cement industry reference to ultratech

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A
COMPREHENSIVE PROJECT REPORT
ON
A STUDY ON CEMENT INDUSTRY WITH SPECIAL REFERENCE TO ULTRATECH
CEMENT LIMITED & STATUS OF CEMENT INDUSTRY IN INDIA
Submitted to
SOM-LALIT INSTITUTE OF BUSINESS MANAGEMENT
UNDER THE GUIDANCE OF
Faculty Guide
Ms. Reshmi Menon
IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE
DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
GRANTED BY
Gujarat Technological University
Submitted by
DOSHI SELVIN 167780592021
SAGAR MOTWANI 167780592088
M.B.A – SEMESTER IV
SOM-LALIT INSTITUTE OF BUSINESS MANAGEMENT
M.B.A PROGRAMME
Affiliated to Gujarat Technological University
Ahmedabad
MAY 2018

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PREFACE
The cement industry today is one of the most lucrative industries. Further, due to increase in
the population of the country and a movement towards urbanization, there is an increase in the
demand of infrastructural development in the country. As a result, demand for cement is also
increasing. The cement industry of the country has witnessed the growth of various companies
like J.K.cement, Ambuja cement, Ultra Tech cement, ACC cement, which provide quality cement
to the country. Various others small players and foreign players are coming to India to compete
at International level.
This report deals with introduction of cement industry in India, players of cement industry
(domestic as well as foreign players), attractiveness of cement market, and types of cement,
factors affecting demand of cement in India, key issues and trends in cement sector.
It also includes company study of Ultra Tech cement. This part includes introduction to
company, product profile of company, and information of various functional departments of
company.
In today s globalize world, where cutthroat competition is prevailing in the market, theoretical
knowledge is not sufficient. Beside this one need to have practical knowledge, which would
help a i dividual i his/her arrier a tivities a d it is true that ―Experience is the best teacher.

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ACKNOWLEDGEMENT
We, the students pursuing M.B.A (fourth semester), in SOM-LALIT INSTITUTE OF BUSINESS
MANAGEMENT, feel privileged to prepare this comprehensive project report at this stage,
which is the result of all our efforts and many others who helped us throughout the preparation
of report. We feel honored to present this report in front of you. We request you to
acknowledge this report.
We express our profound sense of gratitude in all its humbleness to our guide for their flawless
guidance and constructive criticism throughout our project report. We owe a debt of gratitude
especially to those people, who provided us an opportunity directly or indirectly to gain such
knowledge. We are also very thankful to our esteemed professor Ms. Reshmi Menon, who has
provided us such a flawless beautiful guidance.
We are ver tha kful to ― SOM-LALIT INSTITUTE OF BUSINESS MANAGEMENT for giving us
such an opportunity and industrial exposure.

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DECLARATION
We, Selvin Doshi and Sagar Motwani, hereby declare that this report for our Comprehensive
Project entitled “A STUDY ON CEMENT INDUSTRY WITH SPECIAL REFERENCE TO ULTRATECH
CEMENT LIMITED & STATUS OF CEMENT INDUSTRY IN INDIA”, is a result of our own collective
work and an outcome of our constant hard work and engagement with the other publications
as references and we assure all of it has been duly acknowledged.
Place: Ahmedabad
Selvin Doshi & Sagar
Motwani
Date:

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EXECUTIVE SUMMARY
This project contains bird s eye view about global cement industry, details of Indian cement
industry, details about Ultra Tech cement and status of cement industry in India.
In the Indian cement industry bracket, we have put the introduction, history, major domestic
and global players of the cement industry, various types of cement(s), various demand
determinants of cement industry, key issues and analysis of the cement sector. Moreover, we
have taken Ultra Tech cement Limited for our company research study. It contains details like
introduction, company profile of Ultra Tech cement, product profile of the company, and also
details about various functional departments of Ultra Tech cement.
In addition to the study of cement industry and company study of Ultra Tech cement, we have
done some brief secondary research. The purpose of secondary research is to know the status
of cement industry in India. We have used secondary source for the data from various websites
and Wikipedia.
This project gave us an idea about how demand and supply of cement will be in the future. This
project taught us how we can use the secondary data and relate it to find out any details.

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TABLE OF CONTENTS
CHAPTER PARICULARS PAGE
NO NO.
1 INDUSTRY INTRODUCTION 10
1.1 INTRODUCTION 11
1.1.1 Global cement industry 11
1.1.2 Indian cement industry 13
1.1.3 Structure Of Cement Industry 15
1.2 INDUSTRY BACKGROUND 16
1.3 COMPOSITION OF CEMENT 19
1.4. CEMENT MANUFACTURING PROCESS 19
1.5 WHY TO USE CEMENT? 23
1.6 PRODUCT PROFILE 24
1.7 MAJOR DOMESTIC PLAYERS IN INDUSTRY 27
1.8 FOREIGN PLAYERS IN INDUSTRY 35
1.9 MARKET SEGMENTATION 2008-09 42
1.10 DEMAND DETERMINATIONS OF INDUSTRY 45
1.11 DISTRIBUTION CHANNEL OF INDUSTRY 50
1.12 KEY ISSUES AND CURRENT TRENDS 52
1.13 PEST ANALYSIS 54
1.14 MICHEAL PORTER 5 FORCE MODEL 55
1.15 SWOT ANALYSIS 57
1.16 FUTURE OUTLOOK 58
2 COMPANY STUDY OF ULTRA TECH 61
CEMENT
2.1 COMPANY PROFILE 62
2.2 PRODUCT PROFILE 66
2.3 FUNCTIONAL DEPARTMENTS 68
2.3.1 Production Department 68

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2.3.2 Marketing Department 74
2.3.3 Human Resource Department 77
2.3.4 Finance Department 82
2.4 SWOT ANALYSIS OF ULTRA TECH CEMENT 86
2.5 FUTURE OUTLOOK OF ULTRA TECH 87
CEMENT
3 RESEARCH METHODOLOGY 88
3.1 RESEARCH OBJECTIVES 89
3.2 RESEARCH APPROACH 89
3.3 DATA COLLECTION 89
4 DATA ANALYSIS 90
4.1 TOTAL CONSUMPTION OF CEMENT IN 91
INDIA
4.2 DEMAND FORECAST FOR NEXT 5 YEARS 92
4.3. TOTAL SUPPLY OF CEMENT IN INDIA 93
4.4 SUPPLY- DEMEAND GAP IN INDUSTRY 93
4.5 DEMAND-SUPPLY MATRIX WITH CAPACITY 95
UTILIZATION
5 FINDINGS 96
5.1 RESEARCH FINDINGS 97
5.2 INDUSTRY FINDINGS 97
LIMITATIONS 99
CONCLUSIONS 100
REFERENCES 101

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LIST OF TABLES
TABLE NO. PARTICULARS PAGE NO.
1 PRESENT STATUS OF TECHNOLOGY 22
2 MARKET SHARE OF MAJOR PLAYERS IN 38
INDIA 2008-09
3 VARIOUS CEMENT PLANTS WITH IN INDIA 39
ITS INSTALLED CAPACITY
4 REGIONAL SHARE OF INSTALLED 44
CAPACITY
5 CUSTOM DUTY ON CEMENT AS PER 49
BUDGET 2011-12
6 EXCISE DUTY ON CEMENT AS PER 49
BUDGET 2011-12
7 TRENDS OF COMPANY OVER THE YEARS 68
8 STRATEGIC BRANCH UNITS OF THE 69
COMPANY IN INDIA
9 PROFIT & LOSS ACCOUNT OF ULTRA TECH 82
10 CAH FLOW STATEMENT OF ULTRA TECH 83
11 BALANCE-SHEET OF ULTRA TECH 84
12 RATIO ANALYSIS OF ULTRA TECH CEMENT 85
13 TOTAL CONSUMPTION OF CEMENT IN 91
INDIA
14 DEMAND FORECAST WITH AVERAGE 92
GROWTH RATE FOR NEXT 5 YEARS
15 SUPPLY- DEMEAND GAP IN INDUSTRY 93
16 DEMAND-SUPPLY MATRIX WITH CAPACITY 95
UTILIZATION

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LIST OF GRAPHS
GRAPH PARTICULARS PAGE
NO. NO.
1 Market Share Of Major Players In India 2008-09 38
2 Regional Share Of Installed Capacity 44
3 Total Consumption Of Cement In India 91
4 Demand Forecast For Next 5 Years 92
5 Supply- Demand Gap In Industry 94
LIST OF FIGURES
FIGURE PARTICULARS PAGE
NO. NO.
1 Market Segmentation 2008-09 42
2 Michael Porter 5 Force Model 56
3 SWOT Analysis 57
4 Manufacturing Process Of Cement 71
5 Product Mix Of Ultra Tech Cement 74
6 SWOT Analysis Of Ultra Tech Cement 86

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CHAPTER 1: INDUSTRY INTRODUCTION

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1.1. INTRODUCTION
1.1.1. GLOBAL CEMENT INDSTRY
Recent years have seen the cement industry grow dynamically with most of the actions taking
place in emerging economies. Despite the ongoing financial crisis the global economy is facing,
the need for housing and continued government investments in infrastructure development by
emerging economies is offsetting downturn in mature markets. Though, at present, demand is
growing, but at a decelerated pace, the phase is momentary. Long-term projections indicate
healthy demand growths, as world economy stabilizes and construction activity picks up across
global markets into the next decade.
China, followed by India, United States, Japan and Russia, represent the largest producers and
consumers of cement worldwide. Other countries featuring prominently on the global cement
space include Spain, South Korea, Italy, Iran, Turkey, and Brazil. Significant capacity expansions
in China, India, Saudi Arabia, UAE, Turkey, Egypt, and Brazil are underway and planned for the
next few years.
Portland cement is the most widely consumed cement variety worldwide. Sales of straight
Portland cement, which currently accounts for more than 3-quarters of all cement demand
worldwide, will be less robust but still healthy, benefiting from continued growth in
construction spending worldwide and further advances in manufacturing technology. The
largest geographic market is Asia-Pacific, and the fastest growth is forecast to take place in the
Middle East & Africa and Asia-Pacific markets. In fact, China alone consumes more than half the
global Portland cement.
Blended cement, the less environment polluting varieties, would see demand grow in the next
few years, as their favorable environmental profile and excellent performance wins end-user
interest. Again Asia-Pacific represents the largest geographic market, though share of Europe
also stands out.

