A look into the Indian Cement Industry Presentation

8/2/2019 A look into the Indian Cement Industry Presentation

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Deciding the Strategic direction

Presented by: Group 4

(Aninda Basu, Ankur Shukla, Sumit Kumar and Tanuj Goyal)

A look into the Indian Cement Industry


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Indian Cement Industry Abrief

India is the 2nd largest cement market in theworld, accounting for 78 % of global cementproduction and the country also exports cement tomore than 30 countries

It has a total capacity of about 300 m tonnes (MT).The top three players alone control almost 35% ofthe capacity; the balance capacity being quitefragmented

The Housing segment accounts for a major portionof the total domestic demand for cement in India.Between 2010 and 2014, demand for housing

units is estimated to be 4.3 million, leading to a


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Key Points

Supply The demand-supply situation is high skewed with the latter beingsignificantly higher.

Demand Housing sector acts as the principal growth driver for cement.However, recently industrial and infrastructure sectors have alsoemerged as demand drivers.

Barriers to entryHigh capital costs and long gestation periods. Access to limestonereserves (key input) also acts as a significant entry barrier.


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Key Points

Bargaining power ofsuppliers

Licensing of coal and limestone reserves, supply ofpower from the state grid etc. are all controlled by asingle entity, which is the government. However,nowadays producers are relying more on captive power,

but the shortage of coal and volatile fuel prices remain a

concern.

Bargaining power ofcustomers

Cement is a commodity business and sales volumesmostly depend upon the distribution reach of thecompany. However, things are changing and few brands

have started commanding a premium on account ofbetter quality perception.

Competition

Intense competition with players expanding reach andachieving pan India presence.


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Recent Performance

Table 1: demand growth for last decade

Year Dispatches (Mt) Change (%)

2001-02 102.37 9.56

2002-03 111.07 8.50

2003-04 >117.23 5.50

2004-05 127.14 8.45

2005-06 141.57 11.35

2006-07 155.26 9.67

2007-08 167.69 8.01

2008-09 180.95 7.91

2009-10 200.29 10.68

2010-11 209.54 4.61

Source: http://www.cemnet.com/


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Recent Performance

Hopes for an end to the current downturn havefailed to transpire into reality as estimates by

policy makers and cement companies havefallen for the FY10-11 period. These areuncertain times for the industry and cementmanufacturers have no option but to wait

patiently for the next up-cycle.


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Future seems bright

Between 2010 and 2014, demand for housingunits is estimated to be 4.3 million, leading toa higher demand for cement forhomebuilding

The government is strongly focused oninfrastructure development to boosteconomic growth. It plans to increase

investment in infrastructure to USD1 trillionin the 12th Five Year Plan (201217),compared with USD514 billion under the 11thFive Year Plan (200712)


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Vision , Mission, Goals

Vision

The vision of a company lays out some desired future state; itarticulates, often in bold terms, what the company would like toachieve.

Mission

A companys mission describes that what it is that the company does.

What is our business?

What will it be?

And what should it be?

Goals


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India Cements

The India Cements Ltd was established in1946 and the first plant was setup atSankarnagar in Tamilnadu in 1949. Since

then it has grown in stature to sevenplants spread over Tamilnadu and AndhraPradesh. The capacities as on March 2002have increased multifold to 9 million tons

per annum.


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India Cements

Vision

The new millennium will bring with it new challenges and greateropportunities. The successful corporates will be those who equipthemselves to meet the challenges and convert opportunities into

winning strategies. If we are to keep pace, it is imperative that welearn to successfully tread the global pathway.

In this journey, clarity of vision, a readiness to cultivate a global mind-set, effectiveness, harnessing of human resources to enhance job andknowledge skills of employees, a strong accent on R & D andinnovation and a move away from selling, to innovative marketing inrecognition of the fact that the Customer is truly King, are some ofthe strategies that will help corporates to survive and succeed.

In order to move with the changing times, values and ideas must beceaselessly re-examined so as to ensure that they are in tune with theorganisation's goals.

The India Cements Limited is committed to contribute


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India Cements

Mission

Aiming High:

We should be one of the largest Cement Companies in the

Country. Our growth in size will be through continuous review ofpotentials of the existing manufacturing resources, strategicacquisitions and expansions

Core Competency:

Cement will be our mainstay. However, we shall venture into

related fields which afford purposeful synergy.

Quality Quest:

Product quality, consistency and customer service will bepursued as an act of faith throughout the organisation.

Modern Mind set:


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India Cements

Pursuit Of Excellence:

The growing size of our business

permit us to have an R & D set upof our own. We shall continuouslychallenge methods, systems,

operating parameters. We shallconstantly review ourmanufacturing systems to upgradequality and value of products.


