| A. | INDUSTRY STRUCTURE AND DEVELOPMENT |
| CEMENT | |
| Indian Cement Industry continues to be the second largest Cement producer in the world with installed capacity of 275.01 Million Tons and producing world-class quality Cement from State-of-the Art technology manufacturing facilities. | |
| The Indian Cement Industry had a growth of only 5% in the year under review as compared to 12% in previous year due to slowdown in the housings sector, prolonged monsoon and delay in execution of infrastructure projects. | |
| Cement Industry achieved the capacity utilization of about 75% as against 85% last year. This has dropped mainly due to substantial addition of capacity during the last three years. Capacity utilization in the Southern Region (where both the cement plants of the Company are situated) saw the highest capacity additions in the last three years and average utilization of 65%. | |
| TYRE | |
| The Indian Tyre Industry is dominated by the organized sector and consists of five major players – MRF, J.K. Tyres, Apollo Tyres, Birla Tyres and Ceat Tyres, who together account for approximately 85% of the industry's turnover. These big five players are present in all product segments except for two wheeler where only Ceat, MRF and Birla Tyres are present. 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. Some of the global majors like Bridgestone and Goodyear also have their operations in India. However, they have relatively smaller sized operations today. | |
| Quite unlike the global tyre industry, which is dominated by passenger car radial tyre sales, commercial vehicle tyres' sales constitute 65% of the turnover of the Indian tyre industry. Another point of difference between Indian and the global tyre industry is the extent of radialisation in the commercial vehicle segment. While globally it is around 80%. In India, radials in commercial vehicles hovers around 10-15% which till two years back was at around 5%. As original equipment manufacturers make a move towards embracing radial tyres for their commercial vehicles, radialisation in the truck segment is slowly gaining ground. Keeping these factors in view, radialisation levels in the commercial vehicle segment are expected to be anywhere between 25-30% in the next two years. | |
| In anticipation of the next big radialisation wave, most manufacturers have either installed capacities or announced plans of doing the same, including Apollo, Birla, MRF, Bridgestone, J.K. Tyre and Michelin. Similarly, considering strong demand forecast in the passenger car segment, manufacturers across the board are making investments to maximize capacities. | |
| The Indian Tyre industry is equipped to meet the demand of the domestic market, besides generating surpluses for export. | |
| RAYON & TRANSPARENT PAPER | |
| The country has annual production capacity of about 40,000 tons of Viscose Filament Yarn and demand is estimated to be around 55,000 tons annually. The gap is met by imports. Hence there is scope of increasing indigenous production for which Indian industry is taking necessary steps for enhancing their production capacity. The boost in demand is due to high cost of imports and rising prices of competing yarn. | |
| Even the Section being only producer of Transparent Paper in the country, the demand is not increasing effectively. The high cost of production is making this product unviable in the long run. However the production & sales remained stable. The production was maintained according to the size of demand. | |
| SPUN PIPES | |
| The Industry witnessed good demand for Ductile Iron pipes during the year under review. Cast Iron pipes continue to face very stiff competition from Ductile Iron pipes. As the section is under Suspension of Work since 2nd May 2008, no comments are made under the heads “Opportunities & Threats, Segment wise Performance, Outlook and Risks & Concerns”. | |
| HEAVY CHEMICALS | |
| The capacity utilization of Indian Caustic Soda Industry improved to around 80% during the year due to improvement of demand. The demand for the main product Caustic Soda and joint product Chlorine improved during the 3rd quarter and peaked towards the end of the year as imports were lower due to unfavourable price in international market. | |
| Capacity utilization of Sulphuric Acid Plant was normal despite inflow of by-product material from zinc and copper smelters. | |
| As the Section is under suspension of work since 8th December, 2010, no comments are made under the heads Opportunities & Threats, Segmentwise Performance, Outlook and Risk & Concerns. | |
