Indi projct cement

Somaiya Institute of Management Studies & Research,
Mumbai.
2012-14
Study of four major Indian
brands in the CEMENT
Sector.
A comparative analysis.
PARNAMOY DUTTA
Roll No. : 13
PGDM (IB)

Contents
1. Introduction 1
2. Major Players in India
 ACC Limited
o History
o Slogan and Vision
o Major milestones
 Ambuja Cements Limited
o History
o Slogan and Vision
o Major milestones
 UltraTech Cement Limited
o History
o Slogan and Vision
o Major milestones
 JK Cement Limited
o History
o Slogan and Vision
o Major milestones
2
2
2
4
4
6
6
7
7
8
8
9
9
11
11
12
12
3. Comparison
 Market Share of Major Companies
 Pricing in the last few months
 Distribution
 Promotions
13
13
13
14
16
4. Observations on: Comparing
 Production in MnT (million tonnes)
 Profit after TAX in ` Crores
 Sales Volume in MnT
 Net Worth in ` Crores
18
18
18
19
19
5. Cement Industry: Overview 20
6. Bibliography 24

2
Introduction
India is one of the emerging markets in the global economy. As a result there is a positive
growth rate in the infrastructure and housing markets. Regular government spending on the
rural sector and infrastructure spend accomplished by rise in the number of infrastructure
projects implemented by the private sector will also drive forward the growth in domestic
cement demand. According to forecast it is expected that due to this positive vibe in the
market India’s cement production will grow at a compound annual growth rate of 12% during
2012-14 to reach 303 million metric ton. Cement Manufacturing Association is targeting to
achieve 550 Million metric ton capacities by the year 2020. It can be also assumed that with
relaxing of FDI norms a number of foreign players can also enter the industry thereby
increasing the competitiveness and quality of the product delivered. Also with the increase of
number of production units the advantages of industrialization will also enrich our
economical situation.
India is the 2nd
largest producer of cement in world after China. There are almost 137 large
and 365 mini cement plants. Leading players in the industry include ACC limited, UltraTech
Cement Limited, Ambuja Cements Limited, JK Cement Limited, etc. Cement acts as an
adhesive that holds concrete together and is hence vital for meeting the economy’s needs of
housing & accommodation and necessary infrastructure for roads, bridges, schools, hospitals,
offices and other utilities.
The demand for cement depends on the rate of growth and level of development of the
economy. Considering the present scenario of raw materials needed for construction it is well
understood that there is no substitute for cement hence the demand for cement is price
inelastic.
In this report we will look at the major players in the Indian market today. Then we will do a
comparative analysis between them. And finally we will decipher the major observation on
the major players and the industry as a whole.
Let us now look at the major players in India.

3
Major Players
ACC Limited:
History:
ACC Limited was formed in the 1936 when ten existing
companies came together to merge to form a single entity.
Hence the name Associated Cement Companies Limited. These companies belong to four
prominent business groups Tatas, Khataus, Killick Nixon and F E Dinshaw groups. F E
Dinshaw is recognized as the founder of ACC. This merger was the first of its kind even
before the term mergers and acquisitions were coined.
The Tata group was with the group till 1999. By the end of 2000 the Tata group sold all 14.45
per cent of its shareholding in ACC to subsidiary companies of Gujarat Ambuja Cements Ltd
(later called Ambuja Cement Ltd), who then became the largest single shareholder in ACC.
In a significant turn of events in 2005 a new association of Holcim group of Switzerland and
ACC was formed with the help of Ambuja Cements India Limited (ACIL) after which
shareholdings of ACIL increased to 34.69 percent.
This is an important event in the history of ACC as Holcim was a world leader in cement
production with worldwide operations in 70 countries.
ACC's First Board Meeting in 1936 at The Esplanade, Mumbai.