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India Cements

Company Highlights The Company is the largest producer of cement in South

India.

The Company's plants are well spread with three inTamilnadu and four in Andhra Pradesh which cater to allmajor markets in South India and Maharashtra.

The Company is the market leader with a market share of28% in the South. It aims to achieve a 35% market share in

the near future. The Company has access to huge limestoneresources and plans to expand capacity by de-bottleneckingand optimization of existing plants as well as by acquisitions.

The Company has a strong distribution networkwith over10,000 stockists of whom 25% are dedicated.

The Company has well established brands- Sankar Super


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India Cements

Business Model

Value Proposition

The Company value proposition consist of manufacturing

varieties of cement like Ordinary Portland Cement, PortlandPozzolona cement & Sulphate resistance cement.

Target Customer

The company main revenue comes from Housing,

Infrastructure & Commercial Projects. Value Configuration

The company uses cutting edge technologies and many keyprocesses like mining, crushing, grinding, homonizing etc.,are done in house to speed up the production and

manufacturing process.


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India Cements

Cost Structure

The major cost element of thetotal cost is energy (28% ofthe total cost). Followed by

transportation & handlingwhich represents (20% ), rawmaterial (15%), staff cost(9%).

Partner Network

The Company in its partnernetwork includes mainlydealers, retailers &renowned businessassociates.

SOURCE: BSEINDIA.COM

I C t E l ti f


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In a Cements-Evolution ofcompany from 2000 to 2010

I C t E l ti f


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In a Cements-Evolution ofcompany from 2000 to 2010

2007-2009

2010-2011


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Ambuja Cements

Ambuja Cements was set up in 1986.

In the last decade the company hasgrown ten fold.

The total cement capacity of thecompany is 16.5 million tonnes.

It achieved capacity utilization of 100%

in 1st 6 months.

Capacity built up from 0.7 MT in 1986to16.5 MT as of today at CAGR of 18%.

Organic growth through acquisitions.


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Ambuja Cements

Vision

To be the most admired and competitivecompany in our industry

Mission

Create value for all

Delighted customers Inspired employees

Enlightened partners

Energised society


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Ambuja Cements

It defines a personal mission for itsemployees

The spirit of I Can.

Give a man orders and he will do the taskreasonably well. But let him set his owntargets, give him freedom and authority andhis task becomes a personal mission.


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Ambuja Cements- Evolution ofcompany from 2000 to 2010


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Ambuja Cements

Strategic Direction

Ambuja cement has been doing activities inparallel to become the most admired and

competitive company(the vision) Admired : CSR activities (triple bottom line)

Competitive : Technological innovations,

expertise and sustainability It has followed its mission and is in the right

direction to achieve the vision.


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Ambuja Cements

Strategic Direction-The mission

Sustainability The way of Life

Some of the most efficient plants in the world

Global standards for environment protection

Innovation in technology

Worked on the triple bottom line

Ambuja Cement Foundation

CSR organization supported by Ambuja Cements

Works with communities surrounding manufacturingsites

Natural resource management, Agricultural


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References

http://www.ibef.org (India Brand Equity Foundation)

http://www.indiacements.co.in/milestone.htm

http://indiacements.co.in/trends.htm

http://www.moneycontrol.com/company-facts/indiacements/history/IC#

http://indiacements.co.in/visionandmission.htm

http://www.ambujacement.com/vmv.php

http://www.ambujacement.com/milestones.php
http://www.ibef.org/http://www.indiacements.co.in/milestone.htmhttp://indiacements.co.in/trends.htmhttp://www.moneycontrol.com/company-facts/indiacements/history/IChttp://www.moneycontrol.com/company-facts/indiacements/history/IChttp://indiacements.co.in/visionandmission.htmhttp://www.ambujacement.com/vmv.phphttp://www.ambujacement.com/milestones.phphttp://www.ambujacement.com/milestones.phphttp://www.ambujacement.com/vmv.phphttp://www.ambujacement.com/vmv.phphttp://indiacements.co.in/visionandmission.htmhttp://indiacements.co.in/visionandmission.htmhttp://www.moneycontrol.com/company-facts/indiacements/history/IChttp://www.moneycontrol.com/company-facts/indiacements/history/IChttp://indiacements.co.in/trends.htmhttp://indiacements.co.in/trends.htmhttp://www.indiacements.co.in/milestone.htmhttp://www.indiacements.co.in/milestone.htmhttp://www.ibef.org/http://www.ibef.org/

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A look into the Indian Cement Industry Presentation

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