Vous êtes sur la page 1sur 93

TABLE OF CONTENTS

1.EXECUTIVE SUMMARY ................................................................................................. 3

2. INTRODUCTION ............................................................................................................. 6

2.1. INDUSTRY OVERVIEW ................................................................................................... 7

2.2. COMPANY OVERVIEW ..................................................................................................31

3. PROJECT PROFILE ..................................................................................................... 50

4. OBJECTIVE OF STUDY............................................................................................... 56

5. OBSERVATION AND ANALYSIS ............................................................................. 58

6. FINDINGS ....................................................................................................................... 72

7. RECOMMENDATIONS AND CONCLUSIONS ....................................................... 78

8. LEARNING OUTCOME…………………………….......……………………………………..81

9. REFERENCES ................................................................................................................ 84

10. ANNEXURE ................................................................................................................. 86

1
LIST OF TABLES, FIGURES & GRAPHS

Table 1 : Region-wise production of cement .............................................................................10


Table 2 : Region-wise Cement Consumption .............................................................................11
Table 3: Cluster-wise capacity of various regions (7 major clusters) ..........................................13
Table 4: Weighted Average Energy Consumption ......................................................................16
Table 5: Particulate Emission Standards from Stacks .................................................................16
Table 6: Permissible Emission ....................................................................................................17
Table 7: Home Loan Rates and disbursement of loans...............................................................23
Table 8: Projects under the NHDP .............................................................................................25
Table 9: Demand & Supply Scenario ..........................................................................................27
Table 10: Historical cement demand supply model ...................................................................28
Table 11: FORECAST MODEL :FY(09) TO FY(12) ..........................................................................29
Table 12: Market share (State-wise) ..........................................................................................41
Table 13: Selling Channels of Birla Gold .....................................................................................43

Figure 1: A Panoramic view of Mines .......................................................................................33


Figure 2: Power Plant View........................................................................................................34
Figure 3: Rail Lines.....................................................................................................................34
Figure 4: View of Greenaries in Plant Area ................................................................................40

Graph 1: Region-wise production increase for Dec 2008 ...........................................................11


Graph 2: Region-wise consumption & YoY growth % .................................................................12
Graph 3: Cement Prices .............................................................................................................17
Graph 4: Cement demand drivers .............................................................................................21
Graph 5: Home Loan Rates and disbursement of loans .............................................................24

2
EXECUTIVE
SUMMARY

3
EXECUTIVE SUMMARY
It is a general phenomenon that buyers in same market seek products for broadly the same
function, but different buyers have different evaluative criteria about what constitute the right
choice of performing the function. As a consequence different offering will attract different
buyers.

A market segment is explained to mean homogeneous group consisting of buyers who seek the
same offering. In other words Market Segmentation may be defined, as the division of the
market in to groups of segments having similar wants. But wants must be interpreted very
broadly, broader than products characteristics only. Segment may differ also in their needs for
information, reassurance, technical support, service, promotion, distribution and host of other
non-products benefits that are part of their purchases; they may also differ in their capacity for
these differences.

Maihar Cement (Birla Gold) is well-established brand in Bihar region, besides it has market in
Madhya Pradesh, Uttar Pradesh, Orissa and other parts of the Country. One of the major
section, which requires or purchases cement in bulk quantity are engineers, architect, builders
and contractors. This section or segment is known as the non-trader segment. And the retailers,
stockists, whole-sellers and dealers are known as trader segment.

I carried out my project concerning “Perception of Trade and Non-trade Segments of BIRLA
GOLD Cement in Satna market”.
The project was carried out in the market of Satna region in Madhya Pradesh. There are five
major market players in cement industry of these areas. They are Jaypee, Birla Gold, Ultratech,
ACC, and Prism. Apart from these there are few local brands such as Birla Samrat (M.P. Birla
group) in Madhya Pradesh which is selling in the market.
The information about the market was gathered by visiting retailers in the market. Interview of
retailers was taken depending upon there accessibility. Also opinion of engineers, contractors,
architects and builders (who posses knowledge regarding different brands available in the

4
market) has been taken. Survey was done for both trade and non-trade segment to get the
right picture about the market scenario.
While doing the project attempt was made to collect maximum information about the market.
To get actual and correct information, it was not told retailers that the survey is conducted by
Maihar Cement for confidentiality reasons. Large numbers of retailers were visited to get the
actual picture of the market. Again, the retailers of each grade (according to the performance)
were visited, to get each and every detail about the market.

5
INTRODUCTION

6
INTRODUCTION
Cement is a binder which sets and hardens independently, and can bind other materials
together. The word "cement" traces to the Romans, who used the term "opus caementicium"
to describe masonry which resembled concrete and was made from crushed rock with burnt
lime as binder. Cement is an essential component of infrastructure development and most
important input of construction industry, particularly in the government’s infrastructure and
housing programs, which are necessary for the country’s socioeconomic growth and
development.

Cement ranks second in volume among the industrial products manufactured in the world. And
it is the most widely used man-made product and second only to water as world’s most heavily
consumed substance. Cement is poly-phased inorganic compound of complex nature formed by
burning of calcareous and argillaceous raw materials as a binding material. Cement is used as a
binding material in various types of civil constructions. Earlier, clay or lime was used for binding
materials together. Its properties include-
Low cost, high performance
Binder with almost any hard material
Building block
Gain strength progressively with ageing
Substitutes with steel, polyester, epoxy-resin, plasticizers

With advancement in manufacturing technology, today cement is a completely technical


product. Various types of grades of cement are being manufactured to satisfy different needs of
the construction industry. However, cement is still considered as a non-technical product and
used in a traditional and often unscientific manner. Compressive strength is the important
known parameter for approving the quality of cement. Strength of cement is also affected by
water-cement ratio, grading of aggregates, methods of preparation, methods of compaction,
curing conditions and atmospheric conditions.

7
INDUSTRY OVERVIEW: INDIAN CEMENT INDUSTRY

Cement is the preferred building material in India. It is used extensively in household and
industrial construction. Earlier, government sector used to consume over 50% of the total
cement sold in India, but in the last decade, its share has come down to 35%. Rural areas
consume less than 23% of the total cement. Availability of cheaper building materials for non-
permanent structures affects the rural demand.

The Indian Cement industry is the second largest cement producer in the world. The industry
has undergone rapid technological upgradation and vibrant growth during the last two decades,
and some of the plants can be compared in every respect with the best operating plants in the
world. The industry is highly energy intensive and the energy bill in some of the plants is as high
as 60% of cement manufacturing cost. Although the newer plants are equipped with the latest
state-of-the-art equipment, there exists substantial scope for reduction in energy consumption
in many of the older plants adopting various energy conservation measures.

There are around 11 different types of cement that are being produced in India. The production
of all these cement varieties is according to the specifications of the BIS (Bureau of Indian
Standards). Some of the various types of cement produced in India are:
 Clinker Cement
 Ordinary Portland Cement (OPC)
 Portland Blast Furnace Slag Cement (PSC)
 Portland Pozzolana Cement (PPC)
 Rapid Hardening Portland Cement
 Oil Well Cement
 White Cement
 Sulphate Resisting Portland Cement
The production of PPC and PSC are based on Fly Ash and Blast furnace slag, the waste product
of Thermal Power Plant and Steel Plant respectively.

8
CHARACTERISTICS-
State wise Capacity
As cement is a low value commodity, freight costs assume a significant proportion of the final
cost. Transporting costs render the prices of cement in distant destinations uncompetitive. For
instance, it is financially infeasible to transport cement by road over 250 kms. Railways are
mostly used to transport cement over longer distances. However, its bulky nature and
infrastructure bottlenecks render even rail transport unviable over very long distances (that is
why Madras Cements or India Cements, located in the south, can hardly make a difference to
the fortunes of west-based companies like Gujarat Ambuja). Therefore, manufacturers tend to
sell cement at the nearest market first and sell in distant markets only if additional realization is
greater than freight costs incurred. This highlights the regional nature of the cement industry.

