Main Report

Fundamental Analysis of Cement Sector DHIRENDRA C SAROJ MMS – Finance (2008-10) Roll No: - 42

ACKNOWLEDGEMENT

1

No endeavor is complete without acknowledging those who have helped to make this project a success. As such I would like to thank all those who have helped me to complete this project. First it is our pleasure to thank Dr. M A Kohojkar (Director, Thakur Institute of Management Studies & Research) for granting us the opportunity to present out project report – “Fundamental Analysis of Cement Sector”. I express my heart filled gratitude to honorable Sir, Shri Ganesh Nair (AVPIndiaIfoline Ltd.) Shri Mukesh Patel (SM-Indiainfoline Ltd. & Project Coordinator ), who offered all the possible assistance during our developing period and for the interest he took in sorting out our difficulties and offering us guidance, constant encouragement and help. I would like to thank all the faculties of Thakur Institute of Management Studies & Research, they provided me with the necessary information and advice, and many thanks are due for the same. This study could not have been successful without the valuable inputs of my colleagues.

EXECUTIVE SUMMARY

2

India is the world's second largest producer of cement after China, with cement companies adding nearly eight million tonnes (MT) capacity in April 2009, taking the total installed capacity to 219 MT and despatch of 16.65 million tonnes during April 2009. A few of the leading manufacturers are the UltraTech/Grasim combine, Dalmia Cements, India Cements, Holcim etc. The cement industry may add 40-45 MT of capacity this fiscal, a 21 per cent increase over the installed capacity at 212 MT in 2008-09. With the boost given by the government to various infrastructure projects, road networks and housing facilities, growth in the cement consumption is anticipated in the coming years. Another 50 MT capacity is likely to be added this year, according to industry sources. With almost total capacity utilisation levels in the industry, cement despatches have maintained a 10 per cent growth rate. Total despatches grew to 170 MT during 2007–08 as against 155 MT in 2006–07. Moreover, cement despatches were 18.12 MT in March 2009, showing a growth of 10.35 per cent as compared to 16.42 MT in March 2008. During March 2009, cement production was 18.10 MT, registering a growth of 10.43 per cent as compared to 16.39 MT in March 2008. Despite concerns of slowdown, led by a change in economic scenario along with excess supply pressure, the cement industry has ended FY 2008-09 on a strong note. According to experts, the fourth quarter of the current financial year 2009 will report a 2-3 per cent growth in margins due to rise in prices and 10-12 per cent year-on-year growth in sales due to sudden increase in demand this quarter.

OBJECTIVE

3

Main objective of the study “Fundamental Analysis of Cement Sector” is to examine strengths and future prospects of Cement Sector. In order to examine the strength of Cement Sector I used the Fundamental Analysis which includes the study of Economy, Industry and Company Fundamentals. The objectives of the study are as follows: •

To analyze the fundamentals to acquire in-depth knowledge of the cement Sector.

•

To find out how the judgment is taken by the analyst on the basis of fundamental analysis of the company.

•

To study the demand of cement particularly Infrastructure including Housing and Construction.

•

To analyze the impact of union budget 2008-09 on cement industry.

•

To recommend the best investment points to the retail investor to get high returns with low risk.

•

To study the future prospect of Indian Cement Industry.

Sr. No.

CONTENT Executive Summary

Page No.

4

1 2

Introduction Types of Cement in India Clinker Cement 2.1 2.2

Ordinary Cement

2.3

Portland Blast Furnace Slag Cement

2.4

Portland Cement

2.5

3 4 5

Portland

Pozzolana

Rapid Hardening Portland Cement

2.6

Oil Well Cement

2.7

White Cement

2.8

6 8

Sulphate Resisting Portland Cement Cement Manufacturing Process Cost Structure Major Player’s Of The

18 23 25

Industry 6

30

SCENARIO:DEMAND AND SUPPLY

7

SUPPLIE’S ESTIMATE’S

31

8

Factor’s Responsible For The Growth of cement sector

31

9

Forecast model(fy09-fy12)

36

10

Big Player’s

37

11

ACC Ltd.

38

12

Outlook Of 2008

46

13

Conclusion

49

14

Cement sector to see M&A’s By 2009 end

51

Key Findings

53

16

Indian Cement industry forecast to 2012

54

17

Bibliography

55

18

Annexure

56

15

5

INTRODUCTION The Indian cement industry with a total capacity of about 190 m tonnes in financial year-2008 is the second largest market after China. Despite the fact that the Indian cement industry has clocked production of more than 100 m tonnes for the last five years, registering

an average growth of nearly 9%, the

per capita consumption of around 150 kgs compares poorly with the world average of over 260 kgs and more than 450 kgs in China. This, more than

6

anything underlines the tremendous scope for growth in the Indian cement industry in the long term .Although consolidation has taken place in the Indian cement industry with the top five players controlling almost 50% of the capacity, the balance capacity still remains pretty fragmented. Cement, being a bulk commodity, is a freight intensive industry and transporting cement over long distances can prove to be uneconomical. This has resulted in cement being largely a regional play with the industry divided into five main regions viz. north, south, west, east and the central region.

While the southern region always had excess capacity in the past owing to abundant availability of limestone, the western and northern region are the most lucrative markets on account of higher income levels. However, with capacity addition taking place at a slower rate as compared to growth in demand, the demand supply parity has been restored to some extent in the Southern region for the medium term. Considering the pace at which infrastructural activity is taking place in different regions, the players have lined up expansion plans accordingly. Despite the growth of the Indian cement industry, India’s per capita production of 115 kilograms per year lags the world average of over 250 kgs and China’s production of more than 450 kgs per person. Clearly there remains room for tremendous growth in the industry in India. But if India is to reach its

7

potential, the free hand of the market must be left unfettered. For this to happen, the Indian government must make sure that foreign companies that have a history of price fixing and market collusion receive appropriate regulation. If market shares get fixed, India will be the loser and the gap between India and China will only grow in the race to become the next economic superpower.