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In terms of market, China remains the largest regional market, where Construction Contractors,
followed by Concrete Products Producers represent the largest markets for cement. The fastest
growing market, however, would be Ready-mix Concrete Producers, as they benefit from ban
imposed by the Chinese government on mortar and concrete mixing at construction sites.
Meanwhile, the second largest regional market, India, would see cement demand advance the
fastest for the Ready-mix Concrete Producers market. Though demand from Consumers, the
largest cement market, would continue to grow, it would lose share to Ready-mix Concrete
Producers and Concrete Products Producers markets.
Cement Is a Cyclical Industry, in Which Growth Interspersed by Shorter periods of Decline. Over
recent decades, different geographical markets have experienced different cycles, meaning that
is comparatively rare for their periods of decline to coincide. This also means that as a rule the
number of markets in growth at any one time will exceed those in decline.
The global marketplace is characterized by participants such as Lafarge (France), Holcim
(Switzerland), Cemex (Mexico), Heidelberg Cement (Germany) and Italcementi (Italy), which
represent the five leading manufacturers of cement. Other international cement makers
include Buzzi Unicem (Italy), Cimpor (Portugal), CRH (Ireland), Votorantim Cimentos (Brazil),
Sumitomo Osaka Cement (Japan), Taiheiyo Cement (Japan), and Anhui Conch (China). Other
leading regional market leaders include: Anhui Conch, China Shanshui, China National Building
Material, and Tangshan Jidong in China; and ACC, Ambuja Cement, Grasim, UltraTech, and India
Cements in India.
The key growth drivers for cement consumption are population growth (increasing demand for
housing, commercial building and infrastructure) and economic growth (driving up the
consumption of cement per capita). Rapid

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Urbanization and the booming infrastructure have lead to an increase in construction and
development across India, attracting even the global players. Cement is a global industry made
up of local markets. When a product is both heavy and cheap, transaction costs become a key
factor in determining its profitability, so cement plants need to be close to customers. This is a
why global cement industry leaders are seeking to be present in as many local markets as they
can, resulting in the growing dominance of the industry by its largest business according to the
leading manufacturer of cement production equipment in the world, FLSmidth, world cement
consumption is set to price on average between 3.6% and 4.8% per year in the coming years.
1.1.2 INDIAN CEMENT INDUSTRY
India is fast emerging on the world map as a strong economy and a global power. The country is
going through a phase of rapid development and growth. All the vital industries and sectors of
the country are registering growth and thus, luring investors. And cement industry is one of
them.
India is the world s second largest cement producer after china, accounting for about 6% of the
world s production. Annual per-capita consumption of India is around 156 Kg, which is much
lower than the global average of 396 Kg. Cement is one of the core Industries, which plays a
vital role in the growth of the nation. Limestone and coal being the basic material s of cement
manufacturing, India has the requisite quantity of cement grade limestone deposits, backed by
adverse reserves of coal. India also has the requisite technical expertise to produce best quality
of cement with the most energy efficient processes. Many Indian companies have attained high
levels of energy efficiency in their plants, which are comparable to international benchmarks.
The cement industry is one of the main beneficiaries of the infrastructure boom. With robust
demand and adequate supply, the industry has bright future. The Indian Cement Industry with
total capacity of 166.75 million tones is the second

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Largest after China. Private housing sector is the major consumer of cement (53%) followed by
the government infrastructure sector.
For a variety of applications, various types and grades of cement are used. The most common
types of cement are Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC) and
Portland Slag Cement (PSC). Indian cement industry produces various types of cements such as
OPC, PPC, Portland Blast Furnace Slag Cement (PBFSC) or PSC, oil-well cement, rapid hardening
- Portland cement, sulphate - resisting Portland cement & white cement.
The Indian cement industry has continued its growth trajectory over the past ten years.
Domestic cement demand growth has surpassed the economic growth rate for the past three
years.
The key drivers for cement demand are real estate sector, infrastructure and industry
expansion projects. Among these real estate sector is the key driver of cement demand. The
demand for cement is closely related to the growth in the construction sector. Consequently,
cement demand has been posting a healthy growth rate of around 8 per cent since 1997-98,
propelled by the increased thrust on infrastructure development, and the higher demand from
the housing sector and industrial projects.
Cement is bulky commodity and cannot be easily transported over long distances making it a
regional market place, with the nation being divided into five regions. Each region is
characterized by its own demand-supply dynamics. Over the past few years the cost of cement
production has grown at a CAGR of 8.4%.
With increase in infrastructure development activity with projects such as state and national
highways, and global demand has led Indian cement industry to

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Increase their production capacity. This in turn has attracted the top cement companies in the
world to enter the Indian market and take the advantage of growth in demand.
The cement sector continues to emphasize on cost cutting through enhanced productivity,
reduction in energy costs and logistic expenses.
The government has considered spending more than US $700 billion on infrastructure in the
12
th
five year plan. Apart from this railways, urban infrastructure, ports, airports, IT sector,
organized retailing, malls and multiplexes will be the main sectors driving the demand of
cement in the country. So we can see that cement industry is moving towards both challenges
and opportunities poised by the presence of domestic and global players in the Indian market.
This trend is likely to continue in the coming years.
1.1.3. STRUCTURE OF CEMENT INDUSTRY
 It is a fragmented industry. There are around 91 cement companies in India, operating
around 152 large and 400 mini plants, where majority of production of cement 94% in
the country is by large plants.
 One of the other defining features of the Indian cement industry is that the location of
limestone reserves in select states has resulted in its evolving in the form of clusters.
 Since cement is a high bulk and low value commodity, competition is also localized
because the cost of transportation of cement to distant markets often results in the
product being uncompetitive in those markets.
 Another distinguishing characteristic comes from it being cyclical in nature as the
market and consumption is closely linked to economic and cyclical

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Cycles. In India, cement Production is normally at its peak in the month of March. While it is at
its lowest in the month of August and September. The cyclical nature of this industry has mean
that only large players are able to withstand the downturn in demand due to their economies
of scale, operational efficiencies, centrally controlled distribution systems and geographical
diversification.
1.2. INDUSTRY BACKGROUND
Finally it was in 1914 that the first licensed cement manufacturing unit was set up by Pre
Independence.
Pre Independence
The first endeavor to manufacture cement dates back to 1889 when a Calcutta based company
endeavored to manufacture cement from Argillaceous (kankar).
But the first endeavor to manufacture cement in an organized way commenced in Madras.
South India Industries Limited began manufacture of Portland cement in 1904.But the effort did
not succeed and the company had to halt production. India Cement Company Ltd at Porbandar,
Gujarat with an available capacity of 10,000 tons and production of 1000 installed. The First
World War gave the impetus to the cement industry still in its initial stages. The following
decade saw tremendous progress in terms of manufacturing units, installed capacity and
production. This phase is also referred to as the Nascent Stage of Indian Cement Industry.
In 1927, the Concrete Association of India was formed with the twin goals of creating a
positive awareness among the public of the utility of cement and to propagate cement
consumption.

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Post-Independence
The growth rate of cement was slow around the period after independence due to various
factors like low prices, slow growth in additional capacity and rising cost. The government
intervened several times to boost the industry, by increasing prices and providing financial
incentives. But it had little impact on the industry.
In 1956, the price and distribution control system was set up to ensure fair prices for both the
manufacturers and consumers across the country and to reduce regional imbalances and reach
self-sufficiency.
Period of Restriction (1969-1982)
The cement industry in India was severely restrained by the government during this period.
Government hold over the industry was through both direct and indirect means. Government
intervened directly by exercising authority over production, capacity and distribution of cement
and it intervened indirectly through price control.
In 1977 the government authorized higher prices for cement manufactured by new units or
through capacity increase in existing units. But still the growth rate was below par.
In 1979 the government introduced a three tier price system. Prices were different for cement
produced in low, medium and high cost plants.
However the price control did not have the desired effect. Rise in input cost, reduced profit
margins meant the manufacturers could not allocate funds for increase in capacity.

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Partial Control (1982-1989)
To give impetus to the cement industry, the Government of India introduced a quota system in
1982.A quota of 66.60% was imposed for sales to Government and small real estate developers.
For new units and sick units a lower quota at 50% was affected. The remaining 33.40% was
allowed to be sold in the open market.
These changes had a desired effect on the industry. Profitability of the manufacturers increased
substantially, but the rising input cost was a cause for concern.
Post Liberalization
In 1989 the cement industry was given complete freedom, to gear it up to meet the challenges
of free market competition due to the impending policy of liberalization. In 1991 the industry
was de licensed.
This resulted in an accelerated growth for the industry and availability of state of the art
technology for modernization. Most of the major players invested heavily for capacity
expansion.
To maximize the opportunity available in the form of global markets, the industry laid greater
focus on exports. The role of the government has been extremely crucial in the growth of the
industry.
Indian cement industry is globally competitive because the industry has witnessed healthy
trends such as cost control and continuous technology up gradation.

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1.3. COMPOSITION OF CEMENT
Cement is a mixture of compounds, consisting mainly of silicates and aluminates of calcium,
formed out of calcium oxide, silica, aluminum oxide and iron oxide. Cement is manufactured by
burning a mixture of limestone and clay at high temperatures in a kiln, and then finely grinding
the resulting clinker along with gypsum. It is a fine powder which when mixed with water sets
to a hard mass as a result of hydration of the constituent compounds. It is the most commonly
used construction material. The end product thus obtained is called Ordinary Portland Cement
(OPC).
1.5. CEMENT MANUFACTURING PROCESS
Cement production involves the chemical combination of calcium carbonate (limestone), silica,
alumina, iron ore and small amounts of other materials. Cement is produced by burning
limestone to make clinker and the clinker is blended with additives and then finely ground to
produce different cement types. Desired physical and chemical properties of cement can be
obtained by changing the percentages of the basic chemical components.

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Cement is manufactured from Limestone and involves the following unit operations:
 Mining
 Crushing
 Raw meal grinding
 Pyro-processing
 Cement grinding
 Packing & dispatch
Raw Materials Preparation
Raw material preparation involves crushing of the quarried material, further raw grinding and
blending the materials. The specific electrical energy consumption in raw materials preparation
accounts for a significant part of overall electrical energy consumption.
Mining
The major raw material for cement manufacture is limestone, which is mined in open cast
mines in the quarry and then transported to the crusher.
Crushing
The mined limestone is conveyed to the crusher through dumpers/ropeways/belt conveyors.
The material is then crushed in the crusher to a size of about 25-75mm.The crushing is done in
two stages in the older plants while in the modern plants normally single stage crushing is done.
The typical crushers used are jaw Crusher and hammer crusher.
Raw meal grinding
The crushed limestone is grounded into fine powder in the dry condition. The Vertical Roller
Mill (VRM) is comparatively more energy efficient than ball mill

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Consuming only 65% of the energy consumption of the ball mill. The ball mill along with a pre-
grinding system such as roll press is also used in some of the plants with very hard and abrasive
limestone.
Pyro-processing
This takes place in the kiln system. The kiln is a major consumer of both the electrical and
thermal energy in a cement plant. The calcinations of limestone and the conversion into clinker
takes place in the precalciner and kiln respectively.
Cement grinding
The clinker which is produced in the kiln is then grounded along with about 5% Gypsum to
produce OPC. Ball mills have been generally used for grinding in cement plants in India either
alone or in combination with roller press systems. In some of the recently installed plants, the
VRM has been installed. The other types of cement such as PPC and PSC are also produced by
grinding clinker with fly-ash and blast furnace slag respectively.