The Indian cement industry has to be viewed in terms of five regions:-


North (Punjab, Delhi, Haryana, Himachal Pradesh, Rajasthan, Chandigarh, J&K and
Uttaranchal)
West (Maharashtra and Gujarat)
South (Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Pondicherry, Andaman &
Nicobar and Goa)
East (Bihar, Orissa, West Bengal, Assam, Meghalaya, Jharkhand and Chhattisgarh)
Central (Uttar Pradesh and Madhya Pradesh)
South accounts for 33.03% of cement production capacity of the country, with Andhra Pradesh
accounting for 15.27% of the total production capacity of India. It has an installed capacity of
around 20mn tons of cement and ranks first in the country, followed by Tamil Nadu with 9.94%
of the total production capacity.
North accounts for 18.02% of the total production capacity, with Rajasthan at 12.55% of the
total production capacity of the country.
West accounts for 16.85% of the total production capacity. Maharashtra and Gujarat have
production capacity of 6.89% and 9.96% respectively.

9
East and Central Regions account for 16.33% and 15.77% of the total production capacity of the
country respectively.

Production & Dispatches (Region-wise):


During the month of December 2008 the cement industry posted excellent growth in
production mainly from the northern and the eastern region of the country. The demand
continued to be strong as can be evident from the capacity utilization levels in all the major
regions. Increase in installed capacities by some players also contributed to improved
production growth.
 The central region of the country achieved the highest capacity utilization rate of 98%.
 The northern region and the eastern region had a capacity utilization rate of 93%
respectively.
 The western region and the southern region had a capacity utilization level of 95% and
86% respectively.
The overall cement production and dispatches increased by 11% to 15.82 million metric tonnes
and 15.81 million metric tonnes respectively during the month of December 2008 as compared
to the same period last year. Excess dispatch implies that there is strong demand as inventories
are being disposed off quickly. The production and dispatches were higher by 10% and 11%
respectively as compared to the previous month.
The following graph gives a clear indication of the increase in production (Region wise) in
December in comparison to the previous month.
Table 1 : Region-wise production of cement

Region Increase % Production in million tonnes

Central 13 2.31
Northern 22 3.74
Southern 9 4.94
Western 2 2.51
Eastern 9 2.32

10
Region-wise Production increase for Dec 2008
25

20
Percentage

15

10

0
Northern Central Southern Western Eastern

(Source: Capitaline)

Graph 1: Region-wise production increase for Dec 2008

CONSUMPTION:
Southern region continued its trend of higher consumption with the total consumption
reaching a level of 4.58 million tonnes thus registering a YoY growth rate of 9.3%. Andhra
Pradesh and Tamil Nadu were the dominant consumers in the southern region accounting for
1.59 and 1.3 million tonnes respectively. Following South is the Western region with a
consumption of 3.02 million tonnes. The following graph gives a clear indication of the region
wise consumption and their YoY growth percentage.
Table 2 : Region-wise Cement Consumption

Region Consumption YoY growth %

Central 2.38 25
Northern 3.21 11.7
Southern 4.58 9.3
Western 2.46 14.1
Eastern 3.02 8.3

11
(Source: PL Research)
Graph 2: Region-wise consumption & YoY growth %

Trade between these regions is on a very low scale mainly because of the transportation
bottlenecks and uncompetitive cost of transportation. This apart, there are other factors that
determine the location of a cement plant. Proximity to limestone deposits, availability of coal
and power and the markets the plants cater to, are some of the critical factors that determine
the viability of a cement plant.

Seven Clusters:
Cement and its raw materials namely coal and limestone, are all bulky items that make
transportation difficult and uneconomical. Given this, cement plants are located close to both,
sources of raw materials and markets. Most of limestone deposits in India are located in
Madhya Pradesh, Rajasthan, Andhra Pradesh, Maharashtra and Gujarat, leading to
concentration of cement units in these states. This has resulted in ‘clusters’. There are seven
such clusters in the country and account for 51% of the cement capacity. There is a trade-off
between proximity to markets and proximity to raw materials due to which some cement
plants have been set up near big markets despite lack of raw materials.

12
CLUSTER CAPACITY
Satna, MP 11.77 mntpa
Chandrapur, Maharashtra/ AP 9.59 mntpa
Gulbarga, Karnataka/ AP 6.83 mntpa
Yerranguntla, AP 1.9 mntpa
Nalgonda, AP 5.85 mntpa
Bilaspur, MP 9.7 mntpa
Chandoria, Rajasthan/ MP 7.03 mntpa
(Source: www.researchand markets.com)

Table 3: Cluster-wise capacity of various regions (7 major clusters)

Factors Affecting Cement Industry:

LIMESTONE RESERVES

Limestone is the main raw material for manufacture of cement. For manufacture of one tonne
of cement, a quantity of 1.5 tonne of limestone is required. India is endowed with large
deposits of limestone. The estimated total reserves of cement-grade limestone are 95.623
billion tonnes. However, the limestone deposits are not uniformly distributed in all the States.
There is a concentration of about 73 per cent of the total reserves in five States, namely,
Andhra Pradesh, Karnataka, Gujarat, Rajasthan and Madhya Pradesh. This concentration is
about 48 per cent in South Zone, 23 per cent in North Zone, 21 per cent in West Zone and the
remaining 8 per cent in East Zone.

COAL
The consumption of coal in a typically dry process system ranges from 20-25% of clinker
production. This means for per ton clinker produced 0.20-0.25 ton of coal is consumed. This
contributes 35-40% of the production cost. The cement industry consumes about 10mn tons of
coal annually. Since coalfields like BCCL supply a poor quality of coal, NCL and CCL the industry
has to blend high-grade coal with it. The Indian coal has a low calorific value (3,500-4,000
kcal/kg) with ash content as high as 25-30% compared to imported coal of high calorific value

13
(7,000-8,000 kcal/kg) with low ash content 6-7%. Lignite is also used as a fuel by blending it
with coal. However this process is not very common.

ELECTRICITY
Cement industry consumes about 5.5bn units of electricity annually while one ton of cement
approximately requires 75-85 units of electricity. Power tariffs vary according to the location of
the plant and on the production process. The state governments supply this input and hence
plants in different states shall have different power tariffs. Another major hindrance to the
industry is severe power cuts. Most of the cement producing states like AP, MP experience
power cuts to the tune of 25-30% every year causing substantial production loss.

TRANSPORTATION
Cement is mostly packed in HDPE (High Density Poly Ethylene) bags. It is then transported
either by rail or road. Road transportation beyond 200 kms is not economical therefore about
55% of cement is being moved by the railways. There is also the problem of inadequate
availability of wagons especially on western railways and southeastern railways. Under this
scenario, manufacturers are looking for sea routes, this being not only cheap but also reducing
the losses in transit. Today, 70% of the cement movement worldwide is by sea compared to
10% in India. However, the scenario is changing with most of the big players like ACC and
Ultratech having set up their bulk terminals.

