Why invest?
AIA is part of a global duopoly in the high chrome mill internals business. Its global share stands at 25 per cent. In India it has a 90 per cent share of the domestic cement sector and around 70 per cent of the thermal utilities sector.
In spite of the absence of any entry barrier, AIA has managed to retain its hold over its market by virtue of the services it provides and the relationships it has cultivated over the decades with its clients, which makes it a preferred supplier.
AIA is now making inroads into the vast mining industry. High Chrome Mill Internals (HCMI) are covered in only 20 per cent of the industry leaving a huge open opportunity. Demand from the mining industry is expected to be four times bigger than that in the cement sector (ICICI estimates).
A high replacement demand keeps a steady stream of revenue and accounts for 85-90 per cent of total demand. The opportunities are immense and AIA holds a market leader position in this segment.
- Second largest manufacturer of high chrome mill internals (HCMI) in the world
- Operates with a global market share of 25 per cent
- Market share in India stands at 90 per cent in the cement sector
- Inroads into mining expected to have big payoffs in the long run
Caution: Continued slowdown in the cement and mining industries, which are its two key client sectors could hit the company hard.
This article was originally published on July 08, 2014.
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