4
Slogan:
“Build with Confidence” a very catchy and apt tagline which caters well to its clients.
Vision:
“To be one of the most respected companies in India; recognized for challenging conventions
and delivering on our promises.”
Major Milestones:
Year Actions
1936 ACC Limited formed. First board meeting.
1947 India’s first entirely indigenous cement plant
set up at Chaibasa, Bihar.
1956 Bulk Cement Depot established at Delhi.
1961 Manufacture of Portland Slag Cement (from
Chaibasa plant) and Accocid Cement
(resistant to corrosion of acid and chemicals)
for the first time in India.
1968 Advent of computers in ACC for data
processing and designing management
information and control systems.
1973 Take-over of The Cement Marketing
Company of India.
1977 ASSOCHAM national award for contribution
in rural and agricultural development
activities.
1978 Introduction of the energy efficient
precalcinator technology for the first time in
India. Full scale commercial production
based on MFC technology at Wadi in 1979.
1979 ACC wins international contract for
operation and management of a cement plant
at Yanbu-Ras Biridi in Saudi Arabia.

5
1982 Commissioning of the first 1 MTPA plant in
the country at Wadi, Karnataka.
1987 New binder for sub-zero temperatures
developed to be used for Indian expedition to
Antarctica.
1992 Incorporation of Bulk Cement Corporation of
India, a joint venture with the Government of
India.
1995 Selected as the most respected company by
Business India
1999-2000 Tata Group sells their stake in ACC to the
GACL group, who with 14.45% now emerge
as the single largest shareholder of ACC.
2004 Listed in London Stock Exchange
2005 Strategic alliance with Holcim group.
2008 CNBC-TV18 India Business Leader Award.
2010 FICCI Award for Outstanding Corporate
Vision
2011 World’s largest kiln installed at Wadi Plant,
in Karnataka.
Major Manufacturing Units:
ACC Limited has its major manufacturing sites at the following places:
 Bargarh Cement Works
 Chaibasa Cement Works
 Chanda Cement Works
 Damodhar Cement Works
 Kudithini Cement Works
 Kymore Cement Works
 Sindri Cement Works
 Wadi Cement Works
 Thondebhavi Cement Works
 Tikaria Cement Works

6
Ambuja Cements Limited:
History:
Ambuja Cements Limited is one of the leading cement
manufacturing companies in India. It was founded by Narotam
Sekhsaria and Suresh Neotia in 1983. It was previously known as
Gujarat Ambuja Cements Ltd. Under Narotam Sekhsaria
business acumen and leadership skills the company registered
good growth rate. The company commenced cement production in 1986. The global cement
major Holcim acquired management control of ACL in 2006. Holcim holds a little over 46%
equity in ACL. It has a capacity of 25 million tonnes from its five integrated cement
manufacturing plants and eight cement grinding units from across the country.
Its environment protection measures are on par with global standards. It is the first cement
company to built 3 captive ports along the west coast of India to facilitate timely, cost
effective and environmentally cleaner shipments of bulk cement to its customers.
Cement Manufacturing Unit in Gujarat.

7
Slogan:
With “Viraat Compressive Strength” as their tagline Ambuja Cements Limited the company
appeals to its target consumers as the strongest cement available in the market.
Vision:
“To be the most admired and competitive company in our industry.”
Major Milestones:
Year Actions
1986 First cement manufacturing plant set up at
Ambujanagar, Gujarat worth 0.7 million
tonnes capacity commences production.
1988 Undertook the Van-Vihar project to convert a
mined area into an environmentally restored
and scenic location.
1992 Setting up plants at Ambujanagar, Gujarat and
at Suli, Himachal Pradesh. Also the company
Kodinar Taluka under its CSR initiative
1996 Achieves highest ever export by any Indian
Cement Company.
1997 Setting up of power plants at Gujarat and
Himachal Pradesh.
1999 Cement plant set up in Sri Lanka.
2002 Over 100% capacity utilisation achieved at
Chandrapur Plant.
2007 Chairman Suresh Neotia is awarded with
Padma Bhushan.
2008 Corporate communications department set up.
2011 Achieves water-positive status, as certified by
an independent foundation, Det Norske
Veritas.

