23-01-2013, 02:36 PM
THE INDIAN CEMENT INDUSTRY
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INTRODUCTION
CAPITAL BUDGEING:
An efficient allocation of capital is the most important finance function in modern times. It involves decisions to commit firm’s funds to long-term assets. Such decisions are tend to determine the value of company/firm by influencing its growth, profitability & risk.
Investment decisions are generally known as capital budgeting or capital expenditure decisions. It is clever decisions to invest current in long term assets expecting long-term benefits firm’s investment decisions would generally include expansion, acquisition, modernization and replacement of long-term assets.
Such decisions can be investment decisions, financing decisions or operating decisions. Investment decisions deal with investment of organization’s resources in Long tern (fixed) Assets and / or Short term (Current) Assets. Decisions pertaining to investment in Short term Assets fall under “Working Capital Management”. Decisions pertaining to investment in Long term Assets are classified as “Capital Budgeting” decisions.
Capital budgeting decisions are related to allocation of investible funds to different long-term assets. They have long-term implications and affect the future growth and profitability of the firm.
METHODOLOGY
To achieve aforesaid objective the following methodology has been adopted. The information for this report has been collected through the primary and secondary sources.
Primary sources
It is also called as first handed information; the data is collected through the observation in the organization and interview with officials. By asking question with the accounts and other persons in the financial department. A part from these some information is collected through the seminars, which were held by KESORAM
INDUSTRY PROFILE
INTRODUCTION OF CEMENT:
The basic need of human being is food clothing and shelter love and affection /possession is on never ending process for a human being. As the time passes on human beings their wants and wishes also changed from ancient times to modern times and among them the living pattern and costruction works also have been changed from temporary construction of house to permanent construction and the basic material used in construction is “Cement”.
Cement the word derived from a latin word ‘CEMENTTUM’ means stone chipping such as we used in roman.
Cement the word as per oxford, it is commonly used is any substance applied for soft stocking things. But cement means is most vital and important material for modern constructions. It is a material which sets and hardness when mixed with water. Cement is basically used in construction as a building agent. In ancient times clay bricks and stones have been used for construction works.
THE INDIAN CEMENT INDUSTRY:
By staring priduction in 1914 the story of India cement industry is a stage of continuous of growth.
India is the fourth largest cement producer after China, Japan and U.S.A. so far annual production and demand has been growing a pace at roughly 68 million tons with an installed capacity of 82 millions tons.
In 1914 as the foundation of stable cement Industry was laid as sun above. It was Indian Cement Company at Porbandar in Gujarat. In 1920, the cement marketing corporation was formed to promote the sale and distribution of cement. A significant development was made in 1930 when all manufacturers mergers together to form the Associated
Cement Company Limited.
Cement Industry is the major Industry it has taken rapid strides for a modest beginning at porbandar in 1914 to the 1980’s with over understanding out of the 60 units, 14 units are in the public sectors remaining units are in private sector.
Indian endowed with cement grade lime stones (90 Billion tons ) and coal (190 Billion tons ). The basic raw material required for cement manufacture and self sufficient in manufacturing cement making machineries. During nineties it had a particular impressive expansion with a growth rate of 10%.
The strength and vitality of cement Industry can be gouged by the intrest shown and support given by World Bank, considering the excellent performance of the industry in utilizing loans and achieving the objectives and targets. The World Bank is examine the feasibility of providing a third line of credit for further upgrading Industry in varying areas, which will make it global.
TECHNOLOGY:
Cement may be manufactured employing three alternative technologies.
1. The largely out molded well process technology.
2. The more modern dry process that requires only 19% coal utilization.
3. The latest percallinator technology through which optimum utilization may be achieved. Here the calcinatory or raw.
Material is partly or completed carried out before the feud enters the rotator kin besides saving power, the adoption of this technology enable in increase in installed capacity by 30-35%, the 30,000 tons per day plants being setup in the country use this technology.
TECHNOLOGICAL CHANGES:
Continuous technological upgrading and assimilation of latest technology has been going on in the cement industry. Presently 93% of the total capacity in the industry is based on modern and environment friendly dry process technology and only 7% of the capacity is based on old wet and semi-dry process technology.
There is tremendous scope for waste heat recovery in cement plants and there by reduction in emission level. One project for co-generation of power utilizing waste heat in an Insian cement plant is being implemented with Japanese assistance under Green Aid Plan. The induction of advanced technology has helped the industry immensely to conserve energy and fuel and to save materials substantially.
India is also producing different varieties of cement like Ordinary Portland Cement (OPC), Portland Puzzling Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement etc. production of these varieties of cement conform to the BIS Specifications. Also, some cement plants have set up dedicated jetties for promoting bulk transportation and export.
TOTAL PRODUCTION:
The cement industry comprises of 125 large cement plants with an installed capacity of 148.28 million tons and more than 300 mini cement plants with an estimated capacity of 11.10 million tons per annum. The Cement Corporation of India, which is a Central Public Sector Undertaking, has 10 units. There are 10 large cement plants owned by various state Governments. The total installed capacity in the country as a whole is 159.38 million tons.
Actual cement production in 2004-05 was 116.35 million tons as against a production of 107.90 million tons in 2003-04, registering a growth rate of 8.84%. Major players in cement production are Ambuja cement, Aditya cement, J K Cement and L & T cement.
Apart from meeting the entire domestic demand, the industry is also exporting cement and clinker. The export of cement during 2003-04 and 2005-06 was 5.14 million tons and 6.92 million tons respectively. Export during April-May, 2005 was 1.35 million tons. Major exporters were Gujarat Ambuja Cements Ltd. and L & T Ltd.
DISTRIBUTION SYSTEM:
Distribution of cement was entirely under Government control until 1982. at present the Industry has to make an agreement towards the levy quota which is to be sold compulsorily to the Government the rest of the output or open market quota may be sold in the open market evolved prices the output lifted by the Government is allocated state wise.
NEED AND IMPORTANCE:
In India we see rapid industrial development in the last few centuries. Indian industry is growing at considerable ratio which reveals India is a developing country. And there are different industrial sectors are playing a vital role for the economy’s development. They are steel cement SOF. Information Technology Medical Science etc.
One among them was “CEMENT INDUSTRY” which plays a vital role for the country’s development. In India cement industry is growing rationally and marketing is the king pin of all activities particularly to the business because of this changes in the external environment i.e., social, political, legal, technical and international environment and changes in marketing. There is increased in the salaries in all most in every market leading to competition is aspects of price, promotion etc., which help to increase the standard of living of people.