3.11. Future prospect of the Industry
The objective here is analyze the growth and future prospect of the industry. The purpose is to make predictions about the future growth of the industry.
The cement industry of India has shown tremendous growth over the past few years. The industry is expected to grow in terms of capacity in the coming years. However, the increase in capacity is only possible if the demand will rise and match the supply.
In November 2012, the Indian Brand Equity Foundation (IBEF) stated that it expected double digit growth for the industry post the year 2012. It is reported that the cement industry would increase production by around 71 mt/year to reach over 300 mt/year by 2014. (Edwards F. 2.)
The Indian Government’s 12th Five Year Plan, which runs from the year 2013-2017 states that the industry will possess a capacity of 480 mt/yr by the year 2017. (Edwards F. 2.)
This quantity increase represents that the production will become almost double of the current production. The question that arises now is the utilization rate. The government promises significant investments in infrastructure, though corruption has hampered such investments in the past.
Issues in land acquisiton make it difficult for firms to enter the market and the greenfield investments remain low. If the interested producers are able to gain access to land, access to limestone is another issue. In some areas, the limestone reserves are so small that they cannnot be utilized for a
• Capacity would not increase significantly; it would increase by 20,000 immediately, and could be brought up to 48,000 in twelve months
and the economy by raising the quantity needed to be supplied to keep up with the demand of the
The framework used in this note is organized around the estimates of industry demand, market share, costs, and performance. All data
These expansion plans will result in the creation of 12 additional jobs. This project was designated as a Southern Tier priority project under the URI/CFA process.
Employment. It will create 450,000 permanent jobs for construction. After the project is completed worker will be need for the maintenance of the HSR and
Political environment of Canada and US jurisdictions create a regulatory profile that prohibits growth which impacts the return on the investment in major projects/strategy either through cost or lack of infrastructure (supply and
production has been at its highest in the last twenty years and it will continue to grow unless we
The industry seems to be less cyclical but the production will be low during recession and the sales of companies will grow rapidly during good economic times. As the industry consist of four companies and produces key components that cannot be replicated with technology; and needs skilled workers, buyers have to buy the products to continue the production. The companies with great sales can get financing at the interest rate of 8%.
be involved in. This ultimately can lead to an increase in production as well as expansion of
hope to witness in the future. The market feasibility and infrastructure demands must both be
* Production capacity is 10,000 units a year however they hope to construct a $45 million facility with a capacity of
|the industry and its challenges it is important to understand its various phases of growth so far. |
As shown in Exhibit 13, the production capacity of major firms in china slightly exceeded 2 million units in 2002, this figure is expected to reach 3.5 million units by 2012 – as shown in Exhibit 14.
• Increased production capacity- the Nairobi plant was operating with only one shift yet it has a three shift potential and forecast production at 2,300 units- approximately 60% of the capacity of
In order to find out its success strategies or factors, the following shows its Strengths and opportunities. In addition, its weaknesses and threats could reflect considerations on this future forward.