Consolidation in the Indian Cement Industry

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BSTR162 For delivery in electronic format: Rs. 700;
For delivery through courier (within India): Rs. 700 + Rs. 25 for Shipping & Handling Charges


Acquisition strategy | Consolidation
Case Length : 27 Pages
Period : 1997 - 2005
Organization : -
Pub Date : 2005
Teaching Note : Not Available
Countries : India
Industry : Engineering, Construction, and Real Estate


The note looks into the consolidation going on in the cement industry in India. Through its almost century long existence, the cement industry in India has grown to a stage where it has become the second largest producer of cement in the world.

After the dismantling of government controls for the cement industry in 1989, the rate of growth in capacity addition in the cement industry increased. Due to the increased production and the lack of matching consumption, there was excess capacity in the market which resulted in companies struggling to remain viable. Entry of foreign players resulted in the consolidation of the fragmented industry.

The note looks into the major acquisition deals that happened during the past decade and also deals with the role cartels played in the pricing of cement in various markets. The note deals with the latest trends of the Indian cement industry and ends with an outlook for the industry in the future.


The consolidation going on in the Indian cement industry

Why an industry consolidates and what is the effect of consolidation on an industry

How companies use acquisition as a way to stall the entry of a foreign players into the local market

The role played by cartels in a market

The necessity for geographical proximity to the consumer

How the entry of major foreign players can bring about a change in acquisition values


  Page No.
Introduction 1
Industry Background 2
Consolidation in the Industry 3
Industry Performance 5
Industry Problems/ Recommendations 5
Outlook 6
Exhibits 9


Indian cement industry, Per capita consumption, Greenfield capacity, Holcim Group (Holcim), Lafarge, Italcementi SpA, Tisco, Larsen & Toubro, ACC (Associated Cement Companies), GACL (Gujarat Ambuja Cement Ltd), Grasim industries, Consolidation, Capacity utilisation, Mergers and acquisitions, Raymond

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