Market Study For Aggregates in Greater Hyderabad PDF

ROBO SILICON PRIVATE LIMITED
MARKET STUDY FOR AGGREGATES

IN GREATER HYDERABAD
North
Hyderabad
West
Hyderabad
East
Hyderabad
South
Hyderabad
HOLTEC
MARCH 2009
Market Study for Aggregates, Greater Hyderabad

Robo Silicon
TABLE OF CONTENTS
NO
PARTICULARS
EXECUTIVE SUMMARY
PAGE NO
I - XIV
Preamble
II
Demand
II
III
Supply
III
IV
Market Characteristics
VI
Future Outlook
XI
VI
Strategic Alternatives
XIII
DEMAND
1.1 1.16
1.1
Preamble
1.1
1.2
Past Consumption of Aggregates
1.2
Total Market Size
1.2
Market Characteristics
1.5
1.3.1
Product Mix
1.5
1.3.2
Customer Segments
1.6
1.3.3
Prices
1.8
1.3.4
Terms of Delivery
1.9
1.3.5
Distribution
1.9
1.3.6
Logistics
1.10
1.3.7
Valued Attributes
1.10
Aggregate Business
1.11
Aggregate Industry Structure
1.11
1.5
Operating Margin
1.14
1.6
Conclusion
1.15
1.2.1
1.3
1.4
1.4.1
SUPPLY
2.1 2.11
2.1
Preamble
2.1
2.2
Industry Structure
2.1
2.3
Source of Aggregates
2.1
Natural Sand/River Sand
2.1
2.3.1
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TABLE OF CONTENTS
NO
2.3.2
PARTICULARS
PAGE NO
Quarry Zones
2.2
2.4
Types of Crushers
2.3
2.4.1
Two Stage Crushers
2.3
2.4.2
Three Stage VSI Crushers
2.3
Aggregate Suppliers
2.3
2.5.1
Product Mix
2.4
2.5.2
Customer Segmentation
2.5
2.6
Share of Organized Players in overall Aggregate

Market
2.7
2.7
Practices followed by Different Categories of Players
2.8
2.7.1
Unorganized Players
2.8
2.7.2
Organized Players
2.9
Conclusion
2.10
2.5
2.8
3
FUTURE OUTLOOK
3.1 3.6
3.1
Preamble
3.1
3.2
Drivers of Demand
3.1
3.3
Future Aggregate Demand
3.1
3.3.1
Future Aggregate Demand for Building Construction
3.2
3.3.2
Future Aggregate Demand for Road Construction
3.2
3.3.3
Overall Future Demand of Aggregates
3.3
3.3.4
Zone wise Future Demand for Aggregates
3.3
3.4
Future Aggregate Supply
3.4
3.5
Conclusion
3.5
STRATEGIC ALTERNATIVES
4.1 4.9
4.1
Preamble
4.1
4.2
Opportunities for Robo Silicon
4.1
4.3
Threats to Robo Silicon
4.2
4.4
Strengths of Robo Silicon
4.3
4.5
Weaknesses of Robo Silicon
4.5
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TABLE OF CONTENTS
NO
PARTICULARS
PAGE NO
4.6
Broad Strategies
4.5
4.7
Conclusion
4.8
A1
ANNEXURE 1- CURRENT AND PAST CONSUMPTION
A 1.1 A 1.10
A2
ANNEXURE 2- DEMAND FORECASTING
A 2.1 A 2.8
A3
ANNEXURE 3- MARKET PROFILE
A 3.1 A 3.20
A4
ANNEXURE 4- PLANT PROFILES
A 4.1 A 4.10
A5
ANNEXURE 5- CUSTOMER PERCEPTION
A 5.1 A 5.25
A6
ANNEXURE 6- LIST OF RMC PLANTS HYDERABAD
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A 6.1
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LIST OF TABLES
Table
No
Content
Page No
Estimated year wise Aggregate Consumption for

Building Construction
II
II
Estimated year wise Aggregate Consumption for Road

Construction
III
III
Estimated Zone wise Aggregate Consumption for

Building Construction- 2008-09
III
IV
Sources of Natural/River Sand
IV
List of Organized Players
VI
Share of Organized Players of the Total Aggregate

Consumption in Greater Hyderabad for Building
Construction
VII
VII
Product Mix
VII
VIII
Share of Organized Players of the Aggregate

Construction
VIII
IX
Average Current Prices of Natural/ River Sand
IX
Valued Attributes for Aggregate Procurement
XI
XI
Projected Aggregate Demand based on Cement

Consumption for Building Construction in Greater
Hyderabad
XII
XII
Projected Aggregate Demand for Road Construction
XII
XIII
Projected Overall Aggregate Demand in Greater

Hyderabad
XIII
1.1

Building Construction 2008- 09
1.4
1.2
Estimated Year wise Aggregate Consumption for

1.4
1.3
Estimated Year wise Aggregate Consumption for Road

Construction
1.4
1.4
Estimated Year wise Overall Aggregate Consumption in

Greater Hyderabad
1.5
1.5
Average Current Prices of Natural/ River Sand
1.8
1.6
Valued Attributes for Aggregate Procurement
1.11
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LIST OF TABLES
Table
No
Content
Page No
1.7
Typical Cash Cost of Production and Margin for three

Stage VSI Crusher and two Stage Crusher
1.14
1.8
Total Consumption of Different types of Aggregates
1.15
1.9

1.15
2.1
Sources of Natural/ River Sand
2.1
2.2
List of Organized Players
2.4
2.3
Volumes of Different types of Aggregates
2.7
2.4
Total Aggregate Consumption in Greater Hyderabad for

2.7
2.5
Share of Organized Players of the Total Aggregate

Construction
2.7
3.1
Projected Aggregate Demand based on Cement

Consumption for Building Construction in Greater
Hyderabad
3.2
3.2
Projected Aggregate Demand for Road Construction
3.2
3.3
Projected Overall Aggregate Demand in Greater

Hyderabad
3.3
3.4
Projected Zone wise Overall Aggregate Demand for

3.3
3.5
Projected Zone wise Sand Demand for Building

Construction
3.4
3.6
Projected Zone wise 10 mm Aggregate Demand for

3.4
3.7
Projected Zone wise 20 mm Aggregate Demand for

3.4
4.1
TOWS matrix for Robo Silicon
4.6
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LIST OF CHARTS
Chart
No
Content
Page No
1.1
Market Zones- Greater Hyderabad
1.1
1.2
Estimated Concrete Market Size (000 t per month)
1.3
1.3
Aggregate Product Mix- Greater Hyderabad
1.6
1.4
Customer Segmentation Greater Hyderabad
1.7
2.1
Product Mix- Organized Players
2.5
2.2
2.6
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EXECUTIVE SUMMARY
I
PREAMBLE:
The objective of the report is to gain an insight into the market for Aggregates in Greater
Hyderabad.
Aggregates can be broadly classified into two categories, i.e. Coarse Aggregates and
Fine Aggregates (Sand)
Coarse Aggregates are generally artificially crushed rocks, boulders or large cobbles.
These are generally used for preparing concrete and other construction applications.
Coarse Aggregates are generally available in different sizes. Most commonly used
aggregate sizes are 10 mm and 20 mm. Aggregate of sizes other than these are used
for specific applications, for instance, 40 mm or 60 mm aggregates are used for base
course in road construction.
Fine Aggregates or Sand is classified as aggregates of particle size 4.75 mm and
below. Fine aggregates can either be naturally occurring sand, sourced either from the
river bed or mined from the sand quarries or produced by crushing of rocks, boulders or
large cobbles to conform to the particle size of 4.75 mm and down. Such type of sand
which is produced by crushing of rocks is known as Manufactured Sand.
Apart from this Crushed Rock Fines (CRF) which is primarily the leftover fine particles
from the crushing of rocks to produce coarse aggregates, is also used as a substitute for
either Natural Sand or Manufactured Sand.
Thus, for the purpose of the study aggregates have been divided into two major
categories:
Coarse Aggregates, of sizes 10mm, 20 mm, 40 mm and 60 mm.

Fine Aggregates, which have been further divided into,
Natural Sand or commonly termed as River Sand.
Manufactured Sand, commonly known as Robo Sand in Greater
Hyderabad.
CRF, which is the finer particles generated during the crushing process
for manufacturing coarse aggregates.
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II
DEMAND:
Market Size
Aggregates are used for following major applications:
Preparation of Concrete
Preparation of Mortar
Construction of Roads
For the purpose of the study the first two applications have been classified under
Building Construction and the last application has been classified under Road
Construction.
The total aggregate consumption in Greater Hyderabad is estimated to have grown
from 1.10 mio t pm in 2005 06 to 1.97 mio t pm in 2008 09 at a CAGR of around
21 % pa.
The past aggregate consumption for Building Construction as well as for Road
Construction in given below.
For the purpose of, estimating the past aggregate demand for Building Construction in
Greater Hyderabad we have used past cement consumption as a base.
Cement consumed for Building Construction was further divided into two applications,
namely,
Concrete Preparation
Mortar Preparation for masonry, plastering, flooring etc.
Based on the cement consumed for concrete preparation and usage norms, past
concrete demand was estimated and in turn, based on the design mix; past aggregate
demand for concreting application was estimated. Similarly, based on the usage norms
and proportion of cement to sand used for preparation of mortar, past sand demand for
preparation of mortar was estimated.
Figures in 000 t pm
Type
2005-06
2006-07
2007-08
2008-09
Sand
623
841
934
1,090
10 mm
176
238
264
308
20 mm
289
390
433
506
Total
1,088
1,469
1,631
1,904
Table I: Estimated Year wise Aggregate Consumption for Building Construction
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The past and current aggregate consumption for Road Construction has been estimated
on account of construction of the Phase I of the Outer Ring Road and resurfacing of the
existing roads in Greater Hyderabad. Approximately 20 % of the existing roads were
assumed to be resurfaced annually and 5 % of the existing roads were assumed to be
newly constructed.
Figures in 000 t pm
Type
2005-06
2006-07
2007-08
2008-09
Sand
24
24
10 mm
13
14
20 mm
16
16
40 mm
60 mm
13
14
Total
18
19
73
75
Table II: Estimated Year wise Aggregate Consumption for Road Construction
The current zone wise aggregate demand for Building Construction is given below. The
zone wise aggregate consumption has been estimated based on the zone wise cement
consumption. The data for zone wise cement consumption was sourced from the cement
companies operating in Greater Hyderabad.
Figures in 000 t pm
Market
Estimated Aggregate Consumption
North Hyderabad
478
East Hyderabad
283
West Hyderabad
761
South Hyderabad
382
TOTAL
1,904
Table III: Estimated Zone wise Aggregate Consumption for Building Construction
2008- 09
III
SUPPLY:
Industry Structure
Aggregate producers/ suppliers can be grouped under two categories:
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Organized Players: Typically, these players have multi-location plants, i.e. more
than one plant.
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These players have more contemporary production equipment, good quality

control measures and a good image in the market and thus, charge price
premium for their aggregates.
These players cater mostly to Large Construction Companies, RMC Companies
and Small & Medium Builders though sometimes they also supply Individual
Builders.
Players under this category are Robo Silicon, Rocksand, Rank and Great India
Mining.
Unorganized Players: This category of players is either crusher owners or just

traders dealing in the supply of aggregates by sourcing it from different crushers.
They are usually characterized by older type of equipment. Most of these plants
do not have very good quality control measures in place and are therefore unable
to deliver very consistent quality.
Most of the aggregate suppliers outsource the transportation of aggregates. In fact at

times these transporters in themselves act as the traders/ middle men for supply of
aggregates.
Sources of Natural Sand/ River Sand
Natural Sand or River Sand is sourced from different locations ranging between 150 Km
to 270 Km from Greater Hyderabad. The major sources of Natural Sand are given in
Table 2.1.
Location
Distance (Km)
Vijaywada
270 (approx)
Karim Nagar
160 (approx)
Nizamabad
170 (approx)
Warangal
150 (approx)
Table IV: Sources of Natural/ River Sand
Quarry Zones
Coarse aggregates, Manufactured Sand and CRF are sourced from the quarry zones
located within Greater Hyderabad. These zones are well spread around Greater
Hyderabad and are approved by the mining department. Mining licenses are issued to
crusher owners for mining of rocks and operations of crushers in these zones.
Designated quarry zones in Greater Hyderabad are given below:
Keesara
Girimapuram
Dasarapally
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Pathancheruvu
Shamashabad
Kazipalli
Paharisharif
Medchal
Apart from these locations, some crushers are also prsent around the Outer Ring Road.
These crushers were basically setup to cater to the aggregate demand for the Outer
Ring Road project only, however, during the interactions with the aggregate suppliers it
was revealed that aggregates produced from these crushers are also illegally sold in the
open market in the areas in close vicinity to these crushers.
Aggregate Suppliers
Aggregate industry is primarily an unorganized sector with a large number of small
players. Due to the sheer large number of aggregate suppliers and the fact that the
industry is dominated by unorganized players it is difficult to list down all the players
operating in the market. Based on the interactions with the suppliers interviewed during
the course of our visit, we estimate the total number of such crushers at around 200.
As mentioned above there are four aggregate suppliers, which fall into the category of
Organized Players. These players posses similar crusher technology i.e. three stage VSI
crushers and the quality of their products is also similar. The table below gives the
names, location and capacity of these players. Apart from this another new player has
entered into the market with similar equipment which has also been included in the list
given below.
Current Output
(t pm)#
Capacity
Utilisation*
110,000
50%
166,400
67%
83,200
40%
320
30,000
23%
200
41,600
50%
2,145
431,200
48%
Company
Location
Capacity (tph)
Robo Silicon
Keesara
125
Robo Silicon
Girimapur
200
Robo Silicon
Dasarapally
200
Rock Sand
Bandamadari
200
Rock Sand
Kajipally
200
Rock Sand
Great India
Minerals
Great India
Minerals
Rank Silicon
Madaram
200
Keesara
250
Gachibowli
250
Medchala**
Vedhanya
Lakadaram
Total
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* Capacity utilization has been calculated based on 16 hours of operations per day for 26 days
per month.
** Two crushers of 120 tph and 200 tph at same location.
# Total production including 20 mm, 10 mm and Manufactured Sand
Source: Aggregate Companies
Table V: List of Organized Players
IV
MARKET CHARACTERISTICS:
Customer Segmentation- Greater Hyderabad

Customer segmentation for aggregates in Greater Hyderabad is estimated based on the
segment wise cement consumed and in turn aggregate usage norms were applied to
estimate aggregate consumption by different customer segments. The segment wise
cement consumption was sourced from the cement companies operating in Greater
Hyderabad.
Small & Medium Builders are the largest customer segment with a share of around 40 %
in Greater Hyderabad. The second largest segment is Individual Builders and the share
of this segment is around 30 %. Large Construction Companies and RMC Companies
consume around 17 % and 13 %, respectively.
Customer Segmentation- Organized Players
Comprising 43 % of the volume, RMC companies are the largest customer segment for
Organized Players. RMC companies primarily procure Manufactured Sand because it is
well graded and of uniform quality compared to Natural Sand. Also, Manufactured Sand
is priced lower than the Natural Sand.
Large Construction Companies are the second largest customer segment, with a share
of 28 % of total volumes sold.
Small & Medium Builders have a share of 25 %, as there are only few customers in this
segment who have the technical understanding to use Manufactured Sand.
Individual Builders are the smallest segment with a share of only 4 % due to the primary
reason of lack of knowledge about the Manufactured Sand. Moreover, the limited reach
of the Organized Players into this segment is another reason for such a low share of
Individual Builder segment.
Segment wise share of Organized Player
From the customer segmentation for Organized Players mentioned above, it is evident
that the aggregates produced by these players are primarily consumed for Building
Construction activities. The share of Organized Players (for different customer
segments) of the total aggregate consumption for Building Construction in Greater
Hyderabad is given below.
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Figures in t pm
Customer Segments
Individual Builders
Small & Medium
Builders
Large Construction
Companies
RMC
Aggregate
Consumption
Volume of
Organized Players
Share
571,012
16,328
3%
757,663
109,880
15%
322,206
121,660
38%
252,685
183,332
73%
Total
1,903,566
431,200
23 %
Table VI: Share of Organized Players of the Total Aggregate Consumption in
Greater Hyderabad for Building Construction
Share of Organized Players is the highest in the RMC segment with a share of 73 %.
This is primarily due to the fact that RMC companies are the most organized customer
segment and thus, source their aggregates from the organized aggregate suppliers.
Moreover, RMC companies have the highest awareness level about the quality of
aggregates produced from three stage VSI crushers over two stage crushers.
Product Mix- Greater Hyderabad
Based on the estimated current aggregate demand for as mentioned in Table I and
Table II, the overall product mix in Greater Hyderabad is given below:
Aggregate Type
% Share
Sand
57
10 mm
16
20 mm
26
60 40 mm
1
Table VII: Product Mix

Sand is the dominating product for all the organized players. It has a share of 43 % of
the total production of these players. This is primarily due to the fact that the primary
product for this category of players is the Manufactured Sand and for this specific reason
these players have 3 stage VSI crushers. Aggregates of 20 mm and 10 mm have
production shares of 33 % and 24 %, respectively.
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Share of Organized Players in Overall Greater Hyderabad Aggregate Market

