RNCOS, a leading market research and information analysis company, has recently published a comprehensive report on the cement sector titled "Cement Outlook 2012". Given below are excerpts from an emailed interview with Shushumal Maheshwari, CEO of the company, who gives us a peek into the report.What is the current status of the industry – as against last year’s performance – and what is the expected performance next year?As per our report, "Indian Cement Industry Forecast to 2012", Indian cement industry added an estimated 20.5 MTPA of capacity during 2009-10, taking the total installed capacity to around 240 MTPA. Cement production at large plants grew at the rate of over 10 per cent during 2009-10 to reach 201 per cent against the total production of 182 per cent in the previous fiscal. Moreover, it is estimated that the cement production will reach around 303 per cent by the end of 2013-14.What are the major developments that will be affecting cement performance in the coming days?Due to a large number of outstanding cement projects in pipeline and with the strong demand by the private and the government sectors, the total installed capacity of cement production in India is expected to reach 345 per cent by 2013-14. Many big cement manufacturers (including Ambuja Cement, Grasim, Ultratech, Shri Cement, etc) have announced massive capacity expansion plans with investments worth crores already in pipeline. For instance, the joint collaboration of UltraTech-Grasim together will invest around INR 70 billion to set up three Greenfield Facilities. These facilities are expected to be established in the states of Andhra Pradesh, Chattisgarh, and Tamil Nadu during the next three-four years. Additionally, Shree Cement is investing INR 5 billion to expand its cement capacity.What are the major mergers & acquisitions that can spur growth?Various domestic and international cement companies are targeting the Indian market to expand their reach and increase their operating margins.Some of the recent mergers and acquisition trends in the country’s cement sector are as follows:??Dalmia Cement has increased its stake in OCL India from 21.7 per cent to to 45.4 per cent with an investment of US$ 38.24 million as a part of its plan to expand its footprint in eastern India??Ultratech Cement, the country’s second-largest cement maker and a part of Aditya Birla Group acquired Dubai-based ETA Star Cement for an enterprise value of US$ 382.1 million??Holcim strengthened its position in India by increasing its share holdings in Ambuja Cement from 22 per cent to 56 per cent through various open market transactions alongwith an open offer for a total investment of US$ 1.8 billion??Leading foreign funds, such as Fidelity, ABN Amro, HSBC, Nomura Asset Management Funds, and other emerging market funds have collectively bought around 7.5 per cent share in India’s third largest cement firm, India Cements (ICL), for US$ 124.91 million??Cimpor, the Portugese cement maker, paid US$ 68.10 million for Grasim Industries’ 53.63 per cent stake in Shree Digvijay Cement.Additionally, some of the other major companies, such as Reliance, Holcim, and Lafarge are waiting for an appropriate time to consolidate. Meanwhile, Holcim Group has started strengthening its stake in ACC through the acquisition route. Ambuja Cements and three other Holcim entities have also raised their stake in the ACC from 2.01 per cent to 48.21 per cent through open market transactions in December 2010.Besides, some companies, such as Gujarat Sidhee, Saurashtra Cement, and Andhra Cement are looking for significant valuation deals for a possible takeover Similarly, Hyderabad-based Penna Cement and Nagpur-based Murli Cement are also hunting for a strategic partner and are negotiating with a foreign cement manufacturer for a possible takeover. Low cement prices in the industry with rising cost of raw materials has made tough for small cement players to survive.What are the major obstacles/policies that hinder growth?High cement prices and government import duties on raw materials leading to further rise in cement prices are the major obstacles that may hinder the growth.What regions will be the best performers in the coming days and why? As per our research, it is expected that Tamil Nadu, Andhra Pradesh, and Karnataka will be the major contributors to the high production capacity of Southern region. In Northern region, Rajasthan, and Uttaranchal will support capacity installation developments.What are the demand areas /sectors that will catalyze cement industry’s growth in the coming days: Trends and drivers? Drivers??Growing construction activities??Rising consumption.Trends??Capacity expansions by major players??Overseas acquisitions of raw materials and??Tapping rural marketWhat would be the estimated production in the coming days?As per our research, "Indian Cement Industry Forecast to 2012", in 2010-11, the estimated cement production was around 220 MTPA and the installed capacity is anticipated to reach around 345 MTPA by 2013-14.Regional Capacity Expansion by PlayersNorthern Region??JK Lakshmi plans INR 14 billion capital expenditure for increasing its capacity from 4.7 MTPA to 8 MTPA by FY 2013.??Shree Cement revives Raipur Cement Plan to Invest INR 10 billion to set up a 2 MTPA clinkerisation unit near Raipur, Chhattisgarh.??Ambuja to set up INR 15 billion cement plant to set up an INR 15 billion cement plant in Nagaur, Rajasthan, which is expected to become operational by 2013.??Ambuja Cements Nalagarh Cement Plant inaugurated its 1.5 MTPA capacity grinding unit at Nalagarh, Himachal Pradesh.??Jaypee Commissions 1.75 MTPA cement plant in Himachal Pradesh.Southern Region??Vasavadatta Cement will invest INR 10 billion in Karnataka to raise annual capacity from the current 6 MTPA to 8 MTPA by 2013.??Grasim Industries to expand Malkhed Rajshree Cement Plant to raise the company’s current production capacity by 4.25 MTPA.??Jaiprakash Associates is setting up a 3.5 MTPA per annum plant in the South.??Madras Cements Plan to Invest US$ 178.4 million to increase capacity at its Ariyalur Plant to 4.5 MTPA from 2 MTPA.??UltraTech-Grasim will invest INR 70 billion to set up three Greenfield Facilities in the states of Chattisgarh, Andhra Pradesh, and Tamil Nadu during the next three-four years.Western Region??Surya Group is also planning to invest US$ 873.3 million in a new 5 MTPA cement plant to be established in Gujarat.??Jaiprakash, Dighi Port to invest INR 6 billion in Cement Plant to set up a cement grinding plant with an annual capacity of 3 MTPA in Gujarat.??ACC to set up Mega Cement Project in Maharashtra to set up a mega cement project in Maharashtra, with an annual capacity of 3 MTPA.Eastern Region??ACC Bargarh enhances production capacity from its initial capacity of 0.96 MTPA to 2.5 MTPA annually since January, 2011.??India Cements plans to set up Portland cement manufacturing unit in Chhattisgarh??Ultratech Cement announces 3-Year, INR 110 billion expansion plan??Shiva Cement signs deals worth INR 8 billion for expansion plan??Ambuja Cements Capacity Expansion is expected to increase to 27 MTPA in 2011 following the completion of additional grinding capacity at the Bhatapara Chhattisgarh) and Maratha (Maharashtra) plants.??ACC Cement intends to set up a 3 MTPA Cement Plant in Malkangiri Orissa in June 2010.