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Projecct report Projecct report Document Transcript

  • A RESEARCH PROJECT ON Assessment of market performance of Birla white cement & designing Strategies for enhancement (Grasim industries) SUBMITTED TO Sinhgad Institutes of Management and Computer Application BY Mr. Jitendra Singh Rajpurohit MBA 1st YEAR Under the guidance of Prof. Vijaya puranik Academic Year 2012-14
  • DECLARATION This is to declare that the project work entitled “Assessment of market performance of Birla white cement & designing Strategies for enhancement (Grasim industries)”Submitted to PUNE UNIVERSITY in partial fulfillment of the requirements for the award of degree of MASTER OF BUSINESS ADMINISTRATION is a record of original project work done by us under the supervision and guidance of Ass. Prof.. Date: (K.M.SUBATHRA) PLACE s
  • ACKNOWLEDGEMENT I am extremely grateful to Dr. JAYSHREE SURESH, B.A., MBA, PhD, the Dean of management studies for her excellent governance of all the activities and affairs of the department of which I am also a benefactor. Ass.Prof. Mrs. M.CHITRA., MBA, M.Phil, (Ph.D) my faculty guide deserves a special mention here, as without his supervision and guidance my project would not have been commenced and completed as desired. I express my deep sense of gratitude to my external guide Mr. R. MADHAN KUMAR., Sales officer, GRASIM INDUSTRIES LTD for his valuable guidance throughout the project in the organization. I also appreciate the help rendered by the respondents who shared their views and gave valuable data. My biggest debt is to my parents, relatives and my friends who have my greatest source of inspiration at every stage of my project work. Finally I thank those who have not been referred to here above, but have contributed in one way or another to the successful completion of my project and in offing of this project report.
  • 1.1 Objective of the study Main objective of the study is to find out the “Assessment of market performance of Birla white cement & designing Strategies for enhancement (Grasim industries) To examine strengths and future prospects of Birla white in Cement Sector. In order to examine the strength in Cement Sector I used the Fundamental Analysis which includes the study of Industry and marketing Fundamentals. The objectives of the study are as follows: To analyze the fundamentals to acquire in-depth knowledge of the cement Sector. To study the demand of Birla cement particularly Infrastructure including Housing and Construction. .To recommend the best investment points to invest money to get high returns with low risk. .To study the future prospect of Birla white in Cement Industry. . To suggest the company with various measures to retain their customers in long run and to increase their good will.
  • SCOPE OF THE STUDY Since there lays a huge potential for BIRLA WHITE CEMENT in the Replacement Market segment even though it is leader in the market, the demand and customer‟s preference to buy cements are growing day by day. More over the purchasing power of all the customers have considerably grown up. The scope of the study is to identify whether the present dealers preference can capitalize and make best use of available opportunity in the market. And how the firm‟s financial performance helps to make it. Towards the end, the study attempts to understand some of the expectations and satisfaction aspects of the dealers and formulate changes in financial performance to accomplish growth in the market.
  • LIMITATIONS OF THE STUDY Following limitations were encountered while preparing this project:  This project has been completed with the analysis, observation and strategies based on the data obtained from 100 dealers who are dealing with BIRLA WHITE; and Annual reports; it just constitutes one part of the data collection, there were limitations for primary data collection because of confidentiality.  The dealers preference pattern may differ based upon the market trend of  Demand and supply.