From the customer segmentation for Organized Players mentioned above, it is evident
that the aggregates produced by these players are primarily consumed for Building
Construction activities. The share of Organized Players (for different types of
aggregates) of the total aggregate consumption for Building Construction in Greater
Hyderabad is given below.
Figures in t pm
Aggregate
Consumption for
Volume of
Organized Players
Share
1,089,726
186,320
17%
10 mm
308,330
102,420
33%
20 mm
505,510
142,460
28%
Type of
Aggregate
Sand
Total
1,903,566
431,200
23%
Table VIII: Share of Organized Players of the Aggregate Consumption in Greater
Hyderabad for Building Construction
The overall share of Organized Players of the total aggregate consumption for Building
Construction is around 23 %.
Prices
Pricing is primarily based on the following factors:
Distance & location of construction site.
Total volumetric consumption of Aggregates.
Availability of Aggregates (for Natural/ River Sand).
Relationship with the customer, etc.
The delivered prices excluding 4 % VAT and Rs 30 per t Royalty, for 10 mm and 20 mm
were reported to be Rs 400 per t and Rs 450 per t, respectively.
The current prices for Natural Sand/ River Sand as reported by the suppliers, along with
the sources are given below:
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Figures in Rs per t
Location
Distance (Km)
Average Current Price
Vijaywada
270 (approx)
450 to 550
Karim Nagar
160 (approx)
450 to 500
Nizamabad
170 (approx)
450 to 500
Warangal
150 (approx)
450 to 500
Table IX: Average Current Prices of Natural/ River Sand
Prices of Natural Sand/ River Sand are subject to availability and have high seasonality.
The price for Individual Builders is around Rs 50 per t to Rs 75 per t higher than the
above mentioned prices. Moreover, it was also revealed that the price of Natural/ River
Sand has reduced in the past 4 to 5 months and was previously as high as Rs 600 per t.
As opposed to Natural/ River Sand, Manufactured Sand (generally known as Robo
Sand) is priced at Rs 350 per t. The price of this product generally remains stable as it
can be sources from crushers operating within Greater Hyderabad. Moreover,
Manufactured Sand prices are not very much affected by the seasonality factor as
stocks are maintained by every supplier of Manufactured Sand.
The prices of Crushed Rock Fines (CRF) which is primarily fine particle sized waste from
2 stage crusher operations and sold as a substitute of both Natural as well as
Manufactured Sand, is priced as low as Rs 270 per t. CRF is primarily used by RMC
segment on account of its lower price which in turn reduces the cost of concrete
prepared by them.
Based on the interactions with the RMC companies most of the RMC companies replace
Natural Sand by 30 % of CRF. Apart from this, RMC companies like Lafarge (erstwhile
L&T Concrete) revealed during our interactions, to have completely shifted to 100 %
usage of Manufactured Sand and CRF and have modified their concrete design mix to
suit the usage of the same.
Loading costs, included in the above mentioned landed prices of aggregates, is around
Rs 200 to Rs 300 per truck depending on the capacity of truck.
Terms & Conditions of Sale
Terms of delivery differ from segment to segment. The Individual Builders primarily buys
for cash from the local building material retailer. However, Small & Medium Builders,
Large Construction Companies and RMC Companies procure aggregates on credit
depending on the relationship with the aggregate supplier. Generally, it is observed, a
credit period ranging from 7 days to 45 days is extended depending upon the past
relationship with the customer.
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Distribution
Aggregates are supplied primarily by the building material suppliers who may or may not
own crushers. Different distribution channels cater to different customer segments.
Traditionally, aggregates both coarse and fine, are sold at special markets known as
Adda. There are around 40 to 50 Addas all across Greater Hyderabad spread around
different areas within the city.
Individual Builders and to a certain extent Small & Medium Builders procure aggregates
from these Addas. Apart from these, small time building material suppliers/ retailers
also procure aggregates from these Addas. An additional Rs 50 per t to Rs 60 per t,
transportation cost is charged for delivering aggregates from Addas to the site.
Large Construction Companies and RMC Companies source aggregates from large
aggregate suppliers. These suppliers are a primarily crusher owners who directly deal
with large customers as the requirement of large customers is generally of continuous
nature. Aggregates are delivered at site.
Logistics
Aggregates are generally supplied in trucks of capacity ranging from 11.5 t to 35 t.
Natural Sand/ River Sand is generally transported in trucks of 25 t to 35 t from the
sources mentioned in the previous section to Greater Hyderabad. During the course of
the visit it was revealed by most of the suppliers of sand, that most of the transporters
carry higher than the permitted truck load, which eventually reduces the per t
transportation cost of sand. Similar over loading practice is also followed for the
transportation of coarse aggregates.
Valued Attributes
Different customer segments perceive different attributes for aggregates. The most
valued attributes considered for the procurement of aggregates and the degree of
importance attached to each by different customer segments are given below:
Extent of Importance
Individual
Builders
Small &
Medium
Builders
Large
Construction
Companies
RMC
Price
High
High
Medium
High
Quality
High
Medium
High
High
Time to delivery
Average
Average
Average
Average
Reliability of Supply
Average
Average
Average
Average
Attribute
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Attribute
Individual
Builders
Small &
Medium
Builders
Large
Construction
Companies
RMC
Low
Low
Low
Low
Medium
Relationship
with
Suppliers
Recommendation
by
Peers/
Masons/
Contractors
Source: Aggregate Suppliers and Consumers
Table X: Valued Attributes for Aggregate Procurement

Operating Margins
The supply of aggregates is dominated by unorganized players which primarily operate
two stage crushers. In recent years though, a small number of three stage VSI crushers
have been set up which are operated by organized players.
The operating margin in case of three stage VSI crusher is around 17 % while in case of
two stage crusher is 22 %.
FUTURE OUTLOOK:
Future Demand
As mentioned above, aggregates are used for following major applications:
Construction.
For the purpose of, estimating the future aggregate demand for Building Construction
future cement demand in Greater Hyderabad was estimated.
namely,
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Based on the cement consumed for concrete preparation and usage norms, future
concrete demand was estimated and in turn based on the design mix; future aggregate
and proportion of cement to sand used for preparation of mortar, future sand demand for
Further, to estimate aggregate demand arising out of construction of roads in future,
usage norms for construction of different courses of road were utilized.
Based on the future cement demand, the associated future aggregate demand for
Building Construction is shown below. The cumulative average growth rate (CAGR) for
the period 2009-10 to 2013- 14 is estimated to be 13 % pa.
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Cement
Demand
396
448
506
572
646
Sand
1,232
1,393
1,575
1,780
2,011
10 mm
349
394
446
504
569
20 mm
572
646
731
826
933
3,513
Total
2,153
2,433
2,752
3,110
Table XI: Projected Aggregate Demand based on Cement Consumption for
Building Construction in Greater Hyderabad
Based on the estimated future construction of new roads and resurfacing of the existing
roads, the estimated future aggregate demand for Road Construction is presented below
The cumulative average growth rate (CAGR) for the period 2009-10 to 2013- 14 is
estimated to be 28 % pa. The high growth rate of future aggregate demand is primarily
attributed to the 140 Km Phase II of the Outer Ring Road which is likely to start in
coming few months.
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Sand
38
53
70
85
102
10 mm
20
28
36
44
52
20 mm
25
36
46
57
68
40 mm
11
15
20
25
29
60 mm
21
30
39
48
57
Total
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115
162
211
259
Table XII: Projected Aggregate Demand for Road Construction
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The overall future aggregate demand in Greater Hyderabad including both Building
Construction as well as Road Construction is given below:
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Sand
1,270
1,447
1,644
1,865
2,112
10 mm
369
422
482
547
621
20 mm
597
682
777
883
1,001
40 mm
11
15
20
25
29
60 mm
21
30
39
48
57
3,820
Total
2,268
2,596
2,962
3,368
Table XIII: Projected Overall Aggregate Demand in Greater Hyderabad
The overall future aggregate demand is projected to grow from 2.3 mio t pm in 2009-10
to 3.8 mio t pm in 2013- 14 at a CAGR of around 14 % pa.
Future Supply
As mentioned earlier, there are around 200 crushers currently located in Greater
Hyderabad. Most of these crushers are two stage crushers and are generally operating
at very low capacity utilization primarily due to the fact that they are old crushers with
high incidence of break downs. Even the new generation three stage VSI crushers
currently operating in Greater Hyderabad are operating at an average capacity utilization
of below 50 %. Thus, there is a scope of increasing the output of the existing crushers to
cater to the growing aggregate demand in future.
Thus, we believe that existing players will ramp up capacity as demand goes up even if
no concrete plans have been announced and aggregate production capacity will be able
to keep pace with the demand. Further, low gestation period of setting up of new plants
i.e. 3 4 months and lower investment cost would also contribute towards the likelihood
of setting of new crushers. Thus, in the overall context of the future supply of aggregates
there is unlikely to be a large surplus or deficit for aggregates.
On the whole, based on market feedback, the trend would be of phasing out of two stage
crushers and replacing them with new high efficiency and high capacity three stage VSI
crushers. However, the technical competence of these new players to produce the right
quality of Manufactured Sand remains to be seen.
VI
STRATEGIC ALTERNATIVES:
Strategic alternatives for Robo Silicon have been derived using a TOWS matrix. This
methodology involves examining each strength/ weakness in conjunction with each
opportunity/ threat to identify four types of strategic alternatives.
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Based on the analysis the following broad strategies for success have been identified.
Area
Strategy
1. Zonal Focus
Setup new capacity in South Zone
2. Capacity
Expand existing crushers

Setup new crushers
3. Customer Segmentation
Focus on RMC companies

Increase presence in individual builder segment
4. Pricing
Price aggressively to counter competition
5. Promotion
Mount campaign to
Manufactured Sand
educate
users
about
Overall, there is a good demand for aggregates in Greater Hyderabad. This is primarily
due to a continuing growth in the construction sector. With the state governments
strategy to develop Hyderabad as nations IT hub, there is a great scope for a healthy
growth in construction activities in Greater Hyderabad. Moreover with changing
construction trends, the focus is on high rise premium residential as well as commercial
buildings, the demand for high quality building materials is likely to grow in future. This
augurs well for the Aggregate Industry.
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CHAPTER 1: DEMAND
1.1
PREAMBLE
The objective of this study is to gain transparency and insight into the Aggregate
market scenario in the Greater Hyderabad region, forecast future trends and
thereby establish a base for consequent strategy development. The markets are
depicted in Chart 1.1
Greater Hyderabad has been divided into 4 market zones, viz., North Hyderabad, East
Hyderabad, West Hyderabad and South Hyderabad. These zones are depicted in Chart
1.1.
North
Hyderabad
West
Hyderabad
East
Hyderabad
South
Hyderabad
Chart 1.1: Market Zones- Greater Hyderabad

Aggregates can be broadly classified into two categories Coarse Aggregates and Fine
Aggregates (Sand).
Coarse Aggregates are generally artificially crushed rocks, boulders or large cobbles.
These are generally used for preparing concrete and other construction applications.
Coarse Aggregates are available in different sizes. Most commonly used aggregate
sizes are 10 mm and 20 mm. Aggregate of sizes other than these are used for specific
applications, for example 40 mm or 60 mm aggregates are used for base course in road
construction.
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Fine Aggregates or Sand is classified as aggregates of particle size less than equal to
4.75 mm. Fine aggregates can either be naturally occurring sand, sourced from either
the river bed or mined from the sand quarries or produced by crushing of rocks, boulders
or large cobbles to conform to the particle size of less than equal to 4.75 mm. Sand
which is produced by crushing of rocks is known as Manufactured Sand.
Apart from this Crushed Rock Fines (CRF) which is primarily the leftover fine particles
from the crushing of rocks to produce coarse aggregates, is also used as a substitute of
either the Natural Sand or Manufactured Sand.
Thus, for the purpose of this study aggregates have been divided into two major
categories:
Coarse Aggregates, of sizes 10mm, 20 mm, 40 mm and 60 mm.

Fine Aggregates, which have been further divided into,
Natural Sand or commonly known as River Sand.
Manufactured Sand, commonly known as Robo Sand in Greater
Hyderabad.
CRF, which is the fine particles generated during the crushing process for
manufacturing coarse aggregates.
This chapter presents the current scenario of the aggregate market in Greater
Hyderabad. Chapter 2 details the current supply, Chapters 3 discusses the future trends
and Chapter 4 enumerates strategic alternatives for Robo Silicon to tackle the future
competition.
1.2
PAST CONSUMPTION OF AGGREGATES
1.2.1
Total Market Size
Aggregates are used for the following major applications:
Construction.
Further the aggregate demand for concreting applications for construction of bridges,
flyovers, culverts etc. have been included in the Building Construction whereas the
Road Construction includes only the aggregate consumed for the construction of
different courses/ layers of the roads.
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The estimated market size of aggregate from 2005-06 to 2008-09 is given in Chart 1.2.
The information for 2008-09 is extrapolated based on April 2008 - February 2009 data.
The aggregate market size, for this period, has been estimated based on cement
consumed for building construction as well as for road construction.
For the purpose of estimation of the aggregate demand for building construction, total
cement consumption in Hyderabad has been used. Further estimates of several cement
manufacturers and distributors in Hyderabad have been considered. Cement consumed
for building construction is further divided into two applications, namely,
Based on the cement consumed for concrete preparation and usage norms, total
concrete was estimated. This concrete estimate in turn was used to estimate the total
aggregates consumption based on the design mix. Similarly based on the usage norms
and the proportion of cement to sand used for preparation of mortar, total sand
consumed for preparation of mortar was estimated.
Further to estimate the aggregate demand arising out of construction of roads, usage
norms for construction of different courses of road were utilized. Details of the estimation
of past consumption of aggregates are mentioned in Annexure 1.
The year wise total estimated aggregate consumption is shown in Chart 1.2 below.
2,500
'000 t pm
2,000
1,979
1,500
1,705
1,487
1,000
1,105
500
0
2005-06
2006-07
2007-08
2008-09
Years
Note: Figures depict the overall aggregates consumption including both fine and coarse
aggregates
Source: HOLTEC Analysis
Chart 1.2: Estimated Concrete Market Size (000 t per month)
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The aggregate market size (volume) in Greater Hyderabad has grown at the rate of 21%
pa during the last 4 years. The growth is attributed to the overall increase in cement
growth (average of 21 % pa during the same period) as well as construction of new
roads mainly the recent 22.5 Km stretch of the Outer Ring Road .
Monthly estimates of zone-wise aggregate demand for building construction in 2008-09
is given in Table 1.1. These are based on monthly average cement consumption over
the period April 2008 - February 2009. Zone wise aggregate demand has been
estimated on the basis of total cement consumed for building construction in each
market. Profiles for each zone are given in Annexure 3.
Figures in 000 t pm
Market
North Hyderabad
478
East Hyderabad
283
West Hyderabad
761
South Hyderabad
382
TOTAL
1,904
Table 1.1: Estimated Zone wise Aggregate Consumption for Building Construction
2008- 09
Year wise Monthly estimates of Aggregate consumption for Building Construction as well
as for Road Construction are given in Table 1.2 and Table 1.3, respectively.
Figures in 000 t pm
Type
2005-06
2006-07
2007-08
2008-09
Sand
623
841
934
1,090
10 mm
176
238
264
308
20 mm
289
390
433
506
Total
1,088
1,469
1,631
1,904
Table 1.2: Estimated Year wise Aggregate Consumption for Building Construction
Aggregate consumption in Greater Hyderabad has grown at a Cumulative Average
Growth Rate (CAGR) of 21 % pa for the period of 2005-06 to 2008-09. The growth is
attributed to overall growth in cement demand (21 % pa for the same period).
Figures in 000 t pm
Type
2005-06
2006-07
2007-08
2008-09
Sand
24
24
10 mm
13
14
20 mm
16
16
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Type
2005-06
2006-07
2007-08
2008-09
40 mm
60 mm
13
14
Total
18
19
73
75
Table 1.3: Estimated Year wise Aggregate Consumption for Road Construction
Aggregate consumption for the road construction has grown at a CAGR of 62 % pa for
the period of 2005-06 to 2008-09. Aggregate consumption has grown at a very high rate
in last two years owing to the construction of Phase I (22.5 Km out of total 160 Km
length) of the Outer Ring Road.
The overall year wise aggregate consumption in Greater Hyderabad including both
building construction as well as road construction is given in Table 1.4
Figures in 000 t pm
Type
2005-06
2006-07
2007-08
2008-09
Sand
628
846
958
1,114
10 mm
180
242
278
322
20 mm
292
394
449
522
40 mm
60 mm
13
14
Total
1,105
1,487
1,705
1,979
Table 1.4: Estimated Year wise Overall Aggregate Consumption in Greater
Hyderabad
The overall aggregate consumption in Greater Hyderabad is has grown at a CAGR of
21% pa for the period of 2005 06 to 2008 09. The growth is attributed to the high
growth in cement consumption due to high construction activities with a large number of
housing as well as commercial projects being implemented during the same period. In
addition to the growth in building construction, the construction and completion of the
Phase I of the Outer Ring Road has also contributed towards the growth in the overall
aggregate consumption in Greater Hyderabad.
1.3
MARKET CHARACTERISTICS
1.3.1
Product Mix
The most prevalent types of aggregates consumed are Sand (size 4.75 mm and down),
10 mm and 20 mm, which corresponds to around 99 % of the total market size. The rest
comprises of 40 mm and 60 mm which are primarily used for road construction only.
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The overall product mix for Greater Hyderabad is given below; this corresponds to the
average monthly volume of each type of aggregate. The data for the same was collected
during the course of interaction with end users and aggregate suppliers, which was
finally triangulated based on the estimates of total aggregate consumption in Greater
Hyderabad based on the usage norms.
60 to 40
mm
1%
20 mm
26%
Sand
57%
10 mm
16%
Source: End Users, Aggregate Suppliers, HOLTEC analysis
Chart 1.3: Aggregate Product Mix- Greater Hyderabad

1.3.2
Customer Segments
Customer segments for Aggregates include Individual Builders, Small & Medium
Builders (or Contractors), Large Construction Companies. and Ready Mix Concrete
Companies (RMC).
Individual Builders are one time users of aggregates as they use aggregates for
concreting as well as for preparation of mortar during the construction of their houses
which is a one time construction activity.
Small and Medium Builders (or Contractors) generally comprise of builders or
contractors, which are engaged in construction of small projects such as G + 5 floor
residential or commercial complexes. Based on interactions with aggregate suppliers, it
was seen that generally builders/ contractors with projects with ranging from 50 to 200
apartments are classified as Small and Medium Builders. They procure aggregates for a
number of projects, which may be under execution stage at a particular point in time.
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These types of aggregate users usually undertake building construction. This segment
is the most price sensitive segment as the prime objective of these builders is to
complete the construction at the earliest and at a lower cost. They are also not
very quality conscious and are ready to compromise on quality, to a certain extent, for
lower price of aggregates.
Large Construction Companies are generally large real estate developers or
construction companies and undertake high-rise building projects or infrastructure
projects. The aggregate requirement for this type of customer on a particular project is
highest. Infrastructure companies, specifically road contractors are generally given
special permission to setup mobile crushers on site to fulfill their aggregate requirement.
The customer segmentation for Greater Hyderabad given below represents the volume
of Aggregates consumed (in t pm) by each type of customer. The data for the same was
collected during the course of interaction with aggregate suppliers and was further
triangulated based on the estimated demand for aggregates for building construction
and road construction.
RMC
13%
Independent
Builders
30%
Large
Construction
Cos.
17%
Small &
Medium
Builders
40%
Source: Aggregate Suppliers, HOLTEC Analysis
Chart 1.4: Customer Segmentation Greater Hyderabad
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Small & Medium Builders is the largest aggregate consuming segment with a
consumption share of around 40 %. The sheer number of such customers makes this
segment a major customer segment. Independent Builders have share of 30 % in the
over all aggregate market of Greater Hyderabad.
Large Construction Companies engaged in high rise building construction, real estate
development as well as infrastructure development have consumption share of around
17 %.
Ready Mix Concrete Companies which are one of the major sources of concrete for
Small & Medium Builders and also fulfill part of the concreting requirements of Large
Construction Companies are estimated to consume around 13 % of the total aggregate
consumed in Greater Hyderabad.
1.3.3
Prices
Pricing is primarily based on the following factors:
Distance & location of construction site
Total volumetric consumption of aggregates
Availability of aggregates (for Natural/ River Sand)
Relationship with the customer, etc
Prices quoted for all types of aggregates are delivered prices. Price of coarse
aggregates i.e. 10 mm, 20 mm etc. primarily remain constant and are only slight affected
by the seasonality mainly because the sources of coarse aggregates are located in and
around Greater Hyderabad and crushers generally maintain stocks at their crusher
locations. The prices for 10 mm and 20 mm were reported to be Rs 400 per t and Rs
450 per t, respectively.
However, prices of Natural/ River Sand are subjected to availability and have high
seasonality. Most of the Natural/ River Sand are sourced from the following areas:
Figures in Rs per t
Location
Distance (Km)
Average Current Price
Vijaywada
270 (approx)
450 to 550
Karim Nagar
160 (approx)
450 to 500
Nizamabad
170 (approx)
450 to 500
Warangal
150 (approx)
450 to 500
Table 1.5: Average Current Prices of Natural/ River Sand
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The above mentioned prices are average landed prices at site in Greater Hyderabad for
projects excluding 4 % VAT and Rs 30 per t royalty (charged on coarse aggregates and
Manufactured Sand) levied by the mining department. During the course of the market
visit it was also revealed by some of the aggregate suppliers that the price for Individual
Builders/ Buyers is around Rs 50 per t to Rs 75 per t higher than the above mentioned
prices. Moreover, it was also revealed that the price of Natural/ River Sand have
dropped in the past 4-5 months and previously price was as high as Rs 600 per t.
As opposed to Natural/ River Sand, Manufactured Sand (generally known as Robo
Sand) is priced at Rs 350 per t. Prices for Manufactured Sand have remained more or
less stable in the past as it can be sources from crushers operating within Greater
Hyderabad. Moreover, Manufactured Sand prices are not greatly affected by the
seasonality factor as stocks are maintained by every supplier of Manufactured Sand.
The prices of Crushed Rock Fines (CRF) which is primarily fine particle sized waste from
2 stage crusher operations and sold as a substitute of both Natural as well as
Manufactured Sand, is priced as low as Rs 270 per t. CRF is primarily used by RMC
segment on account of its lower price which in turn reduces the cost of concrete
prepared by them.
Based on the interactions with the RMC companies most of the RMC companies replace
Natural Sand by 30 % of CRF. Apart from this, RMC companies like Lafarge (erstwhile
L&T Concrete) revealed during our interactions, to have completely shifted to 100 %
Manufactured Sand and CRF and have modified their design mix to suit the usage of the
same.
Around Rs 200 to Rs 300 per truck are loading cost depending upon the capacity of
truck, which are included in the above mentioned landed prices of aggregates.
1.3.4
Terms of Delivery
Terms of delivery differ from segment to segment. The Individual Builders primarily buys
for cash from the local building material retailer. However, Small & Medium Builders,
Large Construction Companies and RMC Companies procure aggregates on credit
depending upon the relationship with the aggregate supplier. Generally, it is observed, a
credit period ranging from 7 to 45 days is extended depending upon the past relationship
with the customer.
1.3.5
Distribution
Aggregates are supplied primarily by the building material suppliers who may or may not
own their own crushers. Different distribution channels cater to different customer
segments.
Traditionally aggregates both coarse aggregates and fine aggregates are sold at special
markets known as Adda. There are around 40 to 50 Addas all across Greater
Hyderabad spread around different areas within the city. Business generally starts early
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in the morning and all transactions are over by 9 oclock. Transporters and building
material suppliers gather at these Addas which is a common sale point for all types of
building materials. Individual Builders and to a certain extent Small & Medium Builders
procure aggregates from these Addas. Apart from them small time building material
suppliers/ retailers also procure aggregates from these Addas. An additional Rs 50 per
t to Rs 60 per t, transportation cost is charged for delivering aggregates from Addas to
the site.
Large Construction Companies and RMC Companies source aggregates from large
aggregate suppliers. These suppliers are a primarily crusher owner who directly deal
with large customers as the requirement of large customers is generally of continuous in
nature. Aggregates are delivered at site.
1.3.6
Logistics
Aggregates are generally supplied in trucks of capacity ranging from 11.5 t to 35 t.

