B. OPPORTUNITIES AND THREATS

CEMENT
 
In order to meet future demand for cement, the Industry has taken up massive capacity expansion of 70 - 80 million tons during the next three years. It has already added 45 million tons of cement capacity during the year 2007-08 and 2008-09. All this is done in anticipation of the huge demand for cement and also good realization in the last two years.

There is promising growth of infrastructure like national and state highways, roads for rural connectivity, mass housing, irrigation projects, airports and power houses, etc. This massive capacity expansion needs better distribution channels by rail and road to reach the goods to end users. Rail and road fall under infrastructure developments of the Government, which needs to cope up with the increased requirement. Moreover, due to global recession, higher capacity additions may lead to excess supplies which may put pressure on cement demand and prices. The supply of lower ash content coal and increased coal price have been a matter of concern for the industry as coal being a substantial input cost in the cost of cement production.

TYRE

The national thrust on road infrastructure and construction of expressways and national highways present a range of opportunities for the Tyre industry. Creation of road infrastructure has given a tremendous fillip to surface transportation. The Tyre industry will continue to play an important role in this dynamic and evolving situation.

The volatility in raw material prices and import of tyres from China, however, remain points of concern for the industry.

RAYON & TRANSPARENT PAPER

The resurgence of domestic demand of value added products made of VFY is a good opportunity to liquidate the stocks. Stiff competition from China in international market of VFY and also dumping in the domestic market are the biggest threat to the industry. Imposition of Anti-dumping Duty which is under active consideration of the Government of India, should help in overcoming this problem.

The cheap substitutes, unregulated imports, higher cost of inputs are the major concerns of the T.P. Industry. The recent reduction in Excise Duty rates will help in improving the competitiveness of these products to some extent.

HEAVY CHEMICALS

The improvement in demand for Caustic Soda from the Aluminium Sector in the wake of some major capacity expansion is encouraging. However, the disposal of allied products due to increased availability remains a major hurdle.