Types of Cement in India The types of cement in India have increased over the years with the advancement in research, development, and technology. The Indian cement industry is witnessing a boom as a result of which the production of different kinds of cement in India has also increased. By a fair estimate, there are around 11 different types of cement that are being produced in India. The production of all these cement varieties is according to the specifications of the BIS. Some of the various types of cement produced in India are: • • •

Clinker Cement Ordinary Portland Cement Portland Blast Furnace Slag Cement

8

• • • • •

Portland Pozzolana Cement Rapid Hardening Portland Cement Oil Well Cement White Cement Sulphate Resisting Portland Cement

In India, the different types of cement are manufactured using dry, semi-dry, and wet processes. In the production of Clinker Cement, a lot of energy is required. It is produced by using materials such as limestone, iron oxides, aluminum, and silicon oxides. Among the different kinds of cement produced in India, Portland Pozzolana Cement, Ordinary Portland Cement, and Portland Blast Furnace Slag Cement are the most important because they account for around 99% of the total cement production in India. The Portland variety of cement is the most common one among the types of cement in India and is produced from gypsum and clinker. The Ordinary Portland cement and Portland Blast Furnace Slag Cement are used mostly in the construction of airports and bridges. The production of white cement in the country is very less for it is very expensive in comparison to grey cement. In India, while cement is usually utilized for decorative purposes, marble foundation work, and to fill up the gaps between tiles of ceramic and marble. The different types of cement in India have registered an increase in production in the last few years. Efforts must be made by the cement industry in India and the government of India to ensure that the cement industry continues innovation and research to come up with more and more varieties in the near future.

1.Clinker Cement Clinker Cement has registered a growth over the last few years in India. The Indian cement industry is growing at a rapid pace and this has given a major boost to the production and sale of Clinker Cement in India. The cement industry in India is highly technologically intensive and as a result, the quality of clinker cement that is produced in India is of a very high grade and is often considered among the best in the world. The production of Clinker Cement requires a lot of energy because it needs to be manufactured at the temperature of around 1400-1450 degree Celsius.

9

The various raw materials required for the production of Clinker Cement are: • • • • •

Iron Ore Bauxite Clay Limestone Quartz

Clinker Cement in India is produced in such large quantities that it is able to meet the domestic demand and is also exported. In 2001- 2002, 1.76 million tons of clinker cement were exported. In 2002- 2003, that figure stood at 3.45 million tons, and in 2003- 2004 5.64 million tons of clinker cement was exported from India. This shows that the export of clinker cement from India has been increasing gradually but steadily.

Clinker Cement is usually ground with calcium sulphate so that it becomes Portland cement. It is also ground with other ingredients to produce Pozzolanic Cement, Blast Furnace Slag Cement, and Silica Fume Cement. If Clinker Cement is kept in a dry condition, it can be stored for a long period of time without any loss of its quality. It is for this reason that Clinker Cement is preferred in the construction of houses, bridges, and complexes.

2.Ordinary Portland Cement

10

Ordinary Portland Cement (OPC) is manufactured in the form of different grades, the most common in India being Grade-53, Grade-43, and Grade-33. OPC is manufactured by burning siliceous materials like limestone at 1400 degree Celsius and thereafter grinding it with gypsum. Tata Chemicals Limited is a major producer of OPC Grade 43 and 53. The value of each of these grades of cement has been briefly mentioned below: Ordinary Portland Cement-Grade 43: Having been certified with IS 8112:1989 standards, Grade 43 is in high demand in India and is largely used for residential, commercial, and other building construction purposes. It has a compressive strength of 560 kg per square cm. Today OPC 43 is most widely available in Gujarat through an extensive distribution network. •

Ordinary Portland Cement-Grade 53: Having been certified with IS12269:1987 standards, Grade 53 is known for its rich quality and is highly durable. Hence it is used for constructing bigger structures like building foundations, bridges, tall buildings, and structures designed to withstand heavy pressure. Expert opinions and directions from technicians and engineers are a must in this regard. With a good distribution network this cement is available most abundantly in Gujarat.

As such, Ordinary Portland Cement is used for quite a wide range of applications. Some of the Ordinary Portland applications are in pre-stressed concrete, dry-lean mixes, durable pre-cast concrete, and ready mixes for general purposes. The chemical components of Ordinary Portland Cement are Magnesium (MgO), Alumina (AL2O3), Silica (SiO2), Iron (Fe2O3), and Sulphur trioxide(SO3). Some of the big names involved in OPC manufacture are Tata Chemicals, Ultratech Cement, and ACC cement. Ordinary Portland Cement is in great demand in India and will continue to be used in Indian infrastructural upgradation and other constructions.

3.Portland Pozzolana Cement

11

Portland Pozzolana Cement is manufactured by blending pozzolanic materials, OPC clinker, and gypsum either grinding them together or separately. Today Portland Pozzolana Cement is widely in demand for industrial and residential buildings, roads, dams, and machine foundations. Pozzolana is an important ingredient in PPC which is commonly used in the form of: • • • •

Fly ash Volcanic ash Silica fumes Calcined clay

PPC is resistant to harsh water attacks and prevents the formation of calcium hydroxide at the time of cement setting and hydration. It withstands aggressive gases, thermal cracks, wet cracking, etc. The BIS quality specifications for Pozzolana materials used in PPC have been mentioned below: • •

Fly ash - IS 3812:1981 Calcined clay - IS 1344:1981

PPC is used in heavy load infrastructure and constructions such as marine structures, hydraulic structures, mass concreting works, plastering, masonry mortars, and all applications of ordinary Portland cement. One of the top Indian brands of Portland Pozzolana is 'Shudh Cement' manufactured by Tata Chemicals Limited. Shudh cement has 5 percent of the market share and is available abundantly in Gujarat, penetrating all 3 - primary, secondary, and tertiary markets. Some of the other big names in the Portland Pozzolana manufacture are Ultratech, Ambuja, ACC cements, Star Cement, and Birla group. Portland Pozzolana Cement is highly popular in India and with many cement plants setting up jetties for transportation, initial costs would gradually decrease as well.