Natural/ River Sand is generally transported in trucks of 25 t to 35 t from the sources
mentioned in previous section to Greater Hyderabad. During the course of the visit it was
revealed by most of the suppliers of sand, that most of the transporters carry over load
thereby exceeding the maximum load carrying limit which eventually reduces the per t
transportation cost of sand. Similar overloading practice is also followed for the
transportation of coarse aggregates.
1.3.7
Valued Attributes
Different customer segments perceive the attributes differently for procuring aggregates
for their projects. Individual Builders rate quality to be the most important attribute of
aggregates and are ready to pay slightly higher price for the better quality aggregates.
This is mainly due to the fact that this customer segment buys aggregates for the
construction of their own house which is a one time investment.
Small & Medium Builders rate price to be the most important attribute and are willing to
compromise on the quality to a certain extent. The projects undertaken by this segment
are meant to be occupied by individuals.
Large Construction Companies and RMC Companies rate quality to be the most
important parameter for procurement of the aggregates. However price is considered to
be almost equally important as well; this customer segment is ready to pay a right price
for the desired quality.
The most valued attributes considered for the procurement of aggregates and the
degree of importance attached to each attribute as per the different customer segments
are given in Table 1.6. The main attributes considered for selection of aggregate
supplier by different customer segments in Greater Hyderabad have been detailed in
Annexure 5.
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Individual
Builders
Small &
Medium
Builders
Large
Construction
Companies
RMC
Price
High
High
Medium
High
Quality
High
Medium
High
High
Time to delivery
Average
Average
Average
Average
Relationship
with
Suppliers
Recommendation
by
Peers/
Masons/
Contractors
Average
Average
Average
Average
Low
Low
Low
Low
Medium
Attribute
Source: Aggregate Suppliers and Consumers
Table 1.6: Valued Attributes for Aggregate Procurement
1.4
AGGREGATE BUSINESS
1.4.1
Aggregate Industry Structure
The Aggregate industry is analysed using Porters five forces model.

Porter's five forces model is a framework for the industry analysis and business strategy
development, developed by Michael E. Porter. It uses concept of five forces that
determine the competitive intensity and therefore attractiveness of a market.
Attractiveness in this context refers to the overall industry profitability. An "unattractive"
industry is one where the combination of forces acts to drive down overall profitability. A
very unattractive industry would be one approaching "pure competition". Porter's Five
Forces include three forces from 'horizontal' competition: threat of substitute products,
the threat of established rivals, and the threat of new entrants; and two forces from
'vertical' competition: the bargaining power of suppliers, bargaining power of customers.
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Threat of new
entrants
Bargaining power
of suppliers
Bargaining power
of buyers
Rivalry among
existing competitors
Threat of substitute
products
Rivalry among existing competitors

Rivalry among existing competitors is high. There are two types of Aggregate
players in Greater Hyderabad. Organized players like Robo Silicon, Great India Mining,
Rocksand Minerals and Rank and Local players primarily from the unorganized sector.
Rivalry is especially high in the second category of players. Most of these local players
are building material suppliers or small crusher owners who by the virtue of being in the
building material industry are present in the market. This category is also characterized
by a large number of players ranging from small to medium setups.
Bargaining power of buyers
Aggregates buyers can be classified in 4 distinct segments:

Individual Builders (who build their own houses).

Small and Medium Builders (Housing and Commercial Complex Builders).
Large Construction Companies (Large contractors involved in large projects).
Ready Mix Concrete Companies (RMC)
Large Construction Companies and RMC companies in particular are quality conscious
due to the very nature of their requirement. Moreover Large Construction Companies are
involved in either infrastructure or high-rise building projects, which have stringent quality
standards thereby making high quality aggregate sourcing of utmost importance.
Similarly RMC companies also have to abide by the strict quality standards of concrete
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preparation often as per the specific requirements of their end consumer. Thus, both
these segments are not so price conscious and are willing to pay reasonable price
for the required quality of aggregates, thereby rendering aggregate suppliers
better bargaining power over the customers as there are very few aggregate
suppliers which can satisfy the prerequisite high quality standards laid down by
these segments of the customers. However, due to the limited number of suppliers
falling in the category of organized aggregate suppliers which can satisfy the demand of
these segments, such customers are forced to buy aggregates from varied sources.
Therefore, due to limited supply of high quality aggregates the actual bargaining
power of the aggregate suppliers is lower.
Individual Builder segment is quality conscious and is also willing to pay higher price for
the right quality of aggregates. Thus, aggregate suppliers have a high bargaining
power over the consumers in this segment. Moreover, due to the fact that individual
builders are characterized by one time purchase also renders higher bargaining power to
the aggregate suppliers, which is evident by the fact that the price for Individual Builders
is reported to be Rs 50 per t to Rs 75 per t higher than the average price for all other
customer segments.
Small & Medium Builders are not so quality conscious and thus are in a position to
dictate prices, as switching-costs are virtually non-existent. This, along with
presence of price-undercutting by unorganized aggregate suppliers leads to the buyers
having substantial power in influencing the aggregate prices.
Bargaining power of suppliers
The most important cost component in aggregates especially coarse aggregates is the
cost of quarry operations. Quarry operations are generally given on contract basis to
mining contractors thus, in order to be competitive the mining contractors have to charge
competitive price for carrying out mining operations. Thus the bargaining power of
mining contactors is low.
In case of Natural/ River Sand the main cost component is the transportation cost.
Natural/ River Sand is sourced from the river bed at a nominal Royalty of around Rs 50
per t payable to the local Panchayat. With a number of transporters operating in the
market the bargaining power of suppliers and with current low demand- high supply
scenario the bargaining power of the transporters is low.
Threat of substitutes
Manufactured Sand is actually a substitute of Natural/ River Sand. With depleting natural
sources of sand and increasing awareness about the environmental impact of scraping
river beds for sand, Manufactured Sand will slowly and steadily replace Natural/ River
Sand.
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CRF is also used as a cheap substitute to both Natural Sand as well as Manufactured
Sand even though its particle size distribution is not as per the technical standards of
construction.
Threat of new entrants
Entry cost into the aggregate industry is rather low. With low investment cost to
setup crushers and abundant availability of quarry zones the threat of new entrants is
high.
Conclusion
Structural analysis of the aggregate industry thus indicates intense competition; buyer
dominated high price-sensitivity (especially in Small & Medium Builder segment),
availability of substitutes and a high threat of new entrants.
1.5
OPERATING MARGIN
The supply of aggregates is dominated by unorganized players which primarily operate

two stage crushers. In recent years though a few number of three stage VSI crushers
have been set up which are operated by organized players. The typical cash cost of
production and operating margins for three stage VSI crusher and two stage crusher in
Greater Hyderabad is estimated below:
Figures in Rs per t
Particulars
3 Stage VSI Crusher
2 Stage Crusher
Variable Cost
173
157
Fixed Cost
36
29
Selling, General & Admin. Expenses
14
14
Overheads
11
11
Freight
100
100
Total Cash Cost of Production
334
311
Average Selling Price
400
400
Profit
66
89
Operating Margin
17%
22%
Table 1.7: Typical Cash Cost of Production and Margin for three Stage VSI
Crusher and two Stage Crusher
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It can be observed in the above table, the operating margin in case of three stage VSI
crusher is around 17 % while in case of two stage crusher is 22 %. Margins shown are
based on the average market price for coarse aggregates i.e. 10 mm and 20 mm.
1.6
CONCLUSION
The current market for Aggregates in Greater Hyderabad is estimated at around 1.98
mio t pm. The monthly consumption of different types of aggregates for 2008-09 is given
below:
Figures in 000 t pm
Type
2008-09
Sand
1,114
10 mm
322
20 mm
522
40 mm
60 mm
14
Total
1,979
Table 1.8: Total Consumption of Different types of Aggregates
Total current consumption of aggregates for the building construction is estimated to be
around 1.9 mio t pm and for the road construction is estimated to be around 0.9 mio t
pm.
The Zone wise aggregate consumption in 2008-09 for the building construction is given
below:
Figures in 000 t pm
Market
North Hyderabad
478
East Hyderabad
283
West Hyderabad
761
South Hyderabad
382
TOTAL
1,904
Table 1.9: Estimated Zone wise Aggregate Consumption for Building Construction
Aggregate consumption in Greater Hyderabad grew at a CAGR of 21 % pa during the
period of 2005-06 to 2008-09.
Sand has maximum share of around 57 % of the total aggregates consumed in 2008-09.
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Aggregates are supplied by building material suppliers who may or may not own their
own crushers. Traditionally aggregates are sold at common market for all building
materials called Addas which are spread across Greater Hyderabad. Individual
Builders and to certain extent Small & Medium Builders source their requirement from
these Addas. Large Construction Companies and RMC procure aggregates directly
from the large building material suppliers who are also the crusher owners.
Trucks of varying capacity i.e. 11.5 t to 35 t are used for transportation of aggregates.
With aggregate industry dominated by unorganized players, customers have a high
bargaining power over the aggregate suppliers.
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CHAPTER 2: SUPPLY
2.1
PREAMBLE:
This chapter looks at the current aggregate industry structure and aggregate producers
in Greater Hyderabad.
2.2
INDUSTRY STRUCTURE:
Aggregate producers/ suppliers can be grouped under two categories:

Organized Players: Typically, these players have multi-location plants, i.e. more
than one plant.
These players have more contemporary production equipment, good quality
control measures and a good image in the market and thus, charge price
premium for their aggregates.
These players cater mostly to Large Construction Companies, RMC Companies
and Small & Medium Builders though sometimes they also supply Individual
Builders.
Players under this category are Robo Silicon, Rocksand, Rank and Great India
Mining
Unorganized Players: This category of players is either crusher owners or just

traders dealing in the supply of aggregates by sourcing it from different crushers.
They are usually characterized by older type of equipment. Most of these plants
do not have very good quality control measures in place and are therefore unable
to deliver very consistent quality.
Most of the aggregate suppliers outsource the transportation of aggregates. In fact at

times these transporters in themselves act as the traders/ middle men for supply of
aggregates.
2.3
SOURCES OF AGGREGATES:
2.3.1
Natural Sand/ River Sand
Natural Sand or River Sand is sourced from different locations ranging between 150 Km
to 270 Km from Greater Hyderabad. The major sources of Natural Sand are given in
Table 2.1.
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Location
Distance (Km)
Vijaywada
270 (approx)
2.1

Robo Silicon
Location
Distance (Km)
Karim Nagar
160 (approx)
Nizamabad
170 (approx)
Warangal
150 (approx)
Table 2.1: Sources of Natural/ River Sand
Natural Sand is primarily supplied from Karim Nagar and Nizamabad. With
transportation cost reported to be around 70 % of the price of Natural Sand, both Karim
Nagar and Nizamabad are much competitive sources, in terms of lower transportation
cost, of Natural Sand when compared to Vijaywada. Although Warangal is as
competitive as Karim Nagar and Nizamabad due to almost similar distance, it was
revealed by both suppliers as well as consumers that Natural Sand from the later two
locations are preferred due to the better quality of sand from these locations.
2.3.2
Quarry Zones
Aggregates other than Natural Sand i.e. Coarse aggregates, Manufactured Sand and
CRF are sourced from the quarry zones located within Greater Hyderabad. These quarry
zones are well spread around Greater Hyderabad and are approved quarry zones from
the mining department. Mining licenses are issued to crusher owners for mining of rocks
and operations of crushers in these quarry zones. Designated quarry zones in Greater
Hyderabad are given below:
Keesara
Girimapuram
Dasarapally
Pathancheruvu
Shamashabad
Kazipalli
Paharisharif
Medchal
Out of the above mentioned seven quarry zones Keesara, Girimapuram, Dasarapally
and Pathancheruvu are major quarry zones where most of the crushers are located.
Most of the crushers located in these quarry zones ideally supply within 35 Km to 40 Km
of radius. Moreover, these locations are also close to the major pockets of construction
activities in Greater Hyderabad.
Apart from these above mentioned locations, some crushers are also setup around the
currently under construction Outer Ring Road. These crushers were basically setup to
cater to the aggregate demand for the Outer Ring Road project only, however, during
the interactions with the aggregate suppliers it was revealed that aggregates produced
from these crushers are also illegally sold in the open market in the areas in close
vicinity to these crushers.
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TYPES OF CRUSHERS:
2.4
There primarily two types of crushers currently operating in Greater Hyderabad. They
are:
2.4.1
Two Stage Crusher

Three Stage Vertical Shaft Impactor (VSI) Crushers also termed as VSI crushers
Two Stage Crushers
Two Stage Crushers operating in Greater Hyderabad are generally older crushers which
has only two crushing stages. In stage one large rocks or boulders mined from the
quarry are fed into a Jaw Crusher which crushes or breaks these large boulders into
smaller size of up to 60 mm. This output of smaller size, from the Jaw Crusher is then
fed into the second stage or the last stage where these rock particles are further crushed
to even smaller size of 10 mm and 20 mm. Apart from 10 mm and 20 mm finer particles
are also generated which is a waste of the second stage operations. This finer particle
waste or dust is sold as CRF as a substitute of Natural Sand or Manufactured Sand.
2.4.2
Three Stage VSI Crushers
As opposed to a two stage crusher a three stage crusher has a third additional crushing
stage which ensures better quality crushing operations. Similar to a two stage crusher
boulders are fed into the Grizzly Crusher which crushes or breaks these large boulders
into smaller size of up to 60 mm. Output from this stage is fed into the second stage
which further reduces or crushes the particles to up to 40 mm. The output from the
second stage is fed into the third and final stage which is a VSI crusher. VSI crushes the
40 mm particles into 20 mm, 10 mm and 4.75 mm down. The output from the VSI
crusher is well graded and cubical in shape.
2.5
AGGREGATE SUPPLIERS:
Aggregate industry is primarily an unorganized sector with a large number of small

players. Due to the sheer large number of aggregate suppliers and the fact that the
industry is dominated by unorganized players it is difficult to list down all the players
operating in the market. Based on the interactions with the suppliers interviewed during
the course of our visit a most prominent guesstimate of the total number of crushers, as
per the existing suppliers, is around 200 crushers.
As mentioned above there are in all four aggregate suppliers which fall in the category of
Organized Players. These players posses similar crusher technology i.e. three stage VSI
crushers and the quality of their products is also similar. Table 2.2 gives the names,
location and capacity of these players. Apart from this another new player has entered
into the market with similar equipment which has also been included in the list given
below.
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Current Output
(t pm)#
Capacity
Utilisation*
110,000
50%
166,400
67%
83,200
40%
320
30,000
23%
200
41,600
50%
2,145
431,200
48%
Company
Location
Capacity (tph)
Robo Silicon
Keesara
125
Robo Silicon
Girimapur
200
Robo Silicon
Dasarapally
200
Rock Sand
Bandamadari
200
Rock Sand
Kajipally
200
Rock Sand
Great India
Minerals
Great India
Minerals
Rank Silicon
Madaram
200
Keesara
250
Gachibowli
250
Medchala**
Vedhanya
Lakadaram
Total
* Capacity utilization has been calculated based on 16 hours of operations per day for 26 days
per month.
** Two crushers of 120 tph and 200 tph at same location.
# Total production including 20 mm, 10 mm and Manufactured Sand
Source: Aggregate Companies
Table 2.2: List of Organized Players

Profiles of the above mentioned players are given in Annexure 4.
2.5.1
Product Mix
The overall product mix of Organized Players is given in Chart 2.1.
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20 mm
33%
Sand
43%
10 mm
24%
Chart 2.1: Product Mix- Organized Players

Sand is the dominating product for all the organized players. It has a share of 43 % of
the total production of these players. This is primarily due to the fact that the primary
product for this category of players is the Manufactured Sand and for this specific reason
these players have 3 stage VSI crushers. 20 mm and 10 mm have production share of
33 % and 24 %, respectively.
2.5.2
The overall Customer Segmentation for Organized Players is given in Chart 2.2.
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Independent
Builders
4%
Small &
Medium
Builders
25%
RMC
43%
Large
Construction
Cos.
28%
Chart 2.2: Product Mix- Organized Players

With 43 % share, RMC is the largest consumption segment for Organized Players. This
is primarily due to the fact that RMC industry is the most technically competent and
aware of the latest trends in concrete technology. Moreover, RMC companies primarily
procures Manufactured Sand from the Organized Players on two accounts, firstly,
Manufactured Sand is well graded and of uniform quality compared to the Natural Sand
and secondly, the Manufactured Sand is priced lower than the Natural Sand.
For very much the similar reasons to RMC, Large Construction Companies is the second
largest customer segment, with a consumption share of 28 %, for Organized Players.
Small & Medium Builders have a share of 25 % as there are few customers in this
segment which have the technical understanding of the usage of Manufactured Sand.
Moreover, lower price of Manufactured Sand compared to Natural Sand is also a
contributing factor towards its usage.
Individual Builders is the smallest segment with a share of only 3 % due to the primary
reason of lack of knowledge about the Manufactured Sand. Moreover, very limited reach
of the Organized Players in this segment is another reason for such a low consumption
share of Individual Segments. Further, it was also revealed during our interviews that
there exists a overall sense of doubt in the minds of Individual Builders regarding the
Manufactured Sands ability to perform similarly to the Natural Sand i.e. it is a general
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perception in the Individual segment that the concrete prepared by Manufactured Sand
will be of inferior quality when compared to the one prepared by Natural Sand.
2.6
SHARE OF ORGANIZED PLAYERS IN OVERALL AGGREGATE