TECHNOLOGY
Cement Industry has been in existence in India for over eight decades. From the initially
available wet process technology the industry has travelled through semi-dry and the latest
energy efficient dry process technology. Recent plants have been erected with state-of-art
technology comparable to those available in the world. The earlier cement plants that came
into existence were mostly of small kiln capacities of 300 to 600 tpd based either on wet or dry
process; however, the new plants set up later were of the order of 3000 tpd or more exclusively
of dry process. Kilns of the capacities 5000 to 7000 tpd are also in operation now. At present

14
91% of the total kiln capacity comprise dry process, 7% wet process and the remaining 2% on
semi-dry process based technologies.
Indian cement industry has been actively pursuing various avenues to improve its productivity
and energy efficiency. There has been all-around upgradation of technology in all sections of
the plant like mining, process, equipment and machinery, packaging and transportation.
Adoption of modern techniques like photo-grammetry and remote sensing has enabled the
industry to discover virgin limestone. Advanced equipment like hydraulic excavators, surface
miners, large wheel loaders and mobile crushers have helped the industry in increasing its
productivity considerably. The modern raw material evaluation and management system starts
from computerized mine planning through on-line bulk material analysis to automated X-ray
analysis and process computers to control the weigh feeders. Expert systems based on ‘fuzzy
logic’ are used to control the operation of kilns and mills to ensure that the process systems
operate at optimum levels of energy efficiency all the time. Energy efficient technologies are
being adopted for a new as well as for retrofits, modernization and expansion of existing plants.
A number of cement plants in the country are now equipped with double string pre-heater
towers with pre-calciners, vertical roller mills, roller presses, high efficiency fans and motors
with slip power recovery systems. Besides this, the software approach involving detailed
process diagnostic studies and energy audits are used successfully by almost every large and
medium sized cement plant in the country.

ENERGY CONSERVATION
The cement industry is an energy intensive industry by virtue of high temperature reactions and
various physical operations involved in its manufacture. The industry uses both coal and power
as energy inputs. The cost of energy accounts for about 45% of the total production cost.
Energy management in modern cement plants in India meets the standards comparable with
the best in the world. Energy studies of cement plants are being carried out in a large number
of plants on a continuing basis by the National Council for Cement & Building Materials (NCB).
NCB has a mobile energy diagnostic unit (Energy Bus) equipped with necessary instrumentation
and on-board computer with relevant software for conducting the energy studies on systematic

15
and accurate manner. NCB has been giving National Awards for Energy Efficiency in Indian
Cement Industry to the best performing cement plants on annual basis since 1986. Based on
the recent data of 51 participating plants, the weighted average energy consumption is: -

Thermal Energy Electrical Energy


Consumption Consumption (kWh/t
(Kcal/kg Clinker) Cement)

Dry Process Plants 763 96.88

Overall (Combined for all 769 96.86


Processes)
(Source: NCB)

Table 4: Weighted Average Energy Consumption

POLLUTION CONTROL
The main source of pollution in cement industry is dust emission. The industry’s achievement in
controlling particulate emission has been quite satisfactory. Considerable progress has been
made in installing Electrostatic Precipitators (ESPs) and bag houses/fabric filters in various
sections of cement plants, especially after the promulgation of the environment legislation in
1981 and 1986. The Central Pollution Control Board has fixed standards for particulate
emissions from stacks as under: -
Capacity Protected Area Other Area
200 tpd & less 250 mg/Nm3 400 mg/Nm3
Above 200 tpd 150 mg/Nm3 250 mg/Nm3
(Source: government data)

Table 5: Particulate Emission Standards from Stacks

However, the State Pollution Control Board have authority to make the limits more stringent, if
required and accordingly the following States have formulated particulate emission for general
area as under :-

16
Permissible particulate emission levels for
States general area
Madhya Pradesh 150 mg/Nm3
Gujarat 150 mg/Nm3
Andhra Pradesh 115 mg/Nm3
Himachal Pradesh 150 mg/Nm3
Rajasthan (some parts) 150 mg/Nm3
(Source: government data)

Table 6: Permissible Emission

PRODUCTION COSTS
Cement companies reported 10 per cent growth in their revenues, while their net profit
declined by 21 per cent on compression of margins, last year. Almost all cement companies
faced margin pressures on account of an increase in their overall production costs. Coal which
accounts for almost 35-40 per cent of the cost of production of cement is in short supply. Coal
prices increased by over 100 per cent in the last one year. This has lead to an overall increase in
the cement prices, thus affecting the demand for it.

Graph 3: Cement Prices

17
Cement industry in India is currently going through a consolidation phase. Some examples of
consolidation in the Indian cement industry are: Gujarat Ambuja taking a stake of 14 per cent in
ACC, and taking over DLF Cements and Modi Cement; ACC taking over IDCOL; India Cement
taking over Raasi Cement and Sri Vishnu Cement; and Grasim's acquisition of the cement
business of L&T, Indian Rayon's cement division, and Cimpor, the Portuguese cement maker,
paid US$ 68.10 million for Grasim Industries' 53.63 per cent stake in Shree Digvijay Cement.
Foreign cement companies are also picking up stakes in large Indian cement companies. Swiss
cement major Holcim has picked up 14.8 per cent of the promoters' stake in Gujarat Ambuja
Cements (GACL). Holcim's acquisition has led to the emergence of two major groups in the
Indian cement industry, the Holcim-ACC-Gujarat Ambuja Cements combine and the Aditya Birla
group through Grasim Industries and Ultratech Cement. Lafarge, the French cement major
Lafarge has acquired the cement plants of Raymond and Tisco. Italy based Italcementi has
acquired a stake in the K.K. Birla promoted Zuari Industries' cement plant in Andhra Pradesh,
and German cement company Heidelberg Cement has entered into an equal joint-venture
agreement with S P Lohia Group controlled Indo-Rama Cement.
Issues concerning Cement Industry -
 High Transportation Cost is affecting the competitiveness of the cement industry.
Freight accounts for 17% of the production cost. Road is the preferred mode for
transportation for distances less than 250km. However, industry is heavily dependant on
roads for longer distances too as the railway infrastructure is not adequate.
 Cement industry is highly capital intensive industry and nearly 55-60% of the inputs are
controlled by the government.
 There is regional imbalance in the distribution of cement industry. Limestone availability
in pockets has led to uneven capacity additions.
 Coal availability and quality is also affecting the production.
 Technological change is the way to the future. Continuous technological upgrading and
assimilation of latest technology has been going on in the cement industry. There is
tremendous scope for waste heat recovery in cement plants and thereby reduction in
emission level.

18
Government Policies
Government policies have affected the growth of cement plants in India in various stages. Their
control on cement for a long time and then partial decontrol and then total decontrol has
contributed to the gradual opening up of the market for cement producers. The stages of
growth of the cement industry can be best described in the following stages:
 Price and Distribution Controls (1940-1981):
During the Second World War, cement was declared as an essential commodity under
the Defence of India Rules and was brought under price and distribution controls which
resulted in sluggish growth. The installed capacity reached only 27.9 MT by the year
1980-81.
 Partial Decontrol (1982-1988):
In February 1982, partial decontrol was announced. Under this scheme, levy cement
quota was fixed for the units and the balance could be sold in the open market. This
resulted in extensive modernization and expansion drive, which can be seen from the
increase in the installed capacity to 59MT in 1988-89 in comparison with the figure of a
mere 27.9MT in 1980-81, an increase of almost 111%.
 Total Decontrol (1989):
In the year 1989, total decontrol of the cement industry was announced. By
decontrolling the cement industry, the government relaxed the forces of demand and
supply. In the next two years, the industry enjoyed a boom in sales and profits. By 1992,
the pace of overall economic liberalization had peaked; ironically, however, the
economy slipped into recession taking the cement industry down with it. For 1992-93,
the industry remained stagnant with no addition to existing capacity.

Government Controls
The prices that primarily control the price of cement are coal, power tariffs, railway, freight,
royalty and cess on limestone. Interestingly, all of these prices are controlled by government. It
is now encouraging the use of wastes such as slag and fly ash as a substitute to limestone
concerning environmental issues which helps in reducing pollution.