  • Introduction 1.4 INTRODUCTION “CEMENT” in its broadest term, may be stated as „Substance which acts as a binding or bonding agent between two or more materials‟. The year 1817 is considered to be the starting point for the revival of the construction industry. It was early in the 1800‟s that Louis Vicat (1876 –1861), a young, 22-year old civil 24 25
  • engineer conducted work on the hydraulicity of the “lime-volcanic ash” mixture. This binder, which had been used since Roman times, remained the only material known to set in contact with water. In India, cement was first manufactured in 1904, near Madras (Chennai) by the South India Industrial Ltd. and in 1914 the same company has established cement plant in Porabandar (Gujarat) with a capacity of 1000 tons. By 1918, three factories were established, since then the industry has come a long way. During First Five Year Plan (1951-1957), cement production rose from 2.69 million tons to 4.6 million tons. By 1969, the total production was 13.2 million tons and occupied 9th place in the world. Since 1969, a good rate of growth has been achieved in the country. During 1977, there were 56 cement factories functioning with the production of 19 million tons. The Indian cement industry is 70 years old. It has been decontrolled from price and distribution on 1st March 1989 and delicensed on 25th July 1991. However, the performance of the industry and prices of cement are monitored regularly. The constraints faced by the industry are reviewed in the Infrastructure Coordination Committee meetings held in the Cabinet Secretariat under the Chairmanship of Secretary (Coordination). The Cabinet Committee on Infrastructure also reviews its performance. Spread across the length and breadth of the country, there are about 120 large plants belonging to 56 companies besides some 300 mini plants with a total installed capacity of about 118 million tons and a production of 98 million tons realized in 1991. At an expected 10% growth rate the production is likely to about 158.5 million tons at the end of 2006 – 2007.
  • 1.5 INDUSTRY PROFILE Capacity and Production Cement production and consumption in the world is estimated at 1775 to 1800 million tones in 2004. In the last few years, cement consumption is reported to have been growing at about 2.5% according to different sources. 26 27
  • The cement industry comprises of 125 large cement plants with an installed capacity of 148.28 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum. The Cement Corporation of India, which is a Central Public Sector Undertaking, has 10 units. There are 10 large cement plants owned by various State Governments. The total installed capacity in the country as a whole is 159.38 million tonnes. Actual cement production in 2002-03 was 116.35 million tonnes as against a production of 106.90 million tonnes in 2001-02, registering a growth rate of 8.84%. Keeping in view the trend of growth of the industry in previous years, a production target of 126 million tonnes has been fixed for the year 2006-08. During the period April-June 2008, a production (provisional) was 31.30 million tonnes. The industry has achieved a growth rate of 4.86 per cent during this period. Exports Apart from meeting the entire domestic demand, the industry is also exporting cement and clinker. The export of cement during 2001-02 and 2003-04 was 5.14 million tonnes and 6.92 million tonnes respectively. Export during April-May, 2008 was 1.35 million tonnes. Major exporters were Gujarat Ambuja Cements Ltd. and L&T Ltd. {Now L&T Ltd (cement division) is named as Ultra Tech Cement Ltd., which is undertaken by Grasim Industries Ltd. Industry Inputs Highly capital intensive industry. Nearly 55-60% of the inputs controlled by the government. Facing problems due to power shortage. Coal availability and quality affecting production. Mini plants realization of revenue lower than large plants, survival difficult. Future Demand drivers
  • • Infrastructure & construction sector the major demand drivers. Some demand determinants: Economic growth. Industrial activity. Real estate business. Construction activity. Investments in the core sector. Signs of a revival: Growth in the housing sector. • Demand - supply balance expected in the next 12 - 15 months. • Higher capacity utilization likely in the future. • Encouraging trend in demand due to pick-up in rural housing demand and industrial revival. • Industry likely to grow at 8-10% in the next few years. Recommendations on Cement Industry For the development of the cement industry „Working Group on Cement Industry‟ was constituted by the Planning Commission for the formulation of X Five Year Plan. The Working Group has projected a growth rate of 10% for the cement industry during the plan period and has projected creation of additional capacity of 40-62 million tonnes mainly through expansion of existing plants. The Working Group has identified following thrust areas for improving demand for cement; (i) Further push to housing development programs. (ii) Promotion of concrete Highways and roads. (iii) Use of ready-mix concrete in large infrastructure projects. Further, in order to improve global competitiveness of the Indian Cement Industry, the Department of Industrial Policy & Promotion commissioned a study on the global 29
