gujrat ambuja presentation,ravish roshan-9968009808


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gujrat ambuja presentation,ravish roshan-9968009808

  1. 1. STUDENT- PGDM INSTITUTE OF MANAGEMENT STUDIES, NOIDA <ul><li>Prepared by – </li></ul><ul><li>RAVISH ROSHAN (,9968009808 </li></ul>(mail ur comments, please)
  2. 2. Ambuja Cement February 2005
  3. 3. Brief History <ul><li>Gujarat Ambuja Cements Ltd was established as Ambuja Cements Private Ltd in 1981 by Narotam Satyanarayan Sekhsaria. </li></ul><ul><li>In 1983 the company floated a public issue and in 1993, GACL commissioned its second cement plant at Ambuja Nagar. </li></ul><ul><li>In 1996 , GACL set up its third 1 mtpa plant at Ambuja NAgar, named Guj Line </li></ul><ul><li>In 1997, GACL acquired Modi Cement. This plant was renamed as Ambuja Cement Eastern Limited </li></ul>
  4. 4. In 1998 GACL acquired the Nadikudi and Proddatur. In 1999 GACL acquired 51% stake in Delhi based DLF Cement. This company invested its money in the cement business because of factors such as : stable demand lack of substitutes limited competition
  5. 5. About Ambuja Cement <ul><li>Its focus :- </li></ul><ul><li>Best quality cement </li></ul><ul><li>Good packaging </li></ul><ul><li>Logistic management - strong distribution network </li></ul><ul><li>Customer service </li></ul>
  6. 6. Capacity built up from 0.7 Mio t in 1986 to 18.0 Mio t as of today at CAGR of 18% Organic growth and growth through acquisitions 2001 - Private equity investors (American International Group & Government of Singapore) invested in ACIL 2005 - ACIL restructured as a joint venture with Holcim 2006 - Founder promoters sold part of their holding in ACL in favour of Holcim ACL is a Holcim Group company since May 2006
  7. 7. 10 <ul><li>Capacity built up from 0.7 mn. Tonnes in 1986 to 16.0 mn. Tonnes today. </li></ul><ul><li>Sea transportation of bulk cement from Gujarat to 3 terminal ports at Surat, Mumbai & Sri Lanka. </li></ul><ul><li>A captive port at Muldwarka (Gujarat) for inward / outward movement of goods. </li></ul>
  8. 8. Cement Plant Grinding Station Terminal Port North – Central Region Cement Capacity 7.0 Mio t Positioning - ACL South-West Region Cement Capacity 8.0 Mio t Eastern Region Cement Capacity 3.0 Mio t
  9. 9. <ul><li>Investment in India – Core Themes </li></ul><ul><ul><li>Capital spending continues to be strong </li></ul></ul><ul><ul><li>Uptrend in industrial cycle – Avg. IIP growth at 10.2% being strongest in the past 11 years. </li></ul></ul><ul><ul><li>Strong underlying strength reflected in secular rising trend in the Indian Capital market. </li></ul></ul><ul><ul><li>Emphasis on infrastructure – US$ 320Billion planned expenditure. </li></ul></ul><ul><ul><li>Real Estate – Backed by IT/ITES leading to development of Tier II cities </li></ul></ul><ul><ul><li>Retail – Malls & Multiplexes </li></ul></ul><ul><li>World gaining confidence in Indian economic growth </li></ul><ul><li>Buoyant returns on account of impressive performance </li></ul>Demand Drivers 6
  10. 10. Strategy <ul><li>Strong presence in growing markets of North & West </li></ul><ul><li>Largest exporter of cement </li></ul><ul><li>Grinding close to market </li></ul><ul><li>Premium brand </li></ul><ul><li>Extensive & primarily exclusive distribution network </li></ul><ul><ul><li>Over 6,600 dealers and 20,500 retailers </li></ul></ul><ul><li>Captive Infrastructure </li></ul><ul><ul><li>Port, Receiving Terminals and Power Plants (230 MW) </li></ul></ul><ul><li>Sea Transportation </li></ul>