19
EXPORTS
The cement sector is relatively insulated from international markets. This is largely due to
inadequate infrastructure to carry on international trade. Being a very bulky item, international
trade is very limited and only between neighboring states. This is amply borne out by the fact
that cement accounts for not more than 0.20% of total world exports.
Having a long coastline, India is well positioned to export cement to the Middle East and Sri
Lanka. However, congestion at the Indian ports and lack of cement handling facilities restrict
the free movement of cement out of India. Hence, only those companies who have their own
jetties are able to export. Moreover, currently, prices in the international market too are at un-
remunerative levels. Nevertheless, companies like Gujarat Ambuja and L&T are major
exporters, who export mainly to get incentives like duty-free import of high grade coal and oil.
This apart, large scale cement exports are possible only when cement prices in the international
market look up.

REASONS FOR THE GROWTH OF CEMENT INDUSTRY


The domestic cement industry is highly insulated from global cement markets. Exports have
been constant at about 6% of total cement demand for past few years. With the Government of
India intervention, making cement duty free, cement is being imported from neighboring
countries. However, due to logistics issues and lack of port handling capabilities imports of
cement will remain negligible and do not pose a threat to domestic industry. Earlier
government sector used to consume over 50% of the total cement sold in India but in the last
decade, its share has come down to 35%.

Demand for cement is linked to the economic activity in any country. Broadly, it can be
categorized into demand for housing construction (homes, offices etc.) and infrastructure
creation (ports, roads, power plants etc). The real driver of cement demand is creation of
infrastructure; hence cement demand in emerging economies is much higher than developed

20
countries where the demand has reached a plateau. In India too, the demand for cement will
be affected by spending on infrastructure (including housing).

Indian Cement Industry Demand Drivers - 2009

(Source CMA) Graph 4: Cement demand drivers

Housing and infrastructure sectors constitute a major part of the total demand for cement in
India. These two sectors have been further analyzed.

HOUSING
Housing, besides being a very basic requirement for the urban settlers, also holds the key to
accelerate the pace of development. Investments in housing, like any other industry, have a
multiplier effect on income and employment. Construction sector employment is growing at
the rate of 7% per annum. Housing provides opportunities for home-based economic activities.
The Indian Housing sector has grown by leaps and bounds in the last few years. The total home
loan disbursements to this sector has risen from Rs 19,723 crore in the year ended 2000 to a
massive Rs 2,52,932 crore in the year 2008.This robust growth has been triggered by a number
of factors. Some of which are:
Tax rebates on housing loans

21
Continued growth in population
Decrease in number of people per household (average size of household)
Rise in disposable income levels
Lower interest rates and easy availability of housing finance

Also the Housing Finance Companies and banks have introduced various schemes to attract the
young generation borrower. Free home insurance, lower rates for purchase of consumer
durables, household goods, and refinance options are some of the noteworthy schemes that
the institutes have come up with to attract the borrowers.

The Indian housing industry is highly fragmented, with the unorganized sector, comprising small
builders and contractors, accounting for over 70% of the housing units constructed and the
organized sector accounting for the rest. The organized sector comprises large builders and
government or government affiliated entities. The housing market witnessed a frenzied boom
in the early nineties on the back of a booming stock market and a liberalization process that
was kicked off in 1991. The stock market and real estate markets crashed in quick succession –
1994 and 1995 respectively, followed by a prolonged period of about 8 years of little or no
appreciation in real estate. The crash, accentuated by high inflation and high interest rates, not
only kept speculative inflows out but also kept genuine home seekers at bay. However, reversal
in that trend is being witnessed in the past 3-4 years because of several reasons.

One of the most important reasons is that the rural people are moving from thatched mud
units to pucca (brick and mortar) structures. With increasing rural affluence, demand for
cement for construction of houses in villages has gone up significantly overt the last few years.
The cement industry is expecting around 50 per cent of the overall demand to come from the
rural housing sector during the current year and beyond. Rural people, especially in the most
underdeveloped states, are increasingly replacing thatched mud hutments and switching over
to pucca structures. While a marked increase in demand is being seen in the rural parts of

22
predominantly underdeveloped states such as Bihar, Chhattisgarh and Uttar Pradesh, the hill
states of Uttarakhand, Himachal Pradesh and the north-east are also seeing a spurt in demand.

The Centre's latest estimates peg the estimated shortage of houses in rural areas at around 15
million as against an overall shortage of 22 million dwelling units in the rural and urban areas
put together. The Centre, under its Bharat Nirman programme, expects over six million houses
to be built in rural areas over the next four years. Rural housing projects undertaken by about
15 states through their own capital subsidy or credit-cum-subsidy schemes have also resulted in
rural housing coverage going up during the last few years. These states, including Tamil Nadu,
Andhra Pradesh, Karnataka, Gujarat, Uttarakhand, Jharkhand, Sikkim, Meghalaya and Punjab,
have together constructed about 27 lakh houses from 2001 to 2005, according to Planning
Commission estimates. The cement industry recorded another year of double digit demand
growth (10 per cent for 2006-07). The demand buoyancy is witnessed across sectors with
increased focus on infrastructure development, rising industrial activity, and strong real estate
demand from commercial and residential sectors.
Table 7: Home Loan Rates and disbursement of loans

Year Interest Rate (in %) Quantum of Loan


lent in Rs Crore
2000 13.00 19,723.38
2001 12.15 22,425.09
2002 11.35 29,359.29
2003 09.85 51,672.70
2004 07.65 89,449.00
2005 07.50 1,34,276.00
2006 08.50 1,79,060.00
2007 11.00 2,24,481.00
2008 9.00 2,52,932.00
(Source: RBI Trend and Progress Reports)

23
Another reason is the fall in interest rates, which have also greatly contributed to the growth of
the housing sector thus fuelling the demand for cement and in turn its production. The
following graph gives a clear indication of the rise in the quantum of loans lent as against the
rate of interest prevailing over a period of time.

Graph 5: Home Loan Rates and disbursement of loans

INFRASTRUCTURE
Infrastructure projects along with commercial constructions accounts for about 35% of the total
cement consumption in India. With the government increasing its focus on infrastructure
spending, particularly on roads, ports and airports, the cement demand is likely to go up in the
near future.
Since India began opening up in 1991, until recently, the progress of infrastructure has been
very poor and has been a zigzag process. But if one considers the following developments, it
would be visible that India is turning the corner on the infrastructure question and in turn
spurring the demand for cement.

24
Firstly, there are over a hundred Special Economic Zones (SEZs) in India either in operation or
under construction. Many international companies, like Nokia and automotive makers like
Volvo, are actually producing in the SEZs. Construction has been taking place – land clearance
has been done to relocate squatters or farmers away from their land and this has already
happened in the last five years or so.

The other thing to look at is the organized retail sector in India. There are well over 500 retail
malls either already operating in India or in various stages of construction and this is also new in
the last three to five years.
The various road projects under the National Highway Development Program (NHDP Phase I
and II) initiated by the previous government are being successfully implemented by the present
government. Further, government has also announced new projects namely NHDP Phase, III, IV,
V and VI, which include having four lanes on high density highways, upgradation of existing
highways, six-laning of roads under NHDP Phase I and also 1,000kms of new expressways. The
total cost of these new projects is about Rs. 1,075 billion and is expected to be completed by
FY2012. A total demand of close to 50 million tonnes of cement is expected from the above
projects.
Table 8: Projects under the NHDP

Project Details Date of Cement Consumption


completion (Mn tonnes)
NHDP Phase I GQ & Portconnectivity 90% complete -
NHDP Phase II NSEW Corridor Dec, 2009 8.8
NHDP Phase III Four laning of 10,000 kms of Mar, 2010 12.8
high density National
Highways
NHDP Phase IV Upgradation of existing Mar, 2012 18.0
20000 highways to 2 lane
NHDP Phase V Six laning of GQ & other high Mar, 2012 3.5
density highways
NHDP Phase VI 1000 kms of expressways Mar, 2012 4.5
Total 47.5
(Source: NHAI, committee on infrastructure)

25
Moreover, the government has set aside over USD 100 billion for infrastructure spending in
between 2007 and 2012. New airports have come up and the efforts are on to modernize the
existing ones. Thus, infrastructure is getting its share of attention and in turn spurring demand
for cement.

