| A. INDUSTRY STRUCTURE AND DEVELOPMENT | |
| CEMENT | |
| Indian Cement Industry continues to be the second largest cement producer in the world with installed capacity of 244.69 million Ton. | |
| The Indian Cement Industry had a growth of 12% in the year under review as compared to 8% in previous year in spite of the global financial melt down affecting the entire world economy including India. | |
| During the year under review, Cement Industry has achieved capacity utilization of 85% as against 88% in preceding year, which has dropped mainly due to augmentation of new capacity. | |
| The cement production and consumption in India has recorded growth of 12% and 13% respectively over preceding year but the cement production and consumption in Southern Region, where both the cement Plants of the Company are situated have been only 9% & 5% respectively due to sizable addition of new capacity which has put pressure on Cement prices as well. | |
| TYRE | |
| The Indian Tyre Industry is mainly dominated by the organized sector and consists of five major players who together account for approximately 85% of the Industry's turnover. These companies have a presence in all the major segments of the Tyre Industry – the replacement market, Original Equipment Manufacturers (OEMs) as well as export and consequently, offer the consumer a well diversified product mix. | |
| In the Indian Tyre Industry commercial vehicle tyres take the lead and account for approximately 65% of the Industry’s turnover. As a result, the growth of the entire Tyre Industry depends on primary factors like agricultural growth, overall GDP growth, industrial production, growth in vehicle demand and secondary factors like infrastructure development, prevailing interest rates and financing options. Another significant difference between the Indian and the global Tyre Industry is the extent of radialisation in the commercial vehicle tyres. Globally, commercial vehicle tyres are radialized to the extent of 70% as compared to India where the radialisation levels in this segment until last year was only 10%. However, this trend is gradually changing and it is expected that radialisation levels will go up to the extent of 20-25% in the next 2 years. The major domestic players have announced significant expansion plans to meet the growing demand for commercial vehicle radial tyres. | |
| RAYON & TRANSPARENT PAPER | |
| There is no growth in the production capacities in the country. The demand for Viscose Filament Yarn (VFY) is expected to be moderate in the short to medium term in view of the high competition with other fibres and increased imports in the country. |
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| Further, the Transparent Paper (TP) manufacturing is not viable due to high cost of inputs, cheap substitutes resulting into restricted demand. | |
| Looking to erratic demand of both the products, there does not appear to be any further scope of development. |
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| SPUN PIPES | |
| The Industry witnessed sluggish demand during the first half of the year under review. While demand for pipes has picked up but Cast Iron pipes continue to face very stiff competition from 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 Indian Caustic Soda Industry declined to around 67% during the year due to demand recession and huge
import at dumping price. The Industry’s demand for imposition of safeguard duty – in addition to prevailing anti-dumping duty – has
been favourably considered by the designated authority resulting in sharp decline in imports towards the end of the year. |
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| Capacity utilization in Sulphuric Acid Industry suffered in the first half due to import of the product at throwaway prices. However, the situation improved in the second half due to increase in prices of Sulphur and Sulphuric Acid in International Market. | |
