Professional Documents
Culture Documents
Cement Industry
3.00
2.50 18.50
THREAT OF NEW ENTRANTS * Economies of scale * High Capital requirement * Avg gestation period of 2-3 yrs * Access 2 distribution channels * Oversupplied market BARGAINING POWER OF SUPPLIERS * Large and few sellers * Monopolistic control of external cost element * No substitutes * Sellers product is important input
BARGAINING POWER OF BUYERS * Standard product * Rising share of retail purchase and declining share of bulk purchasers * No substitute
THREAT OF COMPETITORS * Large no. of competitors * Marginal product differentiation * High fixed costs * Lack of switching cost * High exit barriers
SWOT ANALYSIS
STRENGTHS
Brand name Most profitable cement co. in India Lowest cost producer Sea transportation Captive power plant Fuel efficiency
WEAKNESSES
Cement industry is highly fragmented Demand-supply gap, overcapacity Increasing cost of production High interest rates Packaging
OPPORTUNITIES
Government infrastructure spending Investment in industrial and commercial projects Commercial construction activity
THREATS
Imports from Pakistan affecting markets in North India Excess overcapacity can hurt margins as well as prices Consolidation through Mergers & Acquisitions
M&As
Gujarat Ambuja's acquisition of Modi Cement ($44 per tonne) in 1997. Gujarat Ambuja's acquisition of DLF in 1999 ($108)
Gujarat Ambuja acquired a 14.4-per cent stake in ACC from the Tata group in 1999 at Rs 370 per share. Holcim buys a 67-per cent stake in Ambuja Cement India in 2005 for 810million(about 3500crore).
2005 2004
2003 2002 2001 2000 1999 1998 1997 Total
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0 0 0 0 0 0 1 1
1 0
0 0 0 2 5 0 0 8
0 0
0 0 0 0 0 0 0 2