rodolfo danielli chief operating officer milano, february 23 rd , 2006
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India: the Italcementi experience. Rodolfo Danielli Chief Operating Officer Milano, February 23 rd , 2006. Index. Italcementi Group. The Indian Market. Indian Presence. The Group has secured a worldwide presence... (at 30/06/2005). ALBANIA. NORTH AMERICA (U.S.A./CANADA). 1. 9 1. 5 - PowerPoint PPT PresentationTRANSCRIPT
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Rodolfo Danielli
Chief Operating Officer
Milano, February 23rd , 2006
India: the Italcementi India: the Italcementi experienceexperience
2
Index
Italcementi GroupItalcementi Group
Indian PresenceIndian Presence
The Indian MarketThe Indian Market
3
18
8
1
19 Countries
62 Cement plants
12 Grinding centres
570 Concrete plants
TOTAL GROUP
152 Quarries
4 Terminals (one of which is also grinding center)
Over 20.000 Employees (*)
FRANCE
BELGIUM ITALYEGYPT (*)
BULGARIA
ALBANIANORTH AMERICA (U.S.A./CANADA)9
1
5
1
MOROCCO3
1
17
3
SPAIN
3 37
9
9
1
193
81
1 11
3
246
52
5
8
2
TURKEY
4
1
18
1
1
CIPRUS (**)
2
1
2
3
351
GAMBIA
MAURITANIA
1
1
1
KAZAKHSTAN
INDIA
SRI LANKA
THAILAND
GREECE
(*) N° employees in the consolidated area
(*) including 2 plants of Asec Cement, consolidated from August 2005
(**) Not consolidated on a line-by-line basis
The Group has secured a worldwide presence...(at 30/06/2005)
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...with an organisation focused on four strategic areas...
CEOCarlo Pesenti
CEOCarlo Pesenti
StaffStaff
North AmericaNorth America EuropeEurope MENA a)MENA a)AsiaAsia
- India
- Thailand
- Kazakhstan
- Italy
- France
- Belgium
- Spain
- Greece
COORodolfo Danielli
COORodolfo Danielli
- Morocco
- Egypt
- Turkey
- Cyprus
- Bulgariab)
StaffStaff
StaffStaffStaffStaff
- United Staes
- Canada
- Puerto Rico
Mature
Emerging
a) Middle East North Africab) Included in MENA for consistency with Italcementi Group strategic portfolio
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a) full capacity included for participation > 33%,
Million tons
94%94%
> 20
1992
42%
> 45
47%
11%
1997 2007
42%
> 70
27%
31%
2002
Emerging countries
Other mature countries
Italy
~ 50%
~ 50%
...and a perspective of further growth in emerging markets...1992-2007 Influenced Cement Capacity a)
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KazakhstanShymkent Cement
ThailandAsia Cement
IndiaZuari Cement (JV 50%)
...particularly in Asia where the Group already operates in Kazakhstan, India and Thailand (at 30/06/2005)
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Index
Italcementi GroupItalcementi Group
Indian PresenceIndian Presence
The Indian MarketThe Indian Market
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India is the second largest national cement market worldwide, driven by an emerging economy and a buoyant population …
Source: macroeconomic data, EIU January ’05cement data, Cement Manufacturers Ass.
Companies: 55
Cement sector ‘04:
Plantsc): 127
Production Capacityc) (mt): 146
Cement Consumption:
- million tons:
- Kg/inhab:
119,4c)
110
Population: 1.080 m
GDP per head: 610 US $
GDPa) CAGR ’99 - ’04: 5,7 %
GFIb) CAGR ’99 - ’04: 6,9 %
Pop. CAGR '99-'04: 1,5%
a) Gross Domestic Productb) Gross Fixed Investmentc) CMA plants with production capacity > 200 kt, 2005 est. 131 mt
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...with a construction sector showing solid growth, overcome in recent years only by the growth of Services...
Construction sector accounts today
for 5% of Indian GDP
Strong growth in recent years driven
by non-residential (incentives to FDI)
Increasing weight of residential
(easier access to financial credit,
strong development of major cities)
100
130
160
190
220
1993-94 1996-97 1999-00 2002-03
AgricolturaCostruzioniIndustriaServiziPIL
Agricolture
Construction
Industry
Services
GDP
GDP at cost of factors by origin (index 1993-94=100)
Source: Ministry of Statistics
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...and is expected to further grow due to high development rates and infrastructure programs...
Infrastructures development
supported by private/public
partnerships:
National Highway Development
Plana)
National Marine Development
Programb)
Airports development c)
Relaunch of railways d)
Legenda Stato avanzamento lavori al 30 novembre 2005 Golden quadrilater*: NS & EW corridor: Lavori completati Lavori in corso Progetti da assegnare * Completato al 90%. Fonte: Governo indiano
Legenda Stato avanzamento lavori al 30 novembre 2005 Golden quadrilater*: NS & EW corridor: Lavori completati Lavori in corso Progetti da assegnare * Completato al 90%. Fonte: Governo indiano
a) Creation of 52 thousands km of new highways and modernisation of secondary roads b) Modernisation of 180 Indian ports c) New airports (Hyderbad, Bangalore) and modernisation of existing (New Delhi, Bombay)d) New 9 thousand km railway corridor
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... with a positive impact on cement demand growth in the medium and long termIndia cement demand, mt/year
0
20
40
60
80
100
120
140
160
180
200
Actual data Structural Curve
Long term expected growth
CAGR 5,5%
Period CAGR%
1973 - 83 6,71983 - 93 7,21993 - 03 7,6
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Index
Italcementi GroupItalcementi Group
Indian PresenceIndian Presence
The Indian MarketThe Indian Market
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Italcementi plants in South India
Italcementi invested USD120m since 2001 to acquire 2 plants with 3,2 mt capacity and a 7%a)- 8%b) share of the South India market...
a) on total market b) on CMA market
Yerraguntla
January 2001: acquisition of 50% of Zuari Cement (Yerraguntla)
Capacity 1.950 kt
Net Sales 2005: USD82,6m
Sitapuram
January 2002: acquisition (through Zuari Cement) of Sri Vishnu Cement (Sitapuram)
Capacity 1.250 kt
Net Sales 2005: USD39,5m
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...with the aim to further develop its presence in the country
It has taken time to fully assimilate the complexities of operating in the country
(challenging cement market, strong price pressure, changing fiscal environment)
The high expertise of local human resources allows today to maintain only one
expatriate as General Manager in the organisation, and various plans are underway
to capitalise Groupwide on Indian resources
Several important industrial investments are underway:
- 40 MW steam coal power plant
- second clinker line in Yerraguntla
- grinding centre in Chennai
The Group is continuosly seeking opportunities for further growth in the Country
through acquisitions
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India: India: a successful integration and a successful integration and
an increasingly bright futurean increasingly bright future