  11. 11. Financial performance showing improving trajectory ACL’s EBITDA in FY 2006 witnessed an impressive growth
  12. 12. Financial Results - Latest Quarter Rs. Crores 15 Rs. Crores Particulars Oct – Dec Growth (%) 2006 2005 Sales Volume (mn. Tonnes) 4.1 3.9 6 Net Sales 1329 894 49 EBITDA 519 232 124 PBT 458 155 195 PAT 338 107 216 EBITDA (%) 39% 26% 13 EBITDA Per Ton 1266 595 113 EBITDA Per Ton 29 14 107
  13. 13. Power Clinker content Fuel (coal) Transport <ul><li>Captive Power Plants, AFR </li></ul><ul><li>AFR/process efficiency / international sourcing </li></ul><ul><li>Composite cement </li></ul><ul><li>Grinding facility close to end user, production close to raw materials </li></ul><ul><li>Terminal logistics </li></ul>Cost drivers
  14. 14. <ul><li>Consumption per unit of Production </li></ul><ul><li>Increase Captive Generation </li></ul><ul><li>Measures </li></ul><ul><ul><li>Shift from liquid to solid fuel to reduce cost of captive energy cost by approx. Rs.2 per unit. </li></ul></ul><ul><ul><li>Reduction dependence on grid power, with the construction of additional power plants aggregating to 178 MWs </li></ul></ul><ul><ul><li>Captive power ensures continuous and consistent supply of power </li></ul></ul>Energy
  15. 15. <ul><li>GACL has a large distribution network of 11500 outlets. it is one the first cement copanies in the country to recognise the importance of brand building. </li></ul><ul><li>GACL had merged as one of the most energy efficient and technologically advanced cement manufacturer in India. </li></ul><ul><li>GACL was the overall market leader in the Indian cement industry and earned a huge profit </li></ul>
  16. 16. <ul><li>GACL worked hard to reduce mining expenses. </li></ul><ul><li>GACL implemented new technologies that could access lime stone in smaller areas where blasting is not possible. </li></ul>
  17. 17. Ambuja Cement – 2009 Capacity to increase from 16 mn. Tonnes to 22 mn. tonnes <ul><li>New Projects: </li></ul><ul><li>Eastern Region </li></ul><ul><li>2.2 mn. tonne clinkerisation plant at Bhatapara in Chhattisgarh (Q12009) </li></ul><ul><li>Northern Region </li></ul><ul><li>1.8 mn. tonne clinkerisation plant in Himachal Pradesh with 2 grinding stations aggregating to 3.0 mn. tonnes. (Q2 2009) </li></ul><ul><li>Power Plants: </li></ul><ul><li>178 MW at different locations. </li></ul>Panipat Rauri Dadri Bhatapara Total Outlay of Rs. 3500 Crores mn. tonnes Cement Plants Grinding Station Sea Terminal Port Clinker Capacity Cement Capacity Western India Northern India Eastern India 7.0 6.3 3.2 8.0 10.0 4.0 Total Capacity 16.5 22.0
  18. 18. <ul><li>Demand expected to grow by over 10%, on a back of strong GDP growth (Cement historically has grown 1.2 times of GDP) </li></ul><ul><li>New Supply is limited in next two years </li></ul><ul><li>Demand to outstrip supply. </li></ul><ul><li>Consolidation drive has changed the face of industry. </li></ul>The way forward 7
  19. 19. Ambuja Growth Plans <ul><li>Plan to grow to 20 mn. tonnes in next 3 years </li></ul><ul><li>By way of Productivity enhancement and Acquisitions </li></ul><ul><li>Growth to be funded from free cash flows </li></ul>
  20. 20. Challenges <ul><li>Cement is energy intensive industry </li></ul><ul><li>Coal, Power & Oil constitute major costs </li></ul><ul><li>Increasing cost of fuel </li></ul><ul><li>Better realisation only in few markets </li></ul>
  21. 21. 33 Thank you