Trends,Analysis,Foresight Of Global Economy,International Managemenet & Business Strategy.VISION BEYOND ANALYSIS
Wednesday, November 24, 2010
Indian Cement@ Growth
- Cement and gypsum products have received cumulative foreign direct investment (FDI) of US$ 1708.69 million between April 2000 and March 2010, according to the Department of Industrial Policy and Promotion.
- Madras Cements Ltd is planning to invest US$ 178.4 million to increase the manufacturing capacity of its Ariyalur plant in Tamil Nadu to 4.5 MT from 2 MT by April 2011.
- Surya Group plans to invest US$ 873.3 million in a new 5 million MT cement plan to be set up in Gujarat.
- My Home Industries Limited (MHI), a 50:50 joint venture (JV) between the Hyderabad-based My Home Group and Ireland's building material major CRH Plc, plans to scale up its cement production capacity from the existing 5 million tonne per annum (mtpa) to 15 mtpa by 2016. The company would undertake this capacity expansion at a cost of US$ 1 billion.
- Shree Cement, plans to invest US$ 97.13 million this year to set up a 1.5 million MT clinker and grinding unit in Rajasthan. Moreover, in June 2010,
- Shree Cement signed a memorandum of understanding (MoU) with the Karnataka government to invest US$ 423.6 million for setting up a cement unit and a power plant. US$ 317.7 million will be used to set up a cement manufacturing unit with an annual capacity of 3 mtpa while the balance will be for the 100 mega watt power plant.
- Jaiprakash Associates plans to invest US$ 640 million to increase its cement capacity.
- Swiss cement company Holcim plans to invest US$ 1 billion in setting up 2-3 greenfield manufacturing plants in the country in the next five years to serve the rising domestic demand.
- Holcim is present in the country through ACC and Ambuja Cements and holds around 46 per cent stake in each company. While ACC operates 16 cement plants, Ambuja Cements controls five plants in India.
- The Aditya Birla group is the largest cement-making group by capacity in the country and controls Grasim Industries and Ultratech Cement.
- The opening up of the cement-grade limestone regions is expected to draw investments to the tune of Rs 18,000 crore for the cement industry.
- KKR- Dalmia Cement signed a deal worth US$ 159.57 million in May 2010.
- French cement company Vicat acquired a 51 per cent stake in Bharathi Cement Company Ltd, promoted by Y S Jagan Mohan Reddy, Member of Parliament, to tap the southern markets, which represent 40 per cent of the total Indian cement market.
- Increased infrastructure spending has been a key focus area. In the Union Budget 2010-11, US$ 37.4 billion has been provided for infrastructure development.
- The government has also increased budgetary allocation for roads by 13 per cent to US$ 4.3 billion.
• As a result, output in 2007 exceeded the figure observed four years before by more than 50%.
• In 2008, however, the 90 cement plants operating in the region reduced production levels to just over 90 million tonnes – with Russia accounting for 60% of total output – in order to adjust to the more modest demand for, and increased imports of, cement to the region.
• This was followed by a 17% reduction to fewer than 76 million tonnes in 2009, as construction activity declined substantially.
Go for a Long Drive@Clear the Haze.
At the end I would like to advise investors and corporate finance and private equity investors do open their eyes and look for the invisible growth of the future of cement industry. There are plenty of investment opportunities in hand at present and will be more in the coming quarters. Demand fluctuates but that does not mean it will not increase beyond the ordinary level. Once it start picking up it might be impossible for the existing production capacity to entertain the growth. Invest with long term mindset and don’t go for the words of short term. If one can understand that if sensex needs to surpass and reach higher figures Indian infrastructure is the only wheel and that wheel needs the support of cement, steel and finance to keep rolling the wheel. 30000 sensex is possible and Indian GDP growth of 10% is achievable provided we change the outlook towards the growth. We had enough of conservative outlook. We need to have a bold and a cautious outlook so that we don’t miss any opportunity of the long term
Posted by IANALYSIS WRITERS at 2:18 PM 2 comments
Labels: SECTOR ANALYSIS
Tuesday, November 23, 2010
INDIAN CONSTRUCTION@GROWTH

The demand of construction is increasing with a speed equivalent to the speed of Delhi metro traveling each day. Road Construction and infrastructure construction is wheel of Indian economic growth from the time of 2004 when it became a word of mouth. Recent economic growth is placing increasing strains on India's physical infrastructure, not only from population growth and expanding economic activities, but also structural changes in the economy. Before recession have touched the Indian shores the total investment in India's infrastructure was estimated at approximately 5% of GDP in 2006-07.