4.Portland Blast Furnace Slag Cement

12

In recent years, there has been a significant growth in the production of Portland Blast Furnace Slag Cement and its sales have also increased considerably over the last few years. This has given a major boost to the Indian cement industry. The Slag Cement of the Portland Blast Furnace is a type of cement that is hydraulic and is manufactured in a blast furnace where iron ore is reduced to iron. The molten slag which is tapped is quickly drenched with water, dried, and then grounded to a fine powder. This fine powder that is produced is commonly known as the Portland Blast Furnace Slag Cement. The manufacture of Portland Blast Furnace Slag Cement requires 75% less energy than that needed for the production of the Portland cement. The low cost of production of Portland Blast Furnace Slag Cement makes it cheaper than Portland cement. It is for this reason that in recent years, the sales of Portland Blast Furnace Slag Cement have increased. Portland Blast Furnace Slag Cement has a typical light color and an easier 'finish' ability. Its concrete workability is better and it has a higher flexural and compressive strength. It is resistant to chemicals and also has more hardened consistency. This is the reason that Portland Blast Furnace Slag Cement is used in the construction of dams, bridges, building complexes, and pipes. The various raw materials required for the production of Portland Blast Furnace Slag Cement are: • • • •

Limestone Iron Ore Iron Scrap Coke

The major countries where Portland Blast Furnace Slag Cement is exported from India are: • • • • • • •

South Africa UAE Sri Lanka Nepal Bangladesh Australia Doha-Qatar

The production and use of Portland Blast Furnace Slag Cement have increased over the years. The Indian government has undertaken several investments in

13

the production of the Portland Blast Furnace Slag Cement so that its quality and durability can be improved.

5.Oil Well Cement Oil Well Cement as the name suggests, is used for the grouting of the oil wells, also known as the cementing of the oil wells. This is done for both, the off-shore and on-shore oil wells. As the number of oil wells in India is increasing steadily, the sales of Oil Well Cement have also increased. This has boosted the Indian cement industry to a large-extent. Oil Well Cement is manufactured from the clinker of Portland cement and also from cements that have been hydraulically blended. Oil Well Cement can resist high pressure as well as very high temperatures. Oil Well Cement sets very slowly because it has organic 'retarders' which prevent it from setting too fast. It is due to all these characteristics that it is used in the building of the oil wells where the pressure is around 20,000 PSI and the temperature is around 500 degrees-Fahrenheit. There are 3 grades of Oil Well Cements. Grades O is ordinary and is used commonly; HSR is high sulphate resistant; and MSR is moderate sulphate resistant. Each grade is used where it is applicable at a particular range of oil well sulphate environments, temperatures, pressures, and depths. Oil Well Cement has proved to be very beneficial for the petroleum industry due to its characteristics. For it is due to the Oil Well Cement that the oil wells function properly. The various raw materials required for the production of Oil Well Cement are: • • • •

Limestone Iron Ore Coke Iron Scrap

14

6.Rapid Hardening Portland Cement Rapid Hardening Portland Cement (RHPC) is a type of cement that is used for special purposes when a faster rate of early high strength is required. RHPC has a higher rate of strength development than the Normal Portland Cement (NPC). The Rapid Hardening Portland Cement's better strength performance is achieved by increasing the refinement of the product. This is the reason that its use is increasing-in-India. Rapid Hardening Portland Cement is manufactured by fusing together limestone (which has been finely grounded) and shale, at extremely high temperatures to produce cement clinker. To this cement clinker, gypsum is added in small quantities and then finely grounded to produce Rapid Hardening Portland Cement. It is usually manufactured using the dry process technology. Rapid Hardening Portland Cement is used in concrete masonry manufacture, repair work which is urgent, concreting in cold weather, and in pre-cast production of concrete. Rapid Hardening Portland Cement has proved to be a boon in the places where quick repairs are required such as airfield and highway pavements, marine structures, and bridge decks. The Rapid Hardening Portland Cement should be stored in a dry place, or else its quality deteriorates due to premature carbonation and hydration. As the Indian cement industry produces Rapid Hardening Portland Cement in large quantities, it is able to meet the domestic demand and also export to other countries. The cement industry in India exports cement mainly to the West Asian countries. The raw materials required for the manufacture of Rapid Hardening Portland Cement are: • • • •

Limestone Shale Gypsum Coke

15

7.Sulphate Resisting Portland Cement Sulphate Resisting Portland Cement (SRC) is a type of Portland cement in which the quantity of tricalcium alumiante is less than 5%. It can be used for purposes wherever Portland Pozzolana Cement, Slag Cement, and Ordinary Portland Cement are used. The use of Portland Sulphate Resisting Cement has proved beneficial, particularly in conditions where there is a risk of damage to the concrete from sulphate attack. The use of Sulphate Resisting Portland Cement is recommended in places where the concrete is in contact with the soil, ground water, exposed to seacoast, and sea water. In all these conditions, the concrete is exposed to attack from sulphates that are present in excessive amounts, which damage the structure. This is the reason that the use of the Sulphate Resisting Portland Cement have increased in India. The Sulphate Resisting Portland Cement should be kept in a place which is dry otherwise through premature hydration and carbonation the quality of cement deteriorates. The cement industry in India manufactures Sulphate Resisting Portland Cement in large quantities so that it is able to meet the domestic demand and also export to other countries as well. The Indian cement industry exports cement chiefly to the West Asian countries. The various uses of Sulphate Resisting Portland Cement are: • • • • • •

Underground and basements structures Works in coastal areas Piles and foundations Water and sewage treatment plants Sugar, chemical, and fertilizers factories Petrochemical and food processing industries

The raw materials required for the production of Sulphate Resisting Portland Cement are: • • • •

Coke Limestone Iron Ore Iron Scrap

Sulphate Resisting Portland Cement has proved beneficial for construction purposes in India due to its climatic conditions. The cement industry in India

16

must take steps in order to ensure that its quality is improved and to ensure that it is readily available in the market. The Sulphate Resisting Portland Cement should be stored in a dry place, or else its quality deteriorates due to premature carbonation and hydration. As the Indian cement industry produces Sulphate Resisting Portland Cement in large quantities, it is able to meet the domestic demand and also export to other countries. The cement industry in India exports cement mainly to the West Asian countries.

8.White Cement White Cement has registered growth in production and sale in India in the last few years. The White Cement sector has been growing at the rate of 11% per year. This has given the Indian cement industry a major boost. White Cement is much like the ordinary grey cement except that it is white in color. In order to get this color of the White Cement, its method of production is different from that of the ordinary cement. However, this modification in its production method makes White Cement far more expensive then the ordinary cement. The production of White Cement requires exact standards and so it is a product which is used for specialized purposes. White Cement is produced at temperatures that hover around 1450-1500 degrees Celsius. This temperature is more than what is required by the ordinary grey cement. As more energy is required during the manufacture of White Cement, it goes to make it more expensive than the ordinary grey cement. White Cement is used in architectural projects the use of white cement has been specified. It is used in decorative works and also wherever vibrant colors are desired. White Cement is used to fill up the gaps between marble and ceramic tiles for a smoother and more beautiful finish. The various raw materials required for the production of White Cement are: • •

Limestone Sand

17

• • • • •

Iron Ore Nickel Titanium Chromium Vanadium

The major countries where White Cement is exported from India are: • • • • • • •

UAE Australia South Africa Sri Lanka Doha- Qatar Bangladesh Nepal

CEMENT MANUFACTURING PROCESS Lime stone is the basic raw material used in cement production. Good quality lime stone‟s are abundantly available in the mines owned by India Cements Ltd.