Global Players entering the Indian Market:


Rapid urbanization and the booming infrastructure have lead to an increase in construction and
development across India, attracting even the global players. The recent years have witnessed a
surge of foreign direct investment in the cement sector. International players like France's
Lafarge, Holcim from Switzerland, Italy's Italcementi and Germany's Heidelberg Cements
together hold more than a quarter of the total capacity.
 Holcim, one of the world's leading suppliers of cement, has 24 plants in the country and
enjoys a market share of about 23–25 per cent. It will further invest about US$ 2.49
billion in the next five years to set up plants and raise capacity by 25 MT in the country.
Holcim has a global sale worth about US$ 20 billion, where India contributes US$ 2
billion–US$ 2.5 billion.
 Italcementi Group, which acquired full stake in the K K Birla promoted Zuari Industries'
cement, for US$ 126.62 million in 2006 plans to invest US$ 174 million over the next two
years in various Greenfield and acquisition projects.
 The French cement major, Lafarge which acquired the cement plants of Raymond and
Tisco with an installed capacity of 6.5 MTPA a few years back plans to grow it to 15-30
MTPA in the next 10 years. Till now its manufacturing capacity was concentrated in East
India, but now the company is spreading its wings to the north and south. It is setting up
four Greenfield projects in Rajasthan, Himachal Pradesh, north-east and south India,
with a combined capacity of around 5 MT.
 German major, Heidelberg Cement has merged Mysore Cement, in which it owns
around 54 per cent stake, Indorama, (where it acquired 100 per cent stake in 2008) and
its 100 per cent Indian subsidiary, Heidelberg Cement India.

26
Current Scenario: Indian Cement Industry
The cement industry has continued its growth trajectory over the past seven years. Domestic
cement demand growth has surpassed the economic growth rate of the country for the past
couple of years. The growth rate of cement demand over the past five years at 8.37 % was
higher than the rate of growth of supply at 4.84% as also the rate of growth of capacity addition
during the same period. Demand for cement in the country is expected to continue its buoyant
ride on the back of robust economic growth and infrastructure development in the country.

DEMAND & SUPPLY SCENARIO


Date Production (% change) Consumption (% change) Capacity utilization (%) Excess supply(%)

Jan-08 5.2 10.8 102.4 1.0

Feb-08 (0.9) 5.4 101.2 0.1

Mar-08 11.2 (0.3) 104.1 1.8

Apr-08 (8.3) 10.7 91.9 (1.1)

May-08 (0.9) (9.8) 89.1 0.4

Jun-08 (1.5) 2.0 86.5 (0.2)

Jul-08 (0.1) (1.3) 86.4 0.0

Aug-08 (10.2) (2.5) 77.3 (1.1)

Sep-08 5.6 (9.5) 81.6 1.0

Oct-08 6.2 4.9 86.3 1.2

Nov-08 (2.9) 3.1 83.3 0.4

Dec-08 10.3 0.9 91.7 1.7

Jan-09 2.0 11.0 93.4 0.5

(Source: www.ibef.org) Table 9: Demand & Supply Scenario

The table above highlights the fact that consumption of cement has not taken back seat and
industry is growing and has been operating at the near equilibrium levels. Supply has fallen
short only for last monsoon which is usually a slack period for this industry. It is clearly can be

27
noted from the above data the production in Jan(08) 5.2% and in Dec(08) production increased
to 10.3% and consumption in Jan(08) 10.8% and in Dec(08) 0.9% and in Jan(09) increased to
11.0% and the supplies in Jan(09) become 0.5% in excess which is a indicator that cement
industry has a significant growth over the year.

SUPPLIE’S ESTIMATE’S

*in (m tonnes) FY04 FY05 FY06 FY07 FY08 FY09

Year-end installed capacity 144 152 158 166 199 222

Actual effective capacity 144 152 158 166 180 207

(-) Mothballed capacity 8.5 8.2 8.5 8.3 5.7 4.9

Effective installed capacity 136 143 150 158 174 202

Domestic consumption 114 121 136 149 164 178

Export (cement + clinker) 9 10.1 9.2 8.9 6 6.1

Domestic consumption + export 123 131 145 158 170 184

Surplus / (deficit) 13 12 5 0 4 18

% surplus (w.r.t effective capacity) 10% 9% 3% 0% 2% 9%

Actual utilization 86% 88% 95% 99% 97% 91%

Average prices 141 153 163 206 231 239

Change in average price 3% 8% 6% 27% 12% 4%

Capacity growth 5% 6% 4% 6% 10% 16%

Domestic demand growth 5.80% 6.40% 12.00% 9.90% 10.10% 8%

(Source: www.ibef.org) Table 10: Historical cement demand supply model

Historically, the sustainable capacity utilization in the cement industry has been 80-85%. This
implies FY09 and FY10 are unlikely to be years of overcapacity in the traditional sense. This
indicates the self efficiency of the Indian Cement Industry and also emphasizes that India
doesn’t require import of cement in future. Domestic Cement industry is highly insulated from

28
global cement markets. Exports have been constant at about 6% of total cement demand for
past few years.

FORECAST MODEL
*in (m tonnes) FY09 FY10E FY11E FY12E

Year-end installed capacity 222 250 287 300

Actual effective capacity 207 231 257 283

(-) Mothballed capacity 4.9 4.9 4.9 4.9

Effective installed capacity 202 226 252 278

Domestic consumption 178 187 205 226

Export (cement + clinker) 6.1 5 8 9

Domestic consumption + export 184 192 213 235

Surplus / (deficit) 18 35 38 43

% surplus (w.r.t effective capacity) 9% 15% 15% 15%

Actual utilization 91% 85% 85% 85%

Average prices 239 240 240 240

Change in average price 4% 0% 0% 0%

Capacity growth 16% 12% 11% 10%

Domestic demand growth 8% 5% 10% 10%

(Source: www.ibef.org) Table 11: FORECAST MODEL :FY(09) TO FY(12)

The above model is a forecast model for the growing cement sector from FY09 to FY12 the
contributing factors taken to consideration are -

o Export

o Domestic Consumption

o Average Prices

o Capacity Growth and

29
o Domestic Demand Growth

The above factors are increasing in a considerable rate indicating a positive sign towards the
growth of this sector.

30
COMPANY OVERVIEW

Introduction:
Maihar Cement is a division of Century Textiles and Industries Ltd, a flagship company of BK
Birla Group. The company is well diversified having interest in cement, textiles, rayon,
chemicals, pulp and paper.

Maihar Cement is situated at Sarlanagar (Maihar) Dist. Satna in the State of Madhya Pradesh
with an installed capacity of 4.20 Million TPA. Maihar is 45 Kms South - East of Satna on
Howrah - Mumbai Central Railway Main Line. Maihar is well known for Sharda Devi Temple and
Maihar Gharana Music whose proponent was renowned Musician Padma Vibhushan Baba
Allaudin Khan.

