Four top cement manufacturers in the country – ACC, Ambuja Cement (ACL), Grasim and UltraTech – will see a dip in their market share post 2010, when expanded capacities of all cement manufacturers go on stream.

Experts believe that the total market share of the four majors, which now stands at 39%, will drop to about 34% due to aggressive capacity expansion by other players like India Cements, Shree Cement and Binani, among others.

?Moreover, small companies and regional players are also increasing their footprint by entering other regions. This is creating a fear among cement majors about losing market share,? said Pawan Burde, an analyst with Angel Broking.

Among the top four cement manufacturers, ACC plans to expand its capacity to 30.4 mtpa, ACL to 25 mtpa and Grasim, including UltraTech, to 48.8 mtpa by 2010. This will take the production capacity of these companies taken together to about 104.2 mtpa against the expected industry capacity of 300 mtpa.

Among the smaller players, India Cement Ltd is expected to hike its capacity to 18 mtpa, while Shree Cement Ltd plans a 10 mtpa capacity expansion by 2010.

Similarly, Prism Cement plans to expand its capacity to 10 mtpa from the current 2.5 mtpa through its greenfield and brownfield expansions in Madhya Pradesh and Andhra Pradesh. According to a Mumbai based investment banker, ?The capacity expansion announced by the top four in percentage terms is less as compared to others. Also, these players are not undertaking any acquisitions currently. This has already started impacting their market share.?

Industry players revealed that the market share of the top four cement manufacturers will drop to 34% post 2010, as mentioned earlier. The share of mid-large players (the likes of Shree Cement, Madras Cement, India Cement) will remain about 36%; and the share of small players (like My Home Industries Ltd, Orient and Binani) will be about 24%. New players (like Reliance, Murli Agro, JSW Cement) will hold 6% market share.

The fact that small and mid tier companies are reaching beyond their traditional markets will also pose a challenge to the cement majors. For instance, Prism is now targeting markets in south India. With the help of its new plant in Andhra Pradesh, it will reach out to Andhra Pradesh, Karnataka, Tamil Nadu and some parts of Kerala. At present, it caters to markets in eastern UP, north-eastern MP and western Bihar. Likewise, Binani Cement, buoyed by its new plant in Gujarat, has entered the Mumbai market.

Shares of ACC Ltd and UltraTech Cement Ltd on Thursday were down 0.15% and 0.56% respectively to close at Rs 586.85 and Rs 605.05 on the Bombay Stock

Exchange (BSE). ACL and Grasim Industries Ltd shares were up 0.61% and 0.92% and closed at Rs 82 and Rs 2,020.75 respectively on the BSE.

Going ahead, the cement industry also fears a drop in margins to about 15% from the current 23%. ?The profit is expected to reduce by Rs 200-300 per tonne of cement,? said industry players.