18

Limestone is obtained from the mines through the process of heavy blasting limestone

conducted under strict supervision and safety precautions. The herewith obtained at India Cements Ltd. Mines are of very

superior quality.

The limestone in the form on huge stones is loaded in the dumpers and are transported to the crusher.

The dumper unloads the huge stones into the crusher. This machine is used to crush the huge stones into smaller chunks of approximately 20mm in size.

19

Using accurate weighing machines the material is fed into a vertical roller mill. It is a vertical steel mill with huge rollers used for grinding the material.

Powdered form of different grades is mixed homogenously in the blending silo.

The ground raw material is fed into a 6-stage pre heater where it meets the hot gases rising from the Kiln. Pre-heating of material before calcinations is a crucial process as it saves a lot of energy.

20

Calcination is the most crucial stage in cement manufacturing process. The raw materials is fed into a kiln, which is a huge rotating furnace. Using coal as the fuel the Kiln heats the raw material to a staggering temperature of 1400 degrees Celsius.

Subsequent to the intense heating, the raw material is sent to a cooler that brings the temperature of the material down to 200 degrees Celsius. The sudden cooling of the material results in the formation of grey colored nodules known as clinker.

Clinker which is prestructured reinforced cement concrete, is now sent to the clinker silo to avoid weathering effects.

21

Clinker and gypsum are fed to a cement mill in definite proportions with the help of weigh feeders. This procedure is popularly known as “Cement Mill”.

Then cement is packed in the packing plant into cement wags which weigh 50 kilograms each, with the help of automatic electronic packers and then are loaded into trucks .

Once the cement is packed in its respective bags i.e different bags are used for PPC & OPC type cements, they are directly loaded into trucks & train racks using conveyor belts, this process is also a fully automated process.

22

During this whole manufacturing process, hourly samples are taken from manufactured cement and is stringently tested at the shift labs in the plant. These check are to determine the setting time and strength of the cement manufactured to keep the quality of the cement being manufactured under constant observation.

COST STRUCTURE Since the industry operates on fixed cost, higher the capacity sold, the wider the cost distributed on the same base. The basic reason for not keeping production low or reducing production and inter-alia utilization is due to the incidence of high fixed costs. The cement units continue to operate at rated capacities to cover their costs. This can be gauged by the fact that most units had installed captive power generation facilities to reduce dependence on the grid.

23

1. Power: The cement industry is energy intensive in nature and thus power costs form the most critical cost component in cement manufacturing (about 30% to total expenses). Most of the companies resort to captive power plants in order to reduce power costs, as this source is cheaper and results in uninterrupted supply of power. Therefore, higher the captive power consumption of the company, the better it is for the company.

2. Coal: The consumption of coal in a typically dry process system ranges from 20-25% of clinker production. This means for per ton clinker produced 0.20-0.25 ton of coal is consumed. This contributes 35-40% of the production cost. The cement industry consumes about 10mn tons of coal annually. Since coalfields like BCCL supply a poor quality of coal, NCL and CCL the industry has to blend high-grade coal with it. The Indian coal has a low calorific value (3,500-4,000 kcal/kg) with ash content as high as 25-30% compared to imported coal of high calorific value (7,000-8,000 kcal/kg) with low ash content 6-7%. Lignite is also used as a fuel by blending it with coal. However this process is not very common.

3. Energy: The cement industry is highly energy intensive, with more than 40% of the manufacturing cost being contributed by energy. In the production of Clinker Cement, a lot of energy is required. Energy, including the landed cost of coal (25%) and freight (15%) are the major cost components.

4. Transportation: Since cement is a bulk commodity, transporting is a costly affair (over 15 per cent). Companies that have plants located closer to the markets as well as to the source of raw materials have an advantage over their peers, as this leads to lower freight costs. Also, plants located in coastal belts find it much cheaper to transport cement by the sea route in order to cater to the coastal markets such as Mumbai and the states of Gujarat and Tamil Nadu.

24

5. Raw Material: On account of sufficient reserves of raw materials such as limestone and gypsum, the raw material costs are generally lower than freight and power costs in the cement industry.

6. Other Costs: Excise duties imposed by the government and labor wages are among the other important cost components involved in the manufacturing of cement. Interest and depreciation account for 25-30% of costs, depending on the age and capital structure of the plant.

25

MAJOR PLAYER’S OF THE INDUSTRY This section provides the overview and financial information on prominent players in the Indian cement sector, like o Associated Cement Company Ltd. (ACC), o Grasim Industries Ltd., o Ambuja Cements Ltd., o UltraTech Cement Ltd., o J.K. Cement Limited, o Madras Cements Ltd., o Jaypee Group. o

Binani Cement Limited

o Prism Cement Limited

AMBUJA CEMENT The company's cement plant was commissioned in 1985. It was set up in technical collaboration with Krupp Polysius, Germany, Bakau Wolf and Fuller KCP. The company got necessary approvals for setting up another cement plant with 1 million tonne capacity per annum at Himachal Pradesh

in

the year

1991.

The

Company

undertook

bulk

cement

transportation, by sea, to the major markets of Mumbai, Surat and other deficit zones on the West Coast.

26

Transportation was to be carried out by three specially designed ships during the year 1992. During the year 1994, the company's Muller location 1.5 million tonne cement project with clinkerization facility at site in H.P and grinding facility both at Suli & Ropar in Punjab was bespoken. In 1997, Kodinar plant of the company was originated its commercial production with an enhanced capacity. In the last decade the company has grown tenfold. It was the first company in India to introduce the concept of bulk cement movement by the sea transport. The company's most distinctive attribute, however, is its approach to the business. Ambuja follows a unique homegrown philosophy for successful survival. Ambuja is the most profitable cement company in India, and one of the lowest cost producers of cement in the world. The company was awarded for its credit, the National Award for commitment to quality by the Prime Minister of India, National Award for outstanding pollution control by the Prime Minister of India, Best Award for highest exports by CAPEXIL and Economic Times - Harvard Business School Association

Award

for

corporate excellence in

different

years.