MARKET:
As mentioned in Table 2.2 the current total production of the Organized Players is
431,200 t pm. Based on the current product mix of Organized Players the volumes of
different types of aggregates is given in Table 2.3.
Figures in t pm
Type of Aggregate
Volume
Sand
186,320
10 mm
102,420
20 mm
142,460
Total
431,200
Table 2.3: Volumes of Different types of Aggregates
Further from the overall customer segmentation for Organized Players depicted in Chart
2.2, it is very much evident that the aggregates produced by these players are primarily
consumed for Building Construction activities. As mentioned in Chapter 1, (Table 1.2)
the total monthly estimated aggregate consumption in Greater Hyderabad, for different
types of aggregates in 2008-09 is given in Table 2.4.
Type of Aggregate
Volume (t pm)
Sand
1,089,726
10 mm
308,330
20 mm
505,510
Total
1,903,566
Table 2.4: Total Aggregate Consumption in Greater Hyderabad for Building
Construction
Based on the above two tables the share of Organized Players (for different types of
aggregates) of the total aggregate consumption for Building Construction in Greater
Hyderabad is given in Table 2.5.
Figures in t pm
Type of
Aggregate
Sand
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Total Consumption
for Building
Construction
Volume of
Organized Players
Share
1,089,726
186,320
17%
2.7

Robo Silicon
Total Consumption
for Building
Construction
Volume of
Organized Players
Share
10 mm
308,330
102,420
33%
20 mm
505,510
142,460
28%
Type of
Aggregate
Total
1,903,566
431,200
23%
Table 2.5: Share of Organized Players of the Total Aggregate Consumption in
Greater Hyderabad for Building Construction
The overall share of Organized Players of the total aggregate consumption for Building
Construction is around 23 %.
Manufactured Sand has a share of 17 % of the total sand consumption for Building
Construction. Similarly, 10 mm and 20 mm have shares of 33 % and 28 %, respectively.
2.7
PRACTICES
PLAYERS:
FOLLOWED
BY
DIFFERENT
CATEGORIES
OF
General business practices followed by different categories of players are mentioned

below:
2.6.1
Unorganized Players
Low or no Quality Control: Players in this category exercise low or no quality

control procedures. The entire thrust of such crusher operators is to achieve
maximum output without undertaking any quality control measures to ensure
proper quality of aggregates.
Price undercutting or Opportunistic Pricing: Unorganized players generally

follow opportunistic pricing policy and vary their prices according to the variation
in demand. During the peak demand periods players in this category artificially
create a deficit situation to drive the overall market prices, upwards. In the low
demand period these players practice price undercutting in order to gain supply
orders.
Evasion of Royalty: The state mining department which issues the licenses for
quarry operations charges Rs 30 per t of Royalty for carrying out mining of rocks.
Moreover, especially the small crusher owners illegally operate quarries and
crushers and thereby evade royalty to be paid to the mining department.
Cash Transactions: Most of the unorganized players prefer to deal in cash so

as to evade 4 % VAT applicable on the sales of aggregates. Most of the
customers specially Individual Builders and Small & Medium Builders, in an effort
to save on the applicable VAT encourage cash transactions while procuring
aggregates.
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Overloading of Trucks: In an effort to reduce the overall cost of transportation

most of the unorganized players overload the trucks beyond the permissible load
carrying limit prescribed by the Road Transport Authority.
2.6.2
Organized Players
High Quality Control: Players under this category have three stage VSI
crushers. The aggregates produced by 3 stage crusher in of higher quality when
compared with a two stage crusher. The aggregates are well graded and posses
cubical shape. Further, players like Robo Silicon have their in house quality
control labs at all their crusher locations and undertake periodic checks to ensure
the right quality of the aggregates.
Competitive and Uniform Pricing: Manufactured Sand being a fairly new

concept is in its growth stage of product life cycle. In order to create a market for
itself vis--vis Natural Sand which is very readily accepted in the market,
manufactured sand players have to price their product competitively. Moreover,
as there is no seasonality effect on the supply of Manufactured Sand, its prices
are more or less uniform through out the year as opposed to Natural Sand whose
prices vary from time to time especially during the monsoon season when the
supply of Natural Sand decreases due to inability to source sand from the river
beds.
Compliance with the mining regulations: Organized players follow all the
mining regulations laid down by the mining department. Proper licenses are
procured by these players for quarry and crusher operations and all proper
records are maintained of the total volume of mined rocks so as to enable them
to pay the Royalty on the mining operations to the mining department. Royalty
of Rs 30 per t is applicable on the aggregate which is charged to the customers
over and above the base price of the aggregates.
Transparency of transactions: All the commercial transactions are transparent

in nature. Customers are presented with proper invoices and 4 % VAT which is
applicable on aggregate sales is charged to the customers.
No or Occasional Overloading: Almost every organized player is known to

follow proper loading regulations as per the transport department. Although
mostly no overloading of supply trucks was reported by all the players in this
category but during our interactions with the customers it was revealed that
occasionally organized players also practice overloading of trucks. These are
mostly very scattered incidents of overloading of trucks as opposed to
unorganized players who mostly follow the practice of overloading of trucks.
Professional Business Approach: Organized players have a very professional

business approach. They usually have a well trained designated sales team
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which takes care of the day to day sales operations. Apart from this there are
well defined procedures for the each and every operation of the business.
After Sales Support: Apart from Robo Silicon there is no other player which
extends after sales technical support to its customers. They have a team of
technically qualified personnel who visit the customer site during concreting to
ensure proper usage of the aggregates.
2.8
CONCLUSION:
There are primarily two categories of aggregate suppliers operating in Greater

Hyderabad,
Organized Players, which are primarily 3 stage VSI crusher owners and are
main suppliers of manufactured sand along with 10 mm and 20 mm coarse
aggregates.
Unorganized Players, which are either building materials traders or 2 stage

crusher owners. They are suppliers of Natural Sand, CRF and coarse
aggregates.
Natural Sand is sourced from four locations located at a distance from 150 Km to 270
Km from Greater Hyderabad. These locations are:
Vijaywada
Karim Nagar
Nizamabad
Warangal
Coarse aggregates are sourced from crushers located in and around Greater
Hyderabad. There are designated quarry zones where crushers are located. The major
quarry zones are:
Keesara
Girimapuram
Dasarapally
Pathancheruvu
Shamashabad
Kazipalli
Paharisharif
Medchal
There are around 200 crushers located in Greater Hyderabad at different locations in the
above mentioned quarry zones. Most of these crushers are old two stage crushers which
primarily produce 10 mm and 20 mm aggregates along with the finer particle waste
which is sold as CRF in the market.
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There are 5 organized players which operate three stage VSI crushers and their primary
output is Manufactured Sand. The combined total capacity of these players is 2,145 tph
with most of the crushers having a capacity of 200 tph. The total production of
aggregates of all sizes is around 431,200 t pm which is around 23 % of the total
aggregates consumed for Building Construction in Greater Hyderabad.
Manufactured Sand has the highest share in terms of production output of these players
and is estimated to be around 43 % of the total production.
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CHAPTER 3: FUTURE OUTLOOK

PREAMBLE
3.1
This chapter looks at future demand and supply for aggregates. Projections for demand
and the dispersion in the different zones have been made. The details of demand
forecast for all the products are given in Annexure 2.
DRIVERS OF DEMAND
3.2
Drivers for aggregates demand derive directly from the drivers for construction in
Greater Hyderabad. The construction industry in Greater Hyderabad has received a
tremendous boost over the last few years. The underlying factor for this growth has been
the development of IT sector in the city. The state governments special thrust in
developing Hyderabad as nations IT hub has contributed towards tremendous rise in the
construction activities in Greater Hyderabad. IT majors like Microsoft, Wipro, Satyam,
Infosys etc. have established their development centers due to favorable environment
extended by the state government. Development of Hyderabad as IT center of the
country has led to a spurt in construction activities with major national level developers
undertaking premium residential as well as commercial projects along side the local
builders and developers.
FUTURE AGGREGATE DEMAND
3.3
As mentioned in the Chapter 1, aggregates are used for following major applications:
Construction.
For the purpose of, estimating the future aggregate demand for Building Construction
future cement demand in Greater Hyderabad was estimated based on the past cement
consumption.
namely,
Based on the cement consumed for concrete preparation and usage norms future
concrete demand was estimated and in turn based on the design mix, future aggregate
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Robo Silicon
and proportion of cement to sand used for preparation of mortar, future sand demand for
Further to estimate aggregate demand arising out of construction of roads in future,
usage norms for construction of different courses of road were utilized. Details of the
estimation of future demand of aggregates are mentioned in Annexure 2.
3.3.1
Future Aggregate Demand for Building Construction
Based on the future cement demand the associated future aggregate demand for
Building Construction is shown in Table 3.1. The cumulative average growth rate
(CAGR) for the period 2009-10 to 2013- 14 is estimated to be 13 % pa.
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Cement
Demand
396
448
506
572
646
Sand
1,232
1,393
1,575
1,780
2,011
10 mm
349
394
446
504
569
20 mm
572
646
731
826
933
3,513
Total
2,153
2,433
2,752
3,110
Table 3.1: Projected Aggregate Demand based on Cement Consumption for
Building Construction in Greater Hyderabad
3.3.2
Future Aggregate Demand for Road Construction
Based on the estimated future construction of new roads and resurfacing of the existing
roads, the estimated future aggregate demand for Road Construction is presented in
Table 3.2. The cumulative average growth rate (CAGR) for the period 2009-10 to 201314 is estimated to be 28 % pa. The high growth rate of future aggregate demand is
primarily attributed to the 140 Km Phase II of the Outer Ring Road which is likely to start
in coming few months.
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Sand
38
53
70
85
102
10 mm
20
28
36
44
52
20 mm
25
36
46
57
68
40 mm
11
15
20
25
29
60 mm
21
30
39
48
57
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Type
Total
3.3.3
2009-10
2010-11
2011-12
2012-13
115
162
211
259
Table 3.2: Projected Aggregate Demand for Road Construction
2013-14
308
Overall Future Demand of Aggregates
The overall future aggregate demand in Greater Hyderabad including both Building
Construction as well as Road Construction is given in Table 3.3
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Sand
1,270
1,447
1,644
1,865
2,112
10 mm
369
422
482
547
621
20 mm
597
682
777
883
1,001
40 mm
11
15
20
25
29
60 mm
21
30
39
48
57
3,820
Total
2,268
2,596
2,962
3,368
Table 3.3: Projected Overall Aggregate Demand in Greater Hyderabad
The overall future aggregate demand is projected to grow from 2.3 mio t pm in 2009-10
to 3.8 mio t pm in 2013- 14 at a CAGR of around 14 % pa.
3.3.4
Zone wise Future Demand for Aggregates
The zone wise future demand of sand and coarse aggregates for Building Construction
is given in Table 3.4 to Table 3.7.
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
North Hyderabad
540
611
690
780
881
East Hyderabad
320
362
410
462
522
West Hyderabad
860
972
1,099
1,242
1,405
South Hyderabad
433
488
553
626
705
Total
2,153
2,433
2,752
3,110
3,513
Table 3.4: Projected Zone wise Overall Aggregate Demand for Building
Construction
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Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
North Hyderabad
319
360
407
460
520
East Hyderabad
176
199
224
254
287
West Hyderabad
483
546
617
697
788
South Hyderabad
255
288
326
368
416
Total
1,233
1,393
1,574
1,779
2,011
Table 3.5: Projected Zone wise Sand Demand for Building Construction
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
North Hyderabad
84
95
107
121
137
East Hyderabad
55
62
70
79
89
West Hyderabad
143
162
183
207
234
South Hyderabad
67
76
86
97
109
Total
349
395
446
504
569
Table 3.6: Projected Zone wise 10 mm Aggregate Demand for Building
Construction
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
North Hyderabad
138
156
176
199
225
East Hyderabad
90
101
115
130
146
West Hyderabad
234
265
299
338
382
South Hyderabad
110
125
141
159
180
Total
572
647
731
826
933
Table 3.7: Projected Zone wise 20 mm Aggregate Demand for Building
Construction
3.4
FUTURE AGGREGATE SUPPLY
As mentioned in Chapter 2, there are around 200 crushers currently located in Greater
Hyderabad. Most of these crushers are two stage crushers and are generally operating
at very low capacity utilization primarily due to the fact that they are old crushers with
high break down incidence. Even the new generation three stage VSI crushers currently
operating in Greater Hyderabad are operating at an average capacity utilization of just
below 50 %. Thus, there is a scope of increasing the output of the existing crushers to
cater to the growing aggregate demand in future.
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Further, with the proven higher quality output advantage of a three stage VSI crusher
over two stage crusher, the trend is likely to be to phase out the old, low capacity two
stage crushers and install new three stage VSI crushers of higher capacity.
With depleting river beds and concerns raised on the detrimental environmental impact,
current sources of Natural Sand are likely to be abandoned thereby reducing the
availability of Natural Sand in future. Under such a scenario the construction sector in
Greater Hyderabad is likely to look for the alternatives to replace Natural Sand and this
presents a very good opportunity for the growth in the supply of Manufactured Sand.
As already elaborated in preceding chapters, aggregate industry is primarily an
unorganized sector; therefore, it is difficult to ascertain any new capacity additions i.e.
setting up of new crushers. In the absence of any published or secondary source of
information coupled with unwillingness of the current aggregate suppliers to share
information about their future plans of setting up of new crushers it is not possible to
ascertain the future capacity additions.
Thus, we believe that existing players will ramp up capacity as demand goes up even if
no concrete plans have been announced and aggregate production capacity will be able
to keep pace with the demand. Further, low gestation period of setting up of new plants
i.e. 3 4 months and lower investment cost would also contribute towards the likelihood
of setting of new crushers. Thus, in the overall context of the future supply of aggregates
there is unlikely to be a large surplus or deficit for aggregates.
On the whole, based on market feedback, the trend would be of phasing out of two stage
crushers and replacing them with new high efficiency and high capacity three stage VSI
crusher. However, the extent of technical competency of these new players to produce
the right quality of Manufactured Sand remains to be observed.
3.4 CONCLUSION
Future aggregate demand has been estimated based on demand for Building
Construction and Road Construction.
The demand of aggregates for Building Construction is estimated to grow from 2.1 mio t
pm in 2009-10 to 3.5 mio t pm in 2013- 14 at a CAGR of 13 % pa.
The demand for aggregates for Road Construction is estimated mainly on account of
construction of the Phase II of Outer Ring Road and resurfacing of existing roads and is
likely to grow from 0.1 mio t pm in 2009-10 to 0.3 mio t pm in 2013- 14 at a CAGR of 28
% pa.
The total aggregate demand in Greater Hyderabad based on the above two applications
is likely to grow from 2.2 mio t pm in 2009- 10 to 3.8 mio t pm in 2013- 14 at a CAGR of
14 % pa.
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Robo Silicon
West Zone is likely to continue to be the largest consumption center and is likely to grow
from 0.8 mio t pm in 2009-10 to 1.4 mio t pm in 2013- 14.
North Zone and South Zone are likely to be the second and third largest consumption
centers, respectively and estimated demand is likely to reach to a level of 0.9 mio t pm
and 0.7 mio t pm, respectively by 2013- 14.
Aggregate demand for the East Zone is likely to grow from 0.3 mio t pm in 2009- 10 to
0.5 mio t pm in 2013- 14.
On account of depleting river beds and environmental issues related to scraping of river
beds, supply of Natural Sand/ River Sand is likely to be affected in future. This scenario
would present a good opportunity for the growth of Manufactured Sand supply which is
likely to be the best suitable alternative of Natural Sand.
With no concrete plans of new capacity additions (new crusher installations) announced
by any of the existing or new players and low gestation period of setting up of new
crushers, coupled with low investment cost, there is unlikely to be a large surplus or
deficit for aggregates in Greater Hyderabad.
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Robo Silicon
CHAPTER 4: STRATEGIC ALTERNATIVES

4.1
PREAMBLE
The objective of this chapter is to derive strategic alternatives for Robo Silicon to counter
market threats and gain competitive advantage over its competitors.
An analysis of the industry using Porters 5 forces model has already been done in
Section 1.7 of the report. The findings of this analysis are summarized below.
Intense competition among the aggregate players.
Domination of buyers due to high price sensitivity, especially in the Individual and
Small & Medium Builder segment.
High threat of new entrants due to low entry barriers.
This chapter commences with a discussion on opportunities and threats posed by the
external environment and issues internal to the company i.e. the strengths and
weaknesses of Robo Silicon. Strategic alternatives for enhancing market share have
been derived using the TOWS methodology.
4.2
OPPORTUNITIES FOR ROBO SILICON
High Market Demand:

Aggregate market since 2005-06 has grown at a CAGR of 21 % pa. This has
resulted due to a boom in the construction industry. As explained in Chapter 3,
the construction sector as well as the aggregate industry is likely to witness
continuing growth. This represents an opportunity for Robo Silicon.
Change in Construction Trends:
The trend of construction is changing since the last few years with more high rise
buildings being constructed in Greater Hyderabad. This trend is likely to continue
in future with more and more multistorey residential as well as commercial
projects being undertaken. This would lead to better quality construction, which in
turn would result in demand for high quality building materials, which can only be
supplied by the organized sector.
Unorganized Competition:
Aggregate industry in Greater Hyderabad is largely fragmented, with a number of

small and medium sized players operating in the market. These players are
generally building material suppliers who own old, inefficient two stage crushers,
to take advantage of the current high growth in the construction sector. Being
small operations these players lack the professionalism and tact to plan well in
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Robo Silicon
advance to enhance their supply capabilities, for keeping pace with the growth in
demand.
Robo Silicon, being the most professionally managed aggregate player in
Greater Hyderabad has a huge advantage over the smaller players by the virtue
of being able to plan well ahead to tap the growing demand.
Growing Awareness about Manufactured Sand:
With improved construction techniques being employed by construction sector,

the demand for high quality building materials is likely to increase. Moreover, with
increasing number of aggregate suppliers planning to set up three stage VSI
crushers, availability as well as awareness of Manufactured Sand is slated to
increase presenting opportunity for conversion of Natural Sand customers to
Manufactured Sand.
Stringent Environment Norms:
With increasing concern over environmental degradation, stringent environmental

regulations are likely to be implemented. This would result in reduced availability
of Natural Sand which is primarily sourced from river beds. Under such a
scenario construction sector will be forced to look for alternatives of the Natural
Sand and Manufactured Sand is the best alternative in this respect.
4.3
THREATS TO ROBO SILICON
Low Entry Barriers:

