1. 11 CEMENT MAY 2014 For updated information, please visit www.ibef.org

2. 22  Executive Summary…………………………. 3  Advantage India……………………………… 4  Market Overview and Trends………………. 5  Growth Drivers……………………………….. 25  Success Stories: Innovative Solutions, UltraTech Cement, Ambuja Cement…………. 31  Opportunities…………………………………. 34  Useful Information…………………………… 36 CEMENT MAY 2014

3. 33 For updated information, please visit www.ibef.org EXECUTIVE SUMMARY Second largest Cement market With nearly 350 million tonnes of cement production capacity, India is the second largest cement producer in the world. By 2020, cement production will reach to 550 million tonnes Dominated by private players Of the total capacity, 98 per cent lies with the private sector and the rest with public sector Higher share of large plants 188 large cement plants together account for 97 per cent of the total installed capacity, while 365 small plants account for the rest Large concentration in South and West Of the total 188 large cement plants in India, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu Source: Planning Commission, Aranca Research CEMENT MAY 2014

4. 44 The engineering sector is delicensed; 100 per cent FDI is allowed in the sector Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period Growing demand For updated information, please visit www.ibef.org ADVANTAGE INDIA Source: Edelweiss, Notes: FY20E – Estimated market size for 2020 ^Planning Commission estimates Robust demand Robust infrastructure growth during 12 th Five Year Plan to drive growth Demand is expected to be boosted by growth in real estate sector Long-term potential Oligopoly market, where large players have partial pricing control Low threat from substitutes Attractive opportunities The North-East, which is witnessing a construction boom, offers attractive investment opportunities Large planned investments in infrastructure and housing is likely to boost demand for cement in the coming years as well Increasing investments Robust investments are being made by the existing players to expand their capacity Increasing presence of Tier II cement players Use of alternate fuels to lower production costs and emissions FY13 Production capacity: 350 million tonnes^ FY20E Production capacity: 550 million tonnes Advantage India CEMENT MAY 2014

5. 55 For updated information, please visit www.ibef.org OVERVIEW OF THE INDIAN CEMENT INDUSTRY Source: Cement Manufacturers’ Association (CMA),Planning Commission, Aranca Research Note: mtpa - Million Tonnes Per Annum, mt – Million Tonnes ^Planning Commission estimates CEMENT Cement Industry (FY13) Mini And White Cement PlantsLarge Cement Plants Cement plants: 188 Installed capacity: 350 mtpa^ Cement production: 251 mt Cement plants: 365 Installed capacity: 11.1 mtpa Cement production: 6.0 mt* MAY 2014

6. 66 For updated information, please visit www.ibef.org INDIA – WORLD’S 2 nd LARGEST CEMENT PLAYER Top Cement Producers in 2012 (million tonnes) Source: International Cement Review, Aranca Research India is the 2 nd largest cement producer as well as consumer in the world led by the enormous growth in the infrastructure and construction sector for the last two decades Top Cement Consumers in 2012 (million tonnes) CEMENT MAY 2014