To achieve a target GDP growth rate of 9% set by the Planning Commission, gross capital formation (GCF) in infrastructure should rise to 9% of GDP by the end of 2012. This equates to an increase of GCF from 2,598 billion rupees in 2007-08 to 5,740 billion rupees in 2011-124. If achieved, the 11th Five-Year Plan period (2007-12) will result in an aggregate GCF of 20,115 billion rupees (US$447 billion at an exchange rate of 45 rupees/U.S. dollar).
The below chart depicts the picture of opportunities for growth in Indian infrastructure :

• More than USD 475 bn worth of investment is to flow into India’s infrastructure by 2012. No country in the world other than India needs and can absorb so many funds for the infrastructure sector. With the above investments India’s infrastructure would be equal to the best in the world by 2017.
The below chart shows the probable investments growth rates:
Posted by IANALYSIS WRITERS at 2:17 PM 0 comments
Labels: SECTOR ANALYSIS
Monday, November 22, 2010
INDIAN POWER..................
Posted by IANALYSIS WRITERS at 4:10 PM 0 comments
Labels: SECTOR ANALYSIS
GOLD AND ITS NEW RELATIVES...
Posted by IANALYSIS WRITERS at 1:27 PM 0 comments
Labels: COMMODITY
Saturday, November 20, 2010
US FEDERAL ……………BUILD IT IN ONE DAY………………
Posted by IANALYSIS WRITERS at 12:41 PM 0 comments
Labels: US ECONOMY
Friday, November 19, 2010
INVEST FOR LONG IN CONSUMER.

The ultimate objective of all production is consumption for the satisfaction of varied needs of man. A free market economy provides freedom to the consumers to buy and consume goods of their choice. Buying preferences of the consumers send signals to the producers to produce various commodities in required quantities. Producers, therefore, produces only those commodities which are desired by the consumers. Consumer behaviour is related to likes and dislikes and expectations of the consumers. Consumer behaviour has changed in recent years owing to enhanced awareness, information technology and more importantly governmental intervention through legislations Everyone from every corner of the world wants to be a part of the Indian economic growth. But where are the real gems of growth and resorces are lying hidden is needs to be identified and act accordingly.What we need to indentify the resources which wil bring growth of India in the coming decades.
Household assets are climbing in urban area and hence we will see a saturation point in the urban area in terms of consumer growth. Hence we will find a paradigm shift of focus towards rural Indian market. Over here the most interesting part will be the demand of cost competitive products and pricing of goods. Target oriented pricing will only improve the quality and market of rural India. What we need is affordability outlook from the rural consumer mindset.
Posted by IANALYSIS WRITERS at 3:58 PM 0 comments
Labels: INDIA'S CORPORATES
Thursday, November 18, 2010
ASIAN TIGRE ,INDIAN BULL IS YET TO CHASE.
In 1980 India and China were each the recipient of 0.1% of global foreign direct investment (FDI). By 2008 India had welcomed 2.4% of overall FDI, China 6.4%.Today we find magnetic attraction of liquidity and other technical knowhow by India and China alone. In this article I will try to present the brief growth opportunities awaiting for Indian Economy with little bit of touch of Chinese economy.
• The US expanded its bilateral trade with India and China. U.S. merchandise exports to India quadrupled between 2002 and 2009 to $16.4 billion, while U.S. services exports increased from $3.3 billion in 2002 to more than $10.5 billion in 2008,
• According to the Department of Industrial Policy and Promotion (DIPP) of India’s Ministry of Commerce and Industry, FDI flow into railway-related components was USD76.7 million from April 2000 to August 2009, a meager 0.08 percent of the total. This ranked the sector 47th among all the sectors that received FDI during the same period.
• Electrical multiple unit (EMU) trains and high-power electric locomotives loom as the next big investment themes in Chinese infrastructure.
• Urbanization requires more high-speed passenger lines, which, in turn, will create strong demand for EMU.
• China will experience an influx of EMU trains in the next three to four years, with around 800 sets expected to be in operation by 2012, up from 176.
• Indian railway is going to be the next hot destination of FDI investments
• Forty-six percent of FDI flow into India has been captured by five sectors: services, computer software and hardware, telecommunications, and construction, in this order.
