units are set up near limestone reserves.



52

Moreover, for exports of cement, ocean freight rates have also increased in the last

year, thereby increasing the freight cost for exporting companies.



53

Major Country Players



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China leads the way in cement consumption and production around the world dueto thelarge scale developments and infrastructure buildup projects that theChinesegovernment isundertaking. According to 2007 estimates the Chinese

productionhovers around 50% of worldtotal while the second closest rival Indiahovers around 6%. Table 1 details production of the top ten nations. In additiontoshowing the production in the years 2006 and 2007 in columns 2and 3, we havecalculated in the fourth column the percent of market share of each country intheyear 2007 by dividing the amount produced in each country by the world total.In column five,we calculate the percent increase in local production, whereas incolumn six we calculate thepercent increase in world share (2006-2007). Somerounding errors are expected as the worldtotal has been rounded. It is worthy tonote that Thailand was very close to making it on the tableas its production nears

that of Brazil and may exceed it in future years. Egypt on the other hand producesabout 1.1% of the world s total.



55



56

Cost effective analytical solutions for the

modern cement industry

Recent advances in X-ray instrumentation and related analytical techniques have

been very beneficial for the cement industry.

Both X-ray fluorescence for total elemental/oxide analysis and X-ray

diffraction for mineral/phase analysis are becoming routine tools in the cement

industry and are revealing their full potential in supplying vital information to the

process and quality control systems. Technical innovations in XRF and XRD have

resulted in more autonomous and integrated instruments such that the cement

analysis is more advanced and complete. For example, quantitative information

about the free lime and clinker phases in conjunction with the total chemical

analysis can now be achieved within a few minutes. A case study dealing with the

clinker phase analysis will be presented.

Additionally a study on the reduction of the production cost achieved by

using the different analytical solutions available for the cement industry will be

presented. Emphasis will be made on cost-effective instruments that provide

prioritized information for optimum process and quality control as well as

environmental issues.



57



58

Swot Analysis

Strengths

Opport-

unities

Threats

Weaknes

ses

Strength

S W

OT



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o The cement industry has many strengths to be considered. Cement is,literally, the building block of the construction industry. Almost everybuilding constructed relies on cement for its foundation. The cement

business is a $10 billion industry, measured by annual cementshipments. There is also a strong reputation behind the cementindustry. Cement is a solid material and consumers rarely havecomplaints about the product. Regional distribution plants have alsomade cement widely available to any type of buyer.

Weaknesses

o The cement industry is not without its drawbacks. The cement

industry relies on construction jobs to create a profit. But the cementindustry heavily relies on weather. About two-thirds of cementproduction takes place between May and October. Cement producersoften use the winter months to produce and stockpile cement, to meetdemand. Another weakness is the cost of transport; the cost of transporting cement is high and this keeps cement from beingprofitable over long distances. In other words, shipping cement costsmore than the profit from selling it.

Opportunities

o The cement industries has opportunities as well. One such opportunityis the cement industry's efficiency. The cement industry has recentlystreamlined its production efforts, using dry manufacturing instead of wet, which is heavier and more time-consuming. The cement industryhas also invested about $6 billion in expansion efforts to meet unmetcement needs. Projections show that by 2012, the cement industry will

o have 25 percent more production capabilities.

Threats

o The nature of the economy have uncovered a number of threats to thecement industry. The cement industry greatly relies on construction.

http://www.ehow.com/careers/





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The current economy has lessened the number of construction jobs,which in turn hurts the cement industry. The cement industry controlsthe majority of the United States market, but not all of it. About 11.5

metric tons of cement are imported annually to support the unmetneed. If other countries can produce and ship cement for a reducedprice, the U.S. cement industry is in danger. The U.S. government isalso attempting to regulate the cement industry's waste. TheEnvironmental Protection Agency has introduced regulations for thecement industry to cut down emissions.



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Bibliography

v Business Opportunitywww.hktdc.com v www.aet.org

v www.hoovers.com

v www.kimberly-clark.com

v www.tomorrow-web.com

v Cement Industry SWOT Analysis | eHow.com

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http://www.aet.org/

http://www.aet.org/

http://www.hoovers.com/


http://www.kimberly-clark.com/


http://www.ehow.com/about_6754859_cement-industry-swot-analysis.html





http://www.aet.org/





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