3. 3
Major Cement Producers of the World
Source: www.statista.com
Rank Country 2010 2011 2012 2013 2014 2015 CAGR
1 China 1880 2110 2210 2420 2480 2350 4.6%
2 India 210 240 270 280 260 270 5.2%
3 USA 67 69 75 77 83 84 4.6%
4 Turkey 63 64 64 71 75 77 4.1%
5 Brazil 59 64 69 70 72 72 4.1%
6 Russia 50 56 62 66 68 69 6.7%
7 Iran 50 61 70 72 65 65 5.4%
8 Indonesia 22 30 32 56 65 65 24.2%
9 Vietnam 50 59 60 58 61 61 4.1%
10 Japan 52 51 51 57 54 55 1.1%
Total 2503 2804 2963 3227 3283 3168
4. 4
World Cement Facts
World cement
production is
said to be at
4100 MnT for
2015.
China is the
cement leader
of the world
with 3500 MnT
per annum
capacity.
India is second
in the race with
441 MnT
capacity. USA
the third.
Leading world capacities
China used more cement in three years
than the U.S used in the entire 20th
century
U.S.
• Consumed 4.5
Gigatons in last
100 years
China
• Consumed
6.6 Gigatons
in the last 3
years
The global market is sized at 237
billion US dollars
Rank Company Country
Capacity
(Mt/yr)
1 CNBM (Sinoma) China 400
2 LafargeHolcim Switzerland 387
3 Anhui Conch China 285
4 Jidong Development China 130
5 Heidelberg Cement Germany 129
6 Shanshui (Sunnsy) China 100
7 Cemex Mexico 94
8 Aditya Birla Group India 91
9 China Resources China 78
10 Taiwan Cement Taiwan 69
Source: Company websites and ARs
Leader companies' Capacities
6. 6
Cement Comparison between India & China
India
441
270
317
Rs/Ton
171
26
2,341,000
33.3%
44.3%
China
4100
2350
302
RMB/Ton
1808
739
10,540,000
19.9%
24.2%
Capacity (MnT)
Production (MnT)
Cement Prices (as on Sept, 2015)
CO2 Emissions (including fossil fuels)
WHRS Capacity
Consumption per capita(Kg/person)
Top 3 Companies’ Contribution in the
Capacity of their Country
Top 5 Companies’ Contribution in the
Capacity of their Country
22. 22
Why China Grew at a Rapid Pace?
Factors China India
Liberalization 1978 1991
Demographics One Child Policy No such policies
HDI(2015) 0.727 0.609
Political Party 1(Communist Party) Many(Capitalist Economy)
Sector focused Manufacturing Sector Service Sector
Increasing Urbanization Tackled using strict land
acquisition reforms and LGFVs
No such reforms in India
Unique parameters
attributing to growth
Cheap and Skilled Labor, Rural
Entrepreneurship, Creative
Entrepreneurship, Centralization,
Exploitation of Economies of
Scale.
Cheap but mostly unskilled
Labor, Reliability on Agriculture
and Service Sector.
Power Shortage Tackled it effectively in different
phases removing its power
shortage problems.
Has been facing power
shortages since a long time due
to low power generation and the
Discoms’ inability to pay its debts
Technique used to
improve Railway Sector
4 phase approach No such approach used
23. 23
China’s 4 phase technique to Railways
In order to develop Railways, China used the 4 phase technique
where they initially focused on the Ordinary speed trains and then
gradually moved their way up to High-speed trains.
24. 24
Local Government Financing Vehicles
LGFV is a company created
by the local government,
which is in charge of
collecting local farmland,
moving the farmers off the
land, then rezoning it for
urban use.
This land is bundled
up into a bond, which
is sold to China's most
powerful bank, China
Development Bank
(CDB).
CDB is wholly
state-owned by
the Chinese
Communist Party.
After buying the
bond, it provides
financing money
to the LGFV.
Then, the LGFV
invites developers
to submit
development plans,
and develop the
land.
• China has more than 10K LGFVs
at present.
• Largely helped tackle the rising
Urbanization situation of China.
• Drawback – Creation of Ghosts’
town. These are the towns that got
created due to excess investments
on housing that were not taken up
by the local residents to dwell.
25. 25
China’s approach to power shortages
1978-1996
• This was the period of huge power
shortages.
• The Chinese government
responded to the crisis by allowing
local investors to invest in
generating capacity.
• The government imposed a tariff of
0.02 Yuan (0.32¢)/kWh on
industrial end users to
compensate investors. This solved
the power shortage problem of that
phase.
2003-2006
• Demand by high-energy-consuming
industries led to another phase of
power shortage.
• The Chinese government
responded by allowing local
governments to make power
generation investment decisions
without central government
approval.
• Simultaneously, the central
government began a market-
oriented restructuring of state-
owned power generation assets
during which “unbundling” of
generation assets took place.
• State Power Corp. was separated
into five separate major power
generation corporations and two
power grid corporations as part of
the central government’s market
competition mechanism.
At Present
• As per Reuters 2015 report China has
produced a little over 5.6 trillion kWh
of electricity in 2015, down 0.2%
from the previous year.
• Power consumption in 2015 stood at
5.55 trillion kWh, an increase of only
0.5% year-on-year.
• There are no such reports of power
shortages in China at present as it
had been able to meet its power
demands in the previous year.
27. 27
SWOT : China
1. Developed Infrastructure
2. Skilled Workers
3. High saving rate: Fuelling
Infrastructure growth
4. Quality Education
5. Manufacturing Hub
6. Quick decision making
7. Superior technology
1. Demographic burden
2. Rising labor cost
3. One child policy (loss of human resource)
1. Market saturation
2. Ongoing regional disputes
3. Oppressive political scenario
4. Environmental Concerns-Rising
global pressure
Strength Weakness
Opportunities Threats
1. Service Sector
28. 28
SWOT : India
1. Demographic dividend
2. Low labor costs
3. Rising middle class
4. Recent reforms
5. Optimistic political equation
(will boost growth)
6. Service orientation
1. Low saving rate
2. Lack of quality education
3. Poor infrastructure
4. Bureaucracy
1. Large and growing workforce
2. Infrastructural inadequacy
3. Untapped in-house demand –
can boost manufacturing
1. Volatile social structure
2. Environmental Concerns-Rising
global pressure
Strength Weakness
Opportunities Threats
29. 29
Lessons for India….
India’s low HDI rankings indicates its low labor pool.
• Focusing on HDI parameters like education, health
etc.
• Infrastructure notoriously lags behind, and that is
another key component in basic economic
development.
• Tackling rampant bureaucracy’s slow decision
making - Current political scenario seems
optimistic.
• Job creation- Programs like “Make in India” can
help.
• Democracy fostered innovation but marred quick
decision making.
• Development of Road and Railway network-
Allowing FDI for faster execution.