The document provides a benchmarking analysis of Shree Cement's raw material procurement costs and fuel mix compared to other cement companies in the cluster. Key findings include: - Shree Cement's landed costs for fly ash, slag, and gypsum are competitive compared to peers. - Shree Cement relies fully on petcoke for fuel, which is volatile, while peers use more stable fuels like coal. - Shree Cement has the largest waste heat recovery system but also the highest power costs per unit. - Opportunities exist for Shree Cement to reduce truck turnaround times, increase bulk receiving capacity, and explore alternative fuels as petcoke availability declines.

1. BITS Pilani
Hyderabad Campus
Bench Marking Assignment
ID No:2022HT79523 J .Naveen Kumar Reddy

2. Competitive Benchmarking & Review of Cluster Cost in
Comparison to ShreeCement
1
1

3. Objective
• T
oreview the raw material procuring cost at Shree Raipur Cement Plant
• Compare freight rate & PTPK of Shree Cement with other peers within cluster
• Compare the landed cost of various raw materials used to produce cement
• Study about turnaround time for inbound logistic process &find the loopholes
• Cost benefit analysis of fuel mix used by the peers present in the cluster
• Competitive Benchmarking of Shree Cement in the above mentionedvertical
2

4. IndianCementIndustryOverview
• India is world’s 2nd largest cement market, both in production
and consumption
• Supported by high level of activity going on in real estateand
high government spending on smart cities and urban
infrastructure.
• Cement production capacity of 455 MTPA as of 2022-2023
• Industry to grow at 5-6 per cent CAGR between FY20– FY25.
• Capacity addition of around 32-36 million tonnes per annum
(MTPA) during FY23-24
• Cement consumption is expected to grow by 4.5 per cent in
FY23-24 supported by pick-up in the housing segment and
higher infrastructure spending
230 243 249 257 269 272
296
FY 17 FY 18 FY 19 FY 20 FY 21 FY22 FY 23
Cement Consumption (MT)
230.49
248.23 255.83
270.04 283.46 279.81
297.56
FY 17 FY 18 FY 19 FY 20 FY 21 FY22 FY 23
Cement Production (MT)
3

5. 1
0.59
16.62
1
9.60
7.95
9.60
3.69
4.62
3.90
5.79
0.36
1
7.27
0.00 5.00 1
0.00 1
5.00 20.00 25.00
Emami
Century
Lafarge Sonadih
Lafarge Arasmeta
Jindal
ACC
Ultratech Hirmi
Ultratech Rawan
JKLakshmi
Shree
Ambuja
%of Road
17.90
3.94
0.00
13.98
1
4.43
1
4.43
17.24
1
1
.79
0.00 5.00 1
0.00 1
5.00 20.00
Emami
Century
Lafarge Sonadih
Lafarge Arasmeta
Jindal
ACC
Ultratech Hirmi
Ultratech Rawan
JKLakshmi
Shree
Ambuja
%of Rail
4.00
0.78
1.49
CementDispatchesbytheCluster
• Almost every company uses both ways of transportation;by
roads & bytrain
• There is lack of availability of covered rakes
• Open wagon loading must be done with a propercontrol
though it has the risk of damaging thematerial
• Open wagon could generate substantial cost saving at mostto
the tune of 20%
3.96
3.76
4.08
3.22
3.57
Ambuja JkLaxmi Emami Lafarge Shree
PTPK ofCluster
Notes: Rake dispatch is profitable
only when
• Demand is of certain quantity
(2600T)
• Truck is not available for road
transport
4

6. Factsabout Cluster
644000
1
86000
240000
1196000
1
40000
246000 250000
400000
200000
0
800000
600000
1200000
1000000
GBFS Receipt (MTPA)
2.1
4
2.85
2.1
0
1
.60
0.55
2.60 2.60
5.00 4.54
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Production Capacity (MTPA)
• Following figures has been drawn from the
informal meeting with concerned person of the
companies presents in the cluster
.
• This will help about to understand the raw
material consumption pattern of different
companies & to benchmark Shree cement
regarding that.
5
1
44000
160000
140000
120000
96000 96000 96000
100000
80000
60000 48000 48000 48000 48000
40000
20000
0
Gypsum Receipt (MTPA)
144000
Series1

7. • Slag Landed cost is calculated on ADB
basis
• InBilaspur Cluster ADB landed is lowest
for ACC
• ACC produces 100%PSC cement in this
cluster
• Landed Cost of Shree Cement fallsunder
L2 category
Comparisonof Slag& gypsumlanded costofthe
clustercompanies
845
705
585
955
1
1
50
730
1200
1100
1000
900 850
800
700
600
500
Slag Landed cost (MT)
21
1
6
2244
2244
2070
2408
2372
2392
2385
2828
2900
2800
2700
2600
2500
2400
2300
2200
2100
2000
1900
1800
Gypsum Landed Cost
• Every company of the cluster uses gypsum as
additive in a proportion of 3-7%
• Different company uses different mix of
chemical & mineralgypsum
• Shree Cement’s GBFS landed cost for this
cluster is second lowest after Century cement
• T
oreduce the dependence of natural
mineral gypsum, Syntheticgypsum
plant can be installed.
• The other waycan be theinstallation
of Flue GasDesulphurization
Source
Consumption
MIX(%)
Mineral
Gypsum
Chemic
al
Gypsu
m
Shree 10% 90%
Ultratech (Rawan) 60% 40%
Ultratech (Hirmi) 60% 40%
Century 100%
Ambuja 70% 30%
ACC 80% 20%
Lafarge (Akaltara) 40% 60%
Lafarge (Sonadih) 50% 50%
Emami 80% 20
Gypsum Consumption
6