Devi Sharda (Maihar)

Apart from Maihar Cement, company has two more cement plants namely Century Cement at
Baikunth, Dist. Raipur in the State of Chhattisgarh with an installed capacity of 2.10 Million TPA
and Manikgarh Cement at Gadchandur, Dist. Chandrapur, Maharashtra with an installed
capacity of 1.90 Million TPA. The combined Capacity of all cement plants taken altogether is

31
8.2 Million TPA. More emphasis is given for production of blended cement which constitutes
about 95% of the total cement produced by the company.

Plants of Century Textiles & Industries Limited:

Century Cement - Chhattisgarh

Maihar Cement – Madhya Pradesh

Manikgarh Cement – Maharashtra

Figures in Million TPA

Units 2008-09

Century Cement 2.1

Maihar Cement 4.2

Manikgarh Cement 1.9

Total 8.2

The capacity enhancement to 8.20 Million TPA is under implementation by carrying out
modification, up gradation and debottlenecking of existing plant & machinery and equipments,

32
which is likely to be completed by Oct-Dec 2009 Quarter. All cement plants are equipped with
captive power plants, which not only ensure an uninterrupted power supply, but also help
company substantially on power cost, as the own generated power is quite economical as
compared to grid power.

The company sells its cement under its premium brand name - BIRLA GOLD.

Shri B.K. Birla group has three more plants :

1) M/S Kesoram cement for southern region

2) M/S Vasavdutta ceent for southern region

3) M/S Manglam cement for western region

Captive Mines:
Maihar Cement has its own Captive Mines with rich limestone reserves at Bhadanpur just 7 Kms
from the plant. Mines' working is fully mechanized and an overland belt conveyor of 7 kms
passing through hilly terrain transports limestone from mines to plant. The aesthetic view of
the surrounding area has been maintained by afforestation of the mining area and also by
creating water reservoir in the excavated area.

Figure 1: A Panoramic view of Mines

33
Captive Power Plant:
To meet the need of the hour and in order to reduce the cost of production, so as to be
competitive, Maihar Cement has installed its own Captive Thermal Power Plant and the
total installed capacity is 35 MW which is helpful in uninterrupted running of the plants on
sustainable basis.

Figure 2: Power Plant View

Logistics:
Strategic location of the plant, connected with NH-7 puts Maihar Cement in a very
advantageous position so far as logistics is concerned. The Plant is well connected by Road with
all the major marketing centers. Being situated on Mumbai - Howrah (via Allahabad) main
Railway Line, it is also well connected with all the States in East & North East.

Figure 3: Rail Lines

34
Maihar Cement is pioneer in producing Blended Cement i.e. Portland Pozzolana Cement. The
motivation for the production of blended cement has been primarily with the aim of preserving
limestone reserves and environment.

Advantages:
Low Heat of hydration resulting in resistance to cracking.
Resistance to corrosive water and chemical attacks and thereby longer life to steel/iron
structure underneath.
High degree of impermeability and workability for the concrete mix.
Higher ultimate strength at longer duration
Higher degree of fineness, resulting in -
- Complete chemical reaction
- Easy workability
- Increased plasticity
Reduced Alkali aggregate reaction as also free lime expansion and thereby resistance to
cracking.
Lower drying shrinkage and low leaching value.

PPC can be used for any type of construction which earlier had been the forte of OPC. However due
to it's special attributes, its use is rather imperative for the following construction works.

Uses:
Hydraulic Structures
Mass Concreting Works
Marine Structures
Masonry Mortars and Plastering
Under aggressive Conditions

The basic raw material in the production of cement is Limestone. The Limestone ore as
obtained from the Mines is fed to the Raw Mills after first crushing it to acceptable size. Certain

35
additives such as Laterite, Bauxite, High Grade Limestone (Sweetener) etc. are also introduced
along with Limestone into the Raw Mills as applicable. In the Raw Mills, the above inputs are
reduced to a particular fineness. The output of the Raw Mills, called 'Raw Meal' is then burnt
in the Kiln and then cooled to produce Clinker.

The fuel used for burning of limestone is powdered coal produced from the coal Mill. The
Clinker is thereupon fed into Cement Mill & pulverized along with Gypsum to yield the basic
cement. A certain proportion of Clinker in the production of cement is replaced by Fly ash to
produce PPC.

Process in Nutshell

Scenic View of Our Uniqueness:


1. Limestone excavated from Mines is transported through Dumpers and fed to crushers

wherein it is reduced from above 850 mm to 80 mm size.

2. Environmental friendly Conveyor belts transport the limestone from the Crusher to the
Plant Site over a distance of 7 kms.

36
3. Scientifically designed Stackers provide for stacking of the limestones received from the
mines in circular / longitudinal stock piles. Use of Reclaimers ensures consistency in
quality.

4. State of the Art Vertical Roller Mill grinds Limestone feed to powdered form called Raw
Meal.

5. Most advanced Coal Mill pulverizes the coal to be injected into Kiln for burning of Raw
Meal.

6. Rotary Kiln provides for Clinkerisation where in Raw Meal fed from VRM is first burnt to
melting (1400 C) & then cooled to 100 - 120 C by means of coolers immediately outside
the Kiln to produce Clinker.

37
7. Close Circuit Cement Mill ensures high quality grinding of clinker, gypsum and Pozzolana
to yield best possible uniformity of the cement particles.

8. Centralized Control Room monitoring the manufacturing process through computers.

Consistency and accuracy in the packing of bags by electronic packing machines:

Packing Plant is equipped with computer controlled electronic packers, which ensure that
cement bags are packed and sealed to 50 kg of cement each accurately. Manual check is also
carried out at random to monitor computer accuracy and introduce correction as applicable.

Packing & Dispatch:

38
Loading of bags in the wagon/trucks is carried out automatically by means of wagon / truck
loading machines, equipped with Electronic Loading Counters which accurately keep count of
the Number of bags being loaded.

Efficient logistic & transportation network ensures prompt delivery of materials to the
customers.

Environmental Management System:


Right from inception, great emphasis has been laid at Maihar Cement on maintaining ecological
balance and environmental preservation so as to provide green, healthy and pollution free
environment. Continuous monitoring of various Pollution Control equipments are done round
the clock to maintain emission levels much below the norms specified by State Pollution
Control Board.

Measures Taken Towards a Cleaner Environment


 Installation of highly efficient Pollution Control Equipments viz., ESPs, Bag Houses and
Pulse Jet Dust Collectors at every dust generating point in the Plant.

 Regular monitoring of all stacks and ambient air quality.

39
 Proper treatment of domestic affluent generated from residential colony in Oxidation
Ponds and use of treated water for plantation purposes.

 Massive efforts for plantation of various species of trees for ecological up-gradation.

Figure 4: View of Greenaries in Plant Area

To control fugitive emission, following additional steps have been taken:

Covering of Conveyor belts transporting various process materials

All raw materials are stored in covered gantry.

Water sprinklers have been provided on the roads to check fugitive emission generated
due to movement of vehicles

Concretization of roads and floors inside the Plant

The Fly Ash generated from Thermal Power Plant is used as an additive for manufacture
of PPC.

The Plant maintains perfect harmony with environment through effective pollution control
measures in respect of air, water, land and noise level. All efforts are made to curb pollution at
grass root level.

40
Customer service:
“Customer delight” remains focus of company’s marketing mix. For that company
provides best quality cement to the customers followed by prompt and perfect “After
Sales Services”. Later, independent customer feedback assessment is done to evaluate
the degree of satisfaction, which is the key to Birla Gold’s marketing strategy.

“Technical Service Cell” has been setup to provide technical assistance to institutions
and people engaged in construction work. Besides on site assistance brochures and
useful guidelines for cement usages provided regularly. Masons, contractors, Architects
and Engineers are also trained on regular basis and so far 53715 such persons have been
trained.