  • competitiveness of the Indian Industry through an organization of international repute, viz. KPMG Consultancy Pvt. Ltd. The report submitted by the organization has made several recommendations for making the Indian Cement Industry more competitive in the international market. The recommendations are under consideration. TECHNOLOGICAL CHANGE Cement industry has made tremendous strides in technological upgradation and assimilation of latest technology. At present ninety three per cent of the total capacity in the industry is based on modern and environment-friendly dry process technology and only seven per cent of the capacity is based on old wet and semi-dry process technology. There is tremendous scope for waste heat recovery in cement plants and thereby reduction in emission level. Example: One project for co-generation of power utilizing waste heat in an Indian cement plant is being implemented with Japanese assistance under Green Aid Plan. The induction of advanced technology has helped the industry immensely to conserve energy and fuel and to save materials substantially. It is manufactured by grinding the raw materials such as limestone, silica, clay, alumina, and iron oxide etc., mixed in certain proportions and then crushing them in a kiln at a temperature of about 13000 C to 15000 C, the material sinters and partially fuses to form modular shaped thing called „Clinker‟ and then it is and ground to a fine powder with addition of gypsum. The product thus formed is called „Cement‟. Depending up on the use of chemical composition, setting and hardening properties and use of raw materials, cement of different categories can be manufactured. They are broadly classified into two groups, namely: Portland cement. Special cement. Portland cement
  • This is most used and is named because of its properties with a well-known natural Stone Quarry at Portland (UK). Joseph Aspdin of England took the patent for producing Portland cement on 21stOctober 1824. Later in 1845 Issac Charles Johnson made better quality cement and established factories during. Ordinary Portland cement is the most commonly used cement for a wide range of applications. These applications cover dry-lean mixes, general-purpose ready-mixes, and even high strength pre-cast and pre-stressed concrete. Special cement These are generally manufactured by adding certain admixture to the cements during the mixing or grinding. The types of special cement are, 1. Portland Pozzolana Cement (PPC), 2. Portland Blast Furnace Slag Cement (PBFS) or (PSC), 3. Oil Well Cement, 4. Rapid Hardening Portland Cement, 5. Sulphate Resisting Portland Cement 6. White Cement etc. (PPC and PSC are considered as Blended cement). Production of these varieties of cement conforms to the Standard Specifications. It is worth mentioning that some cement plants have set up dedicated jetties for promoting bulk transportation and export. CURRENT SCENARIO The Indian cement industry is the second largest producer of quality cement, which meets global standards. The cement industry comprises 130 large cement plants and more than 300 mini cement plants. The industry's capacity at the end of the year reached 188.97 million tons which was 166.73 million tons at the end of the year 2006-07. Cement production during April to March 2007- 08 was 168.31 million tons as compared to 155.66 million tons during the same period for the year 2006-07.Despatches were 167.67 million tons during April to March 2007- 08 31
  • whereas 155.26 during the same period. During April-March 2007-08, cement export was 3.65 million tons as compared to 5.89 during the same period. Cement industry in India is currently going through a consolidation phase. Some examples of consolidation in the Indian cement industry are: Gujarat Ambuja taking a stake of 14 per cent in ACC, and taking over DLF Cements and Modi Cement; ACC taking over IDCOL; India Cement taking over Raasi Cement and Sri Vishnu Cement; and Grasim's acquisition of the cement business of L&T, Indian Rayon's cement division, and Sri Digvijay Cements. Foreign cement companies are also picking up stakes in large Indian cement companies. Swiss cement major Holcim has picked up 14.8 per cent of the promoters' stake in Gujarat Ambuja Cements (GACL). Holcim's acquisition has led to the emergence of two major groups in the Indian cement industry, the Holcim-ACC-Gujarat Ambuja Cements combine and the Aditya Birla group through Grasim Industries and Ultratech Cement. Lafarge, the French cement major has acquired the cement plants of Raymond and Tisco. Italy based Italcementi has acquired a stake in the K.K. Birla promoted Zuari Industries' cement plant in Andhra Pradesh, and German cement company Heidelberg Cement has entered into an equal joint- venture agreement with S P Lohia Group controlled Indo-Rama Cement.