1. 01, April 2013
Dear
Colleagues,
The Year That Went by
Struggled we have during the last financial year 2012-13 in the wake of weakened
economy, falling rupee, stunted industrial growth in general and intense
competition arising from Andhra Pradesh cement industry, epicentre of
overcapacity tremors, in particular. Whatever excuses we could conceive and
allude to our performance, however justified it may be, we must realise that our
business score card shows that we have only met a portion of our interest
commitments through our performance and the management was forced to
bring in funds to meet the balance interest commitments and Term Loan
Repayments.
Silver Lining
Though dark clouds hung around the horizon for most of the time we had a silver
lining in the form of solid foundation laid in three areas;
1) Production of the best quality cement in Southern India.
2) Positioning of the brand in the top of 5-6 rungs in the ladder of 30-35
brands and
3) Employing least number of people.
Top Management
We all know about the positioning of one of the new brand that had come from
the stable of one of the leading industrial house in India and the throw away price
at which another brand, coming from the 3rd
largest Cement company of the
country, is available in the non-trade segment. It was the vision of our Managing
director, Mr.Dinesh Kumar Singhi, and our mentor, Mr.Laxmipat Dudheria , to give
our team the freedom to launch the brand on a strong platform, unmindful of the
financial difficulties, that had helped us to create the silver lining amongst dark
clouds.
Time for Thanks Giving
Colleagues, I am sure you would readily agree with me that mere “Thank
you” crossing our lips is not a fitting reciprocation for the freedom bestowed on
us. It is our responsibility to ensure that as an Organisation we remain financially
2. Independent. Fortunately, I am blessed with a team that does not wait for the
waters to recede to cross the river.
The Year Ahead
Unity
It would not be out of place to mention the quote of Swamy Vivekananda “The
grass when made into to a rope by being joined together can even chain a mad
elephant”.
Small drops become Ocean
In a challenging environment a penny saved is more than a pound earned. If
existing territories/segments are not shoring up the top line, tapping new vistas
will make us healthy. If each one of us take a pledge today to improve our
effectiveness the circle becomes very big and the vortex created by the current
will be powerful enough to suck the greatest challenges.
Goals
A thousand mile journey does not only begin with the small step but also have
intermediary and final goals of destinations.
Production
The manufacturing team has done well to bring down the cost of fuel to Rs.
930 - 950/- MT of clinker from Rs. 1350 - 1400. Power consumption was
brought down to 100-105 units from 130-135 units. Innovate, if not, beg,
borrow or even steal ideas to bring down the fuel cost to Rs. 800/- and
power to 85/90 units per MT. Manufacturing team will do well to remember
that the Sales Team is already fighting pitched battle by positioning the brand in
the premium segment. It is our manufacturing team’s responsibility to supply our
first line of defence with powerful weapons in the form of cost reduction and
continuously give them World Class Cement.
Selling
Sales Team after having positioned, with lots of guts and gumption, BMM
Cement in the premium price category in all markets and achieved 15000 tonnes
sales per month in Bangalore trade segment through a new distribution
concept and 1000 MT each in Hosur, Davanagere and Ananthapur districts.
Kudos to all these Marketing Officers !. Though there is growth in North
Karnataka markets the progress is excruciatingly slow. Initial wave that arose in
Chennai had fallen, quelled by the bee-line of AP brands willing to make the
products available at Rs. 30 - 40/- bag lower than our price. Perhaps the time has
3. come for Chennai team to look at new methods to combat the menace. The
Sales Team would do well to remember that higher the volume they give,
the Manufacturing and Finance department will have the advantage of
spreading the fixed cost thin over larger volumes.
Logistics
Appreciation is also due to the Logistics team for ensuring smooth supplies
without leading to high stock position in the warehouses. I must say the
percentage of clotted and damaged bags is the lowest, by a very wide margin, in
my last two and half decades in the Cement Industry. However we must address
the issue of plugging the chinks in our armour by acting with hastened speed,
more so, as we don’t have the option of moving by rail. In the situation of limited
counter space and with the loads despatched by competitors’ already waiting in
the shops, quantity not despatched in time will tantamount to lost sale. The
sales team will help their own cause of getting timely supplies by impressing
or cajoling the stockist and C/F agent to release the trucks within 2 to 3
hours on their arrival at the destination.
Branding & Marketing
A herculean task well achieved with the smallest of small team. Laudable effort in
ushering in new initiatives. Even routine things were done differently which won
encomiums from friends and foes alike, channel partners as well as competitors.
We have set our standards higher and the challenge is going to be more tough
for the ensuing year. It would be a gross injustice to the efforts put by VP (MO &
A), Mr.Ravinarayanan, and more importantly to the money spent by the
management, if the Sales Team does not use it as a spring board to pick up the
volumes. It is imperative that all the members of selling team should
implement the marketing strategies steadfastly to carve out a niche for
BMM at the Market place.
Finance and Accounting
Despite grappling with very old issues, simultaneously devoting time to the
implementation of ERP and creation of Fixed Assets register, the team had
done well to bring the books of accounts up to date on a daily basis.
However lot more need to be done in terms of issuing statements to the dealers
in time preferably before 10th
of the subsequent month. Quarterly reconciliation
to be done with the vendors, P&L and Balance Sheet to be ready before 3rd
of the
subsequent month.
Human Resources
The organisational climate is being kept free from politics and internal squabbles
due to close co-ordination between VP – MO & A, VP – Manufacturing, Director –
4. Commercial & Logistics, GM – Finance and Accounts and AGM – Accounts. They
are always on the same page when it comes to the dictum of policies, procedure
and systems running the Organization than individuals pulling the different
functions in different directions. We will continue to encourage free
communication, creativity and debate for improving the health of the
organization but will surely trample dissensions in implementing what is
good for the health of the Organization.
Resolve
With the zeal in the heart, stubbornness in the mind, spring in the step and with
the indomitable iron will, let us assiduously go after our goals like men possessed.
I am sure with all your collective support the challenges, however insurmountable
they may appear to be, will go to pieces.
Comrades, Up! Up! Onward!. Down with the attitude of helplessness
and negativity, let us march on!
Happy & Prosperous Financial Year
With Warm Regards
Prakash Panangala