• Power-related projects account for 4 percent, while port-related projects, another area were India needs a lot of improvement, ranked 18th with 1.5 percent of total FDI.
• When I found the flow of liquidity being absorbed after 2008 recession I find astonishing magnetic power attraction of liquidity by India and China alone.
• More than 60% of the funds included in the various stimulus packages introduced by emerging economies during 2008 were committed to infrastructure-related spending in 2009.
• China and India led the way, with 88% and 83%, respectively.
• In the next ten years emerging economies will spend between USD15 trillion and USD20 trillion on infrastructure projects.
• The China and Indian health sector will draw the most highest amount of Global liquidity and will provide immense growth of investments.
• China, for example, increased the number of vaccines included in its national immunization program from 5 to 15 in 2008 and boosted its budget for research and development from USD75 million to USD400 million.
• Indian and Chinese education sector will be next un-trapped huge potential investment destination.
• From 2013 to 2020, China will focus on implementing policies such as free primary education in rural areas, where 737 million.
China economy is already heated up and process of cooling it is still on the way .In that term Indian economy has a long way to go. It bulls have just started warming up for the bull rally.
• The pick up in investment growth in 2009-10 seems to be continuing in the first two quarters of the current fiscal. There are also signs of consumption growth moving towards its trend rate. The recovery is led by industry and with improved growth in services.
• The partial restoration of the tax cuts, compression in expenditure and revenue from 3G auction and disinvestment will help India in meeting our fiscal targets for the current year. This makes the Indian economy more prunes to investments as less fiscal burden on its shoulders.
• In the coming years the Indian economy is poised for more growth due to radical policy changes like a nutrient based fertilizers subsidy regime culminating in direct transfers to farmers at a later date; flexible petroleum pricing policy with levels of subsidy calibrated to international crude prices; public expenditure management; a new Direct Tax Code; and progress towards goods and services tax.
• Among all these the biggest boost will be the New Direct Tax Code which will increase the per-capita savings rate of Indian households which is currently pegging at 36.6% climbing from 28.4%.The new GST regime will also make the Indian trade practices left with huge margin of profits and investments surplus.
• The medium term Fiscal Policy Statement 2010-11 has outlined a decline in fiscal deficit to 4.8% of GDP in 2011-12 and 4.1% of GDP in 2012-13.
The only problem the India economy and china are having is the Inflation devil. Indian economies have taken adequate steps to control the inflation. These include: selective ban on exports and futures trading in rice and some pulses, zero import duty on select food items and removal of restrictions on licensing, stock limits and movement of food articles under the Essential Commodities Act of 1955. Permission was given to import of pulses and sugar by public sector undertakings. Distribution of imported pulses and edible oils was permitted through the Public Distribution System (PDS) and a higher quota of non-levy sugar was released. Along with all these the RBI have taken adequate steps to control the inflation through repo and reverse repo rates.
The economic trade balance and currency have also went through some turbulent times. A robust domestic demand coupled with a weak global demand has resulted in a widening of the trade deficit, which has spilled over into higher levels of current account deficit. The current levels of capital inflows, which exceed financing requirements of our current account deficit, have put pressure on the Rupee, resulting in its appreciation in the last few months. This has implications for India exports.
But apart from all these the Indian economy and China are poised for further upside growth. Flow of funds will dry up some times and again it will flood but the thing which will never be erased will be the immense growth story and the resources yet to found from the Asian economies.
Indian Bull is yet to begin its chase. Whatever has been happening till now can only be called as warm up phase. But the Asian Tiger has made lot of chase and needs some relaxation to begin another round of chase. The conclusion of the Bull and the Tigre is that they have more steams lefts month themselves to fire up and move a head,
Investors should not panic to sell off or neither should develop the thought that they are investing at higher levels. We are in the new phase of changeover of mind where new highs will be our base line .What has happened in the previous phase does not necessarily means we will have to continue and settle with low. We are in the journey of asking more and stretching our outlook beyond the ordinary means. We should now understand that Indian stock market growth is linked with the internal growth of the streets of India. Its not dependent on borrowed capital of Developed economy. Indian growth resources have been identified by Developed and world economy.
The Asian economy will see new sunshine which is yet to come in the coming decades. Just remember everything has a time to come and when it comes it comes in uncountable numbers
Posted by IANALYSIS WRITERS at 1:41 PM 0 comments
Labels: ASIAN ECONOMIES
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