There are low barriers to entry into the aggregate sector, especially at the small
capacity level. The technology for the industry is simple and relatively easy to
access. Investment is also not very high. The gestation period to set up a new
plant is 3-4 months. Thus, there is a possibility of new entrants setting up shop
looking at the growth in the sector.
Increased Supply from Existing Players:
Based on market feedback, it is believed that at present the organized players

are working at around 50 % capacity utilization. Thus, present plants can easily
deliver higher volumes from the present production facilities.
Backward Integration by RMC Companies:
RMC companies, which are big consumers of aggregates, can explore and
backward integrate into setting up of captive crushers to fulfill their aggregate
demand. These plants can easily divert their aggregate supply to other
customers, thereby, increasing the competition.
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Robo Silicon
Currently RMC India and Rank Ready Mix Concrete are known to source their
aggregate demand from their own crushers in Greater Hyderabad.
Low Cost Smaller Players:
As discussed in previous chapters, there is an unorganized section in the

aggregate industry in Greater Hyderabad, with a number of small players
operating in the market. These small players are generally building material
suppliers who have setup their own crushers to take advantage of the growth in
the construction sector. These small players generally set up plants with old
equipment and have much lower operations cost as compared to companies like
Robo Silicon, due to smaller operations. This enables these small players to
produce aggregates at much lower cost when compared to Robo Silicon and are
thus able to offer aggregates at lower price than Robo Silicon, to customers.
Cost Reduction efforts by RMC Companies
In an effort to reduce the overall cost of concrete being sold by RMC companies,
they use CRF in place of Natural Sand or Manufactured Sand as it is priced
much lower. Most RMC companies have initiated up to 60 % replacement of
Natural Sand or Manufactured Sand with CRF. RMC companies have also
modified their design mixes to suit the usage of CRF. Companies like Lafarge
(erstwhile L&T Concrete) have shifted to 100 % usage of CRF.
Lack of Knowledge about Manufactured Sand
Individual Builders are ignorant about the technical aspect of the Manufactured
Sand. Individual Builders are skeptic about the quality and performance of
Manufactured Sand compared to Natural Sand which has been used for
construction for ages. Thus, Natural Sand is perceived to be superior than
Manufactured Sand in terms of quality as it is a naturally occurring building
material.
4.4
STRENGTHS OF ROBO SILICON
High Quality Product

Robo Silicon was the first aggregate supplier to set up a three stage VSI crusher.
The aggregates produced and supplied by Robo Silicon are considered to be of
highest quality especially Manufactured Sand primarily on account of being very
well graded with well shaped particles.
High Brand Image
Being the pioneers in the Manufactured Sand business, Robo Silicon has been
able to build up its brand since 2001. Robo Silicons Manufactured Sand is
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4.3

Robo Silicon
branded as Robo Sand and over a period of time Robo Sand has become a
generic name for Manufactured Sand.
High Technical Competency
Being the oldest player, Robo Silicon has gained experience in the field of
manufacturing of Manufactured Sand. It has almost perfected its manufacturing
process to produce the highest quality of Manufactured Sand. During the course
of its operations Robo Silicon has become the most technically competent
aggregate producer and supplier with well trained production as well as
marketing personnel.
Long and Good Customer Relations
Since 2001, when Robo Silicon started its first crusher at Keesra, it has been
able to establish a very good relationship with major customers of aggregates in
Greater Hyderabad. It has a long standing relationship with Ultra Tech Ready Mix
and is the sole supplier of Manufactured Sand for Ultra Tech Ready Mix. Almost
50 % of the total production of Robo Silicon is supplied to Ultra Tech Ready Mix.
Good Market Reach
With its three plants located in Keesara, Girimapuram and Dasarapally, Robo
Silicon has a very good market reach to cater to different market zones.
Moreover, Robo Silicon also maintains stocks at all the three locations to enable
it to supply as per the requirement of its customers.
Transparent/ Consistent Pricing
Robo Silicon has followed a very transparent/ consistent pricing policy. Robo
Sand prices are generally constant with some minor fluctuations. Robo Silicon is
able to follow this pricing policy as they are the product initiators and their supply
is least affected due to any seasonal changes.
After Sales Service/ Technical Assistance
Robo Silicon is the only aggregate supplier which offers after sales service i.e.
technical assistance to its customers. It has a team of trained professionals, who
visit the customer site to educate and assist in proper preparation of concrete
and in turn facilitate construction of durable concrete structures. Apart from this,
any customer complaints pertaining to the quality or of any other nature are also
addressed by its personnel.
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Robo Silicon
4.5
WEAKNESSES OF ROBO SILICON
Low presence in Individual Builder Segment:

Robo Silicon has a very good presence in the RMC, Large Construction
Companies and Small & Medium Builder segments. However, with only 1 % of
their total sales going into Individual Builder segment, it has a low focus on this
segment. The Independent Builder segment constitutes 30 % of the overall
market of aggregates in Greater Hyderabad. Thus, it is one of the major target
segments which has not been tapped to its full potential by Robo Silicon.
No Crusher in South Zone:
Robo Silicon currently has three plants located in Keesara, Dassarapally and
Girimapuram which cater to the entire Greater Hyderabad. These plants are
locationally more suitable to cater to the East, North and West Zones. With South
zone, especially areas adjoining the new International Airport in Shamshabad,
envisaged to emerge as a major center for construction activities in future. With
no aggregate crusher located in this zone, Robo Silicon may loose upon the
market opportunity when the actual construction work starts in the South Zone.
4.6
BROAD STRATEGIES
Broad strategies for Robo Silicon have been derived using a TOWS matrix. This
methodology involves examining each strength/ weakness in conjunction with each
opportunity/ threat to identify four types of strategic alternatives. These can be classified
as follows:
WT Strategies (mini-mini): These aims to minimise both weaknesses and
threats.
WO Strategies (mini-maxi): These strategies attempt to minimise the
weaknesses and maximise the opportunities presented to the company.
ST Strategies (maxi-mini): These strategies are based on the strengths of the
organisation that can deal with threats in the environment.
SO Strategies (maxi-maxi): These try to leverage the companys strengths to
exploit opportunities presented to it.
The TOWS matrix for Robo Silicon is shown in Table 4.1. The strategies are also listed
in the relevant cell of the matrix with the combination of strength/ weakness, opportunity/
threat identified in parentheses.
For example, the first SO Strategy namely, Focus on RMC, has been derived
considering strength S1 (Pioneers of Manufactured Sand), S2 (Reliable and Consistent
Supply), S3 (High Technical Competency), opportunity O1 (High market demand) and
O2 (Changing Construction Trends). The reference of S1, S2, S3, O1 and O2 is
provided in the parentheses after the strategy.
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Robo Silicon
Strengths (S)
Internal
Factors S1: High Quality Product
S2: High Brand Image
S3: High Technical
Competency
S4: Long and Good
Customer Relations
S5: Good Market Reach
S6: Transparent/ Consistent
Pricing
S7: After Sales Service/
Technical Assistance
External
Factors
Opportunities (O)
O1: High market demand
O2: Changing construction
trends
O3: Unorganised
Competition
O4: Growing Awareness
about Manufactured Sand
O5: Stringent Environment
Norms
Weaknesses (W)
W1: Low presence in
Individual segment
W2: No crushers in South
Zone
SO Strategies

Threats (T)
Focus on RMC (S1, S2,

S3, S4, O1, O2)
Expand Current
Capacities (S1, S2, O1,
O4, O5)
WO Strategies
ST Strategies
T1: Low Entry Barriers

T2: Increased Supply from
Existing Players
T3: Backward Integration by
RMC Companies
T4: Low Cost Smaller
Players
T4: Cost Reduction efforts
by RMC Companies
T5: Lack of Knowledge
about Manufactured Sand
Price aggressively to
counter competition
(S1, S2, S3, S4, T2, T3)
Mount campaign to
educate users about
Manufactured Sand
(S1, T4, T5)
Increase presence in
Individual segment (W 1,
O1)
Setup crusher in South
Zone (W 2, O1, O2, O4,
O5)
WT Strategies
Increase presence in
Individual segment (
W1, T1, T2, T4)
Table 4.1: TOWS matrix for ROBO SILICON
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Robo Silicon
The strategies listed in the TOWS matrix are described below:

With growing construction sector demand for cement, the demand for aggregate is
expected to grow. Robo Silicon already has a good presence in most of the markets
centers of Greater Hyderabad.
Robo Silicon with its three plants located in Keesara, Girimapuram and Dasarapally has
a very good reach in most parts of Greater Hyderabad. With construction activity likely to
pick up in South Hyderabad i.e. area adjoining the new International Airport in
Shamshabad, setting up of new plant in this market zone would further improve Robo
Silicons market reach.
Focus on RMC Companies
With changing construction trends and focus on high rise building construction in Greater
Hyderabad in the future, the demand for high quality premium residential as well as
commercial space is likely to grow. This would in turn result in high demand for quality
building materials. RMC industry being the most organized supplier of high quality
concrete is expected to grow under such a scenario. Thus, RMC industry is envisaged to
be the most important and largest customer segment for Organized Players (like Robo
Silicon) of aggregates. Therefore, it is of utmost importance for Robo Silicon to focus on
this segment.
As Robo Silicon currently has a long term contract for aggregate supply with Ultra Tech
Ready Mix, it would be prudent decision to enter into long term contract with some more
RMC companies so as to ensure continued business. A special pricing policy for such
long term contracts should be adopted to counter the threat of price undercutting by
unorganized players.
Increase presence in Individual Builder Segment
Individual segment is another important segment which could be serviced to gain
stronger foothold in the market.
The main focus of Robo Silicon would remain on the builders/ contractors, construction
companies and RMC companies as Robo Silicon has very good relationship as well as
reputation with these segments of customer. With increasing its focus on the Individual
Builder segment Robo Silicon will ensure very good presence over the entire spectrum
of customers thereby making it an all round player.
Small building material suppliers/ retailers play a vital role in catering to the demand of
aggregates for Individual Builder segment. The current Direct Selling model adopted by
Robo Silicon is best suited for Institutional Customers as the numbers of such
customers are few and they are easily accessible. The same is not true for Individual
Builder segment, which is very large in number and at the same time very scattered.
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4.7

Robo Silicon
Moreover, individual buyers are much more comfortable in dealing with known local
retailer due to the prime reason of Trust and personalized service, which is perceived
to be absent while dealing with a large aggregate supplier like Robo Silicon.
Thus, it would be prudent to appoint exclusive retailers in different areas of the city
specifically to cater to the demand of Individual Builders. Moreover, the current trend of
growth in Organized Retail segment would facilitate Robo Silicon to target the
individual segment through its organized retail distribution model.
Expansion/ New Capacity Setup
With demand for aggregates slated to grow in future, specifically for Manufactured Sand,
it would be sensible for Robo Silicon to enhance its production capability to take
advantage of growth in demand. Robo Silicon can either setup new line at the existing
crusher locations or can setup crushers at new locations based on the future major
market centers. Enhancement of production facility would also facilitate in catering to
long term dedicated supply contracts with RMC companies.
Competitive Pricing
Robo Silicon is the leading Manufactured Sand player in Greater Hyderabad. It is a very
well known brand in its industry and is known to deliver high quality aggregates and
services. With competition expected to grow further with the probable entry of some new
players and expansion by the existing players it would be imperative for Robo Silicon to
counter this expected increase in the competition. A highly competitive overall pricing
policy coupled with high quality of aggregates and services would enable Robo Silicon to
ward off the competition to a great extent.
Customer segment based pricing policy, with higher prices for Individual Builders and
more competitive prices for rest of the customers should be adopted.
Mount campaign to educate users about Manufactured Sand
The misconception that Natural Sand is better than Manufactured Sand prevails
particularly in the Individual segment but also among some users in other segments.
Robo Silicon should start a campaign either singly or jointly with other manufactures of
Manufactured Sand to increase awareness and knowledge of Manufactured Sand and
the advantages of using this product.
4.7
CONCLUSIONS
The strategies are summarized below under various heads.

Area
1. Zonal Focus
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Strategy

4.8

Robo Silicon
Area
Strategy
2. Capacity
Expand existing crushers

Setup new crushers
3. Customer Segmentation
Focus on RMC companies

Increase presence in individual builder segment
4. Pricing
Price aggressively to counter competition
5. Promotion
Mount campaign to
Manufactured Sand
08312
educate
users
about
4.9

Robo Silicon
ANNEXURE 1: CURRENT AND PAST CONSUMPTION

A 1.1 CEMENT MARKET- GREATER HYDERABAD
Past cement consumption in Andhra Pradesh and Greater Hyderabad is given in below:
Figures in mio t pa
Year
Andhra Pradesh
Greater
Hyderabad
2005-06
11.46
2.40
Greater
Hyderabad
(t pm)
200,000
2006-07
12.59
3.24
270,000
26%
2007-08
14.74
3.60
300,000
24%
% of State
21%
2008-09
18.43
4.20
350,000
23%
Table 1: Past Cement Consumption for Andhra Pradesh and Greater Hyderabad
Cement consumption in Andhra Pradesh has grown at a CAGR of around 17 % during
the period of 2005- 06 to 2008- 09. However, during the same period cement
consumption in Greater Hyderabad has grown at a very healthy CAGR of 21 % pa.
A 1.2 PAST AGGREGATE CONSUMPTION

In the absence of any secondary source of data for aggregate consumption in Greater
Hyderabad, the past consumption of aggregate was estimated by the end use method
where the cement consumption and construction of roads were used as surrogate.
Thus, the past aggregate consumption was estimated by two alternate methodologies:
Based on the cement demand termed as Building Construction, which

was further divided into two categories:
Cement consumption for Concrete application
Cement consumption for Mortar preparation
Based on Road Construction
Based on Building Construction:

Building construction is one of the major applications of aggregates. Both coarse as well
as fine aggregates is used for construction activity. Under this methodology cement
consumption in Greater Hyderabad was divided into two major sub applications:
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Robo Silicon
Cement consumed was segregated into different customer segments and further based
on the average cement consumed for the concrete preparation by different segments
was utilized to estimate the total concrete produced.
The customer segmentation of cement and percentage of cement consumed for
concreting application in Greater Hyderabad is given in table below:
Customer Segment
Share of Total
Market
%age of Cement used for

Individual Builders
30%
65%
Small & Medium Builders
35%
70%
Large Construction Companies
20%
75%
RMC
15%
100%
Table 2: Cement Customer Segmentation and %age usage for Concreting
Application
From the above table Individual Builders form 30 % of the total cement market in Greater
Hyderabad and 65% of the total cement consumed by this segment is utilized for
preparation concrete. The rest is utilized primarily of Mortar preparation. For different
segments the percentage of cement usage for concrete applications differs and for RMC
100 % of the cement consumed is for preparation of concrete as it is the final end
product for this segment.
To illustrate the aggregate demand estimation, calculations for the year 2008- 09 are
given below:
Based on the Table 1 and Table 2, the segment wise cement consumed for Concreting
application and Mortar preparation in 2008 09 are given below:
Figure in t pm
Applications
Cement for
Concrete
Cement for
Mortar
Total Cement
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
RMC
68,250
85,750
52,500
52,500
36,750
36,750
17,500
105,000
122,500
70,000
52,500
Table 3: Segment wise and application wise Cement Consumption in Greater

Hyderabad in 2008 09
Based on the grades of concrete used by different segments, the average quantity of
cement used per cu m of concrete is given below:
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A 1.2

Robo Silicon
Figures in Kgs per cu m
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
Cement per cu
350
300
425
of Concrete
Table 4: Segment wise Cement usage per cu m of Concrete
RMC
383
The above mentioned usage norms are based on the interaction with the customers in
each customer segment.
Based on Table 3 and Table 4 the total concrete consumption for 2008 09 is given
below:
Figures cu m per month
Application
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
RMC
Concrete
195,000
285,833
123,529
136,957
Table 5: Segment wise Concrete Consumption for 2008 09 in Greater Hyderabad

To estimate the aggregate demand for concrete application the aggregate usage norms
based on the grades of concrete were utilized. The average Sand, 10 mm and 20 mm
usage norms per cu m of concrete for different customer segments are given below:
Figures Kgs per cu m
Type of
Aggregate
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
RMC
Sand
820
805
722
750
10 mm
410
420
415
416
20 mm
690
680
677
678
Table 6: Segment wise Aggregate Consumption norms for per cu m of Concrete in

Greater Hyderabad
Based on the usage norms of aggregates for preparation of concrete given in Table 6
and total concrete estimated in Table 5, the monthly aggregate consumption for
concrete application is given below:
Figures t pm
Type of
Aggregate
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
RMC
Sand
159,900
230,096
89,250
102,717
10 mm
79,950
120,050
51,265
57,065
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A 1.3

Robo Silicon
Type of
Aggregate
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
RMC
20 mm
134,550
194,367
83,691
92,902

Greater Hyderabad in 2008 09
Cement consumption for Mortar preparation:
From Table 3 the cement consumed for Mortar preparation for different customer
segments is given below:
Figure in t pm
Application
Independent
Builders
Small & Medium

Builders
Large Construction
Cos.
Cement for Mortar
36,750
36,750
17,500
Table 7: Segment wise Cement Consumption for Mortar Preparation in Greater

Hyderabad in 2008 09
The entire cement consumed by RMC companies is utilized for preparation of concrete
which is their end product. Thus, RMC as a customer segment of Mortar preparation has
not been considered.
Mortar is primarily used for following application in Building Construction:
Masonry
Plastering
Flooring
Based on the interaction with the different segments of customers the usage norms for
mortar preparation are given below:
Applications
Cement : Sand
Masonry
1:4
Plastering
1:4 - 1:6, considered 1:5
Flooring
1:8
Table 8: Aggregate Usage norms for Mortar Preparation
Segment wise cement consumed for Mortar preparation for the above mentioned
applications is given below:
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A 1.4

Robo Silicon
Masonry
Independent
Builders
40%
Small & Medium

Builders
40%
Large
Construction Cos.
30%
Plastering
35%
20%
40%
Applications
Flooring
25%
40%
30%
Table 9: Segment wise Cement Consumed for Mortar Preparation for different
applications
In Independent Builder segment, 40 % of the cement consumed for Mortar preparation is
utilized for Masonry application, 35 % of cement consumed is utilized for Plastering and
25 % of cement consumed is utilized for Flooring application. Similarly the usage norms
for other segments are given in above table.
Based on cement consumed for Mortar preparation, mentioned in Table 7, aggregate
usage norms for different applications for mortar, mentioned in Table 8 and segment
wise cement consumption for different applications of Mortar preparation, the segment
wise total sand consumption for Mortar preparation in 2008 09 for Greater Hyderabad
is given below:
Figures in t pm
Masonry
Independent
Builders
58,800
Small & Medium

Builders
58,800
Large
Construction Cos.
21,000
Plastering
64,313
36,750
35,000
Flooring
73,500
117,600
42,000
Applications
Total
196,613
213,150
98,000
Table 10: Segment wise Sand Consumption for Mortar Preparation for different
applications
Thus, based on aggregate consumption for Concrete Preparation as given in Table 6
and sand consumption for Mortar Preparation given in Table 10, the overall aggregate
consumption in Greater Hyderabad is given below:
Figures t pm
Type of
Aggregate
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
RMC
Sand
356,513
443,246
187,250
102,717
10 mm
79,950
120,050
51,265
57,065
20 mm
134,550
194,367
83,691
92,902
Table 11: Segment wise total Aggregate Consumption in Greater Hyderabad in

2008 09
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Robo Silicon
Similar methodology was applied to estimate the year wise aggregate consumption in
Greater Hyderabad. The year wise aggregate consumption for Building Construction is
given below:
Figures in 000 t pm
Type
2005-06
2006-07
2007-08
2008-09
Sand
623
841
934
1,090
10 mm
176
238
264
308
20 mm
289
390
433
506
Total
1,088
1,469
1,631
1,904
Table 12: Estimated Year wise Aggregate Consumption for Building Construction
Based on Road Construction:
The second major application for aggregate usage is Road Construction. Demand for
aggregate based on this approach was divided into two categories:
New Road Construction

