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A. INDUSTRY STRUCTURE AND DEVELOPMENT

CEMENT

The Indian Cement Industry remains the second largest cement producer in the world with an installed capacity of 211.81 million tons.

During the year under review, the Industry has achieved capacity utilization of 88% as against 96% in the preceding year. Percentage of capacity utilization has dropped mainly due to creation of new capacity. However, cement production and consumption have recorded a growth of about 8% over the preceding year.

TYRE

The Indian tyre industry has built capacity of over 70 million tyres per annum, which is mainly dominated by the organised sector consisting of five major players with 85% share. Truck and bus tyres are the principal segments having a share of over 80% of industry turnover. Radialisation has taken place in almost the entire passenger car tyre segment. In the truck and bus segment too, radialisation is gaining in pace and expected to reach 15% by March 2010. The replacement segment constitutes about 65% of the market and around 22% of tyre production in India is exported to more than 65 countries

Tyre being a derived demand product, its prospects are linked to factors like Gross Domestic Product (GDP) growth, agricultural and industrial production and rise in vehicle demand. The industry’s growth is also influenced by secondary factors, such as infrastructure development and interest rates.

The Indian Tyre Industry is equipped to meet the demand of the domestic market, besides generating surplus for export.

RAYON & TRANSPARENT PAPER

The demand for Viscose Filament Yarn (VFY) is expected to be moderate in the short to medium term until the global economic situation improves. Total production capacity in the industry could not be fully utilised due to suspension of work by some manufacturers.

The performance of TP segment is affected due to lower demand and higher production cost vis-a-vis BOPP and other cheaper substitutes. The 'firework' industry, which is the main consuming sector of this product, is also experiencing difficult times .

SPUN PIPES

The year under review was particularly challenging for the industry because of the severe global fi nancial crisis. Like other sectors, the Spun Pipes Industry is also bearing the brunt of this crisis. The industry continues to face competition due to higher input cost compared to the competing product, Ductile Pipes. As the section is under suspension of work since 2nd May, 2008, no comments are made under the heads 'Opportunities & Threats, Segmentwise Performance, Outlook and Risks & Concerns'.

HEAVY CHEMICALS

The capacity utilization of the Indian Caustic Soda Industry during the year was around 75%. Commissioning/streamlining of new Aluminium smelting capacity and increase in capacities due to expansion/modernization of new Caustic soda Plants in Eastern India have reduced the gap in demand & supply of the chemical.

Capacity utilization of Sulphuric Acid Industry was better due to adequate availability of the main raw material Sulphur and steady demand.
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