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Cement Industry Cost Structure

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Recent Facts about Cement Industry

  • India is the second largest cement producer in the world and accounts for over 8 per cent of the global installed capacity, as of 2018.
  • The top 20 companies accounting for around 70 per cent of the total production.
  • Moreover, of the total 210 large cement plants in India, 77 are situated in the states of Andhra Pradesh, Rajasthan & Tamil Nadu.
  • In addition, 210 large cement plants account for a cumulative installed capacity of over 410 million tonnes.
  • While over 350 mini cement plants have an estimated production capacity of nearly 11.10 million tonnes.
  • Two cost saving recently emerging in the industry:
    (a) 15% busy season surcharge for transportation of cement via railways withdrawn during October-June.
    (b) Secondly, the Indian Railways removes 5% freight charges on loading mini rakes.
  • Thus, companies with higher dependence on railways, likely to benefit.
  • Main cost ingredients impacting the cement industry’s margins:
    (a) Limestone, slag, iron ore, aluminous clay and fly-ash.
    (b) Commodities’ prices – petroleum coke, thermal coal and diesel prices.

Cost Structure of Cement Industry

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cost structure of cement industry in india

The cost structure above is as per the latest financial statements of all listed Cement Companies.

Cost Structure of Top 5 Players of Cement Industry

1. Ultratech Cement

ultratech cement cost structure

2. Shree Cement

shree cement cost structure

3. Ambuja Cement

ambuja cement cost structure

4. ACC Ltd

ACC Ltd cost structure

5. The Ramco Cements

The Ramco Cements Ltd cost structure

*Note: The figures above are from latest Financial Statements by the respective companies.

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Disclaimer: The report only represents personal opinions and views of the author. No part of the report should be considered as recommendation for buying/selling any stock. The report & references mentioned are only for the information of the readers about the industry stated.

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