The

company was adjudged as the top Indian company in the cement sector for the Dun and Bradstreet -American Express Corporate Awards 2007. The company developed a unique homespun channel management model called Channel Excellence Programme (CEP) for marketing their product. Over 7000 dealerships and 20,000 retailers across India are covered under this model. The company name was changed from Gujarat Ambuja Cements Limited to Ambuja Cements Limited on April, 2007, the word Gujarat was dropped to reflect the true geographical presence of the company.

27

HSBC value Ambuja Cements at a target 2010e EV/EBITDA of 5.5x, which is at a discount to its historical trading range of 7-10x and in line with its industry peers. “We value Ambuja Cements in line with ACC, which we believe is its closest comparable. Our target price is Rs 50 and we have an Underweight rating on the stock,”

ULTRATECH CEMENT LTD. UltraTech Cement Limited was incorporated as a public limited company on 24th August 2000, as “L&T Cement Limited” a 100% Subsidiary of Larsen & Toubro Limited. The name of the Company was changed to UltraTech Cement Co. Limited with effect from 19th November 2003 after the Aditya Birla group owned Grasim Industries acquired it. The name of the company was again changed to UltraTech Cement Limited with effect from 11 October th

2004. UltraTech Cement Limited has an annual capacity of 18.2 million tonnes. It manufactures and markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzolana Cement. It also manufactures ready mix concrete (RMC). UltraTech Cement Limited has five integrated plants, six grinding units and three terminals — two in India and one in Sri Lanka. UltraTech Cement is the country’s largest exporter of cement clinker. The export markets span countries around the Indian Ocean, Africa, Europe and the Middle East.

28

JAYPEE CEMENT

Jaypee group is the 3rd largest cement producer in the country. The groups cement facilities are located in the Satna Cluster (U.P), which has one of the highest cement production growth rates in India. The group produces special blend of Portland Pozzolana Cement under the brand name ‘Jaypee Cement’ (PPC). Its Cement Division currently operates modern computerized process control cement plants with an aggregate capacity of 13.5 MTPA. The company is in the midst of capacity expansion of its cement business in Northern, Southern, Central, Eastern and Western parts of the country and is slated to be a 24.30 MTPA cement producer by the year 2010 and 26.80 MTPA by 2011 with Captive Thermal Power Plants totaling 327MW. Keeping pace with the advancements in the IT industry, all the 140 cement dumps are networked using TDM/TDMA VSATs along with a dedicated hub to provide 24/7 connectivity between the plants and all the 120 points of cement distribution in order to ensure “track – the – truck” initiative and provide seamless integration. This initiative is the first of its kind in the cement industry in India. In the near future, the group plans to expand its cement capacities via acquisition and greenfield additions to maximize economies of scale and build on vision to focus on large size plants from inception.

29

Madras Cements: HSBC value Madras Cements at 4x EV/EBITDA. HSBC is underweight on the stock with a target price of Rs 60.

India Cements:With a worsening macro outlook and likely oversupply in 2009, HSBC value India Cements at 4.5x 2010e EV/EBITDA, which is at a discount to its historical trading range of 5.5x-8.5x. HSBC gave the target price of Rs 80, with an Underweight rating on the stock.

Shree Cements:The stock has traded in a narrow EV/EBITDA band of 4-6x in the last two years. A concentration of the company’s operations in northern India could make it more vulnerable to potential oversupply in 2009; “We therefore value it at the lower band of its EV/EBITDA range, i.e.3.5x.

30

SCENARIO:DEMAND AND SUPPLY

Production change) Jan-08 5.2 Feb-08 (0.9) Mar11.2 08 Apr(8.3) 08 May(0.9) 08 Jun-08 (1.5) Jul-08 (0.1) Aug(10.2) 08 Sep-08 5.6 Oct-08 6.2 Nov(2.9) 08 Dec10.3 08 Jan-09 2.0 Date

(% Consumption change) 10.8 5.4

(% Capacity utilisation (%) 102.4 101.2

Excess supply(%) 1.0 0.1

(0.3)

104.1

1.8

10.7

91.9

(1.1)

(9.8)

89.1

0.4

2.0 (1.3)

86.5 86.4

(0.2) 0.0

(2.5)

77.3

(1.1)

(9.5) 4.9

81.6 86.3

1.0 1.2

3.1

83.3

0.4

0.9

91.7

1.7

11.0

93.4

0.5

The table above highlights the fact that consumption of cement has not taken back

seat and industry is growing

and has been operating

at the near

equilibrium levels. Supply has fallen short only for last monsoon which is usually a slack period for this industry. It is clearly can be noted from the above data the production in Jan (08) 5.2% and in Dec (08) production increased to 10.3 % and consumption in Jan(08) 10.8% and in Dec(08) 0.9% and in Jan(09)

31

increased to 11.0% and the supplies in Jan(09) become 0.5% in excess which is a indicator that cement industry has a significant growth over the year .

SUPPLIE’S ESTIMATE’S HISTORICAL : DEMAND SUPPLY MODEL

Historical cement demand supply model (m tonnes) Year-end installed capacity Actual effective capacity (-) Mothballed capacity Effective installed capacity Domestic consumption Export (cement + clinker) Domestic consumption + Export Surplus / deficit) % surplus (wrt effective capacity) Actual utilization Average prices Change in average price Capacity growth Domestic demand growth

FY04 144 144 8.5 136 114 9

FY05 152 152 8.2 143 121 10.1

FY06 158 158 8.5 150 136 9.2

FY07 166 166 8.3 158 149 8.9

FY08 199 180 5.7 174 164 6

FY09 222 207 4.9 202 178 6.1

123 13

131 12

145 5

158 0

170 4

184 18

10% 86% 141 3% 5% 5.80%

9% 88% 153 8% 6% 6.40%

3% 95% 163 6% 4% 12.00%

0% 99% 206 27% 6% 9.90%

2% 97% 231 12% 10% 10.10%

9% 91% 239 4% 16% 8%

Historically, the sustainable capacity utilisation in the cement industry has been 80-85%. This implies FY09 and FY10 are unlikely to be years of overcapacity in the traditional sense.