8
UltraTech Cement Limited:
History:
One of the most important players in Indian Cement
Industry is UltraTech Cement Limited. It belongs to the
group of Grasim Industries under the house of Birlas
(Aditya Vikram Group). The inception of the company
can be traced back to mid 1980s (1983-85) with the establishment of Grasim’s first cement
plant at Jawad in Madhya Pradesh. In 2001 with the positive vibe of industrialization and
growth of economy the management decide to increase its reach. In the process Grasim
acquired a stake in L&T Cement. The stake was further increased to majority stake in 2003
thereby giving them a pan-India presence and increased market share. The demerger of L&T
business was completed in 2004 and Grasim acquired a controlling stake in L&T cement Ltd
and the name was changed to UltraTech Cement. In 2010 Samrudhhi Cement Ltd was
amalgamated with UltraTech Cement in July 2010. In September 2010, UltraTech Cement
acquired management control of ETA Star Cement Company, along with its operations in the
UAE, Bahrain and Bangladesh, thereby putting UltraTech on the global map. It is now the
10th
largest producer of grey cement in the world.
Advertisement showing the takeover of L&T Cement

9
Slogan:
With a strong a tagline of “The Engineer’s Choice” UltraTech Cement appeals to its
consumers as the cement that is even preferred by Civil and Construction engineers.
Vision:
Their vision is driven by their values of
INTEGRITY: Honesty in Every Action
Acting and taking decisions in a manner that these are fair, honest, following the
highest standards of professionalism and are also perceived to be so.
COMMITMENT: Deliver on the Promise
On the foundation of Integrity, doing whatever it takes to deliver value to
stakeholders.
PASSION: Energised Action
A missionary zeal arising out of emotional engagement with the organisation that
makes work joyful and inspires each one to give his or her best.
SEAMLESSNESS: Boundary Less in Letter and Spirit
Thinking and working together across functional silos, hierarchies, businesses and
geographies.
SPEED: One Step Ahead Always
Continuously seeking to crash timelines and choosing the right rhythm to optimise
organizational efficiencies.
Major Milestones:
Year Action
1983 Awarpur Cement Works Plant I acquired.
1987 Awarpur Cement Works Plant II acquired.
1994 Hirmi Cement Works acquired.
1995 (IPVM) National Award By Ministry of
Environment & Forests, Government of
India.

10
1998 IMC Ramakrishna Bajaj National Quality
Award. Capexil Certificate of Export
Recognition - Top Exporter- Cement,
Asbestos, Cement Products
1999 Narmada Cement Company Limited
acquired. Ratnagiri Cement Works
acquired.
2001 Grasim acquires 10 per cent stake in
L&T. Subsequently increases stake to
15.3 per cent by October 2002. Durgapur
grinding unit becomes functional.
2002 The Grasim Board approves an open offer for
purchase of up to 20% of the equity shares of
Larsen & Toubro Ltd (L&T), in accordance
with the provisions and guidelines issued by
the SEBI Regulations, 1997. Grasim
increases its stake in L&T to 14.15%.
2004 L&T cement business demerged. New
entity formed named as UltraTech
Cement.
2006 Narmada Cement Company Limited
amalgamated with UltraTech under the
provision of Sick Industrial companied
Act.
2008 Golden Peacock National Quality Award.
2010 Acquired management control of ETA
Star Cement together with its operations
in the UAE, Bahrain and Bangladesh.
Samrudhhi Cement Limited amalgamated
with UltraTech Cement Limited in July
2010.
2011 ASSOCHAM CSR Excellence Award for
its "truly outstanding" CSR activities.

11
JK Cement Limited:
History:
JK Cement is an affiliate of the J.K. Organization, which
was founded by Lala Kamlapat Singhania. Commercial
production commenced in May 1975 at our first plant at
Nimbahera, Rajasthan. At Nimbahera, we started with a single kiln with a production
capacity of 0.3 million tons. After adding two more kilns and precalciner with a capacity of
0.4 million tons in 1988, capacity at Nimbahera increased to 1.54 million tons. During the
years 1998 through 2003, continuous implementation of modifications to each of the kilns,
increased the aggregate capacity at Nimbahera to 2.8 million tons as of September 30, 2005.
Today, J. K. Cement Ltd. is one of the largest cement manufacturers in Northern India. They
are also the second largest white cement manufacturer in India by production capacity. While
the grey cement is primarily sold in the north Indian market, the white cement enjoys demand
in the export market including countries like South Africa, Nigeria, Singapore, Bahrain,
Bangladesh, Sri Lanka, Kenya, Tanzania, UAE and Nepal.
Nimbahera Unit, Rajasthan.