Resurfacing of existing roads

Under this approach the demand was estimated for the Phase I of the Outer Ring Road
which was recently completed. Further, 5 % of the total existing roads in Greater
Hyderabad were assumed to be constructed annually.
The aggregate usage norms based on IRC 37, for different courses/ layers of road are
given below:
Granular Sub- base:
Figures in cu m
Thickness
300 mm
Type of Aggregates
Volume
60 mm
0.64
10 mm
0.25
Sand
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0.38
Table 13: Aggregate usage norms per cu m
A 1.6

Robo Silicon
Wet Mix Macadam:

Figures in cu m
Thickness
225 mm
Type of Aggregates
Volume
40 mm
0.40
20 mm
0.53
Sand
0.40
Dense Bituminous Macadam:

Figures in cu m
Thickness
195 mm
Type of Aggregates
Volume
20 mm
0.44
10 mm
0.41
Sand
0.59
Bituminous Concrete:
Figures in cu m
Thickness
191 mm
Type of Aggregates
Volume
20 mm
0.45
10 mm
0.42
Sand
0.60
Surface Course (for resurfacing only):

Figures in cu m
Thickness
50 mm
Type of Aggregates
Volume
10 mm
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0.03
Table 17: Aggregate usage norms per sq m
A 1.7

Robo Silicon
The total length of Outer Ring Road in Phase I is 22.5 Km. It was assumed that the 50
% of this length was constructed in 2007-08 and the rest in 2008-09. Thus the year wise
length of Phase I constructed is given below:
Year
2007 08
2008 09
Length in Kms.
11.25
11.25
Table 18: Year wise constructed length of Outer Ring Road Phase I
For estimation of aggregate consumption for Phase I of Outer Ring Road the total width
of the paved surface was calculated as below:
Figures in mtrs.
Description
Width
No. of Lanes
Total
75.00
Fast Lane
3.50
Outer Lane
3.75
Hard Shoulder
3.00
Earthen Shoulder
3.00
Median
5.00
Service Roads
3.50
Total
45.50
Green Area
29.50
Actual Paved
37.50*
* Width of Median and Earthen Shoulder has been excluded from Total Width
Table 19: Width of Outer Ring Road Phase I

The total length of existing roads in Greater Hyderabad is given below:
Types of Existing Roads
Length in Kms
R & B Roads
201
MCH Arterial roads
375
Total
576
Source: Andhra Pradesh Roads & Buildings Department
Table 20: Length of Existing Roads

As mentioned above 5 % of the existing roads were assumed to be constructed annually
and further 20 % of the existing roads were assumed to be resurfaced every year. Thus
the length of new roads and for resurfacing is given below:
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Robo Silicon
Figures in Kms
2005-06
2006-07
2007-08
2008-09
Resurfacing
469
494
520
547
New Roads
25
26
27
29
Total
494
520
547
576
Table 21: Year wise length of Existing Roads in Greater Hyderabad
Based on the usage norms of aggregates mentioned above the aggregate consumption
of Phase I of Outer Ring Road, Existing roads and Resurfacing of existing roads is given
below:
Figures in cu m
Type of Aggregates
2007-08
2008-09
Sand
145,314
145,314
10 mm
70,526
70,526
20 mm
96,892
96,892
40 mm
41,766
41,766
60 mm
81,000
81,000
Table 22: Year wise Aggregate Consumption for Outer Ring Road Phase I
Figures in cu m
Type of Aggregates
2005-06
2006-07
2007-08
2008-09
Sand
43,056
44,778
46,500
49,945
10 mm
20,897
21,733
22,568
24,240
20 mm
28,709
29,857
31,005
33,302
40 mm
12,375
12,870
13,365
14,355
60 mm
24,000
24,960
25,920
27,840
Table 23: Year wise Aggregate Consumption for New Road Construction
Figures in cu m
Type of Aggregates
2005-06
2006-07
2007-08
2008-09
10 mm
12,663
13,338
14,040
14,769
Table 24: Year wise Aggregate Consumption for Resurfacing of Existing Roads
Thus, from Table 22 to Table 24, the total yearly past consumption of aggregates in
Greater Hyderabad for Road Construction is given below:
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A 1.9

Robo Silicon
Figures in cu m
Type of Aggregates
2005-06
2006-07
2007-08
2008-09
Sand
43,056
44,778
191,814
195,259
10 mm
33,560
35,071
107,135
109,535
20 mm
28,709
29,857
127,897
130,194
40 mm
12,375
12,870
55,131
56,121
60 mm
24,000
24,960
106,920
108,840
Table 25: Year wise Aggregate Consumption for Road Construction in Greater
Hyderabad
Figures in 000 t pm
Type
2005-06
2006-07
2007-08
2008-09
Sand
24
24
10 mm
13
14
20 mm
16
16
40 mm
60 mm
13
14
Total
18
19
73
75
Note: 1 cu m of compacted aggregates equals 1.5 t of aggregates
Table 26: Estimated Year wise Aggregate Consumption for Road Construction
The total year wise aggregate consumption in Greater Hyderabad including both
Building Construction as well as Road Construction is given in below:
Figures in 000 t pm
Type
2005-06
2006-07
2007-08
2008-09
Sand
628
846
958
1,114
10 mm
180
242
278
322
20 mm
292
394
449
522
40 mm
60 mm
13
14
Total
1,105
1,487
1,705
1,979
Table 27: Estimated Year wise total Aggregate Consumption in Greater Hyderabad
08312
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Robo Silicon
ANNEXURE 2: DEMAND FORECAST

A 2.1 CEMENT MARKET- ANDHRA PRADESH
In order to make quantitative forecasts of cement demand, variables that could logically
bear a relation to cement consumption have been selected. Past data for such variables
have been examined in relation to cement consumption in Andhra Pradesh to examine
whether a correlation between the two exists. Thus, quantitative forecasts of future
cement demand were made using two alternate approaches.
Time Series Analysis
Under the time series analysis, numerous curves were fitted to data for past
cement consumption. These curves were examined for the extent of fit using
various auto regression techniques. The forecast for future growth in cement
consumption with these techniques, using time as an independent variable and
cement consumption as a dependent variable indicates a CAGR for cement
consumption between 6.4% 19.3% pa for different equations, with a weighted
result of 12.0% pa.
Regression versus Net State Domestic Product (NSDP)
Growth in cement consumption, in most countries, shows a strong correlation with

GDP growth. At the state level, cement consumption is related to its NSDP. Based on
a real GDP forecast of India, the NSDP of the state was forecast to grow at 7.3% pa
in real terms. By correlating past cement consumption to the states NSDP; an
expected CAGR of 7.9% was derived for cement consumption.
Estimates of Future Demand
Various methods considered in the earlier paragraphs to estimate future cement growth
in Andhra Pradesh are summarized in the following table:
Forecasting Method
Time Series
Expected Growth Rate

12.0 %
Correlation with NSDP

7.9 %
Table 1: Andhra Pradesh Expected Growth Rates from Various Methodologies
There is a need to take into account, the trend of cement consumption growth being
experienced by the state. The CAGR during the past decade (1999 2009) had been
11.2% pa; the recent 5 year CAGR was 18.1% pa. The growth rates given by the time
series method is in the range 6.4% 19.3% and the NSDP based projection hints at
08312
A 2.1

Robo Silicon
7.9%. The Time Series Analysis forecast is influenced substantially by conditions

prevailing in the past. Since these conditions may not persist on a long-term basis, a
growth forecast using only this method might be misleading. Weighing both quantitative
and non-quantitative factors together along with soft factors, it is expected that the future
CAGR would be 12.0 % pa. On applying this growth rate to the 2008 09 base year
demand of 18.43 mio t, we obtain the following projections for cement demand.
Year
Cement Demand (mio t)
2009 10
20.64
2010 11
23.12
2011 12
25.89
2012 13
29.00
2013 14
32.48
Table 2: Andhra Pradesh Estimates of Cement Demand
Regional Demand:
The region wise current cement demand in Andhra Pradesh is given below:
Region
Telangana
8.55
Rayalseema
3.28
Coastal Andhra
6.60
Total
18.43
Table 3: Region wise Cement Consumption- 2008 09
Greater Hyderabad is part of Telangana region. Telangana is estimated to grow at a

CAGR of 12 % pa whereas; Greater Hyderabad is likely to grow at a higher CAGR of 13
% pa. The future cement demand for Hyderabad is given below:
Year
Cement Demand (t pm)
2009 10
4.75
395,833
2010 11
5.37
447,500
2011 12
6.07
505,833
2012 13
6.86
571,667
2013 14
7.75
645,833
Table 4: Future Cement Demand for Hyderabad
08312
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Robo Silicon
A 2.2 FUTURE DEMAND FOR AGGREGATES

Similar to the methodology followed and elaborated in Annexure 1, the future demand
for aggregates in Greater Hyderabad was estimated by the end use method where the
cement consumption and construction of roads were used as surrogate.
Thus, the future aggregate demand was estimated by two alternate methodologies:
Based on the cement demand termed as Building Construction, which

was further divided into two categories:
Based on Road Construction
Based on Building Construction:

Building construction is one of the major applications of aggregates. Both coarse as well
as fine aggregates is used for construction activity. Under this methodology cement
consumption in Greater Hyderabad was divided into two major sub applications:
Cement consumed was segregated into different customer segments and further based
on the average cement consumed for the concrete preparation by different segments
was utilized to estimate the total concrete produced.
The customer segmentation of cement and percentage of cement consumed for
concreting application in Greater Hyderabad is given in table below:
Customer Segment
Share of Total
Market
%age of Cement used for

Individual Builders
30%
65%
Small & Medium Builders
35%
70%
Large Cosntruction Companies
20%
75%
RMC
15%
100%
Table 5: Cement Customer Segmentation and %age usage for Concreting
Application
From the above table Individual Builders form 30 % of the total cement market in Greater
Hyderabad and 65% of the total cement consumed by this segment is utilized for
preparation concrete. The rest is utilized primarily of Mortar preparation. For different
segments the percentage of cement usage for concrete applications differs and for RMC
08312
A 2.3

Robo Silicon
100 % of the cement consumed is for preparation of concrete as it is the final end
product for this segment.
As already elaborated in Annexure 1 the yearly future cement demand for concrete
application and mortar preparation in each segment was estimated based on the cement
usage norms given in above table.
Based on the grades of concrete used by different segments, the average quantity of
cement used per cu m of concrete is given below:
Figures in Kgs per cu m
Description
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
Cement per cu
350
300
425
of Concrete
Table 6: Segment wise Cement usage per cu m of Concrete
RMC
383
The above mentioned usage norms are based on the interaction with the customers in
each customer segment.
Thus, based on the cement demand for concrete application in each segment and above
mentioned cement consumption for per cu m of concrete preparation, the yearly
segment wise concrete demand for each segment was estimated.
To estimate the aggregate demand for concrete application the aggregate usage norms
based on the grades of concrete were utilized. The average Sand, 10 mm and 20 mm
usage norms per cu m of concrete for different customer segments are given below:
Figures Kgs per cu m
Type of
Aggregate
Independent
Builders
Small & Medium

Builders
Large
Construction Cos.
RMC
Sand
820
805
722
750
10 mm
410
420
415
416
20 mm
690
680
677
678

Greater Hyderabad
Based on the usage norms of aggregates for preparation of concrete given in Table 7
and estimated concrete demand, the monthly aggregate consumption for Concrete
application was estimated.
Cement consumption for Mortar preparation:
Mortar is primarily used for following application in Building Construction:
08312
A 2.4

Robo Silicon
Masonry
Plastering
Flooring
Based on the interaction with the different segments of customers the usage norms for
mortar preparation for different customer segments are given below:
Applications
Cement : Sand
Masonry
1:4
Plastering
1:4 - 1:6, considered 1:5
Flooring
1:8
Table 8: Aggregate Usage norms for Mortar Preparation
Segment wise cement consumed for Mortar preparation for the above mentioned
applications is given below:
Masonry
Independent
Builders
40%
Small & Medium

Builders
40%
Large
Construction Cos.
30%
Plastering
35%
20%
40%
Applications
Flooring
25%
40%
30%
Table 9: Segment wise Cement Consumed for Mortar Preparation for different
applications
In Independent Builder segment, 40 % of the cement consumed for Mortar preparation is
utilized for Masonry application, 35 % of cement consumed is utilized for Plastering and
25 % of cement consumed is utilized for Flooring application. Similarly the usage norms
for other segments are given in above table.
Based on cement consumed for Mortar preparation, aggregate usage norms for different
applications for mortar, mentioned in Table 8 and segment wise cement consumption for
different applications of Mortar preparation, the segment wise future sand demand for
Mortar preparation in Greater Hyderabad was estimated.
Thus, based on future aggregate demand for Concrete Preparation and sand
consumption for Mortar Preparation, the overall aggregate demand in Greater
Hyderabad is given below:
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Sand
1,232
1,393
1,575
1,780
2,011
08312
A 2.5

Robo Silicon
Type
2009-10
2010-11
2011-12
2012-13
2013-14
10 mm
349
394
446
504
569
20 mm
572
646
731
826
933
Total
2,153
2,433
2,752
3,110
3,513
Table 10: Estimated Year wise Future Aggregate Demand for Building
Construction
Based on Road Construction:
The second major application for aggregate usage is Road Construction. Demand for
aggregate based on this approach was divided into two categories:

Resurfacing of existing roads

Under this approach the demand was estimated for the Phase II of the Outer Ring Road.
Further, 5 % of the total existing roads in Greater Hyderabad were assumed to be
constructed annually.
The aggregate usage norms for different courses/ layers of road have already been
elaborated in Annexure 1.
The total length of Outer Ring Road in Phase II is 140 Km, which is due for completion
in 2012. However, based on the time taken for the completion of Phase I, it is assumed
that Phase II would be completed by 2013 14. Thus the year wise length of Phase II to
be constructed is given below:
Year
% completion
2009-10
2010-11
2011-12
2012-13
2013-14
10%
15%
20%
25%
30%
Length in Kms.
14
21
28
35
42
Table 11: Year wise constructed length of Outer Ring Road Phase II
For estimation of aggregate consumption for Phase II of Outer Ring Road the total width
of the paved surface was calculated as below:
Figures in mtrs.
Description
Width
Total
150.00
No. of Lanes
Fast Lane
3.50
Outer Lane
3.75
08312
A 2.6

Robo Silicon
Description
Width
No. of Lanes
Hard Shoulder
3.00
Earthen Shoulder
3.00
Median
5.00
Service Roads
3.50
Total
60.00
Green Area
90.00
Actual Paved
52.00*
* Width of Median and Earthen Shoulder has been excluded from Total Width
Table 12: Width of Outer Ring Road Phase II

The total length of existing roads in Greater Hyderabad is given below:
Length in Kms
R & B Roads
201
MCH Arterial roads
375
Total
576
Source: Andhra Pradesh Roads & Buildings Department
Table 13: Length of Existing Roads

As mentioned above 5 % of the existing roads were assumed to be constructed annually
and further 20 % of the existing roads were assumed to be resurfaced every year. Thus
the length of new roads and for resurfacing is given below:
Figures in Kms
2009-10
2010-11
2011-12
2012-13
2013-14
Resurfacing
576
605
635
667
700
New Roads
29
30
32
33
35
Total
605
635
667
700
Table 14: Year wise length of Roads in Greater Hyderabad
735
Based on the usage norms of aggregates, the future aggregate demand for Phase II of
Outer Ring Road, Existing roads and Resurfacing of existing roads is given below:
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Sand
38
53
70
85
102
10 mm
20
28
36
44
52
20 mm
25
36
46
57
68
08312
A 2.7

Robo Silicon
Type
2009-10
2010-11
2011-12
2012-13
2013-14
40 mm
11
15
20
25
29
60 mm
21
30
39
48
57
Total
115
162
211
259
308
Table 15: Year wise Future Aggregate Demand for Road Construction in Greater
Hyderabad
The overall year wise aggregate demand in Greater Hyderabad including both Building
Construction as well as Road Construction is given in below:
Figures in 000 t pm
Type
2009-10
2010-11
2011-12
2012-13
2013-14
Sand
1,270
1,447
1,644
1,865
2,112
10 mm
369
422
482
547
621
20 mm
597
682
777
883
1,001
40 mm
11
15
20
25
29
60 mm
21
30
39
48
57
Total
2,268
2,596
2,962
3,368
3,820
Table 16: Year wise Overall Future Aggregate Demand in Greater Hyderabad
08312
A 2.8

Robo Silicon
ANNEXURE 3: ZONAL MARKET PROFILE

NORTH HYDERABAD
North
Hyderabad
North Hyderabad comprises of

Mushirabad, Prakasham nagar,
Punjagutta, Medchal, Jidimatla,
Kompalli, Kukkatapally, Shamirpet,
Yamjal, Shambupur, Malkajgiri,
Jawahar Nagar etc.
Population (2008
est.)
Population
Growth pa
Cement
Consumption t
pm (2008-09)
Aggregate
Consumption
(Building
Construction)
000 t pm (200809)
2,036,025
3.06 %
87,500
Sand
10 mm
20 mm
282
74
122
Market Overview
Located alongside the Hyderabad Nagpur Highway, North Hyderabad is gradually
turning into a modern township with major residential projects being planned by small
and medium builders along with individual houses also coming in this region. HUDA
(Hyderabad Urban Development Authority) is planning for a mass affordable residential
project but due to global slowdown, this project is on hold. Other builders include
Rahejas, SMR, GMR are also coming up with projects like Green Valley, which includes
residential and commercial plots. On the state highway to Karim Nagar, Shamirpet is an
upcoming hub for the purpose of construction of farm houses.
There is an upswing in development due to its connectivity with rest of Hyderabad.
08312
A 3.1

Robo Silicon
Segment wise Cement Consumption - 2008- 09 (t pm)

45,000
30,625
30,625
30,000
21,875
15,000
4,375
0
Independent
Builders
Small & Medium

Builders
Large
Construction
Cos.
RMC
Segment wise Concrete Consumption- 2008-09 (cu m pm)

80,000
60,000
71,458
56,875
38,603
40,000
20,000
11,413
0
Independent
Builders
08312
Small & Medium

Builders
Large
Construction
Cos.
RMC
A 3.2

Robo Silicon
Segment wise Aggregate Consumption (for Building Construction only)

Figures in 000 t pm
189
200
167
150
101
100
50
21
0
Independent
Builders
Small & Medium

Builders
Large
Construction
Cos.
RMC
Customer Segmentation- Sand
Large
Construction
Cos.
21%
RMC
3%
Independent
Builders
37%
Small &
Medium
Builders
39%
08312
A 3.3

Robo Silicon
Customer Segmentation- 10 mm
RMC
6%
Independent
Builders
31%
Large
Construction
Cos.
22%
Small &
Medium
Builders
41%
RMC
6%
Large
Construction
Cos.
21%
Independent
Builders
32%
Small &
Medium
Builders
41%
08312
A 3.4

Robo Silicon
Details
Independent
Builders
Small &
Medium
Builders
Large
Construction
Companies
RMC
Manufactured Sand
Awareness Level
Low
Medium - High
High
High
Influencer for
Aggregate usage
House Owner,
Masons,
Contractors
Builder,
Contractor,
Architect
Structural
Consultant
Decision Maker
House-Owner
Builder
Structural
Consultant
Customer,
Quality
Engineer
Quality
Engineer
Suppliers of
Aggregate
Local Building
Material
Retailer
Small &
Medium
Suppliers
Large
Suppliers
Large
Suppliers
Aggregate Prices (Rs./t)