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Table 1: PRESENT STATUS OF TECHNOLOGY
Stage Low Technology Modern Plants Global Technology
Plants
Mining & Conventional Computer aided Computer aided
Material
Handling
Crushing Two stage Single stage In-pit crushing &
conveying
Grinding
Ball Mills with /
without VRM s Roll Presses VRM s, Roll
Conventional with dynamic Presses, Horo Mills
Classifier classifier with dynamic
classifier

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Pyro Wet Semi Dry Dry Dry
Processing - 4 stage preheater - 5/6 stage - 6 stage preheater
-Conventional cooler preheater - High Efficiency
-Single channel - High Efficiency Cooler
Burner Cooler - Multi Channel
- Multi Channel Burner
Burner - Co-processing of
WDF
- Co-generation of
power
- Low NOx/SO2
emission
technologies
Blending & Batch-Blending Silos Continuous - Continuous
Storage Blending silos Blending
- Multi-Chamber
Silos
- Dome silos
Packing & Bag - Bag - Bulk
Dispatch - Bulk - Palletizing & Shrink
Wrapping
Process Relay Logic / Hard DDC DDC
Control Wired / PLC - Fuzzy Logic expert - Neurofuzzy expert
system system
Plant Size, 300-1800 3000-6000 6000-12000
TPD
SOURCE: CENTRE FOR MINING, ENVIRONMENT, PLANT ENGINEERING & OPERATION

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1.6. PRODUCT PROFILE
There are different varieties of cement based on different compositions according to specific
end uses namely Ordinary Portland Cement, Portland Pozzolana Cement, Portland Blast
Furnace Slag Cement, White Cement and Specialized Cement. The basic difference lies in the
percentage of clinker used.
Ordinary Portland cement (OPC)
OPC, popularly known as grey cement, has 95% clinker and 5% of gypsum and other materials.
It accounts for 70% of the total consumption. White cement is a variation of OPC and is used for
decorative purposes like rendering of walls, flooring etc. It contains a very low proportion of
iron oxide.
(i)OPC 43 Grade Cement
It is known for Long-Lasting Strength for Years. It is high grade cement with a consistent 28 days
compressive strength of the order of 60 to Mpa. Greater cement leads to better workability for
given water content, resulting in cohesive concrete. It ensures dense, homogeneous,
impervious & watertight concrete. It increases life of structure not only by high strength, but
also by provides adequate durability.
(ii)OPC 53 Grade Cement
This is an Ordinary Portland Cement which surpasses the requirements of IS: 12269-53 Grade. It
is produced from high quality clinker ground with high purity gypsum. 53 Grade OPC provides
high strength and durability to structures because of its optimum particle size distribution,
superior crystalline structure and balanced phase composition.
Portland Pozzolana Cement (PPC)
PPC has 80% clinker, 15% Pozzolana and 5% gypsum and accounts for 18% of the total cement
consumption. Pozzolana has siliceous and aluminous materials that do not possess cementing
properties but develop these properties in the presence of water. It is cheaply manufactured
because it uses fly ash/burnt

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Clay/coal waste as the main ingredient. It has a lower heat of hydration, which helps in
preventing cracks where large volumes are being cast.
Portland Blast Furnace Slag Cement (PBFSC)
PBFSC consists of 45% clinker, 50% blast furnace slag and 5% gypsum and accounts for 10% of
the total cement consumed. It has a heat of hydration even lower than PPC and is generally
used in construction of dams and similar massive constructions.
White Cement
Basically, it is OPC: clinker using fuel oil (instead of coal) and with iron oxide content below
0.4% to ensure whiteness. Special cooling technique is used. It is used to enhance aesthetic
value, in tiles and for flooring. White cement is much more expensive than grey cement.
Specialized Cement
There are two types of specialized cement.
(i)Oil Well Cement
It is made from clinker with special additives to prevent any porosity.
(ii)Rapid Hardening Portland cement
It is similar to OPC, except that it is ground much finer, so that on casting, the compressible
strength increases rapidly.
Water Proof Cement
It is one type of OPC, with small portion of calcium stearate or non-saponifibale oil to impart
waterproofing properties.

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Rapid Hardening Portland cement
Rapid Hardening Portland Cement is similar to OPC, except that it is ground much finer, so that
on casting, the compressible strength increases rapidly.
Sulphate Resisting Portland cement (SRC)
It is a type of Portland cement in which the quantity of tricalcium aluminates is less than 5%. It
can be used for purposes wherever Portland Pozzolana Cement, Slag Cement, and Ordinary
Portland Cement are used. The use of Portland Sulphate Resisting Cement has proved
beneficial, particularly in conditions where there is a risk of damage to the concrete from
sulphate attack. The use of Sulphate Resisting Portland Cement is recommended in places
where the concrete is in contact with the soil, ground water, exposed to seacoast, and sea
water. In all these conditions, the concrete is exposed to attack from sulphates that are present
in excessive amounts, which damage the structure. This is the reason that the use of the
Sulphate Resisting Portland Cement have increased in India.
The various uses of Sulphate Resisting Portland Cement are:
 Underground and basements structures
 Works in coastal areas
 Piles and foundations
 Water and sewage treatment plants
 Sugar, chemical, and fertilizers factories
 Petrochemical and food processing industries

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1.7. MAJOR PLAYERS OF INDUSTRY
Following are the major players of cement industry in India. Let us take view of them.
ACC Limited
ACC Limited is India's foremost manufacturer of cement and concrete. ACC's operations are
spread throughout the country with 16 modern cement factories, more than 40 Ready mix
concrete plants, 20 sales offices, and several zonal offices. It has a workforce of about 10,000
persons and a countrywide distribution network of over 9,000 dealers.
Since inception in 1936, the company has been a trendsetter and important benchmark for the
cement industry in many areas of cement and concrete technology. ACC has a unique track
record of innovative research, product development and specialized consultancy services. The
company's various manufacturing units are backed by a central technology support services
centre - the only one of its kind in the Indian cement industry.
ACC has made significant contributions to the nation building process by way of quality
products, services and sharing expertise. Its commitment to sustainable development, its high
ethical standards in business dealings and its on-going efforts in community welfare
programmers have won it acclaim as a responsible corporate citizen. ACC s brand name is
synonymous with cement and enjoys a high level of equity in the Indian market. It is the only
cement company that figures in the list of Consumer Super Brands of India.

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Gujarat Ambuja Cements Ltd.
Ambuja Cements Limited, formerly known as Gujarat Ambuja Limited is a major Cement
producing company in India. The Group's principal activity is to manufacture and market
cement and clinker for both domestic and export markets.
The company has entered into a strategic partnership with Holcim, the second largest cement
manufacturer in the world. Holcim had, in January, bought a 14.8 per cent promoters` stake in
the GACL for INR 21.4 billion.
The Joint Venture between the public sector Gujarat Industrial Investment Corporation (GIIC)
and Narottam Sekhsaria & Associates was the reason for confinement of the company. The
company was incorporated in the year 1981 as Ambuja Cements Private Ltd and it was
rehabilitated into a public limited company on 19th March 1983 as Gujarat Ambuja Cements
Ltd, cement production is the role of the company in nature and a cost efficient cement
manufacturer in the country. It is a National Quality ISO 9002 certified company, the only
cement company have this so. It's also the first to receive the same and also have ISO 14000
Certification for environmental systems.
The company's most distinctive attribute, however, is its approach to the business. Ambuja
follows a unique homegrown philosophy of giving people the authority to set their own targets,
and the freedom to achieve their goals. This simple vision has created an environment where
there are no limits to

29. 29
excellence, no limits to efficiency, and has proved to be a powerful engine of growth for the
company.
As a result, Ambuja is the most profitable cement company in India, and one of the lowest cost
producers of cement in the world.
Ultra Tech Cement Limited

30. 30
UltraTech Cement Limited, a Grasim subsidiary was incorporated in 24th August 2000 as L&T
Cement Limited, has an annual capacity of 17 million tones. It manufactures and markets
Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzolana
Cement. As part of the eighth biggest cement manufacturer in the world, UltraTech Cement has
five integrated plants, five grinding units as well as three terminals of its own (one overseas, in
Colombo, Sri Lanka). All the plants have ISO 9001 certification, and all but one have ISO 14001
certification, while two of the plants have already received OSHAS 18001 certification. The
export market comprises of countries around the Indian Ocean, Africa, Europe and the Middle
East. Export is a thrust area in the company's strategy for growth.
Grasim acquired management control in July 2004 and the name of the company was changed
to UltraTech Cement Limited with in 14th October 2004. The Company enhanced its capacity
utilization across its plants. Cement is an energy intensive industry with coal and power being
the major cost contributors. Use of alternative fuels auctioned, while over Rs.600 Crore has
been committed for the installation of captive power plants throughout the year 2004-05.
Narmada Cement Company Limited (NCCL) was amalgamated with the company in May of the
year 2006. UltraTech subsidiaries are Dakshin Cement Limited and UltraTechCeylinco (P)
Limited.
The India Cements Ltd
India Cements is the largest cement producer in southern India with a total capacity of 8.81
million tones and plants in Andhra Pradesh and Tamil Nadu. Its product portfolio includes
ordinary Portland cement and blended cement. The company has limited its business activity to
cement, though it has a marginal exposure to the shipping business. The company plans to
reduce its manpower significantly and exit non-core businesses to turnaround its fortune. It
also expects the export market to open up, with the Gulf emerging as a major importer.

31. 31
Jaiprakash Associates Limited
Jaiprakash Industries, now known as Jaiprakash Associates Limited (JAL) is part of the Jaypee
group with businesses in civil engineering, hospitality, cement, hydropower, design consultancy
and IT. It has an annual capacity of 4.6 million tones with plants located in Rewa & Bela
(Madhya Pradesh) and Sadva Khurd (Uttar Pradesh). The company is upgrading its capacity
through the modernizing of the existing units and the commissioning of a new grinding unit at
Tanda (Uttar Pradesh) with an investment of US$ 163 million. Jaiprakash Associates has decided
to concentrate on its core business of construction and engineering and leave its cement plant
to its subsidiary Jaypee Rewa Cement Ltd. The company manufactures a wide range of world
class cement of OPC grades 33, 43, 53, IRST-40 and special blends of Pozzolana cement.
Binani Cement Ltd
Binani Cement Limited is the flagship subsidiary of Binani Industries Limited (BIL), representing
the Braj Binani Group. The cement business started operations in 1997, in Sirohi District,
Rajasthan with a 1.65 MTPA integrated cement facility and a 25 MW captive power plant with
technological support from F. L. Smidth, Denmark and Larsen & Toubro Ltd.
The capacity was raised to 2.25 MTPA in 2005 through advanced in-house R&D and de-
bottlenecking and the Company was also certified to ISO 9001, ISO 14001 and OHSAS 18001
within a short span from commencement of operation. This is an achievement that clearly
illustrates the management's commitment to quality, efficiency, environment, health and
safety. In 2008, a split-grinding unit at Neem Ka Thana was commissioned, boosting the
capacity in India to 6.25 MTPA.

32. 32
Today, Binani Cement has established itself as one of the top companies in the industry in
terms of efficiency and performance. What truly sets Binani Cement apart is its clear focus on
the core attributes of quality, strength and reliability of the end product. These have paid rich
dividends and seen brand 'Binani' growing in prominence and stature, poised to capture
increasing market share globally.
Binani Cement Ltd. has a consolidated global asset base of $ 616 million and gross income of $
550 million for the year ended 31st March '10.
The Company has operations in India, China and Dubai where it has already scripted a success
story. It has now set its sights on emerging markets in Africa. For the Binani Group, cement
business is a means to transform imagination and vision into reality. Binani Cement has already
set global benchmarks, in its existing operations and is poised to achieve the same stature
worldwide.
Madras Cements
Madras Cements Ltd is one of the oldest cement companies in the southern region and is a part
of the Ramco group. The company is engaged in cement, clinker, dolomite, dry mortar mix,
limestone; ready mix cements (RMC) and units generated from windmills. The company has
three plants in Tamil Nadu, one in Andhra Pradesh and a mini cement plant in Karnataka. It has
a total capacity of 5.47 million tons annually and holds a market share of 3.1 percent. Madras
Cements plans to expand by putting up RMC plants. As Karnataka is a promising market, the
company is further expanding its capacity from the present 1.5 million tons to 3.4 million tones
through an investment of US$ 9 million.