8. Chhattisgarh
basedcement
industry
Raipur Area [Urla]
Real/Hira/Bajrang
Capacity:15 MW x3=45MW
DFA=400 MT
Distanc
e
(KM)
Material
cost (Rs.)
Freigh
t
Rs.
Landed
Cost Rs.
PTPK-
Rs.
Ultratec
h
Rawan
75 327 327 4.36
Ultratec
h Hirmi
65 325 325 5.00
Century 40 264 264 6.60
Shree 90 300 300 3.33
Chhattisgarh
basedcement
industry
Raipur Area [Siltara]
Sarda/SKS/Nakoda
Capacity:30 MW x3=90MW
DFA=600 MT
Distance
(KM)
Material
cost (Rs.)
Freight
Rs.
Landed
Cost Rs.
PTPK-
Rs.
Ultratec
h
Rawan
60 1 315 316 5.25
Ultratec
h Hirmi
50 1 313 314 6.25
Century 35 1 294 295 8.40
Shree 78 1 275 276 3.53
Chhattisgarh
basedcement
industry
KSK[Akaltara]
Capacity:660 MW x2=1320 MW
DFA= 4500 MT
Distanc
e
(KM)
Material
cost (Rs.)
Freigh
t
Rs.
Landed
Cost Rs.
PTPK-
Rs.
Ambuja 1
1
5 -100 438 338 3.81
Ultratec
h
Rawan
130 454 454 3.49
Ultratec
h Hirmi
130 452 452 3.48
Century 125 0 465 465 3.72
Lafarge
Akaltar
a
30 -100 150 50 5.00
Lafarge
Sonadi
h
95 0 390 390 4.11
Shree 1
1
9 0 375 375 3.15
Chhattisgarh
basedcement
industry
NTPC Ltd[Sipat]
Capacity:500 MW x3=1500MW
DFA= 4500 MT
Distanc
e
(KM)
Material
cost (Rs.)
Freigh
t
Rs.
Landed
Cost Rs.
PTPK-Rs.
Ambuja 115 435 435 3.78
Ultratech
Ra wan
120 440 440 3.67
Ultratec
h Hirmi
130 440 440 3.38
Century 115 482 482 4.19
Emami 110 525 525 4.77
Shree 106 365 365 3.44
Chhattisgarh
basedcement
industry
GMR[Tilda]
Capacity:685 MW x2=1370MW
DFA=2000 MT(80%of 1unit)
Distanc
e
(KM)
Material
cost (Rs.)
Freigh
t
Rs.
Landed
Cost Rs.
PTPK-
Rs.
Ultratec
h
Rawan
40 0 275 275 6.88
Ultratec
h Hirmi
30 0 250 250 8.33
Century 15 0 197 197 13.13
Lafarge
(Sonadih)
47 0 285 285 6.06
Emami 57 0 377 377 6.61
Shree 47 0 265 265 5.64
7
Survey Data of Landed Cost &PTPK of Fly Ash

9. 8
Chhattisgarh
basedcement
industry
DB Power[Raigarh]
Capacity:600 MW x2=1200MW
DFA=4000 MT
Distance
(KM)
Material
cost (Rs.)
Freight
Rs.
Landed
Cost Rs.
PTPK-Rs.
Ambuja 160 -150 585 435 3.66
Ultratec
h
Rawan
160 -150 583 433 3.64
Lafarge
(Sonadi
h)
155 -150 570 420 3.68
Emami 162 -150 590 440 3.64
Shree 170 -150 500 350 2.95
Chhattisgarh
basedcement
industry
RKM[Raigarh]
Capacity:250 MW x4=1000MW
DFA=1600MT( 1unit)
Distance
(KM)
Material
cost (Rs.)
Freight
Rs.
Landed
Cost Rs.
PTPK-
Rs.
Ambuja 150 -235 570 335 3.80
Emami 152 -235 543 308 3.57
Shree 160 -300 519 219 3.24
36000
27000
35000 34000
90000
80000
70000
60000
50000
40000
30000
20000 12000
10000
0
DFA (MTPA)
74000 78000
Survey Data of Landed Cost &PTPK of Fly Ash
392 405 396
335
426 420 426
450
400
350
300
250
Landed Cost/PMT
8