“Advertisements and Promotional” campaigns are created and executed in-house by


innovative marketing professionals’ involving whole gamut of activities right from
conceptualization to execution stage.

Market Regions of Birla Gold:


Maihar Cement sales are mainly spread in Madhya Pradesh, Uttaranchal, West Bengal, Bihar,
Uttar Pradesh, Assam and Orissa. The increasing congestion of plants in the Satna belt has led
to intense competition in M.P. market.
Sl No. State Share
1 Bihar 25.91%
2 Uttar Pradesh 46.83%
3 Madhya Pradesh 17.86%
4 Uttaranchal 2.47%
5 West Bengal 1.15%
6 Assam 3.48%
7 Export 2.29%
(Source: company data) Table 12: Market share (State-wise)

41
Cross Branding:
Introduction of cross branding concept is the major achievement as packaging of different
brands of Century, Maihar and Manikgarh cement from different manufacturing facilities
started selling as a single brand ‘Birla Gold’; which in turn has given freight benefits and
advantage of brand powers of established brands like Birla Faulad, Century Gold, Century
Classic etc. This has significantly improved brands base and realization to cement division.

SELLING CHANNELS:
(1) Stock Transfer:
In Bihar and Uttar Pradesh sales are through stock transfer to company dumps. Handling Agents
manage company’s godown / dumps and cement marketing under instruction of the company’s
local office. Cement is sold through dealers.

(2) Consignment Sale:


Earlier sales in Bihar, Orissa, Assam, A.P. and N.E. States, were made through Consignment
Agents. The Consignment Agents used to develop market and sale cement through dealers.
Storage / Warehousing, sales, collection of payment, tax payment and advertising in the area
were under their responsibilities. But now due to issues in Branding and due to customer
dissatisfaction consignment sale has been stopped.

(3) Dealer Sale:


In Chhattisgarh, the company directly supplies material to dealers against their orders and
collects payment from them. These dealers either retail the cement or sale in wholesale to sub
dealers appointed by them.

(4) Direct Sale:


Government Departments or private companies float tenders/ enquires from time to time for
bulk supply of cement. The company actively participates in these tenders. Marketing agents
assist in getting orders/payments and get small commission for the same.

42
Maihar Cement is selling through dealers, stock transfer and also selling directly to government
department/institutional buyers.

Sl No. Channel State Sales By Sales in %

1 Stock Transfer Bihar, Uttar Pradesh, N.E. Handling Agents 27%


2 Dealer Sale Chhattisgarh, M.P., Orissa Dealers 34%
3 Direct Sale All States Government, 39%
Institutional Buyers

TOTAL 100%

(Source: company data)

Table 13: Selling Channels of Birla Gold

As on 31st March 2009, Maihar Cement has more than 4000 stockist/agents.

43
CEMENT- Major Players

ACC LIMITED

Established in 1936, ACC has been a pioneer and trend-setter in cement and concrete
technology. A prominent overseas presence and figuring on the elite list of consumer super
brands of India but most importantly ACC has been amongst the first Indian companies to make
environmental protection, it is a cornerstone of its corporate objectives.

The historic merger of ten existing cement companies led to the establishment of ACC –
melding into a cohesive organization in the year 1936 at Maharashtra. It’s a big company in
cement manufacturing and offers the services of Ready mixed concrete and Consultancy
service. This company is listed by Bombay Stock Exchange, National Stock Exchange and in
London Stock Exchange.

The company received an award as 'Good Corporate Citizen' for the year 2005-2006. During the
year 2007 company acquired 100 % of the equity stake of Lucky Minmat Private Limited for Rs
35 crores and also acquired 14.3 % equity stake in Shiva Cement Limited. Meanwhile the
company divested its entire equity shares in Almatis ACC Ltd to the Almatis group. The overseas
contract with YANBU Cement Company in the kingdom of Saudi Arabia is successfully ongoing
relationship from last 28 years and has been renewed up to February 28, 2011.

The company has developed comprehensive expansion plans to meet the requirements of its
agenda for growth with a view to attain leadership position in the cement industry, for that
company made a project for augmentation of clinkering and cement grinding. As a result with
this the capacity of Gogal works stands increased to 4.4 Metric Tonnes Per Annum. ACC planed
to expand the unit of Bargarh works capacity to 2.14 MTPA together with 30MW captive power
plant is underway.

44
Ready mix concrete business has been identified as an area of strategic priority. ACC
commissioned a Wind Energy Farm in Tamil Nadu to promote clean and green technology. The
company foresees substantial scope for growth of this business in India and has accordingly
finalized plans to expand Ready Mix business in major cities including Tier1 and Tier 2 cities.
ACC realizes the growth potential of Ready Mix, the company has 26 plants for the same and
enhance to 46 in 2008. The company has major capital expenditure projects in hand, as a result
of these projects the total cement capacity of the company will increase to about 30.4 MTPA by
end of 2010 with total outlay of Rs 4,000 crores.

ULTRATECH CEMENT LTD.

UltraTech Cement Limited was incorporated as a public limited company on 24th August 2000,
as “L&T Cement Limited” a 100% Subsidiary of Larsen & Toubro Limited. The name of the
Company was changed to UltraTech Cement Co. Limited with effect from 19th November 2003
after the Aditya Birla group owned Grasim Industries acquired it. The name of the company was
again changed to UltraTech Cement Limited with effect from 11 th October 2004.

UltraTech Cement Limited has an annual capacity of 18.2 million tonnes. It manufactures and
markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzolana
Cement. It also manufactures ready mix concrete (RMC). UltraTech Cement Limited has five
integrated plants, six grinding units and three terminals — two 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.

INDIA CEMENTS

India Cements was set up in 1946 and the company's first plant was established in 1949 at
Sankarnagar, Tamil Nadu. Since the India Cements Ltd. has been established, it has risen in
stature to become the biggest cement producer in south India. India Cements has 7 plants

45
spread across Andhra Pradesh and Tamil Nadu. The total production capacity of the plants is
around 9 million tons per year. In south India, India Cements Company has a 28% market share
and it plans to achieve a market share of around 35% in the near future.

Around 90% of India Cements Company's produce is sold in the Tamil Nadu and Kerala markets.
India Cements Company has a distribution network which is very strong - it has over 10,000
stockists out of which around 25% is devoted to the company. The India Cements Ltd owns
famous brands such as Rassi Super Power, Sankar Super Power, and Coromondal Super Power.
In the year of 1990, ICL acquired Coromandel Cement plant at Cuddapah, consequently
installed capacity rose to 2.6 million tonnes per annum). The India Cements Company has
subsidiary companies which include ICL Financial Services, Industrial Chemicals & Monomers,
ICL International, and ICL Securities. In 1997 India cements acquired Aruna Sugars Finance Ltd
which was later renamed as India Cements Capital & Finance Ltd. It also acquired Cement Plant
of Visaka Cement Industry, at Tandur, Ranga Reddy district of Andhra Pradesh with Installed
capacity 9,00,000 Tonnes.The cement division of Raasi Cement (RCL) was vested with the
company from April.1998 under a scheme of arrangement

India Cements has established itself as a leading cement manufacturing company and as it plans
to expand its production capacity, the company's position in the market is sure to rise in the
near future.

AMBUJA CEMENT

The company's cement plant was commissioned in 1985. It was set up in technical collaboration
with Krupp Polysius, Germany, Bakau Wolf and Fuller KCP. The company got necessary
approvals for setting up another cement plant with 1 million tonne capacity per annum at
Himachal Pradesh in the year 1991. The Company undertook bulk cement transportation, by
sea, to the major markets of Mumbai, Surat and other deficit zones on the West Coast.
Transportation was to be carried out by three specially designed ships during the year 1992.
During the year 1994, the company's Muller location 1.5 million tonne cement project with

46
clinkerization facility at site in H.P and grinding facility both at Suli & Ropar in Punjab was
bespoken. In 1997, Kodinar plant of the company was originated its commercial production
with an enhanced capacity.