33. 33
Birla Corporation Limited
Birla Corporation Limited is the flagship Company of the M.P. Birla Group. It was incorporated
as Birla Jute Manufacturing Company Limited in 1919. Birla Corp's product portfolio includes
acetylene gas, auto trim parts, casting, cement, jute goods, yarn, calcium carbide etc. The
company has two plants in Madhya Pradesh and Rajasthan and one each in West Bengal and
Uttar Pradesh. It manufactures Ordinary Portland cement (OPC), Portland Pozzolana cement, fly
Ash-based PPC, Low-alkali Portland cement, Portland slag cement, low heat cement and
sulphate resistant cement. Large quantities of its cement are exported to Nepal and
Bangladesh. Going forward, the company is setting up its captive power plant to remain cost
competitive.
Shree Cement
Shree Cement is the largest cement manufacturer in North India and among the top five
cement manufacturing groups in the country. The company is being professionally managed by
its promoters Shri B. G. Bangur, Chairman and Shri H. M. Bangur, Managing Director. It has
more than quadrupled its capacity in the last 5 years to reach present cement capacity of
13.512 million tons p.a. with manufacturing plants at Beawar, Ras, Khushkhera, and Suratgarh
and Jaipur in Rajasthan and Laksar (Roorkee) in Uttarakhand. The Company follows a multi-
brand strategy and sells cement under the highly recognized brands of Shree Ultra, Bangur and

34. 34
Rockstron, Which together enjoy largest market share in high value markets of Rajasthan, Delhi
& Haryana.
Operational excellence and efficiency of the Company gets reflected in one of the highest
operating profit margins in the Industry. High-caliber project management and execution
capabilities have seen the Company compress project timelines and push rapid capacity
expansions. A striking case in point is the commissioning of Unit VII in a world record of 367
days which was further Surpassed by commissioning another clinkeriation unit VIII in mere 330
days.
It is known to be an energy efficient and environment friendly company and has received
various awards and accolades at national and international level for excellence in energy
efficiency and environment management.
Shree has set up waste heat recovery projects of 46 MW capacities which is the largest waste
heat power generation capacity in world cement industry excluding China. Shree follows the
triple bottom-line approach of measuring performance against the three benchmarks of
Economic, Social and Environmental. Shree is an active participant at Climate change forums
and is the first Indian cements company to join the Cement Sustainability Initiative of the World
Business Council for Sustainable Development, Switzerland.

35. 35
1.8. FOREIGN PLAYERS IN CEMENT INDUSTRY
Following are the major foreign players entered into the cement industry of India.
Holcim
Holcim, earlier known as Holder bank, has a cement production capacity of 141.9 million tones.
It is a key player in aggregates, concrete and construction related services. It has a strong
market presence in over 70 countries and is a market leader in South America and in a number
of European and overseas markets. Holcim entered India by means of a long-term strategic
alliance with Gujarat Ambuja Cements Ltd (GACL). The alliance aims to strengthen their clinker
and Cement trading activities in South Asia, the Middle East and the region adjoining the Indian
Ocean. Holcim also intends to use India as an additional base for its IT operations, R&D projects
as well as procurement sourcing hub to generate additional synergies and value for the group.
Italcementi Group
The Italcementi group is one of the largest producers and distributors of cement with 60
cement plants, 547 concrete batching units and 155 quarries spread across 19 countries in
Europe, Asia, Africa and North America. Italcementi is present in the Indian markets through a
50:50 joint venture company with Zuari Cements. All initiatives in southern India are routed
through the joint venture company, while Italcementi is free to buy deals in its individual
capacity in northern India. The joint venture company has a capacity of 3.4 million tones and a
market share of 2.1 per cent.

36. 36
Lafarge India
Lafarge India Pvt Ltd, a subsidiary of the Lafarge Group, has a total cement capacity of 5 million
tones and a clinker capacity of 3 million tons in the country. Lafarge commenced operations in
1999 and currently has a market share of 3.4 per cent. It exports clinker and cement to
Bangladesh and Nepal. It produces Portland slag cement, ordinary Portland cement and
Portland Pozzolana cement. The Indian cement plants are located in Chhattisgarh and
Rajasthan. Lafarge Cement has become the largest cement selling firm in the Indian markets of
West Bengal, Bihar, Jharkhand and Chhattisgarh.
Heidelberg Cement - Indorama Cement Ltd
Heidelberg Cement concluded a 50:50 joint venture agreement in India, consisting of the
grinding plant of Indorama Cement Ltd, owned by the Indorama S P Lohia Group, and located in
Mumbai (Bombay) on the West coast of India.
The plant, which was built in 2000, has a cement capacity of 750,000 tones and is in very good
technical condition. It has an excellent market position in the vicinity of the big markets of
Mumbai (17 million residents) and Pune (5 million residents). Due to its location next to a steel
plant of the Ispat Group, led by Mr. P.K. Mittal and Mr. V.K. Mittal, Indorama has also direct
access to blast furnace slag, which is an important factor for sustainable and cost efficient
cement production. Indorama is the only producer of high quality slag cement on the Mumbai
market; the company operates also a terminal near the Mumbai harbor. The approval

37. 37
procedure for the construction of a clinker plant in the neighboring federal state of Gujarat has
been started. Representatives of Heidelberg Cement in the Indorama management are included
in all important decisions.
For Heidelberg Cement, this is the first important step on its way to a long-term market position
on the Indian growth market. In the past ten years, cement consumption in India grew by
approximately 7.5% per year. The building industry developed very dynamically, driven by the
strong growth of population and the quick expansion of infrastructure. Since per capita
consumption of around 125 kg is one of the lowest in Asia, an average growth of 8 % to 9 % is
e pe ted for the ears to o e. The e e t gri di g pla t i Mu ai is our e tra e gate to
I dia , sa s Dr. Ber d S heifele, Chair a of the Ma agi g Board of Heidel erg Ce e t. ―Step
by step, we intend to expand our activities on this very promising market. The acquisition in
India is in line with our strategy to invest specifically in growth markets.
Table 2: MARKET SHARE OF MAJOR PLAYERS IN INDIA 2016-17
Company Market Share (In %)
Ultra Tech Cement Limited 22
Ambuja Cements Limited 13
Shree Cement Limited 6
Jaypee cement 4
ACC Limited 15
Birla Corporation Limited 7
Madras Cement Limited 5
Others 28
SOURCE: Prowess, CMIE

38. 38
Table 3: VARIOUS CEMENT PLANTS WITH ITS INSTALLED CAPACITY
Company Plant No. of Plants Installed
Capacity
(In lakh tonnes)
ACC Ltd Chaibasa, Chanda, 13 241.6
Jamul, Kymore, Lakheri,
Madukkarai, Sindri,
Wadi, Gagal I & II,
Damodar Cement
Works, Tikaria (G), Wadi
New, Baragarh Cement
Works.
Birla Corp. Ltd Birla Vikas, Satna, Birla 7 57.8
Cement, Chanderia,
Durgapur (G), Rae Bareli
(G), Durga Hitech (G)
CCI Ltd Adilabad, Akaltara, 10 NA
Bokajan, Charkhi-Dadri,
Kurkunta, Mandhar,
Neemuch,
Rajban,Tandur, Delhi (G)
Andhra Vizag (G), Nadikude- 2 14.2
Cements Durga Cement
J.K. Group Nimbahera, Mangrol, 5 40.5
Gotan, Lakshmi Cement,
J.K. Udaipur Udyog
Century Century Cement, Maihar 3 78
Textiles Cement, Manikgarh
Cement
India Cements Sankarnagar, 7 140.5
Sankaridurg, Chilamkur
Works, Dalavoi, Visaka
Cement, Yerraguntla,
Raasi Cement
Grasim Rajashree-Malkhed, 9 196.5
Industries Rajashree-Hotgi (G),
Vikram Cement, Aditya
Cement, Grasim
Cement-Raipur, Grasim
South, Grasim-Bhatinda
(G), Grasim Dadri (G),

39. 39
Grasim Panipat (G)
Tamil Nadu Alangulam, Ariyalur 2 NA
Cement
Madras Ramasamyraja Nagar, 3 98.9
Cements Jayantipuram, Alathiyur
Works I & II
Mehta Group Saurashtra Cement, 2 27
Gujarat Sidhee Cement
HMP Cements Porbandar, Shahabad 2 NA
Ultra Tech Ultra Tech-ACW, Ultra 10 219
Cement Tech-JCW (G), Ultra
Tech-HCW, Ultra Tech
Gujarat, Ultra Tech-
APCW, Jafrabad,
Magdalla (G), Ratnagiri
(G), Ultra Tech-ARCW
(G), Ultra Tech-WBCW
(G)
Gujarat Ambuja Cement, 12 184.3
Ambuja Group Gajambuja Cement,
Ambuja Cement-
Himachal Pradesh,
Ambuja Cement Ropar
(G); Ambuja Cement
Rabriyawas,
Ambuja Cement-
Bhatinda (G), Maratha
Cement; Ambuja
Cement Roorkee (G);
Ambuja Cement
Bhatapara, Ambuja
Cement Sankrail (G);
Ambuja Cement
Magdella (G); Ambuja
Cement Farakka (G)
Jaypee Jaypee Rewa, Jaypee 7 122.3
Cement Ltd Bela, Jaypee Sadva
Khurd (G), Jaypee

40. 40
Ayodhya (G), Dalla,
Chunar (G), Jaypee
Panipat (G) Dalla,
Chunar (G), Jaypee
Panipat (G)
Kesoram Kesoram Cement, 2 60.1
Industries Vasvadatta Cement
Mangalam Mangalam Cement, 2 20
Cement Neershree Cement
Mysore Mysore Cement, 3 NA
Cement Diamond Cement I & II,
Diamond Cement-Jhansi
(G)
Orient Paper Orient Cement, Orient 2 34
Industries Cement-Jalgaon (G)
Penna Cement Penna Tadippatri I & II, 3 NA
Industries Ltd. Penna Ganeshpahad,
Penna-Boyareddypalli
Lafarge India Arasmeta, Sonadih, 3 NA
Ltd Jojobera (G)
Malabar Malabar Cements, 2 NA
Cements Malabar Cements (G)
Binani Cement Binani Cement Sirohi, 2 60.8
Binani Cement Sikar (G)
Binani Cement Sirohi,
Binani Cement Sikar (G)
Rain Comdt. Rain Comdt. Unit I, Rain 2 40
Ltd Comdt. Unit II LN-1
Cement Manu. Cement Manu. Co. Ltd, 2 NA
Co. Ltd Megha T&E (P) Ltd (G)
Chettinad Chettinad-Karur & 2 56.5
Cement Chettinad Karikkali
Zuari Cement Zuari Cement, Sri Vishnu 2 22
Ltd Cement
Others* Shree Cement, Prism 19 276.3
Cement, Shree Digvijay-
Sikka, Indo-Rama
Cement (G), Lemos
Cement, Kistna,

41. 41
Bagalkot Cement & Ind.
Ltd,
Dalmia Cement, OCL
India Ltd, J&K Ltd,
Kalyanpur Cement,
KCP Ltd, Mawmluh
Cherra, Panyam
Cements, Sone Valley,
Meghalaya
Cements Ltd, Shriram
Cements, Sanghi
Industries Ltd, My Home
Industries.
SOURCE: CEMENT MANUFACTURERS ASSOCIATION
1.9. MARKET SEGMENTS OF CEMENT INDUSTRY IN INDIA 2016-17
FIGURE 1: MARKET SEGMENTATION 2016-17
Cement
Industry
East West Central North South
The cement industry in India can be divided into the five geographical zones of India —
North, South, East, West and central —based on localized variations in the consumer profile
and supply-demand scenario.

42. 42
Market segment —North

Key markets in northern India include the states of Rajasthan, Punjab, Haryana and the
National Capital Region (NCR)

Demand in this region is being driven by infrastructure, residential and commercial
projects.
Market seg e t ―West

The states of Maharashtra and Gujarat are the key markets in this region.

Over the past few years, growth in housing and commercial real estate has
augmented the demand for cement in this region.

The western region also exports cement to countries in the Middle East.
Market seg e t ―Ce tral

The state of Uttar Pradesh is the key market in this region.

The demand for cement has grown in this region primarily due to an increase in the number of
housing and infrastructure projects.
Market segment —East

The key markets in the East are the states of West Bengal, Orissa and Bihar.