600
475
450
400
400
350
270
200
0
River Sand
Manufactured
Sand
CRF
10 mm
20 mm
Prices are inclusive of:

4 % VAT
Royalty @ Rs. 30/t (Charged only by Reputed Suppliers)
08312
A 3.5

Robo Silicon
EAST HYDERABAD
East Hyderabad comprises of
Nacharam, IDA Uppal, Vijaywada
road, Ramoji Film City, Ghatkesar,
Keesara, LB nagar, Rampalli,
Ramanthapur,
Vanasthalipuram,
Kachwani-singaram,
amberpet,
Habshiguda, Pocharam etc.
Population (2008
est.)
East
Hyderabad
Population
Growth pa
Cement
Consumption t
pm (2008-09)
Aggregate
Consumption
(Building
Construction)
000 t pm (200809)
1,902,061
3.06 %
52,500
Sand
10 mm
20 mm
155
48
79
Market Overview
East Hyderabad has become almost a developed zone in Hyderabad with Ramoji Film
City covering a broader region. Small and Medium Builders like A.S. Enterprises and
AKME Contractors are building residential complexes. Small Builders like Meenakshi
etc. are constructing both residential and commercial projects in this zone, but all the
projects are on-hold due to the liquidity crunch in the market.
Construction of infrastructure projects like construction of Outer Ring Road, flyovers,
roads etc., is going to start, to upgrade the existing infrastructure in this zone.
08312
A 3.6

Robo Silicon

20,000
15,750
15,750
15,750
15,000
10,000
5,250
5,000
0
Independent
Builders
Small & Medium

Builders
Large
Construction
Cos.
RMC

60,000
41,087
36,750
40,000
29,250
20,000
9,265
0
Independent
Builders
08312
Small & Medium

Builders
Large
Construction
Cos.
RMC
A 3.7

Robo Silicon

Figures in 000 t pm
150
100
97
86
76
50
24
0
Independent
Builders
Small & Medium

Builders
Large
Construction
Cos.
RMC

RMC
20%
Independent
Builders
34%
Large
Construction
Cos.
9%
Sm all &
Medium
Builders
37%
08312
A 3.8

Robo Silicon
Independent
Builders
25%
RMC
35%
Large
Construction
Cos.
8%
Sm all &
Medium
Builders
32%
Independent
Builders
25%
RMC
35%
Large
Construction
Cos.
8%
08312
Sm all &
Medium
Builders
32%
A 3.9

Robo Silicon
Details
Independent
Builders
Small &
Medium
Builders
Large
Construction
Companies
RMC
Manufactured Sand
Awareness Level
Low
Medium - High
High
High
Influencer for
Aggregate usage
House Owner,
Masons,
Contractors
Builder,
Contractor,
Architect
Structural
Consultant
Decision Maker
House-Owner
Builder
Structural
Consultant
Customer,
Quality
Engineer
Quality
Engineer
Suppliers of
Aggregate
Local Building
Material
Retailer
Small &
Medium
Suppliers
Large
Suppliers
Large
Suppliers

600
475
450
400
400
350
270
200
0
River Sand
Manufactured
Sand
CRF
10 mm
20 mm

4 % VAT
08312
A 3.10

Robo Silicon
WEST HYDERABAD
West Hyderabad comprises of
Banjara Hills, Hitech city, Madhapur,
Mehdipatnam, Bolaram, Miyapur,
Toli
Chowki,
Patancheruvu,
Serilingampally, Gachibowli, Kollur,
Vattinagulpalle,
Himayatsagar,
Hydershahiguda, etc.
West
Hyderabad
Population (2008
est.)
Population
Growth pa
Cement
Consumption t
pm (2008-09)
Aggregate
Consumption
(Building
Construction)
000 t pm (200809)
1,949,225
3.06 %
1,40,000
Sand
10 mm
20 mm
427
127
207
Market Overview
West Hyderabad has witnessed construction growth in the last few years. This zone is
witnessing construction of high-rise buildings for commercial complexes, with
technology parks for the IT companies and large residential housing projects being
undertaken by various large construction companies. Large Builders like Rahejas, DLF,
etc. have various projects in this region. Industrial zone is also being developed.
However, with currently all the construction activities are running at a slightly slower
pace due to lack of influx of funds. Construction of Outer Ring Road is under progress
with the stretch from Hitec City to Shamshabad being operational.
To cater to the housing needs of the IT industry being setup in this zone, West
Hyderabad is becoming a favored destination for residential followed by large
commercial projects.
08312
A 3.11

Robo Silicon

60,000
51,625
45,000
34,125
30,000
25,375
28,875
Large
Construction
Cos.
RMC
15,000
0
Independent
Builders
Small & Medium

Builders

160,000
120,458
120,000
75,326
80,000
63,375
44,779
40,000
0
Independent
Builders
08312
Small & Medium

Builders
Large
Construction
Cos.
RMC
A 3.12

Robo Silicon

Figures in 000 t pm
450
319
300
186
150
117
139
Large
Construction
Cos.
RMC
0
Independent
Builders
Small & Medium

Builders

RMC
13%
Independent
Builders
27%
Large
Construction
Cos.
16%
Small &
Medium
Builders
44%
08312
A 3.13

Robo Silicon
RMC
25%
Independent
Builders
21%
Large
Construction
Cos.
15%
Small &
Medium
Builders
39%
RMC
25%
Large
Construction
Cos.
15%
08312
Independent
Builders
21%
Small &
Medium
Builders
39%
A 3.14

Robo Silicon
Details
Independent
Builders
Small &
Medium
Builders
Large
Construction
Companies
RMC
Manufactured Sand
Awareness Level
Low
Medium - High
High
High
Influencer for
Aggregate usage
House Owner,
Masons,
Contractors
Builder,
Contractor,
Architect
Structural
Consultant
Decision Maker
House-Owner
Builder
Structural
Consultant
Customer,
Quality
Engineer
Quality
Engineer
Suppliers of
Aggregate
Local Building
Material
Retailer
Small &
Medium
Suppliers
Large
Suppliers
Large
Suppliers

600
475
450
400
400
350
270
200
0
River Sand
Manufactured
Sand
CRF
10 mm
20 mm

4 % VAT
08312
A 3.15

Robo Silicon
SOUTH HYDERABAD
South Hyderabad comprises of
Shamshabad,
Balapur,
Chandrayangutta, Pahari Sharif,
Kottapeta, Nadergul, Afzal nagar,
NTR
nagar,
Raikunta,
Gaganpahad, Keshavagiri, TurkaYamjal, Tukkuguda, etc.
Population (2008
est.)
Population
Growth pa
South
Hyderabad
Cement
Consumption t
pm (2008-09)
Aggregate
Consumption
(Building
Construction)
000 t pm (200809)
1,176,510
3.06 %
70,000
Sand
10 mm
20 mm
225
59
97
Market Overview
South Hyderabad is currently gaining popularity as favored area for investment in land
due to Hyderabads newly operational Rajiv Gandhi International Airport. Construction of
Outer Ring Road is almost completed till the airport. Due to the location of the airport in
this zone, construction of hotels and other commercial projects is in pipeline.
Construction growth is envisaged to accelerate in coming 2 to 3 years. Most of the major
builders and large developers have already started acquiring land in this zone for their
various hospitality and commercial projects.
08312
A 3.16

Robo Silicon

30,000
24,500
24,500
17,500
20,000
10,000
3,500
0
Independent
Builders
Small & Medium

Builders
Large
Construction
Cos.
RMC

80,000
57,167
60,000
45,500
40,000
30,882
20,000
9,130
0
Independent
Builders
08312
Small & Medium

Builders
Large
Construction
Cos.
RMC
A 3.17

Robo Silicon

Figures in 000 t pm
200
150
152
133
100
81
50
17
0
Independent
Builders
Small & Medium

Builders
Large
Construction
Cos.
RMC

Large
Construction
Cos.
21%
RMC
3%
Independent
Builders
37%
Small &
Medium
Builders
39%
08312
A 3.18

Robo Silicon
RMC
6%
Independent
Builders
31%
Large
Construction
Cos.
22%
Small &
Medium
Builders
41%
RMC
6%
Large
Construction
Cos.
21%
Independent
Builders
32%
Small &
Medium
Builders
41%
08312
A 3.19

Robo Silicon
Details
Independent
Builders
Small &
Medium
Builders
Large
Construction
Companies
RMC
Manufactured Sand
Awareness Level
Low
Medium - High
High
High
Influencer for
Aggregate usage
House Owner,
Masons,
Contractors
Builder,
Contractor,
Architect
Structural
Consultant
Decision Maker
House-Owner
Builder
Structural
Consultant
Customer,
Quality
Engineer
Quality
Engineer
Suppliers of
Aggregate
Local Building
Material
Retailer
Small &
Medium
Suppliers
Large
Suppliers
Large
Suppliers

600
475
450
400
400
350
270
200
0
River Sand
Manufactured
Sand
CRF
10 mm
20 mm

4 % VAT
08312
A 3.20

Robo Silicon
ANNEXURE 4: PLANT PROFILES

ROBO SILICON PVT. LTD.
Group
Robo Silicon
Pvt. Ltd.
Plant Type
3 stage VSI
crushers
Plant Location
Keesara,
Girimapuram,
Dasarapally
Plant Capacity
(tph)
1X125 & 2X200
Average
Monthly
Production
(t pm)
110,000
Capacity
Utilisation
50%
20 mm
23%
Sand
55%
10 mm
22%
Product Mix
08312
A 4.1

Robo Silicon
Independent
Builders
1%
Small &
Medium
Builders
25%
RMC
51%
Large
Construction
Cos.
23%
Transport Leads
(in Rs./t)
600
450
400
350
350
Maximum distance
to markets
25 30 Kms.
Royalty
Rs. 30/t
Tax Rate
4% VAT
200
0
Sand
10 mm
20 mm
Average Delivered price

Additional information:
13 t and 25 t trucks used for transportation.
08312
A 4.2

Robo Silicon
ROCKSAND MINERALS PVT. LTD.

Rocksand
Minerals Pvt.Ltd.
Group
3 stage VSI
crushers
Plant Type
20 mm
35%
Plant Location
Bandamadari,
Kajipally,
Madaram
Plant Capacity
(tph)
3 x 200
Average
Monthly
Production
(t pm)
166,400
Capacity
Utilisation
67%
Sand
40%
10 mm
25%
Product Mix
08312
A 4.3

Robo Silicon
Independent
Builders
2%
Small &
Medium
Builders
25%
RMC
43%
Large
Construction
Cos.
30%
(in Rs./t)
Transport Leads
600
450
400
350
335
Maximum distance
to markets
25 30 Kms.
Royalty
Rs. 30/t
Tax Rate
4% VAT
200
0
Sand
10 mm
20 mm
13.5 t and 20 t trucks used for transportation. Can even supply in 35 t trucks on
customers demand.
08312
A 4.4

Robo Silicon
GREAT INDIA MINING PVT. LTD.

Great India
Mining Pvt. Ltd.
Group
20 mm
35%
Plant Type
3 stage VSI
crushers
Plant Location
Keesara,
GachiBowli
Plant Capacity
(tph)
2 x 250
Average
Monthly
Production
(t pm)
83,200
Capacity
Utilisation
40%
Sand
40%
10 mm
25%
Product Mix
08312
A 4.5

Robo Silicon
Independent
Builders
5%
Small &
Medium
Builders
25%
RMC
40%
Large
Construction
Cos.
30%
(in Rs./t)
Transport Leads
600
450
400
350
300
Maximum distance
to markets
25 30 Kms.
Royalty
Rs. 30/t
Tax Rate
4% VAT
200
0
Sand
10 mm
20 mm
13.5 t truck used for 10mm, 20 t truck used for 20 mm and 30 t trucks used for
sand transportation.
08312
A 4.6

Robo Silicon
RANK
Group
Rank
3 stage VSI
crushers
Plant Type
Plant Location
Medchala
Plant Capacity
(tph)
1 x 120 , 1 x 200
Average
Monthly
Production
(t pm)
30,000
Capacity
Utilisation
23%
20 mm
30%
Sand
45%
10 mm
25%
Product Mix
08312
A 4.7

Robo Silicon
Independent
Builders
5%
Small &
Medium
Builders
25%
RMC
40%
Large
Construction
Cos.
30%
(in Rs./t)
Transport Leads
600
450
400
350
335
Maximum distance
to markets
25 30 Kms.
Royalty
Rs. 30/t
Tax Rate
4% VAT
200
0
Sand
10 mm
20 mm
20 t and 30 t trucks used for transportation.
Captive supply of aggregates for its own three ready mix plants.
08312
A 4.8

Robo Silicon
VEDHANYA CONSTRUCTIONS
Vedhanya
Constructions
Group
Plant Type
3 stage VSI
crusher
Plant Location
Lakadaram
Plant Capacity
(tph)
1 x 200
Average
Monthly
Production
(t pm)
41,600
Capacity
Utilisation
50%
Sand
30%
20 mm
50%
10 mm
20%
Product Mix
08312
A 4.9

Robo Silicon
Independent
Builders
15%
RMC
25%
Small &
Medium
Builders
30%
Large
Construction
Cos.
30%
(in Rs./t)
Transport Leads
600
450
400
350
330
Maximum distance
to markets
25 30 Kms.
Royalty
Rs. 30/t
Tax Rate
4% VAT
200
0
Sand
10 mm
20 mm
25 t truck used for 10 mm and 20 mm and 25 t trucks used for sand
transportation.
08312
A 4.10

Robo Silicon
ANNEXURE 5: CUSTOMER PERCEPTION

A 5.1 OBJECTIVE
To collate feedback on the supplier attributes as per Large Consumer (Like, Reputed
RMC, large developers and Builders), Small Consumer (Like, Local RMC, Small &
Medium contractors/ builders) and Individual Builder.
A 5.2 METHODOLOGY FOR DATA COLLECTION

Data was collected by personally administered formal meetings and discussion, with
different categories of aggregate consumers as well as aggregate suppliers, during the
market visit over the period of 11th Feb09 16th Feb09.
Subjects were asked to specify and rate key parameters governing their buying decision
for aggregates.
The parameters were rated on a scale of 1 to 5. 1 being the Unimportant parameter
and 5 being the Most Important parameter.
A 5.3 METHODOLOGY FOR ANALYSIS

Statistical analysis was undertaken to collate and analyze the responses.
Based on these interviews/discussions the key parameters governing the buying
decision of customers are listed below:
Price
Uniform Quality
Timely Delivery
Relationship with Supplier
Recommendation by peers/ masons/ contractors (only in IHB segment)
A total of 87 respondents were interviewed and were asked to rate the different
parameters, as mentioned above, in order of importance, governing their buying decision
for aggregates.
Following types of respondents were interviewed for this purpose:
Individual Builders
RMC Companies (Quality Control personnel, Plant Managers, Purchase officers)
Contractors, Masons
Builders and Developers (Site Engineers)
Crusher Owners/ Operators
08312
A 5.1

Robo Silicon
Direct competitors of Robo Silicon i.e. players which actually manufacture

Manufactured Sand (Robo Sand)
In order to analyze the responses, respondents were classified into the following
categories:
Reputed RMC and Large Construction Companies (like Ultratech, ACC, DLF,
Simplex, etc.)
Local RMC, Small & Medium Builders/ Contractors (like Aparna, Reliaable Mixx,
A.S. enterprises & contractors, AKME contractors, etc.)
Aggregate Suppliers (including Crusher Owners/ Operators, Building Material
Suppliers)
Individual Builders
The distribution of different categories of respondents in given below:

Reputed RMC and
Large Companies
30
Local RMC, Small &

Medium Contractors
Aggregate
Suppliers
IHB
20
15
22
Table 1: No. of Respondents under different Categories
Total
87
Chart 1 gives the percentage distribution of different categories of respondents.

Individual
Builders
25%
Reputed
RMC and
Large
Companies
34%
Aggregate
Suppliers
17%
Local RMC,
Small &
Medium
Builders
23%
Chart 1: Distribution of Respondents
08312
A 5.2

Robo Silicon
A 5.4 RESULTS OF THE FINDINGS

The results of the analysis for different categories of respondents are given below:
Reputed RMC and Large Construction Companies:
Quality
60%
50%
45%
37%
30%
15%
13%
0%
0%
1-Unimportant
2-Least
Important
0%
3-Average
4-Important
5-Most
Important
Chart 2: Responses for Quality as a Supplier short listing Parameter

Mean of responses: 4.4
Coefficient of Variance: 16 %
Maximum responses lie between 4 (Important) and 5 (Most Important) (87 %

respondents)
90 % and above responses lie between 3 (Average) and 5 (Most Important)

(100 % respondents)
The responses towards Quality being the most important attribute for short listing an
aggregate supplier have a mean of 4.4, showing a strong agreement to this statement.
100% of the responses lie between 3 and 5, which implies respondents, considers
quality as the most important parameter for selection of suppliers.
Further, 87% of responses lie between 4 and 5 which reinforce the opinion, with low
coefficient of variance confirming Quality to be the most important parameter for
selection of aggregate suppliers.
08312
A 5.3

Robo Silicon
Price
60%
45%
43%
30%
23%
15%
0%
10%
1-Unimportant
2-Least
Important
23%
0%
3-Average
4-Important
5-Most
Important
Chart 3: Responses for Price as a Supplier short listing Parameter


respondents)

(90 % respondents)
The responses towards Price being the most important attribute for short listing an
aggregate supplier have a mean of 3.8, showing a reasonably strong agreement to this
statement. 67 % of the responses lie between 4 and 5, which implies 67 % respondents,
considers Price as a reasonably important parameter.
90 % responses lie in between 3 and 5 and with Coefficient of Variance being 24 %,
indicates varied opinions of respondents, however Price is still considered to be an
important parameter while selection of suppliers.
08312
A 5.4

Robo Silicon
Timely Delivery
40%
37%
37%
30%
20%
20%
10%
3%
3%
0%
1-Unimportant
2-Least
Important
3-Average
4-Important
5-Most
Important
Chart 4: Responses for Timely Delivery as a Supplier short listing Parameter

Maximum responses lie between 2 (Least Important) and 3 (Average) (74 %

respondents)
90 % and above responses lie between 2 (Least Important) and 4 (Important)

(93 % respondents)
The responses towards Timely Delivery being the most important attribute for short
listing an aggregate supplier have a mean of 2.8, showing a fairly weak agreement to
this statement. Moreover, 74% of the responses lie between 2 and 3, which implies 74 %
respondents, considers Timely Delivery as a parameter of average importance.
indicates varied opinions of respondents.
08312
A 5.5

Robo Silicon
60%
45%
47%
30%
30%
20%
15%
3%
0%
0%
1-Unimportant
2-Least
Important
3-Average
4-Important
5-Most
Important
Chart 5: Responses for Reliability of Supply as a Supplier short listing Parameter

Maximum responses lie between 1 (Unimportant) and 2 (Least Important) (77

% respondents)
90 % and above responses lie between 1 (Unimportant) and 3 (Average) (97

% respondents)
The responses towards Reliability of Supply being the most important attribute for short
listing an aggregate supplier have a mean of 2.0, showing a weak agreement to this
statement. Moreover, 77% of the responses lie between 1 and 2, which implies 77 %
respondents, considers Reliability of Supply as a Least Important attribute for
selecting an aggregate supplier.
indicating a diverse opinion of the respondents.
08312
A 5.6

