1. CEMENT INDUSTRY
CONSTRUCTING THE FUTURE

2. Cement Industry – An
Introduction
• India, being the second largest cement
producer in the world after China with a
total capacity of 151.2 Million Tones (MT),
has got a huge Cement Company.
• The cement industry in India is dominated by
around 20 companies, which account for
almost 70% of the total cement production
in India.

3. Cement Industry – An Introduction
• It is also predicted that the cement production in
India would rise to 236.16 MT in FY11. It's also
expected to rise to 262.61 MT in FY12.

4. DEFINITIONS

5. Definitions
• PV Ratio - The Profit Volume (PV) Ratio is
the ratio of Contribution over Sales. It
measures the Profitability of the firm and is
one of the important ratios for computing
profitability.
• Fixed Cost - A cost that does not change
with an increase or decrease in the amount
of goods or services produced.

6. Definitions
• Variable Cost - A corporate expense that
varies with production output.
• Contribution Per Unit -
A quantitative assessment of
the amount that each good or service sold
by a company adds to its
total sales numbers.
• BEP - Point at which gains equal losses.

7. ULTRATECH CEMENT

8. UltraTech Cement
• UltraTech Cement Limited is among the
world’s top 10 cement companies.
• The company has an annual capacity of 48.8
million tonnes, and manufactures and
markets ordinary Portland Cement,
Portland blast furnace slag cement and
Portland Pozzalana Cement.

9. UltraTech Cement
• The company has eleven integrated plants,
one white cement plant, twelve grinding
units and five terminals — four in India and
one in Sri Lanka.

10. UltraTech Cement
Variable cost 6475.49 4774.93 4491.38 3614.69 3307.28
Production Quantity (Cr.
3.36 1.76 1.59 1.51 1.46
Tonne)
Variable cost PU 1929.24 2707.03 2831.18 2398.76 2259.84
Variable cost (%) 60.35% 70.98% 73.12% 71.03% 70.43%
Fixed Cost 4253.90 1952.43 1651.15 1474.60 1388.81
Fixed Cost (%) 39.65% 29.02% 26.88% 28.97% 29.57%
Contribution 6730.15 2267.89 1894.12 1897.74 1601.77
Contribution (%) 50.96% 32.20% 29.66% 34.43% 32.63%
Contribution PU 2005.11 1285.72 1193.97 1259.37 1094.48
P/V Ratio 0.51 0.32 0.30 0.34 0.33
BEP in unit 2.12 1.52 1.38 1.17 1.27
BEP in volume 8346.84 6063.17 5566.39 4283.32 4256.38
Margin of Safety 1.23 0.25 0.20 0.34 0.19
Margin of Safety (%) 58.21% 16.16% 14.72% 28.70% 15.33%

11. JK CEMENT

12. JK Cement
• J.K. Cement is an affiliate of the J.K.
Organization, which was founded by Lala
Kamlapat Singhania.
• Today, J. K. Cement Ltd. is one of the largest
cement manufacturers in Northern India.

13. JK Cement
Variable cost 1916.54 1487.06 1217.61 1061.07 938.7
Variable Cost (%) 90.78% 90.60% 90.51% 91.34% 92.45%
Fixed Cost 194.70 154.29 127.63 100.66 76.64
Fixed Cost (%) 9.22% 9.40% 9.49% 8.66% 7.55%
Contribution 444.81 566.10 446.81 534.50 404.94
Contribution (%) 18.8% 27.6% 26.8% 33.5% 30.1%
Production quantity (Crore Metric
0.55 0.46 0.40 0.40 0.39
Tonnes)
Contribution Pu 808.21 1234.27 1103.36 1336.94 1041.06
P/V ratio 0.19 0.28 0.27 0.33 0.30
BEP (Volume) 1033.60 559.59 475.44 300.49 254.30
BEP (Units) 0.24 0.13 0.12 0.08 0.07
MOS 0.31 0.33 0.29 0.32 0.32
MOS (%) 128% 267% 250% 431% 428%

14. MADRAS CEMENT

15. Madras Cement
• Madras Cements Ltd is the flag ship
company of RamCo Group, a well known
business group of South India. It is based at
Chennai.
• The cement capacity is 10.49 million tons
per annum.
• The company is the fifth largest cement
producer in the country.

16. Madras Cement
Variable Cost 1833.46 1767.45 1628.87 1149.24 916.55
Variable Cost % 0.91 0.91 0.92 0.91 0.91
Fixed Cost 172.53 179.81 147.47 118.34 85.96
Fixed Cost % 0.09 0.09 0.08 0.09 0.09
Contribution 787.25 1039.73 900.37 856.08 650.82
Contribution % 0.30 0.37 0.36 0.43 0.42
Production Capacity 0.73 0.80 0.65 0.58 0.57
Contribution Pu 1077.73 1295.43 1379.65 1464.61 1148.11
1600858.1 1388029.8 1068895.0
BEP (units) 807995.08 748711.57
5 5 3
BEP in Rs 2620.71 2807.18 2529.24 2005.32 1567.37
P/V Ratio 0.30 0.37 0.36 0.43 0.42
5703816.8 6638088.1 5457184.9 5037098.9 4919930.4
MOS
5 5 7 2 3
MOS %tage 3.56 4.78 5.11 6.23 6.57

17. INDIA CEMENT

18. India Cement
• The India Cements Ltd was established in
1946 and the first plant was setup at
Sankar-Nagar in Tamil-Nadu in 1949.
• Seven plants spread over Tamil-Nadu and
Andhra Pradesh.
• The capacities as on March 2010 have
reached 14.05 mtpa.