Growth in housing and industrial activity is primarily driving demand for cement in this
region.
Market seg e t ―South

Key markets in the southern region are the states of Tamil Nadu, Andhra Pradesh and
Karnataka.

The South zone has vast reserves of limestone.

Growth in the real estate market in the region, coupled with the development of key
infrastructure projects such as airport and metro rail, has resulted in increased demand
for cement in this region.

43. 43
Table 4: REGIONAL SHARE OF INSTALLED CAPACITY
Zone Regional share of installed capacity
(For Financial Year 2016-17)
North 17%
West 18%
Central 16%
East 16%
South 33%
SOURCE: http://eaindustry.nic.in
Graph 2: REGIONAL SHARE OF INSTALLED CAPACITY
Regional share of installed capacity
(For Financial Year 2016-17)
17%
North
33% West
18% Central
16%
16%
East
South

44. 44
1.10. DEMAND DETERMINATIONS OF CEMENT INDUSTRY
Now a day s demand of cement is increasing because of following reasons.
Infrastructure & Commercial construction
The GOI has indicated its strong commitment towards developing infrastructure in the country
and has undertaken several large projects involving construction of ports, airports, power
plants, and highways linking different parts of the country. The GOI plans to spend about 5.97
crore on infrastructure development under the next fiscal Plan compared to 4.94 crore revised
estimate for 2017-18. The Ministry of Road Transport and Highways has planned to INCREASE
allocation to infrastructure by more than 1 Lakh crore for financial year 2018-19.
Commercial construction includes malls, multiplexes, office space, hotels, hospitals etc.
Demand for office space is largely driven by the IT/ITES industry, which Comprises 75-80% of
commercial demand at present. The sector is expected to grow 25-30% annually over the next
few years and would be the key driver of commercial demand.
Increasing demand from housing
Over the last decade, growth in cement consumption has been driven almost entirely by private
housing. The housing segment accounts for a major portion of the total domestic demand for
cement in India. With retail interest rates falling to historic lows, credit off take in the form of
housing loans showing a significant increase, and tax incentives given to housing loans expected
to continue, it is expected that the robust demand generated by this sector will continue.
According to the Thirteenth Five Year Plan (2017-22), cement demand is estimated to increase
by 4.5% in FY2019.
SEZ development
SEZs are areas notified under the SEZ Act 05, with benefit of fiscal incentives from both Central
and State Governments along with minimal regulatory requirements and quality infrastructure
for boosting economic growth. Development of the Special Economic Zones (SEZs) is creating
huge demand for cement.

45. 45
Increasing Population
With an increasing population and growing per capita cement Consumption, which is supported
by large construction activities going on the in the country, the cement market will continue to
grow.
Cement demand – High correlation with GDP
Cement demand is directly linked to economic activity. Since infrastructure investments and
construction activity, which are the main drivers of cement demand, are key components of
GDP, cement demand growth has high correlation to GDP growth. Further, housing (both rural
and urban), also a determinant of cement demand, depends on agricultural productivity and
income levels, which are again a key components of GDP.
Nuclear families and urbanization
The joint family system in India has been gradually moving towards nuclear families. Migration
of population towards urban areas due to better job opportunities coupled with rapid urban
infrastructure development would affect the decline in average size of an Indian household.
Hence, with the ever-growing population, expected reduction in the size of an average Indian
Household, outlook for housing demand remains extremely positive.
Fiscal incentives to continue boosting cement demand
Fiscal incentives granted by the Central Government have provided boost to housing demand.
Fiscal benefits, existent since the FY00 Budget, give tax incentives on both interest payments
and principal repayments on mortgage loans, thereby reducing effective cost of financing and
stimulating housing demand.

46. 46
The East -West and North-South Road Corridors
This project envisages constructing roads that will transverse India approximately 7,000
kilometers). In addition the government has also announced plans to build roads
(approximately 200,000 kilometers) linking every village in the country which has a population
of over 1,000.The increased focus on infrastructure development, together with the increasing
demand for housing and commercial construction are expected to drive growth of the cement
industry going forward.
Upswing in exports
Cement exports have been growing at a CAGR (cumulated average growth rate) of 11.45% since
1997-98. In order to take advantage of the high export prices, coastal plants have been
exporting their additional production, thereby reducing supply pressure in the domestic
market. India mainly exports cement and clinker to its neighboring countries and the countries
in Africa and West Asia. Going forward, with significant redevelopment activity expected in
Dubai, Afghanistan and Iraq, India is proximity to these markets is likely to further boost
exports.
Types of Cement Substitutes
Fly ash
It is one of the byproducts of burning coal to create electric power. The carbon content of fly
ash is a major concern. Class C fly ash, most of which is produced in the west from lignite coal,
contains little carbon. However, Class F fly ash, produced primarily from anthracite and
bituminous coal, contains significant amounts of carbon. Class C and Class F material also differ
from each other and from source to source with regard to strength, rate of strength gain, color
and weatherability. Insuring a consistent supply is a concern among concrete suppliers.
Slag
It is a by-product from production of both iron and steel, and ground iron slag from blast
furnaces can be used for making concrete. Because the demand for the product is rising while
the supply is falling, new grinding plants are coming on line to process imported slag.

47. 47
Silica fume
It was once a cheap waste product; but high demand has made it a high-cost admixture, used
primarily for bridges and other structures where top weathering performance and high strength
are needed. Concrete made from silica fume is expensive, however, not only because of the
material cost, but because the powdery fineness of the fume makes it hard to handle. It is often
turned into slurry before use.
Rice hull ash
It is as long as quality is controlled, is another material that can be used to replace cement.
Current duty structure
Table 5: CUSTOM DUTY ON CEMENT AS PER BUDGET 2016-17
CUSTOMS DUTY PRE BUDGET POST BUDGET
OPC / PPC Nil Nil
Coal 5% 5%
Gypsum 5% 2.5%
Pet Coke 5% 2.5%
SOURCE: http://www.equitymaster.com/budget2016/sectors/Cement.asp

48. 48
1.11. DISTRIBUTION CHANNEL OF CEMENT INDUSTRY
Transportation
Cement industry is highly transport intensive. Transport cost is about 20%. Rail transport being
economical, is the ideal mode for transportation of cement, clinker and coal. Any bottleneck or
inadequacy in Railway transport has, therefore, an adverse impact on cement production and
distribution. This issue has assumed great importance recently due to a number of skewed
policy measures taken by the railways. Most of these policy measures are one sided and
difficult for the users to implement. Thus, these measures have steeply affected the growth of
the cement industry.
Rail Transportation of Cement - A Few Facts
(i)Cement Industry Location Specific
Due to location specific nature of the cement industry, cement plants are concentrated at
limestone deposits which are available in few States. The main raw material coal is available
only in 4/5 States, mostly in the eastern region. Further, cement is a high volume, low priced
commodity. In view of this, long leads of movements are necessary both for inward movement
of raw materials coal, gypsum, etc. and outward movement of cement/clinker to grinding
units/markets and Railways is the only economic mode of such transportation for the cement
industry.
(ii)Railways Ideal Mode of Transport
 Average lead for coal movement - 1000 kms
 Average lead for cement movement - 600 kms
 Average lead for Gypsum movement - 750 kms
 Average lead for Clinker movement - 700 kms
Further, cement is a high volume, low priced commodity. A railway thus is the only economic
mode of such transportation for the cement industry.

49. 49
Cement Distribution Transport Intensive
o Transport Cost - roughly 20% of sale price
o High for a low cost commodity like cement
o Cement Cost < even half that of SALT
Cement - 3rd Largest Revenue Payer to Railways even with 40% rail co-efficient (Contributes
about 9% to their total earnings).
Major Concerns of Cement Industry
(1) Wagons Availability
Regular and consistent availability of wagons, including two-point and mini rakes to the cement
plants, is a big causality. Non-availability of wagons not only throw into disarray the dispatch
plans and affect production of cement, it also obliges Rake availability a consistent problem.
Need to arrive at a long term solution in line with expected industry requirements.
Frequent shifting of priorities of Rakes by Railways to various sectors i.e. Fertilizer, Food grain
and Power resulting in substantial dispatch losses to the cement companies as it is not possible
for them to shift their mode of transport frequently.
Inadequate Infrastructure facilities at Terminals like platform, double line, access road etc., on
the Railways fronts, are hampering the evacuation of material from wagons, leading to
frequent demurrage and wharfage charges being paid by cement plants.
(2) Operational Problems
Railways policy circulars, issued from time to time in a bid to increase the turnaround of
wagons, have not only created for the cement plants operational problems both at loading and
unloading points but have also made them liable to pay penalties, wharfage and demurrage
charges. A few policy decisions which had affected the industry are significant increase in
carrying capacity of wagons and reduction in the permissible free time for loading/unloading of
wagons; round-the clock working at Terminals, which is not feasible due to constraints related
to infrastructure and labor availability, etc.

50. 50
1.12. KEY ISSUES AND CURRENT TRENDS
Following are some of the key issues and current trends related to cement industry in India.
Freight costs
Freight costs constitute 12-18% of cement companies revenues and depend on lead distances
to markets, freight mix between road, rail & sea as well as proximity to source of raw material
such as fly ash. Freight costs have also seen rising trend on account of rising diesel prices.
However, companies are planning to split grinding units located closer to key markets or to fly
ash sources to reduce impact of higher freight costs.
Input costs
Power and fuel costs constitute 18-22% of cement companies revenues. Indian cement
companies largely depend on domestic coal, imported coal and pet coke as a source of fuel.
Fuel is primarily used in kilns and CPPs.
The cost advantage
The Indian cement industry has undergone vital changes though technological up gradation in
the pursuit of cost efficiency and the drive for consolidation. Modernization at the plants and
the Improvements of plant processes have helped reduce manpower requirements.
Opening up the FDI channel
The impact of government policies on cement demand has been steadily decreasing with the
sector being gradually deregulated. At present, 100 per cent foreign direct investment (FDI) is
permitted in the cement industry. Lafarge was the first foreign company to enter the Indian
market in 1999.
Transportation
Cement is mostly packed in paper bags now. It is then transported either by rail or road. Road
transportation beyond 200 kms is not economical therefore about 55% of cement is carried by

51. 51
the railways. There is also the problem of inadequate availability of wagons especially on
western railways and southeastern railways. Under this scenario, there is a need to encourage
transportation through sea, which is not only economical but also reduces losses in transit.
Today, 70% of the cement movement worldwide is by sea compared to 1% in India.
Easing environment norms
To set up a cement plant in India, with an investment of over US$22 million entrepreneurs are
required to obtain environmental clearance from the Ministry of Environment. 100 per cent FDI
is also allowed for private cement companies to set up power projects as well as coal or lignite
mines for captive consumption.
Regulatory issues
 Land acquisition
 Obtaining mining rights
 Obtaining environmental clearances
Demand for high-tech products
 Ready Mix Concrete
 Concrete product manufacturers
 CP (Calcium phosphate) cement
 Green products-blended cement
1.13. PEST ANALYSIS
Political
The price of cement is primarily controlled by the coal rates, power tariffs, railway tariffs,
freight, royalty and cess on limestone. Interestingly, government controls all of these prices.
Government is also one of the biggest consumers of the cement in the country. Most state
governments, in order to attract investments in their respective states, offer fiscal incentives in

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the form of sales tax exemptions/deferrals. States like Haryana offer a freeze on power tariff for
5 years, while Gujarat offers exemption from electric duty.
Economic
Currently, the industry is on the boom, with a lot of government infrastructure and housing
projects under construction. In spite of seeing a fall, the export segment of the industry is
expected to grow again on account of various infrastructure projects that are being taken up all
over the world and numerous outstanding cement plants coming up in near future in the
country.
Social
Usually, the cement industry in India consists of both the organized sector and the unorganized
sector. Organized sector comprises of the well-known cement manufacturing companies while
the main players of the unorganized sector are the regional and local cement-producing units in
various states across the state. Indian consumers prefer buying branded cement like Ultratech,
Jaypee Cement, Lafarge Cement etc. It has been seen in the past, as well, that mini cement
plants with low brand value and image are not able to survive against the cement giants. With a
population of more than 120 billion people, it is expected that cement industry will create
another 25 lakhs jobs in the next 4-5 years.
Technology
From mining to production the entire process depends on technology. The Government of India
plans to study and possibly acquire new technologies from the cement industry of Japan. The
government is discussing technology transfer in the field of energy conservation and
environment protection to help improve efficiency of the Indian cement industry. Cement
industry has made tremendous strides in technological up-gradation and assimilation of latest
technology. At present 93% of the total capacity in the industry is based on modern and
environment-friendly dry process technology.