12
Slogan:
With their tag line “Deewarien Bol Uthengi” JK Cement Limited emphasizes on their quality
and customer satisfaction.
Vision:
Their vision is expansion through balancing equipment keeping in mind customer satisfaction
with a constant focus on quality control.
Major Milestones:
Year Action
1975 Nimbahera Unit commenced production with
initial capacity of 0.3 million tonnes per annum.
1979 Second production line at Nimbahera Unit
increased production to 0.72 MnTPA.
1982 Third production line at Nimbahera Unit
increased production to 1.14 MnTPA.
1984 Lime-based white cement plant was established
at Gotan, with an initial capacity of 0.05 MnTPA.
1987 A captive thermal power plant was installed at
Bamania.
1988 A pre-calciner was installed at Nimbahera,
increasing the total capacity to 1.54 MnTPA.
1990 The JKSL Cement Division instituted Architect
of the Year award.
2000 The total capacity of the white cement plant at
Gotan was increased to 0.3 MnTPA.
2005 The Company was listed on the BSE.
2006 JK Cement finalised the issue price of its recently
concluded Initial public offering (IPO) at Rs 148
per share.
2009 The installed capacity of grey cement increased
to 7.5 MnTPA with the merger of Jaykeycem
Ltd.

13
Comparison
Market Share:
Company Market Share By installed capacity (%)
ACC 10.30
UltraTech 18.30
Ambuja 9.60
JK Cement 3.90
Others 57.90
Prices:
The following chart describes the price of cement in various parts of India from Jan, 2012 to
April, 2012.
RegionMonths Jan(`/50kg) Feb(`/50kg) Mar(`/50kg) Apr(`/50kg)
East 290 302 305 310
West 260 280 305 300
North 275 270 280 278
South 288 285 300 300
Central 255 250 270 280

14
Distribution Network:
Export Domestic
Cement Plant/Manufacturing Unit
Export/
Domestic
Transport Agents Transport Agents
Railways/
Roadways
Railways/
Roadways
PORTS
Distributors/Dealers
End User

15
ACC Limited Ambuja Cements.
UltraTech Cement. JK Cement.

16
Promotions:
ACC Limited:
With the tag line of their product “Sada Atoot Raho” they focus on the longevity of their
product. With the actors in the commercial as common people they have been successful in
reaching the common masses as they could relate to themselves more to the advertisement.
Ambuja Cements Limited:
With this television commercial Ambuja Cement focuses on its quality and strength of its
product. This feature also comics the Indian family problem of division of property. The
depth of the advertisement is not only to promote the product but also has the moral of not
building walls between relationships.

17
UltraTech Cement Limited:
UltraTech appeals to its masses by conveying the message that it’s the engineer’s choice
thereby giving reliability and trustworthiness. Also they were among the front runners in
sponsoring the IPL team Rajasthan Royals thereby making its presence felt at the most
happening cricket tournament in India.
JK Cement Limited:
JK Cement in an aggressive promotional action finalized on explosive Indian batsman
Virender Sehwag as their brand ambassador. It was a good choice as he is a popular figure in
India and also belongs to the northern part of India which is where maximum business of JK
Cement comes from.

18
Observations
Cement production (in million tonnes) for the period 2009 to 2011:
Profit after TAX in `crores for the period 2009 to 2011:
CompanyYear 2009 2010 2011
ACC 21.37 21.14 23.46
UltraTech 15.87 17.64 32.92
Ambuja 18.83 20.13 20.97
JK Cement 4.58 5.5 5.7
ACC 1607 1120 1325
UltraTech 977 1093 1719
Ambuja 1218 1264 1229
JK Cement 142 226 64.05