19. India Cement
Variable Cost 2,664.46 2,540.95 2,117.90 1,726.87 1,376.66
Variable Cost (%) 86.67% 86.29% 87.04% 87.13% 90.90%
Fixed Cost 409.92 403.88 315.24 255.11 137.74
Fixed Cost (%) 13.33% 13.71% 12.96% 12.87% 9.10%
Contribution 3413.29 3687.06 3358.34 3044.25 2255.21
Contribution (%) 100.00% 100.00% 100.00% 100.00% 100.00%
Production
1.00 1.05 0.91 0.92 0.84
Capacity
Contribution PU 3420.03 3513.64 3685.88 3296.63 2677.28
BEP (Units) 1198586.87 1149463.87 855262.79 773851.77 514477.38
BEP (Volume) 409.92 403.88 315.24 255.11 137.74
P/V Ratio 1.00 1.00 1.00 1.00 1.00
MOS 8781713.13 9344104.13 8256091.21 8460589.23 7909034.62
MOS (%) 732.67% 812.91% 965.33% 1093.31% 1537.29%

20. ACC CEMENT

21. ACC Cement
• Established in 1936, ACC has been a
pioneer and trend-setter in cement and
concrete technology.
• Among the first companies in India to
include commitment to environment
protection as a corporate objective.
• ACC is now part of the worldwide Holcim

22. ACC Cement
Variable cost 5,252.12 4,853.55 4,762.99 4,252.68 3,505.30
Variable % 87.14% 88.50% 87.44% 85.74% 87.36%
Fixed Cost 775.22 630.43 684.03 707.24 507.10
Fixed Cost % 12.86% 11.50% 12.56% 14.26% 12.64%
Contribution 2,395.65 3,168.04 2,466.98 2,642.11 2,226.45
Contribution % 31.32% 39.49% 34.12% 38.32% 38.84%
Production Capacity 2.1375 2.1369 2.0836 1.99 1.8733
Contribution PU 1120.77193 1482.540128 1183.998848 1327.693467 1188.517589
BEP in units(Tonnes) 6916839.897 4252363.818 5777286.026 5326831.964 4266659.615
BEP in Rs. 2474.778978 1596.271191 2004.684424 1845.597375 1305.473029
P/V ratio 0.313248176 0.394939158 0.3412158 0.383203839 0.388441575
Margin of Safety(Tonnes) 14458160.1 17116636.18 15058713.97 14573168.04 14466340.38
Margin of Safety % 209.03% 402.52% 260.65% 273.58% 339.06%

23. ANALYSIS

24. Comparison Between Companies
• Variable Cost
Dec '10 Dec '09 Dec '08 Dec '07 Dec '06
ACC 87.14% 88.50% 87.44% 85.74% 87.36%
JK Cement 90.78% 90.60% 90.51% 91.34% 92.45%
India Cement 86.67% 86.29% 87.04% 87.13% 90.90%
Madras Cement 91.40% 90.77% 91.70% 90.66% 91.43%
Ultratech Cement 60.35% 70.98% 73.12% 71.03% 70.43%

25. Fixed Cost
Dec '10 Dec '09 Dec '08 Dec '07 Dec '06
ACC 12.86% 11.50% 12.56% 14.26% 12.64%
JK Cement 9.22% 9.40% 9.49% 8.66% 7.55%
India Cement 13.33% 13.71% 12.96% 12.87% 9.10%
Madras Cement 8.60% 9.23% 8.30% 9.34% 8.57%
Ultratech Cement 39.65% 29.02% 26.88% 28.97% 29.57%

26. Contribution PU
Dec '10 Dec '09 Dec '08 Dec '07 Dec '06
ACC 1120.772 1482.54 1183.999 1327.693 1188.518
JK Cement 808.2103 1234.272 1103.36 1336.943 1041.056
India Cement 750.3081 1092.202 1361.422 1426.594 1042.974
Madras Cement 1077.734 1295.433 1379.649 1464.613 1148.106
Ultratech Cement 2005.109 1285.725 1193.974 1259.367 1094.479

27. P/V Ratio
Dec '10 Dec '09 Dec '08 Dec '07 Dec '06
ACC 0.313248 0.394939 0.341216 0.383204 0.388442
JK Cement 0.188371 0.275721 0.268448 0.33499 0.301375
India Cement 0.219387 0.310847 0.369361 0.432744 0.389565
Madras Cement 0.300396 0.370382 0.355984 0.426904 0.415231
Ultratech Cement 0.509642 0.322014 0.296628 0.344266 0.326289

28. Margin Of Safety
Dec '10 Dec '09 Dec '08 Dec '07 Dec '06
ACC 209.03% 402.52% 260.65% 273.58% 339.06%
JK Cement 128.46% 266.91% 250.08% 431.00% 428.37%
India Cement 82.68% 183.77% 293.49% 416.40% 537.83%
Madras Cement 356.30% 478.24% 510.54% 623.41% 657.12%
Ultratech Cement 58.21% 16.16% 14.72% 28.70% 15.33%

29. CONCLUSION

30. A PRESENTATION BY:
Adil Anwar (11DCP003)
Amritanshu Mehra (11DCP008)
Ravi Gupta (11DCP038)
Rohit Aggarwal (11DCP040)