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1.14. MICHAEL PORTER FIVE FORCE MODEL
The structure and competitive scenario of the Indian cement industry can be described
concisely with the help of Porter s notable Five-Forces Model (1980) that determine the
attractiveness of the industry and the way in which individual firms might choose to compete.
FIGURE 2: MICHEAL PORTER FIVE FORCE MODEL
Bargaining Power of
Suppliers-Very High
Monopolistic control
of
external cost element
(coal, power,
transportation and
taxes) results in high
bargaining power with
the
government.
Threat of Substitutes
- Limited
Only bitumen in road,
and
engineering plastics in
building offer.
some element of
competition,
otherwise no close
substitutes are popular
in India.
Inter Firm Rivalry-
Intense
Large number of
players, intermittent
overcapacity;
marginal product
differentiation; high
storage costs;
and, high exit barrier
in form of significant
capital investment
has led to stiff
competition in the
industry.
Threat of New
Entrants- Limited
High capital
investment, broad
distribution network
and oversupplied
market deter new
entrants. However,
technology and
manpower are easily
available.
Bargaining Power of
Buyers-Limited
Rising share of retail
purchase, declining
share of bulk
purchase by
Government has
taken away the
bargaining power of
customers.

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1.15. SWOT ANALYSIS OF CEMENT INDUSTRY
FIGURE 3: SWOT Analysis
STRENGTHS WEAKNESSES

Double digit growth rate.

Low value commodity.

Growth in housing sector (over

Cement Industry is highly
30%). fragmented.

Infrastructure projects like ports,

Industry is also highly
airports, power projects, dam & regionalized.
irrigation projects.

Low – value commodity makes

National Highway Development
transportation over long distances
un- economical.
Programme.

Bharat Nirman Yojana for rural
infrastructure.

Rise in industrial projects.

Export potential.

Capacity utilization over 90%.
OPPORTUNITIES THREATS

Limited green field capacity

Rising input costs.
addition in pipeline for next two 
Government intervention to adjustyears, leading to favourable
demand. cement prices.

Additional production capacity is 
Possibility of over bunching of
required to meet the demand-
capacities in the long term as some
supply gap.
of the players has already
announced new capacities.

Transportation cost is scaling high;
bottleneck due to loading
restrictions.

Coal prices climbing up.

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1.16. FUTURE OUTLOOK
 The eastern states of India are likely to be the newer and virgin markets for cement
companies and could contribute to their bottom line in future. In the next 10 years,
India could become the main exporter of clinker and gray cement to the Middle East,
Africa, and other developing nations of the world.
 Cement plants near the ports, for instance the plants in Gujarat and Visakhapatnam, will
have an added advantage for exports and will logistically be well armed to face stiff
competition from cement plants in the interior of the country.
 Due to the increasing demand in various sectors such as housing, commercial
construction and industrial construction, cement industry is expected to reach 550-600
Million Tonnes Per Annum (MTPA) by the year 2025.
 A large number of foreign players are also expected to enter the cement sector, owing
to the profit margins and steady demand. In future, domestic cement companies could
go for global listings either through the FCCB route or the GDR route.
 With help from the government in terms of friendlier laws, lower taxation, and
increased infrastructure spending, the sector will grow and take India s economy
forward along with it.
 The cement industry is vital for the development of infrastructure all over the world as
no other material is likely to be its substitute in the near future.
 Infrastructure and industrial activity, real estate business and investment in core sectors
mainly drive the demand for cement. Some emerging markets for cement demand are
concrete roads, concrete canal lining and rural construction (housing).
 The report also emphasizes the importance of bulk transportation of cement, use of
ready - mix concrete and reduction of taxes and levies on cement. Transportation of
cement in bulk is devoid of seepage, pilferage and is environment- friendly.

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 Only two rail bulk cement terminals (Kalamboli and Bangalore) and three port-based
bulks cement terminals (Mumbai, Surat and New Mangalore) have been set up. In India,
only 5% production accounts for bulk transport against 70% world over.
 The Government has identified following thrust areas for improving demand for
cement:
 further push to housing development programmes;
 Promotion of concrete highways and roads;
 Use of ready-mix concrete in large infrastructure projects; and Construction of concrete
roads in rural areas under Prime Minister's Gram Sadak Yojana.
 Favorable and low interest housing finance schemes and various income tax concessions
announced in this context have given fillip to the house building activities. If such
stimulation is continued, it will boost up the future demand for cement in the country.
 The rural infrastructure that includes irrigation facilities, storage, market yards &
mandies, telecommunications and rural electrification would also demand substantial
quantity of cement. As compared to many other sectors of the national economy, the
cement industry is thus favorably placed for a bright future.

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CHAPTER 2: COMPANY STUDY OF
ULTRA TECH CEMENT LIMITED

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2.1. COMPANY INFORMATION
 UltraTech is the largest cement manufacturer in India. It is the part of Aditya Birla group and is
subsidiary of Grasim. It has a capacity of 460 MTPA as of December 2017. The company is the
largest exporter of cement and clinker from India. UltraTech has a presence in the west, south,
north and east. The western and southern regions are its major markets. The company exports
both clinker and cement. The company exports are moving towards cement from clinker owing
to the higher realization in the cement. With UltraTech Cement, the Aditya Birla Group has
established itself as not only the most respected domestic player but also among the global
leaders in cement.
UltraTech Cement Limited is an India's biggest cement company and India s largest exporter of
cement clinker based in Mumbai, India. The company is part of Aditya Birla Group. UltraTech
has a presence in the west, south, north and east. The western and southern regions are its
major markets. The company exports both clinker and cement. The company exports are
moving towards cement from clinker owing to the higher realization in the cement. It
manufactures and markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and
Portland Pozzalana Cement. It also manufactures ready mix concrete (RMC). The export
markets span countries around the Indian Ocean, Africa, Europe and the Middle East. It is part
of Grasim Group. With UltraTech Cement, the Aditya Birla Group has established itself as not
only the most respected domestic player but also among the global leaders in cement.
UltraTech Cement Limited has 12 integrated plants, 11 grinding units in India and 1
clinkerization plant and 4 grinding units outside India.

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Aditya Birla group’s cement capacity
Currently, the Aditya Birla Group is the 11th largest cement producer in the world and the
seventh largest in Asia and Ultra Tech and Grasim together, make it the largest cement
producer in India.
The group mainly has two cement units –Grasim and Ultra tech.
Vision
"To actively contribute to the social and economic development of the communities in which
we operate. In so doing, build a better, sustainable way of life for the weaker sections of society
and raise the country's human development index."
UltraTech Cement Limited had an annual capacity of 460 MTPA in 2017. It manufactures and
markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzalana
Cement. It also manufactures ready mix concrete.
The company has 11 integrated plants, one white cement plant, one clinkerisation plant in UAE,
15 grinding units – 11 in India, 2 in UAE, one in Bahrain and Bangladesh each and and five
terminals — four in India and one in Sri Lanka.
UltraTech Cement is the country s largest exporter of cement clinker. The export markets span
countries around the Indian Ocean, Africa, Europe and the Middle East.
UltraTech's subsidiaries are Dakshin Cements Limited, Harish Cements Limited, UltraTech
Ceylinco (P) Limited and UltraTech Cement Middle East Investments Limited

60. 60
Mission
To deliver superior value to our customers, shareholders, employees and society at large.
Values
 Integrity
 Commitment
 Passion
 Seamlessness
 Speed
Fact files of Ultra-Tech Cement
It includes some facts about Ultra-Tech cement.
 The Aditya Birla Group is the eighth-largest cement producer in the world.
 It is incorporated on 24 August 2000 as L&T Cement Limited.
 Cement business of Larsen & Toubro Limited demerged and vested in company in 2004.
 Grasim acquired management control in July 2004.
 Together with Grasim, one of the largest cements producers in India.
 Name changed to UltraTech Cement Limited with effect from 14 October 2004.
 Narmada Cement Company Limited amalgamated with UltraTech in May 2006.
 Cement business of Grasim demerged and vested in Samruddhi Cement Limited in May
2010.
 Samruddhi Cement Limited amalgamated with UltraTech Cement Limited in July 2010.
 UltraTech Cement Middle East Investments Limited, a wholly owned subsidiary of the
Company has acquired management control of ETA Star Cement together with its
operations in the UAE, Bahrain and Bangladesh in September, 2010.
Sources of Competitive Advantage for Ultra Tech Cement
UltraTech's capabilities in identifying, and leasing, higher quality raw material quarries results in
significant cost savings for them.
(i)Sourcing of Raw Materials
UltraTech's greatest strength is its raw material sourcing. Limestone quarries are usually leased
from the government on a long-term basis (usually at least 25-30 years). UltraTech's capabilities
in identifying, and leasing, higher quality raw material quarries results in significant cost savings

61. 61
for them. This source of long-term competitive advantage is due to their people skills which aid
in identifying the sources and their terms of leasing which lock in these resources for the long
term. Clearly, this resource is valuable and rare.
(ii)Fuel used in Manufacturing Process
The manufacturing process offers no distinct competitive advantage to UltraTech or its largest
competitor ACC, though ACC enjoys lower fuel cost. However, this is not sustainable, and since
UltraTech has already started switching to coal, ACC's advantage is likely to be neutralized in
the near future.
(iii)Financial and Human resource advantage
UltraTech, being a part of the Aditya Birla Group, has access to the deep pockets of its
promoters, as well as human capital of the highest quality. While financial resources may be
rare and inimitable, non-substitutability is debatable. Evidence suggests that in the long term
others like the Holcim group can match the financial resources of ABG. Higher quality of human
capital might be more valuable in the long run, and given their astute knowledge of the Indian
market, ABG might be able to leverage this resource better than their foreign counterparts.
2.2. PRODUCT PROFILE
UltraTech is India's largest exporter of cement clinker. The company's production facilities are
spread across eleven integrated plants, one white cement plant, one clinkerisation plant in UAE,
fifteen grinding units, and five terminals — four in India and one in Sri Lanka. Most of the plants
have ISO 9001, ISO 14001 and OHSAS 18001 certification. In addition, two plants have received
ISO 27001 certification and four have received SA 8000 certification. The process is currently
underway for the remaining plants. The company exports over 2.5 million tonnes per annum,
which is about 30 per cent of the country's total exports. The export market comprises of
countries around the Indian Ocean, Africa, Europe and the Middle East. Export is a thrust area
in the company's strategy for growth.
UltraTech's products include Ordinary Portland cement, Portland Pozzolana cement and
Portland blast furnace slag cement.