32

FACTOR’S RESPONSIBLE FOR THE GROWTH OF THE SECTOR  Technological change

Continuous technological upgrading and assimilation of latest technology has been going on in the cement industry. Presently, 93 per cent of the total capacity in the industry is based on modern and environment-friendly dry process technology and only 7 per cent 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 thereby reduction in emission level.



New Investments

•

Shree Cements will invest almost US$ 244.12 million this year, of which half will be invested towards setting up two grinding units at Rajasthan and Uttarakhand to augment its capacity. The other half will be towards the two power plants in Bangur.

•

ACC Ltd will spend US$ 575 million on capacity expansion in 2009 and 2010. ACC is expanding capacity by a third to 30 MT by 2010.

•

Binani Cement has signed a memorandum of understanding with the Gujarat government to set up a 2.5 MTPA greenfield cement plant in Gujarat at a cost of US$ 169.40 million. Binani Cement has also initiated

33

talks with a few foreign institutional investors (FIIs) to raise US$ 307.99 million for its new projects. •

Bheema Cements Ltd is planning to invest US$ 116.42 million in setting up a new manufacturing line of 1.5 MT capacity at its plant in Andhra Pradesh.



Mergers and Acquisitions (M&As)

A growing and robust economy was noteworthy in terms of the total number of mergers and acquisitions (M&A) in India 2007, with the cement sector contributing to 7 per cent to the total deal value.

•

Holcim strengthened its position in India by increasing its holding in Ambuja Cement from 22 per cent to 56 per cent through various open market transactions with an open offer for a total investment of US$ 1.8 billion. Moreover, it also increased its stake in ACC Cement with US$ 486 million, being the single largest acquirer in the cement sector.

•

Leading foreign funds like Fidelity, ABN Amro, HSBC, Nomura Asset Management Fund and Emerging Market Fund have together bought around 7.5 per cent in India's third-largest cement firm, India Cements (ICL), for US$ 124.91 million.

34

•

Cimpor, the Portugese cement maker, paid US$ 68.10 million for Grasim Industries' 53.63 per cent stake in Shree Digvijay Cement.

•

CRH Plc, the world's second biggest maker and distributor of building materials, acquired a 50 per cent stake in My Home Industries Ltd for almost US$ 372.64 million.

•

Vicat SA, a French cement maker acquired a 6.67 per cent stake in Hyderabad-based Sagar Cement for US$ 14.35 million.



Government Initiatives Government initiatives in the infrastructure sector, coupled with the housing sector boom and urban development, continue being the main drivers of growth for the Indian cement industry.

•

Increased infrastructure spending has been a key focus area over the last five years indicating good times ahead for cement manufacturers.

•

The government has increased budgetary allocation for roads under National Highways Development Project (NHDP).

35

•

Appointing a coal regulator is looked upon as a positive move as it will facilitate timely and proper allocation of coal (a key raw material) blocks to the core sectors, cement being one of them.

Keeping in mind the global meltdown which is impacting the cement companies in India, the government reimposed the counter-veiling duty (CVD) and special CVD on imported cement in January. This is likely to provide a level playing field to domestic companies.

36

FORECAST MODEL :FY(09) TO FY(12)

Table 3: Forecast cement demand supply model (m tonnes) FY09 Year-end installed capacity 224 Actual effective capacity 207 (-) Mothballed capacity 4.9 Effective installed capacity 202 Domestic consumption 178 Export (cement + clinker) 6.1 Domestic consumption + export 184 Surplus / (deficit) 18 % surplus (wrt effective capacity) 9% Actual utilisation 91% Average prices 239 Change in average price 3% Capacity growth 16% Domestic demand growth 8%

FY10E 250 231 4.9 226 187 5 192 35 15% 85% 240 0% 12% 5%

FY11E 287 257 4.9 252 205 8 213 38 15% 85% 240 0% 11% 10%

FY12E 300 283 4.9 278 226 9 235 43 15% 85% 240 0% 10% 10%

The above model is a forcast model for the growing cement sector from FY09 to FY12 the contributing factor’s taken to consideration are o o o o o

Export Domestic Consumption Average Prices Capacity Growth and Domestic Demand Growth

The above all factor’s are increasing in a considerable rate indicating a positive sign towards the growth of the sector.

37

BIG PLAYER’S : CEMENT SECTOR

From the above chart we can see that o ACC contibuted 11.8% to the sector o L&T 11.3% o Grasim 9.6% o Gujrat Ambuja 7.6% o India Cement 6.9% o Madras 3.3% And other’s 49.5% to the sector . So, ACC being the contributing a major part of supplies.

sector leader

38

ACC : THE MARKET LEADER

ACC Limited is India’s foremost manufacturer of cement with a countrywide network of factories and marketing offices. Established in 1936, ACC has been a pioneer and trend-setter in cement and concrete technology. ACC’s brand name is synonymous with cement and enjoys a high level of equity in the Indian market. Among the first companies in India to include commitment to environment protection as a corporate objective, ACC has won several prizes and accolades for environment friendly measures taken at its plants and mines. A prominent overseas presence and figuring on the elite list of consumer super brands of India but most importantly ACC has been amongst the first Indian companies to make environmental protection, it is a cornerstone of its corporate objectives. The historic merger of ten existing cement companies led to the establishment of ACC –melding into a cohesive organization in the year 1936 at Maharashtra. It’s a big company in cement manufacturing and offers the services of Ready mixed concrete and Consultancy service. This company is listed by Bombay Stock Exchange, National Stock Exchange and in London Stock Exchange. The company received an award as 'Good Corporate Citizen' for the year 2005-2006. During the year 2007 company acquired 100 % of the equity stake of Lucky Minmat Private Limited for Rs 35 crores and also acquired 14.3 % equity stake in Shiva Cement Limited. Meanwhile the company divested its entire equity shares in Almatis ACC Ltd to the Almatis group. The overseas contract with YANBU Cement Company in the kingdom of Saudi Arabia is

39

successfully ongoing relationship from last 28 years and has been renewed up to February 28, 2011. The company has developed comprehensive expansion plans to meet the requirements of its agenda for growth with a view to attain leadership position in the cement industry, for that company made a project for augmentation of clinkering and cement grinding. As a result with this the capacity of Gogal works stands increased to 4.4 Metric Tonnes Per Annum. ACC planed to expand the unit of Bargarh works capacity to 2.14 MTPA together with 30MW captive power plant is underway. Ready mix concrete business has been identified as an area of strategic priority. ACC commissioned a Wind Energy Farm in Tamil Nadu to promote clean and green technology. The company foresees substantial scope for growth of this business in India and has accordingly finalized plans to expand Ready Mix business in major cities including Tier1 and Tier 2 cities.ACC realizes the growth potential of Ready Mix, the company has 26 plants for the same and enhance to 46 in 2008. The company has major capital expenditure projects in hand, as a result of these projects the total cement capacity of the company will increase to about 30.4 MTPA by end of 2010 with total outlay of Rs 4,000 crores.