19
Sales volume in million tonnes for the period 2009 to 2011:
Net worth in ` crores for the period 2009 to 2011:
ACC 21.5 21.29 23.73
UltraTech 15.8 17.77 33.23
Ambuja 18.79 20 20.91
JK Cement 4.55 5.45 5.7
ACC 6016 6469 7192
UltraTech 3602 4609 10666
Ambuja 6468 7330 8069
JK Cement 901.62 1082.41 1522.1

20
Cement Industry: Overview
 CMA is targeting to achieve 550 million tonnes capacity by 2020. The data for
Capacity and Production for the fiscal period of 2009 to 2011 are as follows:
 The data for Cement production and despatch (as % of total capacity) for the
previous two Fiscal Year is as follows:
Fiscal Year Capacity in MnT Production in MnT
2009 230.6 187.6
2010 266.2 201
2011 285.8 211
Year Cement Production(%) Cement Despatched(%)
2011-2012 98.81 97.84
2010-2011 96.75 96

21
 Being a bulk item transporting cement over long distances can prove to be
uneconomical as it attracts very high amount of freight. Thus it has been segmented
regionally i.e. Northern, Central, Western, Southern and Eastern. As it is a freight
intensive industry, the segment is completely domestic driven and exports account for
very negligible percentage of the total cement off take.
 India ranks 2nd
in the world cement producing countries.
 Cement Industry now meets with the pollution standards and is in fact one major
consumer of fly ash from Thermal Power Plants and slag from Steel Industry.
 The sector operates on high level of fixed cost and therefore volume growth is
necessary for good growth margins. It is a highly Capital-Intensive Sector.
 Access to raw materials and consuming markets is very necessary as it is a very bulky
commodity.
 The sector is energy intensive in nature as Power plays an important role in the cost of
the product. Hence many companies resort to captive power plant for energy supplies.

22
 Michael Porter’s Five Forces analysis of the Cement Sector:
 BCG Matrix of the Companies studied in this article:
 It is expected that in 2012-13 subdued demand along with excess capacities would
lead to a fall in capacity utilisation.

23
 Capacity utilization (%) for the period of 5 years from 2008-12 is as below:
 The demand is expected to grow by 8% YOY in 2012-13. This is likely to be
spearheaded by infrastructure and household projects in urban places from the west
and the east.
 The price of cement is expected to remain constant.
 News that would boost the cement market:
o Ministry of Roadways, Transport & Highways to roll out $120 billion project
to widen National Highways.
o DLF & Unitech plans a total of `7,000 crores investment in malls.
o Strong balance sheet of the Cement manufacturing companies to fund for
future growth.
o The penalty at three times the profits made via cartelisation by Competition
Commission of India is harsh, subjective in nature and may not materialise.
 Major Challenges:
o Economic slowdown and high taxation such as sales tax, VAT, royalty, etc.
o Price of domestic coal is on the rise as well importing coal for energy is
becoming costlier due to the weakening Rupee.
 Major relief actions by government:
o Overall taxation can be reduced by 20-25% and also by reducing the cross
subsidy burden on electricity, railway freight.
 Manufacturers need to maximize production of blended cement by using industrial
waste & by using efficient machines which lowers input cost.

24
Bibliography
 http://www.equitymaster.com
 http://www.aceanalyser.com
 http://www.jkcement.com
 http://www.acclimited.com
 http://www.ambujacement.com
 http://www.ultratechcement.com
 Annual Report : JKCement 2009-10
 Annual Report : JKCement 2010-11
 Annual Report : UltraTech Cement 2009-10
 Annual Report : UltraTech Cement 2010-11
 Annual Report : ACC Limited 2009-10
 Annual Report : ACC Limited 2010-11
 Annual Report : Ambuja Cement 2009-10
 Annual Report : Ambuja Cement 2010-11
 Google Images
 http://www.youtube.com
 http://www.cmaindia.org
 http://www.iseindia.com
 http://www.alacra.com
 http://www.business.mapsofindia.com
 http://www.dnb.co.in
 http://www.brickworkratings.com
 http://www.icjonline.com
 http://www.ibef.org
 http://www.bseindia.com
 http://economictimes.indiatimes.com
 http://www.business-standard.com
 http://www.constructionupdate.com

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