Step 1: Understand the question.
The question asks for the location of the first cement factory established in India. This is a factual question related to the history of industry in India.
Step 2: Recall historical facts about the Indian cement industry.
The first cement manufacturing plant in India was set up in Chennai (then Madras) in 1904. It was established by the Madras Cement Company (though some sources might refer to it as "South India Industrials Ltd."). While it produced cement, large-scale commercial production in India really took off a bit later, particularly with the establishment of Indian Cement Company Ltd. in Porbandar, Gujarat, in 1914. However, for the establishment of the very first factory, Chennai holds the distinction.
Step 3: Compare with the given options.
(1) Aurangabad: Not associated with the first cement factory.
(2) Chennai: Historically recognized as the location of India's first cement factory.
(3) Vishakapatnam: Not associated with the first cement factory.
(4) Ludhiana: Not associated with the first cement factory.