CEMENT

1. CEMENT MAY 2014 For updated information, please visit www.ibef.org

2. CEMENT • Executive Summary…………………………. 3 • Advantage India……………………………… 4 • Market Overview and Trends………………. 5 • Growth Drivers……………………………….. 25 • Success Stories: Innovative Solutions, UltraTech Cement, Ambuja Cement…………. 31 • Opportunities…………………………………. 34 • Useful Information…………………………… 36 MAY 2014 For updated information, please visit www.ibef.org

3. CEMENT EXECUTIVE SUMMARY • With nearly 350 million tonnes of cement production capacity, India is the second largest cement producer in the world. By 2020, cement production will reach to 550 million tonnes Second largest Cement market • Of the total capacity, 98 per cent lies with the private sector and the rest with public sector Dominated by private players • 188large cement plants together account for 97 per cent of the total installed capacity, while 365 small plants account for the rest Higher share of large plants • Of the total 188large cement plants in India, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu Large concentration in South and West Source: Planning Commission, Aranca Research MAY 2014 For updated information, please visit www.ibef.org

4. CEMENT ADVANTAGE INDIA • Robust demand • Robust infrastructure growth during 12th Five Year Plan to drive growth • Demand is expected to be boosted by growth in real estate sector • Long-term potential • Oligopoly market, where large players have partial pricing control • Low threat from substitutes Growing demand • AdvantageIndia • Increasing investments • Robust investments are being made by the existing players to expand their capacity • Increasing presence of Tier II cement players • Use of alternate fuels to lower production costs and emissions • Attractive opportunities • The North-East, which is witnessing a construction boom, offers attractive investment opportunities • Large planned investments in infrastructure and housing is likely to boost demand for cement in the coming years as well • The engineering sector is delicensed; 100 per cent FDI is allowed in the sector • Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period FY13 FY20E • Production capacity: 350 million tonnes^ • Production capacity: 550 million tonnes Source: Edelweiss, Notes: FY20E – Estimated market size for 2020 ^Planning Commission estimates MAY 2014 For updated information, please visit www.ibef.org

5. CEMENT OVERVIEW OF THE INDIAN CEMENT INDUSTRY Cement Industry (FY13) Large Cement Plants Mini And White Cement Plants • Cement plants: 188 • Installed capacity: 350mtpa^ • Cement production: 251mt • Cement plants: 365 • Installed capacity: 11.1 mtpa • Cement production: 6.0 mt* Source: Cement Manufacturers’ Association (CMA),Planning Commission, Aranca Research Note: mtpa - Million Tonnes Per Annum, mt – Million Tonnes ^Planning Commission estimates MAY 2014 For updated information, please visit www.ibef.org

6. CEMENT INDIA – WORLD’S 2nd LARGEST CEMENT PLAYER • India is the 2nd largest cement producer as well as consumer in the world led by the enormous growth in the infrastructure and construction sector for the last two decades Top Cement Producers in 2012 (million tonnes) Top Cement Consumers in 2012 (million tonnes) Source: International Cement Review, Aranca Research MAY 2014 For updated information, please visit www.ibef.org