The manufacturing cost per tonne of ACC Ltd, India’s largest cement manufacturer by capacity, is the highest in the Indian cement industry, say analysts. ACC’s manufacturing cost is Rs1,529 per tonne against the industry average of Rs1,056 per tonne. India, the second largest cement market in the world, has a total installed capacity of 170 million tonnes per annum (mtpa), according to a

40

report on the sector by domestic brokerage Karvy Stock Broking Ltd that was released last week. Demand for cement in the country stood at 154.9mtpa for the year ended March. Birla Corp. Ltd has the second highest manufacturing cost, Rs1,339 per tonne, followed by UltraTech Cement Ltd, at Rs1,240 per tonne. The ACC share closed on Monday on the Bombay Stock Exchange at Rs1,285.95, gaining 2.83% on a day when the benchmark Sensex rose 639.63 points or 3.47%. The Karvy report has an “underperformer” rating on ACC, based on the rationale that “the cement price would decline and freight and coal cost would increase, which would lead to de-rating of valuation”. The price-earnings multiple of ACC stands at 19.52, higher that the industry average of 14.86. “ACC has the oldest plants,” says Sourav Mallik, associate director (investment banking) at Kotak Mahindra Capital Co. Ltd, the investment banking arm of Kotak Mahindra Bank Ltd. “Some plants are inefficient and it is uneconomical to run them.”

41

ACC has 14 plants at 12 locations nationwide— •

Madukkarai in Tamil Nadu,

•

Wadi (two) in Karnataka,

•

Chamda in Maharashtra,

•

Bargarh in Orissa,

•

Damodhar in West Bengal,

•

Sindri and Chaibasa in Jharkhand,

•

Jamul in Chhattisgarh,

•

Kymore in Madhya Pradesh,

•

Tikaria in Uttar Pradesh,

•

Lakheri in Rajasthan, and

•

Gagal (two) in Himachal Pradesh.

The company has a manufacturing capacity of around 21mtpa and hopes to expand it to 27mtpa by 2009.

42

ACC : QUALITY PRODUCTION

Product Development has always been an important activity at ACC, arising out of a focus on quality and process improvement. It has been a constant partner, driving research, innovation and evaluation. In 1964, a centralized research facility - the Central Research Station (CRS) was established in Thane. The research complex now renamed as ACC Thane Complex, spread over an area of 8000 sq m has modern labs with the latest equipment and manned by highly qualified scientists and technologists who carry out product development work in cement and allied fields.

ACC has effectively pledged its reputation as the market leader in the quality of cement. Maintaining this lead calls for harnessing the resources and expertise of the company - from applied research and production to marketing.

Accordingly, all ACC factories are equipped with state-of-the-art process control instrumentation and associated quality control and testing laboratories. Trained engineers, chemists and technicians man these. The Central Laboratory at ACC

43

Thane Complex is used as a reference laboratory for diagnosis and resolving specific trouble-shooting cases. As a result of this focus on quality, ACC cement specifications exceed those set by BIS by a wide margin. Today, all ACC cement plants have the ISO 9001 Quality Systems certification. This demonstrates our tradition of providing reliable and consistent quality through the application of modern technology, and justifies the preferences of a nationwide customer base.

44

ACHEIVEMENT’S

2006 Subsidiary companies Damodhar Cement & Slag Limited, Bargarh Cement Limited and Tarmac (India) Limited merged with ACC 2006 ACC announces new Workplace policy for HIV/AIDS 2006 Change of name to ACC Limited with effect from September 1, 2006 from The Associated Cement Companies Limited. 2006 ACC receives Good Corporate Citizen Award 2005-06 from Bombay Chamber of Commerce and Industry 2006 New corporate brand identity and logo adopted from October 15, 2006 2006 ACC establishes Anti Retroviral Treatment Centre for HIV/AIDS patients at Wadi in Karnataka– the first ever such project by a private sector company in India. 2007 ACC partners with Christian Medical College for treatment of HIV/AIDS in Tamil Nadu 2007 Sumant Moolgaokar Technical Institute completes 50 years and reopens with new curriculum 2007 ACC commissions Wind energy farm in Tamilnadu. 2008 Ready mixed concrete business hived off to a new subsidiary called ACC Concrete Limited. 2008 ACC Cement Technology Institute formally inaugurated at Jamul on July 7. 2008 First Sustainable Development Report released on June 5. 2008 ACC wins CNBC-TV18 India Business Leader Award in the category India Corporate Citizen of the year 2008

45

Outlook of 2008 The Cement industry has continued its growth trajectory over the past seven years. Domestic cement demand growth has surpassed the economic growth rate of the country for the past couple of years. The growth rate of cement demand over the past five years at 8.37 % was higher than the rate of growth of supply at 4.84% as also the rate of growth of capacity addition during the same period. Demand for cement in the country is expected to continue its buoyant ride on the

46

back of robust economic growth and infrastructure development in the country.

The key drivers for cement demand are real estate sector, infrastructure projects and industrial expansion projects. Among these, real estate sector is the key driver

and

accounted

for

almost

55%

in

FY

07.

During the period FY 03 – 07, capacity additions in the country (30.6 mn tonnes) were at a slower rate compared to demand growth leading to higher average capacity utilization rates from 81.3% to 93.8% during the same period. This has exerted pressure on average prices which have increased from Rs. 156 per bag in FY 03 to Rs. 216 per bag in FY 07. In December 2007, prices stood at Rs. 245 - Rs. 250perbag. Low capacity addition coupled with higher utilization rate also led to increase in proportion of production of blended cements in product mix. Blended cement accounted for 68% of product mix in FY 07 as compared to 49% in FY 03.

Cement is a bulky commodity and cannot be easily transported over long distances making it a regional market place, with the nation being divided into five regions. Each region is characterised by its own demand-supply dynamics. The Southern region dominated the cement consumption at 44.5 mn tonnes in FY 07, accounting for about 30% of total domestic cement consumption. During FY 03-07, Southern region has witnessed highest CAGR of cement demand growth

47

at 10.4% followed by Northern and Eastern regions at 8.9% and 9%, respectively.