Robo Silicon
60%
57%
45%
37%
30%
15%
7%
0%
1-Unimportant
2-Least
Important
3-Average
0%
0%
4-Important
5-Most
Important
Chart 6: Responses for Relationship with Supplier as a Supplier short listing

Parameter

% respondents)
90 % and above responses lie between 1 (Unimportant) and 2 (Least

Important) (93 % respondents)
The responses towards Relationship with Supplier being the most important attribute for
short listing an aggregate supplier have a mean of 1.5, implying disagreement with this
considers Relationship with Supplier as an Unimportant attribute for selecting an
aggregate supplier.
A large number of suppliers are operating in the market, imparting higher bargaining
power to customers in terms of selecting and sourcing aggregates from different
suppliers.
Overall Ranking of Parameters:
The ranking of different parameters for short listing of aggregates suppliers, considered
by Reputed RMC and Large Construction Companies based on the above analysis is
given below:
08312
A 5.7

Robo Silicon
Description
Mean
Rank
Timely
Reliability of
Price
Delivery
Supply
4.4
2.8
3.8
2.0
1
3
2
4
Table 2: Ranking of different Parameters
Quality
Relationship
with Supplier
1.5
5
The responses indicate Quality is the most important aspect in choosing an aggregate
supplier. Reputed RMC and Large Companies give the highest weightage to the
Quality and thus, it is ranked first with a mean value of 4.4.
Price, with a mean value of 3.8 is ranked second and considered to be an important
parameter for supplier selection. With a mean value of 2.8, Timely Delivery is ranked
third and thus, is considered to be a parameter of average importance in selection an
aggregate supplier.
Reliability of Supply is least important parameter in selecting an aggregate supplier
with a mean of 2.0 and thus, is ranked fourth.
Based on the market feedback, with a large number of aggregate suppliers operating in
the market customers have a wider choice of selecting a supplier and therefore, source
aggregates from at least 3 or more suppliers thereby reducing their dependency on a
single or couple of suppliers. Thus, Relationship with Supplier is considered to be an
unimportant parameter in selection of an aggregate supplier. With a mean value of 1.5, it
is therefore ranked last among all the parameters of aggregate supplier selection.
Local RMC and Small & Medium Builders:
Price
80%
60%
60%
40%
40%
20%
0%
0%
0%
1-Unimportant
2-Least
Important
3-Average
0%
4-Important
5-Most
Important
08312
A 5.8

Robo Silicon

respondents)
90 % and above responses lie between 4 (Important) and 5 (Most Important)

(100 % respondents)
aggregate supplier have a mean of 4.6, implying strong agreement with this statement.
100 % of the responses lie between 4 and 5, which implies 100 % respondents,
unanimously consider price in the most important parameter for selection of suppliers.
A low coefficient of variance i.e. 11% supports the above inference.
Quality
40%
35%
30%
25%
20%
25%
10%
10%
0%
5%
1-Unimportant
2-Least
Important
3-Average
4-Important
5-Most
Important

Maximum responses lie between 3 (Average) and 4 (Important) (60 %

respondents)
90 % and above responses lie between 2 (Least Important) and 5 (Most

Important) (95 % respondents)
08312
A 5.9

Robo Silicon
aggregate supplier have a mean of 3.7, showing a reasonable strong agreement to this
considers Quality as an Important attribute for selecting an aggregate supplier.
indicating a diverse opinion of the respondents.
Timely delivery
60%
45%
45%
40%
30%
15%
15%
0%
0%
0%
1-Unimportant
2-Least
Important
3-Average
4-Important
5-Most
Important


respondents)

(100 % respondents)
listing an aggregate supplier have a mean of 2.8, showing a weak agreement to this
considers Timely Delivery as an Average attribute for selecting an aggregate supplier.
indicating somewhat converging opinion about Timely Delivery.
08312
A 5.10

Robo Silicon
60%
45%
45%
35%
30%
20%
15%
0%
0%
4-Important
5-Most
Important
0%
1-Unimportant
2-Least
Important
3-Average

% respondents)

% respondents)
listing an aggregate supplier have a mean of 1.8, showing a very weak agreement to
this statement. 80 % of the responses lie between 1 and 2, which implies 80 %
respondents, considers Reliability of Supply as a Least Important attribute for
100 % responses lie in between 1 and 3 and with higher value of Coefficient of Variance
(45 %), indicates diverse opinion about Reliability of Supply.
08312
A 5.11

Robo Silicon
Relationship with Suppliers
60%
45%
45%
45%
30%
15%
10%
0%
0%
3-Average
4-Important
5-Most
Important
0%
1-Unimportant
2-Least
Important
Chart 11: Responses for Relationship with Suppliers as a Supplier short listing
Parameter

% respondents)

% respondents)
The responses towards Relationship with Suppliers being the most important attribute
for short listing an aggregate supplier have a mean of 1.7, showing a very weak
agreement to this statement. 90 % of the responses lie between 1 and 2, which implies
90 % respondents, considers Relationship with Suppliers as a Least Important
attribute for selecting an aggregate supplier.
100 % responses lie in between 1 and 3 and with higher value of Coefficient of Variance
(41 %), indicates diverse opinion about Relationship with Suppliers.
by Local RMC and Small & Medium Builders based on the above analysis is given
below:
08312
A 5.12

Robo Silicon
Description
Timely
Reliability of
Price
Delivery
Supply
3.7
2.8
4.6
1.8
2
3
1
4
Quality
Mean
Rank
Relationship
with supplier
1.7
5
Price is unanimously ranked first and considered to be the most important parameter in
selection of aggregate supplier, with a mean of 4.6 by Local RMC and Small & Medium
Builders.
Quality, with a mean value of 3.7 is ranked second and considered to be an important
aggregate supplier.
Reliability of Supply is ranked fourth and considered to be a least important parameter
in selecting an aggregate supplier with a mean of 1.8. With a mean of 1.7 Relationship
with Suppliers is ranked last among all the selection parameters and is also considered
to be a Least Important parameter for supplier selection.
Individual Builders:
Price
60%
45%
50%
50%
4-Important
5-Most
Important
30%
15%
0%
0%
0%
1-Unimportant
2-Least
Important
3-Average
0%

08312
A 5.13

Robo Silicon

respondents)

(100 % respondents)
aggregate supplier have a mean of 4.5, implying strong agreement with this statement.
100 % of the responses lie between 4 and 5, which implies 100 % respondents,
unanimously considers Price as the most important parameter for selection of
suppliers.
A low coefficient of variance i.e. 11% suggests very low deviation in the overall opinion
of the respondents.
Quality
60%
45%
50%
50%
4-Important
5-Most
Important
30%
15%
0%
0%
0%
0%
1-Unimportant
2-Least
Important
3-Average


respondents)

(100 % respondents)
08312
A 5.14

Robo Silicon
aggregate supplier are similar to those for Price. A high mean of 4.5, and low
Coefficient of Variance of 11 %, implies a strong agreement with this statement and
thus, considered to be of equal importance to Price by Individual Builders.
Recommendation by Peers/ Masons/ Contractors
60%
45%
45%
41%
30%
15%
14%
0%
0%
1-Unimportant
2-Least
Important
0%
3-Average
4-Important
5-Most
Important
Chart 14: Responses for Recommendation by Peers/ Masons/ Contractors as a

Supplier short listing Parameter

respondents)

(100 % respondents)
The responses towards Recommendation by Peers/ Masons/ Contractors being the

most important attribute for short listing an aggregate supplier have a mean of 4.3,
implying strong agreement with this statement. 86 % of the responses lie between 4 and
5, which implies 86 % respondents, considers Recommendation by Peers/ Masons/
Contractors as the most important parameter for selection of suppliers.
With 100 % responses lying between 3 and 5 and a low coefficient of variance i.e. 16%
suggest very low deviation in the overall opinion of the respondents.
08312
A 5.15

Robo Silicon
45%
36%
30%
32%
32%
15%
0%
0%
0%
1-Unimportant
2-Least
Important
3-Average
4-Important
5-Most
Important

respondents)

(100 % respondents)
listing an aggregate supplier have a mean of 3.0, showing a reasonable agreement to
respondents, considers Reliability of Supply as a Average attribute for selecting an
aggregate supplier.
100 % responses lie in between 2 and 3 and with a Coefficient of Variance value of 27
%, indicates slightly varied opinion about Reliability of Supply.
08312
A 5.16

Robo Silicon
Timely delivery
60%
45%
41%
41%
30%
15%
14%
5%
0%
0%
1-Unimportant
2-Least
Important
3-Average
4-Important
5-Most
Important

respondents)

(95 % respondents)
listing an aggregate supplier have a mean of 2.6, exhibits a fairly weak agreement to
respondents, considers Timely Delivery as a Least Important attribute for selecting an
aggregate supplier.
95 % responses lie in between 2 and 4 and with a Coefficient of Variance value of 30 %,
indicates diverse opinion about Timely Delivery.
08312
A 5.17

Robo Silicon
60%
50%
45%
30%
15%
32%
18%
0%
0%
4-Important
5-Most
Important
0%
1-Unimportant
2-Least
Important
3-Average
Chart 16: Responses for Relationship with Supplier as a Supplier short listing
Parameter

respondents)

% respondents)
for short listing an aggregate supplier have a mean of 2.1, exhibits a weak agreement to
respondents, considers Relationship with Supplier as a Least Important attribute for
100 % responses lie in between 1 and 3 and with a high Coefficient of Variance value of
33 %, indicates diverse opinion pertaining to Relationship with Suppliers.
below:
08312
A 5.18

Robo Silicon
Description
Quality
Mean
Rank
4.5
1
Timely
Delivery
Price
Reliability
of Supply
Relationship
with
supplier
4.5
3.0
2.6
2.1
1
4
5
6
Recommendation
by Peers/Masons/
Contractors
4.3
3
Individual Builders give equal importance to both Quality as well as Price. Both these
parameters are considered to be the Most Important for selection of an aggregate
supplier. With equal mean value of 4.5 each, both Quality as well as Price has been
ranked at first position among all the parameters.
The buying decision of the Individual Builders is highly influenced either by Peers or
Masons or Contractors. Thus, Recommendation by Peers/ Masons/ Contractors is
considered to be an Important parameter with a mean value of 4.3 and thus, is ranked
third.
Reliability of Supply is ranked fourth and considered to be an Average parameter in
selecting an aggregate supplier with a mean of 3.0.
With a mean of 1.7 Relationship with Suppliers is ranked last among all the selection
parameters and is also considered to be a Least Important parameter for supplier
selection.
Timely Delivery with a mean of 2.6 is ranked fifth and is considered as a Least
Important parameter whereas; Relationship with Supplier is also on a Least
Important parameter with a mean of 2.1 and is ranked last.
Aggregate Suppliers:
In order to understand the view point of the aggregate suppliers towards the important
parameters considered by their customers for the supplier selection process, a similar
methodology was employed as for the different customer segments. The results of the
analysis based on the responses by the aggregate supplies are given below:
08312
A 5.19

Robo Silicon
Price
80%
60%
60%
40%
40%
20%
0%
0%
0%
1-Unimportant
2-Least
Important
3-Average
0%
4-Important
5-Most
Important


respondents)

(100 % respondents)
aggregate supplier have a mean of 4.6, exhibits a very strong agreement to this
statement. 100 % of the responses lie between 4 and 5, which implies 100 %
respondents, considers Price as a Most Important attribute for selecting an aggregate
supplier.
Moreover, with a low Coefficient of Variance value of 11 %, indicates that majority of the
respondents perceive Price to be the most important parameter for selection of
aggregate supplier by their customers.
08312
A 5.20

Robo Silicon
Quality
80%
60%
53%
40%
33%
20%
0%
0%
1-Unimportant
2-Least
Important
13%
0%
3-Average
4-Important
5-Most
Important


respondents)

(100 % respondents)
aggregate supplier have a mean of 3.8, exhibits a strong agreement to this statement.
87 % of the responses lie between 3 and 4, which implies 87 % respondents, considers
Quality as an Important attribute for selection of an aggregate supplier.
100 % of responses lie between 3 and 5 and with a Coefficient of Variance value of 18
% indicates converging opinion of the respondents.
08312
A 5.21

Robo Silicon
Timely Delivery
80%
60%
60%
40%
33%
20%
0%
7%
0%
4-Important
5-Most
Important
0%
1-Unimportant
2-Least
Important
3-Average

respondents)
90 % and above responses lie between 2 (Least Important) and 3 (Average)

(93 % respondents)
listing an aggregate supplier have a mean of 2.7, suggesting a fairly weak agreement to
respondents, considers Timely Delivery as a Average attribute for selection of an
aggregate supplier.
With a Coefficient of Variance value of 22 % indicates reasonable converging opinion of
the respondents.
08312
A 5.22

Robo Silicon
80%
60%
60%
40%
20%
20%
20%
0%
0%
4-Important
5-Most
Important
0%
1-Unimportant
2-Least
Important
3-Average

respondents)

% respondents)
listing an aggregate supplier have a mean of 2.0, suggesting a weak agreement to this
considers Reliability of Supply as a Least Important attribute for selection of an
aggregate supplier.
100 % of responses lie between 1 and 3 and with a Coefficient of Variance value of 33
% indicates a diverse opinion of the respondents.
08312
A 5.23

Robo Silicon
60%
45%
40%
40%
30%
20%
15%
0%
0%
4-Important
5-Most
Important
0%
1-Unimportant
2-Least
Important
3-Average
Chart 21: Responses for Relationship with Suppliers as a Supplier short listing
Parameter

% respondents)

% respondents)
for short listing an aggregate supplier have a mean of 1.8, suggesting a very weak
agreement to this statement. 80 % of the responses lie between 1 and 2, which implies
80 % respondents, considers Relationship with Suppliers as a Least Important
attribute for selection of an aggregate supplier.
100 % of responses lie between 1 and 3 and with a high Coefficient of Variance value of
43 % implies a diverse opinion of the respondents.
below:
08312
A 5.24

Robo Silicon
Description
Timely
Reliability of
Price
Delivery
Supply
3.8
2.7
4.6
2.0
2
3
1
4
Quality
Mean
Rank
Relationship
with supplier
1.8
5
According to the aggregate suppliers Price with a mean of 4.6 is the most important
parameter for selection of suppliers by their customers and is ranked first.
Quality, with a mean value of 3.8 is ranked second and considered to be an important
aggregate supplier by customers as per the suppliers.
Reliability of Supply is ranked fourth and considered to be a least important parameter
in selecting an aggregate supplier with a mean of 2.0. With a mean of 1.8 Relationship
with Suppliers is ranked last among all the selection parameters and is also considered
to be a Least Important parameter for supplier selection by the customers as per the
responses given by the aggregate suppliers.
A 5.5 CONCLUSION
Quality, Price, Timely Delivery, Reliability of Supply and Relationship with Suppliers are
the major parameters governing the buying decision of aggregates and selection of
suppliers by all the customer segments in Greater Hyderabad.
Recommendation by Peers/ Masons /Contractors is an additional but an important
parameter considered by only Individual Builders in selection of aggregate suppliers.
The overall ranking of parameters, influencing the buying decision and selection process
for aggregate suppliers by customers in Greater Hyderabad is given below:
Parameters
Mean
Rank
Price
Recommendation by Peers/ Masons/
Contractors*
Quality
4.3
4.3
4.1
Timely Delivery
2.7
2.2
Relationship with Suppliers
1.7
* Only for Individual Builder Segment
Table 6: Overall Ranking of different Parameters in Greater Hyderabad

08312
A 5.25

Robo Silicon
ANNEXURE 6: LIST OF RMC PLANTS HYDERABAD
S. No.
Plant Name
Location
Aparna RMC
IJM Concrete
IJM Concrete
L & T Concrete
L & T Concrete
L & T Concrete
L & T Concrete
RMC India
RMC India
10
RMC India
11
RDC Concrete
12
Reliable Ready Mix
13
Rank Ready Mix
14
Ultratech RMC
15
Ultratech RMC
16
Ultratech RMC
17
Ujwala RMC
Miyapur
Bolaram
Industrial Area
Nacharam
Industrial Area
(IDA Uppal)
Miyapur
Nacharam
Industrial Area
Jidimetla
Gaganpahad
Industrial Area
Nacharam
Industrial Area
Medchal
Bolaram
Industrial Area
Bolaram
Industrial Area
Bolaram
Industrial Area
Bolaram
Industrial Area
Miyapur
Bolaram
Industrial Area
Nacharam
Industrial Area
Bolaram
Industrial Area
Total
Capacity
(cu m/ hr)
120
Average Monthly
Production (cu m)
18,000
120
12,000
60
6,000
60
13,000
30
7,000
30
6,500
30
6,500
90
7,500
60
3,500
60
6,000
60
3,500
60
4,500
90
3,000
90
14,000
60
9,000
30
7,000
60
1,500
1,110
1,28,500
Source: HOLTEC Database
Note: List of RMC plants, their capacities and average monthly production are
based on our market visit in May 2007.
08312
A 6.1

Market Study For Aggregates in Greater Hyderabad PDF

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ROBO SILICON PRIVATE LIMITED

MARKET STUDY FOR AGGREGATES

Market Study for Aggregates, Greater Hyderabad

Past Consumption of Aggregates

Total Market Size

Aggregate Industry Structure

Natural Sand/River Sand

Market Study for Aggregates, Greater Hyderabad

Two Stage Crushers

Three Stage VSI Crushers

Share of Organized Players in overall Aggregate

Practices followed by Different Categories of Players

Future Aggregate Demand

Future Aggregate Demand for Building Construction

Future Aggregate Demand for Road Construction

Overall Future Demand of Aggregates

Zone wise Future Demand for Aggregates

Future Aggregate Supply

Opportunities for Robo Silicon

Threats to Robo Silicon

Strengths of Robo Silicon

Weaknesses of Robo Silicon

Market Study for Aggregates, Greater Hyderabad

ANNEXURE 1- CURRENT AND PAST CONSUMPTION

ANNEXURE 2- DEMAND FORECASTING

ANNEXURE 3- MARKET PROFILE

ANNEXURE 4- PLANT PROFILES

ANNEXURE 5- CUSTOMER PERCEPTION

ANNEXURE 6- LIST OF RMC PLANTS HYDERABAD

Market Study for Aggregates, Greater Hyderabad

Estimated year wise Aggregate Consumption for

Estimated year wise Aggregate Consumption for Road

Estimated Zone wise Aggregate Consumption for

Sources of Natural/River Sand

List of Organized Players

Share of Organized Players of the Total Aggregate

Share of Organized Players of the Aggregate

Average Current Prices of Natural/ River Sand

Valued Attributes for Aggregate Procurement

Projected Aggregate Demand based on Cement

Projected Aggregate Demand for Road Construction

Projected Overall Aggregate Demand in Greater

Estimated Zone wise Aggregate Consumption for

Estimated Year wise Aggregate Consumption for

Estimated Year wise Aggregate Consumption for Road

Estimated Year wise Overall Aggregate Consumption in

Average Current Prices of Natural/ River Sand

Valued Attributes for Aggregate Procurement

Market Study for Aggregates, Greater Hyderabad

Typical Cash Cost of Production and Margin for three

Total Consumption of Different types of Aggregates

Estimated Zone wise Aggregate Consumption for

Sources of Natural/ River Sand

List of Organized Players

Volumes of Different types of Aggregates

Total Aggregate Consumption in Greater Hyderabad for

Share of Organized Players of the Total Aggregate

Projected Aggregate Demand based on Cement

Projected Aggregate Demand for Road Construction

Projected Overall Aggregate Demand in Greater

Projected Zone wise Overall Aggregate Demand for

Projected Zone wise Sand Demand for Building