10. Benchmarkingfor thePower& FuelMix
• JkLaxmi is the “Least-Cost” cement producer in the country
• Shree Cement being the pioneer of using Pet coke at 100%,
the other companies are trying to capitalize on it Power
consumption cost per unit is the least for Shree Cement.
• Shree cement has the largest WHRS(Waste Heat Recovery
System) in the country (Largest globally excluding China) Company ACC Ambuj
a
Ultratec
h
Shr
ee
JK Laxmi
Imported 28 16 21 0 7
AF 4 5 3 0 0
Linkage 42 26 9 0 3
Pet 26 53 67 100 90
• Price behaviour of Pet coke & imported coal is highly
volatile in nature
• Shree Cement should start exploring the possibility of
linkage coal through auction
• Currently no alternative Fuel is used by Shree Cement Shree,16
Ultratech,
5
20
15
10
5
0
-5 0 1 2 4 5
WHRS(%)
84
80.4 80
72
4.8
4.4 73.8
2.3
4.6
2.8
2
4
6
70
75
80
85
65 0
ACC Ambuja Shree
Energy & Power Cost
Energy (Kwh/t)
Ultratech JKLaxmi
Power(INR/Unit)
9
ACC,2.3 Ambuja,1.5
3

11. Madras
Cement's
Use tyre chips & rubber
dust
Use bioenergythrough
burning of coffee husk
& Cashewnutshells
Use low sulphurheavy
stock sludge(LSHS)
Lafarge
Ultratech
Cement
India
Cements
Substitute 10percentof
coal used in kiln with
rice husk
Annual cost
saving of US$
1.7million
Annual
savingsof
US$ 6500
Reduction of
30000tonnes
of carbon
emission
High energy
savings &
lower carbon
emission
Challenges & Solution
10
Rice Husk 3000
Saw Dust 4000-4500
Poultry Waste 1450-1500
Wooden Chips 4000
Baggas 4800-5000
Munciple Waste 4000
Plastic Waste 6000
Bricate 4000-4200
Carbon Powder 5000
Tyre Chips 6000
Tyre Oil 9000
• Availability of Pet coke is becoming challenging
• This will blow to the cement industries specially Shree Cement which is100%
dependence
AF & their NCVvalue

12. 7.02 7.36 8.03
1
3.28
1
9.22
FlyAsh
10.02 6.59
5.57 4.54
Pet Coke LinkageCoal Slag Murrum
Overall TruckCycle
Minimum Maximum
27.55
TruckCyclefor InboundTransportation
• Total truck cycle for the unloading ofraw
material is quite high in comparison to
industrial average.
• Standard deviation of total truck cycle ishigh
particularly for slag, fly ash & murrum.
1
1
Yard Reg.
to
Security
In
Security
In to
Gross
Wt.
Gross
Wt. to
Unloadi
n g In
Unloadi
n g In
to
Unloadi
n g Out
Unloadi
n g Out
to Tare
Wt.
Tare Wt.
Security
Out
Avg.
Time
2.82 0.07 0.01 7.16 0.01 0.26
% of
total
time
27.3 0.7 0.1 69.3 0.1 2.5

13. 12
1) Improve the frequent failure of ERP system in coordination with ITdepartment
2) Increase the no of truck tippler (Bulk Received Unit)
3)Increase the no of silos from 1to 2;No backing for emergencycondition
4) Based on the demand –supply scenario proper forecasting need to bedone
Fly ash consumption at SRCP is 2500 MT per day where as silos
capacity is 5000 MT; if any damage happens with operational one
no backing will be there to store the Fly ash. Proposing installing of1
more silo of equal capacity for smoothoperation
Existing
Scenario
at SRCP
Currently there is 4 BRU which are used for unloading of fly ash,
murrum, pet coke, slag, gypsum. Based on the recent rakes &
consumption pattern studied, 2 more BRU should be installedfor
decrease the turn around time
Existing
Scenario
at SRCP
Recommendations

14. Limitation
• T
ocollect data about the peers is a very challenging task
• Time constrain to complete this cumbersomeproject
• Data collections based on the informal meeting & the
degree of clarity of the same can be questioned
• All the freight rate is negotiated on a fortnight basis;the
study only gives the overall idea not the exactone
• Competitive benchmarking is done only regarding thefacts
of Raw Material Procuring cost; operating cost & others is
not studied under the project
• Competitive Benchmarking will help the
upper management team to take the
decision accordingly
• This will show the overall standing of
the company in comparison to itpeers
• Periodic review will help company for
better efficient operation & tobecome
a pan India player from a regional one
Future Scope
13

15. ACC Ambuja Ultratech
JK
Laxmi Shree
Growth &
Scalability 2 3 5 4 5
Market Mix & Size 4 4 5 4 4
Cost Leadership 2 3 4 4 5
Liquidity Comfort 5 5 4 3 5
Capital Efficiency 5 4 4 3 5
3.3
4.45
3.7
4.8
3.65
ACC Ultratech JKLaxmi Shree Ambuja
Rating of ClusterCompanies
Conclusions
Rating of thecompanies
• Overall rating is based upon theindividual
scoring in each verticals
• Weight is given to each verticals
• Final score is calculated depending upon the
scoring & the givenweightage
14

16. 16