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 Ordinary Portland cement
 Portland blast furnace slag cement
 Portland Pozzolana cement
(i)Ordinary Portland cement
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.
(ii)Portland blast furnace slag cement
Portland blast-furnace slag cement contains up to 70 per cent of finely ground, granulated
blast-furnace slag, a nonmetallic product consisting essentially of silicates and alumino-silicates
of calcium. Slag brings with it the advantage of the energy invested in the slag making. Grinding
slag for cement replacement takes only 25 per cent of the energy needed to manufacture
Portland cement. Using slag cement to replace a portion of Portland cement in a concrete
mixture is a useful method to make concrete better and more consistent. Portland blast-
furnace slag cement has a lighter color, better concrete workability, easier finishability, higher
compressive and flexural strength, lower permeability, improved resistance to aggressive
chemicals and more consistent plastic and hardened consistency.
(iii)Portland Pozzolana cement
Portland Pozzolana cement is ordinary Portland cement blended with Pozzolana materials
(power-station fly ash, burnt clays, ash from burnt plant material or silicious earths), either
together or separately. Portland clinker is ground with gypsum and Pozzolana materials which,
though they do not have cementing properties in themselves, combine chemically with
portland cement in the presence of water to form extra strong cementing material which
resists wet cracking, thermal cracking and has a high degree of cohesion and workability in
concrete and mortar.
2.3. FUNCTIONAL DEPARTMENTS
Following are the details of various functional departments of company.

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2.3.1. PRODUCTION DEPARTMENT
UltraTech Cement Limited has an annual capacity of 48.8 million tones. It manufactures and
markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzalana
Cement. It also manufactures ready mix concrete (RMC).
As part of the ninth biggest cement manufacturer in the world, Ultra Tech Cement has eleven
integrated plants, one white cement plant, twelve grinding units as well as five terminals of its
own (one overseas, in Colombo, Sri Lanka).
Table7: Trends of the company over the years
Year Particulars
2014 The cement business of Grasim demerged and vested in Samruddhi
Cement Limited in May, 2014
2010 Samruddhi Cement Limited amalgamated with UltraTech Cement
Limited in July 2010.
2006 Narmada Cement Company Limited amalgamated with UltraTech.
2004 Completion of the implementation process to demerge the cement
business of L&T and completion of open offer by Grasim, with the
latter acquiring controlling stake in the newly formed company
UltraTech.
2003 Grasim decides to acquire an 8.5 per cent equity stake from L&T and
then make an open offer for 30 per cent of the equity of Cement
Company, to acquire management control of the company.
2002 The Grasim Board approves an open offer for purchase of up to 20
per cent of the equity shares of Larsen & Toubro Ltd (L&T),
2001 Grasim acquires 10 per cent stake in L&T. Subsequently increases
stake to 15.3 per cent by October 2002.
1998-2000 Bulk cements terminals at Mangalore, Navi Mumbai and Colombo.

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Table 8: Strategic Branch Units of the company in India
Location of units Name of Plants
Kiln Capacity Capacities
(Tpd) (Million Tpa)
A Composite plants
Tadipatri (Andhra
APCW
8000 2.3
Pradesh)
Hirmi
HCW
8050 1.6
(Chhattisgarh)
Jafrabad (Gujarat) JFD 15000 5.3
Kovaya (Gujarat) GCW NA NA
Awarpur
ACW
9500 3.3
(Maharashtra)
Reddipalyam
RDCW
NA
(Tamil Nadu) NA
Adityapuram
AC
NA NA
(Rajasthan)
Neemuch
VC
NA NA
(Madhya Pradesh)
Rawan
RWCW
NA NA
(Chhattisgarh)
Malkhed
RC
NA NA
(Karnataka)
Kotputli
KCW
NA NA
(Rajasthan)
B Grinding units
Magdalla (Gujarat) MGD NA NA
Ginigera
GICW
NA NA
(Karnataka)
Ratnagiri
RTN
0.4 NA
(Maharashtra)
Jharsuguda JCW 0.8 NA

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(Orissa)
Arakkonam (Tamil
ARCW
1.2 NA
Nadu)
Durgapur (West
WBCW
1.0 NA
Bengal)
Hotgi
HOCW
NA NA
(Maharashtra)
Bathinda (Punjab) BCW NA NA
Panipat (Haryana) PCW NA NA
Aligarh (Uttar
ALCW
NA NA
Pradesh)
Dadri (Uttar
DCW
NA NA
Pradesh)
Ajman (UAE) NA NA NA
Abu Dhabi, UAE NA NA NA
Bahrain NA NA NA
Bangladesh NA NA NA
C White Cement
Kharia Khangar
BW
NA 0.6
(Rajasthan)
D Clinker Plant
Ras Al Khaimah,
RAK
NA NA
UAE
E Bulk terminals
Navi Mumbai
NA
NA NA
(Maharashtra)
Mangalore
NA
NA NA
(Karnataka)
Shankarpally
NA
NA NA
(Andhra Pradesh)

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Dodaballpur
NA
NA NA
(Karnataka)
Colombo (Sri
NA
NA NA
Lanka)
Ready-mix
9.5 million cubic
NA NA
F concrete plants
metres
(73)
PRODUCTION PROCESS
FIGURE 4: Manufacturing Process of cement
The Advantage of the Company
UltraTech Cement Ltd is one of the largest premium quality cement producer in India. UltraTech
Cement is manufactured in the state of the art dry process plant at Tadipatri (Andhra Pradesh)
and grinding unit at Arakkonam (Tamil Nadu). Advanced instrumentation systems,
computerized process control and online quality control through X-ray ensure consistently high

67. 67
quality product at UltraTech Cement plant. The quality of UltraTech Cement has been globally
accepted and is India's largest exporter of clinker &cement.
UltraTech Cement due to its consistently superior quality has become the first choice amongst
discerning users and construction professionals.
Raw Material
Careful selection and scientific proportioning of raw material with the use of latest technology
enables manufacturing of high quality cement. Rigorous hourly tests are conducted on raw
material. Laboratories at all plants are equipped with sophisticated facilities.
World Class process Technology ensures Quality and Consistency
Quality Assurance is an integral part of Ultra Tech s manufacturing
philosophy. The quality attributes are consistently ensured through rigorous
application of advanced technology.
Key features include:
 Use of good quality limestone and careful selection of other raw material.
 Computerized mining operation and homogenization of crushed Limestone.
 Perfect proportioning of raw materials byQCX (QualityControl Through X-
ray).
 Online process control throughCCR (Computerized ControlRoom
 High-quality clinkerisation and close-circuit grinding for optimum particle
size distribution
 UltraTech Cement plants have been accredited with ISO 9001, 14001, 18001
Certifications by DNV of Netherlands

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Distinct Features of Ultra Tech Products
 Higher Compressive strength
 Optimal fineness
 Balanced physical and chemical properties
 Optimal setting time
 Consistency in quality
 Low-level of Chloride
 High-soundness
Advantages
 Higher workability
 Lower consumption
 Enhanced durability
 Quicker construction
 Overall economy
Customer Care and Guidance
UltraTech Cement offers customers a range of "product plus" services. A full-fledged Technical
Services Network has been set up exclusively for technical advice and guidance in usage of
cement UltraTech Cement is marketed nationwide through large network of stockist's, sales
officers and representatives. Cement dumps have also been established at strategic locations to
facilitate faster delivery of cement.

69. 69
2.3.2. MARKETING DEPARTMENT
Figure 5: Product Mix
Products
Ordinary Portland Portland blast furnace Portland Pozzolana
cement slag cement cement
Distribution Network
• Cement in India is primarily sold through a distributor - dealer network
• Total margins for the distribution channels - 17 to 18 %
• Direct sales less than 2 % of total sales
• Managing the distribution network & strong working relationships with distributors,
contractors etc.
Branding of Ultra tech
In step with its global agenda, the cement business of the Aditya Birla Group, is orchestrating a
contemporary brand makeover. With UltraTech Cement, the Aditya Birla Group has established
itself as not only the most respected domestic player but also among the global leaders in
cement.
Keeping pace with the expanding demand for cement, the cement business of the Aditya Birla
Group has integrated its national cement brands into one entity — UtlraTech Cement.
―Jaa Wahi, pehchaa ayi
— this new brand identity sums up the ultimate promise — a forceful statement that
communicates the business benefit of the level of service and quality that the company provides
to its customers and partners.

70. 70
Branded Channels of Ultra tech
Surging ahead of competition, the cement business brought in a new concept in cement
marketing — UltraTech Building Solutions, a one-stop shop for all construction needs.
"Advocating our Plan, Build and Support" philosophy, it seeks to enhance the shopping
experience of customers and strengthen existing trade partnerships, by upgrading the service
proposition. It offers a wide spectrum of end-to-end home building solutions, high quality
construction materials and allied value-added services. As a business model, UltraTech Building
Solutions offers home building solutions from planning to completion.
Basically, every customer who walks in to UltraTech Building Solutions outlet receives guidance
on construction-related issues as well as value-added services like Vastu, usage of budget
software to estimate costs involved for construction, paper clearance procedures, etc. The
customer gets a ready reckoner of information on how to choose and buy quality construction
materials. With the Rajkot success and with key learning points, the company intends to open
many more outlets across the country.
Advertising & Promotion
India, the world's largest producer of movies in as many as 10-12 different languages, provides
a great opportunity for advertisers to reach the masses. Films are a great entertainment
platform for most Indians. Many FMCGs have encashed this opportunity. The in-film branding
opportunity was used by UltraTech for the first time ever in the cement industry. The film Chak
De India, promoting women's hockey in India, became an all-time hit. In the movie UltraTech
was the sponsor of the Indian women's hockey team. UltraTech branding was all over,
throughout the movie. 'It was a big gamble we took," says Mr. Puranmalka. "Initially we were
sceptical, with many big banners with big stars failing in the recent past. After a lot of

71. 71
deliberation, we decided to go ahead with this gamble and finally Chak De India almost became
like a national anthem, with India winning the women's hockey title in reality and our cricket
team winning the inaugural 20-20 World Cup."
The various initiatives taken by the government recently have given a boost to the rural
economy. The rate of growth of the housing sector in the rural segment is increasing every
year. UltraTech is already well represented in the rural markets and we are planning various
initiatives, which will help us grow in this sector. For obvious reasons I am unable to share these
plans at this stage. These will include providing technical assistance to masons and contractors,
teaching them more cost-efficient construction methods and usage of eco-friendly cement and
cement products.
UltraTech Cement the Official Team Sponsor of Rajasthan Royals
Shilpa Shetty , co–owner along with Raj Kundra give a heart-warming farewell to the team -
Yusuf Pathan, Mohammed Kaif, Ravindra Jadeja, Dinesh Salunkhe, Niraj Patel, Mahesh Rawat,
Swapnil Asnodkar and Siddharth Trivedi as they leave for the African Safari.
UltraTech Cement Limited, the single largest cement brand in the country, today proudly
announced its association with the defending champions of Indian
Premier League 2008, Rajasthan Royals. Through this association UltraTech will be the Official
Team Sponsor of the Jaipur based IPL team.
2.3.3. HUMAN RESOURCE DEPARTMENT
Following are some of the human related issues of ultra tech cement.
MANAGEMENT TEAM
Board of Directors
:: Mr. Kumar Mangalam Birla, Chairman
:: Mrs. Rajashree Birla
:: Mr. R. C. Bhargava
:: Mr. G. M. Dave
:: Mr. A. Gupta

72. 72
:: Mr. N. J. Jhaveri
:: Prof. N. Kumar
:: Mr. S. B. Mathur
:: Mr. V. T. Moorthy
:: Mr. S. Rajgopal
:: Mr. D. D. Rathi
:: Mr. O. P. Puranmalka, Wholetime Director
Executive President & Chief Financial Officer
:: Mr. K. C. Birla
Chief Manufacturing Officer
:: Mr. R.K. Shah
Chief Marketing Officer
:: Mr. S.N.Jajoo
Chief People Officer
:: Mr. C. B. Tiwari
Company Secretary
:: Mr. S. K. Chatterjee
Corporate Social Responsibility by UltraTech Cement
Before Corporate Social Responsibility found a place in corporate lexicon, it was already textured
into our Group's value systems. As early as the 1940s, our founding father Shri G.D Birla espoused
the trusteeship concept of management. Simply stated, this entails that the wealth that one
generates and holds is to be held as in a trust for our multiple stakeholders. With regard to CSR,
this means investing part of our profits beyond business, for the larger good of society.