Over the past five years, cost of cement production has grown at a CAGR of 8.4%. Also, the producers have been able to pass on the hike in cost to consumers on the back of increased demand. Average realizations have increased from Rs. 1,880 per tonne in FY 03 to Rs. 3,133 per tonne in FY 07, at a CAGR of 13.6%, which has been reflected in higher profit margins of the industry.

To reduce the cost of production, the industry has focused on captive power generation. Proportion of cement production through captive power route has increased over the years. Also, cement movement by rail has increased over the years. Market share of top five players in the industry has increased from 42% in FY 02 to 56% in FY 07. In FY 07, Holcim group captured a leadership position with market share of 22.6% followed by Aditya Vikram Birla group at 19.4%.

Domestic Cement industry is highly insulated from global cement markets. Exports have been constant at about 6% of total cement demand for past few years. With GoI intervention, making cement duty free, cement is being imported from neighbouring countries. However, due to logistics issues and lack of port handling capabilities, imports of cement will remain negligible and do not pose a threat

to

domestic

industry.

48

Cement demand is expected to remain buoyant driven by boost in construction sector in the country. As per estimates, investment of USD 25 bn is required in urban housing, USD 450 bn will be required in infrastructure related projects and industrial expansion projects would witness investments of USD 88 over the next five-years. We estimate domestic cement demand to grow at a CAGR of approximately 10% for the next 5 years. The current tight demand - supply situation is expected to extend up to end of calendar year 2008 owing to delays in capacity expansion programmes by various companies. We expect prices to remain firm till the end of CY2008 due to tight demand supply situation and increase in input costs. Thereafter as new capacities come in,

we

may

witness

a

softening

in

prices

in

some

regions.

CONCLUSION Cement production: too early to say worst is over The shares of cement companies have been moving up again, on the back of a decent rise in January dispatches for some companies. Industry data show that cement production and despatches increased by 12.6% and 12.7% year-on-year (y-o-y) in December, after growing by 9.8% and 12% y-o-y in November. The government’s numbers show that all-India growth in cement production was 8.7% in November and 11.6% in December. The momentum is likely to be kept

49

up in January—the Aditya Birla group has said that cement production and despatches are up 9.76% and 7.35%, respectively, ACC Ltd’s production and despatches for January are up 12% and 12.5%, respectively. The numbers have sparked some hope among analysts that demand for cement has picked up. The reasons for the higher demand include pre-poll spending and strong rural demand. A research report by broking firm Sharekhan.com says, “With the revival of infrastructure and private house building activity, the cement industry has given an impressive performance in the last two consecutive months. But sustaining such growth is uncertain, as the real estate segment, which consumes about 55% of the total cement produced, has still not revived due to overall economic slowdown. However, we expect that the overall volume growth in FY2009 will be certainly ahead of street expectations. Further, cement companies are also expected to benefit from softening coal and crude prices.” There is, however, also a base effect at work here. According to analysts at Morgan Stanley, the y-o-y growth in the three-month moving average of cement dispatches was at a low of 4.9% in January 2008, which is why they expect high growth of 11.4% in the three-month moving average of cement despatches for January 2009. In February 2008, however, the three-month moving average went up to 8%, which means that it’ll be difficult to show high growth in February 2009.

50

But perhaps the biggest reason not to set too much store by the rebound in cement despatches is the opinion of the cement producers themselves. The Grasim management, for example, points out that although cement demand can be expected to grow in line with the gross domestic product growth, prices and margins will come under pressure in FY10 as more capacities come on stream.

Cement sector to see M&As' by 2009-end'

Mumbai: The 207-million tonne Indian cement industry may witness M&A activity again by the end of 2009, say industry watchers. However, this time, valuations will be low and deals will be driven by a strategic desire to exit rather than financial compulsion to restructure, they opine. "Large players or MNCs will make acquisitions when new entrants and small companies start feeling margin pressures." Apart from issues relating to oversupply, small

51

companies may have made expansions at high costs and will have to spend on brand building; hence, returns may not be up to their expectations and they will look to be acquired,. Experts believe companies like Reliance, Holcim and Lafarge are waiting for an appropriate time to consolidate. It is also understood that Gujarat Sidhee, Saurashtra Cement and Andhra Cement are waiting for a good valuation to get acquired. "Many sellers are not willing to sell at low valuations. Also, no cement company is running into losses as yet, though they may have reported de-growth in their top line and bottom line," said an investment banker on condition of anonymity. The cement industry witnessed 7 high valuation M&A deals in 2006, which reduced to 2 in 2007. In 2008, however, the number of deals increased to 3; two MNCs, CRH and Vicat, entered India by acquiring stakes in My Home Industries ($462 mn) and Sagar Cement (Rs 70 crore) respectively. The third deal in 2008 was in the RMC space, where Lafarge acquired L&T concrete’s RMC business ($349 mn). Valuations have dipped to $75-100 per tonne now, from the peak level of $300 per tonne. Incidentally, French cement maker Vicat bought stake in Sagar Cements for half the value of what a rival had paid a year earlier. Among the

52

large global players in the cement industry, Cemex is the only company that is not present in India.

.

Key Findings -Domestic demand for cement has been increasing at a fast pace in India and it has surpassed the economic growth rate of the country. -Cement consumption in India is forecasted to grow by over 22% by 2009-10 from 2007-08. -Among the states, Maharashtra has the highest share in consumption at 12.18%, followed by Uttar Pradesh. -In production terms, Andhra Pradesh is leading with 14.72% of total production followed by Rajasthan. -Housing sector is expected to remain the largest cement consumer in coming years.

53

Indian Cement Industry Forecast to 2012 India is fast emerging on the world map as a strong economy and a global power. The country is going through a phase of rapid development and growth. All the vital industries and sectors of the country are registering growth and thus, luring investors. And cement industry is one of them. To throw light on the Indian cement industry, RNCOS has launched its report 'Indian Cement Industry Forecast to 2012' that gives an extensive research and in-depth analysis of the cement industry in India. This report helps clients to analyze the competitive dynamics and emerging opportunities critical to the success of the cement industry in India. Based on this analysis, the report gives a future forecast of the

54

market that is intended as a rough guide to the direction in which the market is likely to move.

Bibliography

55

Annexure:-

56

57