73. 73
While carrying forward this philosophy, our legendary leader,
Mr. Aditya Birla, weaved in the concept of 'sustainable
livelihood', which transcended cheque book philanthropy. In
his view, it was unwise to keep on giving endlessly. Instead, he
felt that channelising resources to
ensure that people have the wherewithal to make both ends meet would be more productive.
He would say, "Give a hungry man fish for a day, he will eat it and the next day, he would be
hungry again. Instead if you taught him how to fish, he would be able to feed himself and his
family for a lifetime."

74. 74
Strategy
Projects of company are carried out under the aegis of the "Aditya Birla Centre for Community
Initiatives and Rural Development", led by Mrs. Rajashree Birla. The Centre provides the
strategic direction, and the thrust areas for work ensuring
performance management as well.
Focus of Ultra Tech cement is on the all-round development
of the communities around our plants located mostly in
distant rural areas and tribal belts. All Group companies —-
Grasim, Hindalco, Aditya Birla Nuvo and UltraTech have
Rural Development Cells which are the implementation
bodies.
Projects are planned after a participatory need assessment of the communities around the
plants. Each project has a one-year and a three-year rolling plan, with milestones and
measurable targets. The objective is to phase out our presence over a period of time and hand
over the
reins of further development to the people. This also enables us to widen our reach. Along with
internal performance assessment mechanisms, our projects are audited by reputed external
agencies, who measure it on qualitative and quantitative parameters, helping us gauge the
effectiveness and providing excellent inputs.
Company s partners in development are government bodies, district authorities, village
panchayats and the end beneficiaries — the villagers. The Government has, in their 5-year
plans, special funds earmarked for human development and we recourse to many of these. At
the same time, we network and collaborate with like-minded bilateral and unilateral agencies to
share ideas, draw from each other's experiences, and ensure that efforts are not duplicated. At
another level, this provides a platform for advocacy. Some of the agencies we have collaborated
with are UNFPA, SIFSA, CARE India, Habitat for Humanity International, Unicef and the World
Bank.

75. 75
Focus areas of the company
Rural development activities span five key areas and our single-minded goal here is to help
build model villages that can stand on their own feet. Focus areas are healthcare, education,
sustainable livelihood, infrastructure and espousing social causes.
Education
Balwadis (pre-school)
Adult education
Non-formal education
Continuing education
Scholarships for girls, merit and technical
education
Health and family welfare
Mobile clinics - doctors visit once a week
Medical camps - general and issue-
based
Health training and awareness
Sanitation - toilets, training, smokeless
chullahs, biogas
Safe drinking water
Mother and child health
Reproductive health
Awareness building
Sustainable development and
livelihood and agriculture and
watershed development
Self-help groups
80

76. 76
SGSY - dairy, readymade garments,
jute project, basket making, aggarbati
making, bee keeping, durrie making.
Check dam
Irrigation
Land development
Soil and water conservation
Pasture development
Social forestry/ plantation activities/
nursery
Horticulture
Farmer training
Infrastructure development
Roads
Dams
Community centres
Houses
Culverts
Electricity
Health centres
Water channels
Schools
Social causes
Widow / dowry-less mass marriages
Women empowerment
Awareness drives on knowledge,
attitude and practices

77. 77
2.3.4. FINANCE DEPARTMENT
Table 9: PROFIT & LOSS ACCOUNT (Rs.Crs)
PARTICULARS Mar '12 Mar '13 Mar '14 Mar '15 Mar '16
Income
Sales Turnover 3,785.29 5,484.35 6,286.24 7,160.42 7,729.13
Excise Duty 485.84 575.3 773.81 774.92 686.31
Net Sales 3,299.45 4,909.05 5,512.43 6,385.50 7,042.82
Other Income 24.59 61.41 98.67 75.35 122.71
Stock Adjustments 39.12 -30.76 23.42 86.34 4.59
Total Income 3,363.16 4,939.70 5,634.52 6,547.19 7,170.12
Expenditure
Raw Materials 772.84 871.3 1,032.34 1,280.31 1,593.03
Power & Fuel Cost 910.11 1,138.32 1,253.26 1,712.98 1,430.91
Employee Cost 92.26 117.22 171.55 216.76 250.28
Other Manufacturing 48.19 56.22 61.52 92.58 97.42
Expenses
Selling and Admin 935.24 1,241.44 1,267.57 1,405.51 1,653.57
Expenses
Miscellaneous 18.32 30.15 35.48 28.88 48.58
Expenses
Preoperative Exp 0 0 -13.37 -8.38 -4.02
Capitalised
Total Expenses 2,776.96 3,454.65 3,808.35 4,728.64 5,069.77
Operating Profit 561.61 1,423.64 1,727.50 1,743.20 1,977.64
PBDIT 586.2 1,485.05 1,826.17 1,818.55 2,100.35
Interest 96.99 92.61 81.93 134.09 124.11
PBDT 489.21 1,392.44 1,744.24 1,684.46 1,976.24
Depreciation 216.03 226.25 237.23 323 388.08
Other Written Off 0 0 0 0 0
Profit Before Tax 273.18 1,166.19 1,507.01 1,361.46 1,588.16
Extra-ordinary items 12.41 0 0 0 0
PBT (Post Extra-ord 285.59 1,166.19 1,507.01 1,361.46 1,588.16
Items)
Tax 55.83 383.91 499.4 384.44 494.92
Reported Net Profit 229.76 782.28 1,007.61 977.02 1,093.24
Total Value Addition 2,004.12 2,583.35 2,776.01 3,448.33 3,476.74
Preference Dividend 0 0 0 0 0
82

78. 78
Equity Dividend 21.79 49.79 62.24 62.24 74.69
Corporate Dividend 3.06 6.98 10.58 10.58 12.41
Tax
Per share data (annualised)
Shares in issue 1,243.99 1,244.86 1,244.86 1,244.86 1,244.87
(lakhs)
Earning Per Share 18.47 62.84 80.94 78.48 87.82
(Rs)
Equity Dividend (%) 17.5 40 50 50 60
Book Value (Rs) 83.46 141.69 216.59 289.22 370.05
Table 10: CASH FLOW STATEMENT (Rs.Crs)
PARTICULAR Mar '12 Mar '13 Mar '14 Mar '15 Mar '16
Net Profit Before Tax 285.59 1166.19 1507.01 1361.46 1588.16
Net Cash From 551.63 1113.09 1375.26 1457.57 1571.93
Operating Activities
Net Cash (used -357.24 -1046.25 -1441.79 -1645.43 -851.66
in)/from
Investing Activities
Net Cash (used -191.02 -38.84 77.63 191.66 -741.03
in)/from Financing
Activities
Net 3.37 27.99 11.1 3.8 -20.76
(decrease)/increase
In Cash and Cash
Equivalents
Opening Cash & Cash 58.23 61.6 89.59 100.69 104.49
Equivalents
Closing Cash & Cash 61.6 89.59 100.69 104.49 83.73
Equivalents

79. 79
Table 11: BALANCE SHEET (Rs.Crs)
PARTICULARS Mar '12 Mar '13 Mar '14 Mar '15 Mar '16
Sources Of Funds
Total Share Capital 124.4 124.49 124.49 124.49 124.49
Equity Share Capital 124.4 124.49 124.49 124.49 124.49
Share Application Money 0.09 0 0.77 1.68 1.99
Preference Share Capital 0 0 0 0 0
Reserves 913.78 1,639.29 2,571.73 3,475.93 4,482.17
Revaluation Reserves 0 0 0 0 0
Networth 1,038.27 1,763.78 2,696.99 3,602.10 4,608.65
Secured Loans 1,221.93 1,151.25 982.66 1,175.80 854.19
Unsecured Loans 229.9 427.38 757.84 965.83 750.33
Total Debt 1,451.83 1,578.63 1,740.50 2,141.63 1,604.52
Total Liabilities 2,490.10 3,342.41 4,437.49 5,743.73 6,213.17
Application Of Funds
Gross Block 4,605.38 4,784.70 4,972.60 7,401.02 8,078.14
Less: Accum. Depreciation 2,068.21 2,267.42 2,472.14 2,765.33 3,136.46
Net Block 2,537.17 2,517.28 2,500.46 4,635.69 4,941.68
Capital Work in Progress 141.03 696.95 2,283.15 677.28 259.37
Investments 172.39 483.45 170.9 1,034.80 1,669.55
Inventories 379.57 433.58 609.76 691.97 821.7
Sundry Debtors 172.55 183.5 216.61 186.18 215.83
Cash and Bank Balance 61.5 89.59 100.69 104.49 83.73
Total Current Assets 613.62 706.67 927.06 982.64 1,121.26
Loans and Advances 168.23 265.46 390.43 395.71 374.92
Fixed Deposits 0.1 0 0 0 0
Total CA, Loans & 781.95 972.13 1,317.49 1,378.35 1,496.18
Advances
Deffered Credit 0 0 0 0 0
Current Liabilities 1,103.26 1,308.93 1,708.96 1,860.59 1,992.60
Provisions 39.18 18.47 125.55 121.8 161.01
Total CL & Provisions 1,142.44 1,327.40 1,834.51 1,982.39 2,153.61
Net Current Assets -360.49 -355.27 -517.02 -604.04 -657.43
Miscellaneous Expenses 0 0 0 0 0
TOTAL ASSETS 2,490.10 3,342.41 4,437.49 5,743.73 6,213.17
Contingent Liabilities 685.42 1,942.56 645.17 355.07 420.26
Book Value (Rs) 83.46 141.69 216.59 289.22 370.05

80. 80
Table 12: RATIO ANALYSIS
PARTICULARS Mar '12 Mar '13 Mar '14 Mar '15 Mar '16
Investment Valuation
Ratios
Face Value (Rs.) 10 10 10 10 10
Dividend Per Share (Rs.) 1.75 4 5 5 6
Profitability Ratios
Profit Before Interest And 10.4 24.1 26.61 21.9 22.24
Tax Margin(%)
Gross Profit Margin(%) 14.9 28.07 27.03 22.24 22.56
Net Profit Margin(%) 6.91 15.75 17.99 15.06 15.3
Return On Capital 14.8 37.54 35.55 26.45 27.22
Employed(%)
Earnings Per Share (RS.) 18.47 62.84 80.94 78.48 87.82
Return On Net Worth(%) 22.13 44.35 37.37 27.13 23.73
Liquidity And Solvency Ratios
Current Ratio 0.67 0.71 0.58 0.59 0.67
Quick Ratio 0.34 0.4 0.38 0.34 0.3
Debt Equity Ratio 1.4 0.9 0.65 0.59 0.35
Interest Cover (In Times) 4.11 14.45 20.85 12.75 14.97
ACTIVITY/TURN OVER RATIO
Inventory Turnover Ratio 8.75 11.46 31.16 22.89 22.65
Debtors Turnover Ratio 19.16 27.58 27.55 31.71 35.04
Investments Turnover 21.2 34.61 31.16 22.89 22.65
Ratio