In the last decade the company has grown tenfold. It was the first company in India to
introduce the concept of bulk cement movement by the sea transport. The company's most
distinctive attribute, however, is its approach to the business. Ambuja follows a unique
homegrown philosophy for successful survival. Ambuja is the most profitable cement company
in India, and one of the lowest cost producers of cement in the world.

The company was awarded for its credit, the National Award for commitment to quality by the
Prime Minister of India, National Award for outstanding pollution control by the Prime Minister
of India, Best Award for highest exports by CAPEXIL and Economic Times - Harvard Business
School Association Award for corporate excellence in different years. The company was
adjudged as the top Indian company in the cement sector for the Dun and Bradstreet -
American Express Corporate Awards 2007. The company developed a unique homespun
channel management model called Channel Excellence Programme (CEP) for marketing their
product. Over 7000 dealerships and 20,000 retailers across India are covered under this model.
The company name was changed from Gujarat Ambuja Cements Limited to Ambuja Cements
Limited on April, 2007, the word Gujarat was dropped to reflect the true geographical presence
of the company.

JAYPEE CEMENT

Jaypee group is the 3rd largest cement producer in the country. The groups cement facilities
are located in the Satna Cluster (U.P), which has one of the highest cement production growth
rates in India.

The group produces special blend of Portland Pozzolana Cement under the brand name ‘Jaypee
Cement’ (PPC). Its Cement Division currently operates modern, computerized process control
cement plants with an aggregate capacity of 13.5 MTPA. The company is in the midst of

47
capacity expansion of its cement business in Northern, Southern, Central, Eastern and Western
parts of the country and is slated to be a 24.30 MTPA cement producer by the year 2010 and
26.80 MTPA by 2011 with Captive Thermal Power Plants totaling 327MW.

Keeping pace with the advancements in the IT industry, all the 140 cement dumps are
networked using TDM/TDMA VSATs along with a dedicated hub to provide 24/7 connectivity
between the plants and all the 120 points of cement distribution in order to ensure “track – the
– truck” initiative and provide seamless integration. This initiative is the first of its kind in the
cement industry in India.

In the near future, the group plans to expand its cement capacities via acquisition and
greenfield additions to maximize economies of scale and build on vision to focus on large size
plants from inception.

LAFARGE INDIA

Lafarge India is a subsidiary of the French Building Materials major Lafarge. Lafarge is the world
leader in building materials, with top-ranking positions in all of its businesses: Cement,
Aggregates & Concrete and Gypsum. Lafarge entered the Indian market in 1999, with the
acquisition of the cement business of Tata Steel. This acquisition was followed by the purchase
of the Raymond Cement facility in 2001.

Lafarge currently has three cement plants in India: two integrated plants in the state of
Chhattisgarh and a grinding station in Jharkhand. Total cement production capacity of Lafarge
in the Indian market currently stands at around 5.5 million tons. Lafarge India produces
different types of cements like Portland Slag Cement, Portland Pozzolana Cement. Lafarge
Cement is famous all over the world for its premium quality and has been used to build many
landmark buildings globally. The company is a leading cement player in Eastern India. It’s
brands Lafarge Cement and Lafarge Concreto Cement enjoy high brand equity here and are
amongst the highest priced brands. Lafarge is committed to the Indian market and has firm
plans to expand its capacity in India.

48
Lafarge cement is available through a large dealer network, throughout eastern India- in the
states of West Bengal, Jharkhand, Bihar, Chhattisgarh, Orissa and North-East States. Lafarge
Cement is also available in parts of Madhya Pradesh and Maharashtra (Vidarbha region), parts
of Uttar Pradesh, Andhra Pradesh & National Capital Region.

49
PROJECT PROFILE

50
PROJECT PROFILE
The project entitled "Perception of Trade and Non-trade Segments of BIRLA GOLD Cement in
Satna market" revolves around the customer, who is the optimal decision maker of a firm's
future. Since the cement is a core product and used by all consumers; it is very necessary firm
to now about their brand's position and customer expectations.

Earlier Marketers aimed at satisfying the customer's need but the present day of Marketing
requires something more that is customers delight.

In this era of globalization Company can survive only when he knows the fast of consumer,
which is changing day by day. A company can get an edge other its competitors in these
cutthroat competitions through superior quality, innovations and better customer
responsiveness. Hence this project aims to analyze how a cement manufacturing company can
create value to all its stakeholders to achieve a leading position in the market.

In order to get competitive advantage in core Industries, A firm will have to not only take care
of consumers taste but also delight its channel partners, which is its external resource.
Normally it takes years to build, and it not easily changed. It ranks in importance with key
internal resources such as manufacturing, research, engineering and field sales processional
etc. It represents a significant corporal commitment to a large number of intelligent companies
whose business is distribution and to the particular market they serve. It represents to a
commitment to a set of policies and practices that constitute the basic fabric on which is woven
an extensive of long-term relationship intermediaries smooth the flow of goods and services.
This procedure is necessary in order to bridge the discrepancy between the assortments of
goods and services generated by the producer and the assortment demanded by the consumer.
The discrepancy results from the fact that manufacturers typically produce a large quality of
limited variety of goods, where as consumers usually desire only a limited quantity of a wide
variety of goods. In order to attain the market share it is necessary to satisfy the channel
members. Channel members are having better knowledge of consumers buying behavior hence
their suggestions regarding the product distributors are of high values.

51
Research Methodology:
DATA COLLECTION METHODOLOGY

Universe

Since the cement is a core product and being used by all types of consumers, so our focus for
collection data was each and every man who are directly or indirectly involved with the sale or
use of cement such as stockists, dealers, civil engineers, contractors, individual customers,
masons, etc.

Sample Plan

To know the position of Maihar Cement in the trade and non-trade segment regarding sale in
comparison with the other brands on the basis of attributes of cement has been done. For this
purpose, opinion of stockists, dealers, engineers, contractors, architects and builders (who
posses knowledge regarding different brands available in the market) has been taken. This
might be helpful to draw the right picture about the market scenario.

This was convenient in nature because I would have to account only those people who actually
require or purchase cement in bulk quantity. The survey is conducted with the help of
questionnaire method and survey is conducted in the Satna region. Survey of 50 traders and
50 non-traders has been done for the analysis. Among the responses, I accepted 95
responses of the survey and rejected 5 (3 traders and 2 non-traders) because of incomplete
questionnaire. The survey was conducted in Satna City (Prem Nagar, Pateri Road), Kothi Road,
Dhawari, Unchehra, Maihar, Devendra Nagar, Panna, Nagaud, Singhpur, Kotar, Birsinghpur,
MadhavGarh, Sajjanpur and Rampur regions of Satna area.

Data Collection

Every type of research requires two types of data to be collected to reach up to any conclusion.

Primary Data are those data, which are directly obtained from people by approaching them
individually, primary data are generated when the researcher employing mail questionnaire,

52
telephone surveys, personal interviews, observations and investigates a particular problem at
hand.

For this project primary data was collected from stockists, dealers, engineers, contractors,
architects, masons and builders by using survey method. Data collection from respondents was
carried out with the help of a structured interview schedule. In this method data was collected
from respondents through questionnaires. I made a survey based on the questionnaire, which
consist of 13 questions. The mode of survey was directly contacting the people and recording
their response based on well-defined questions and also through telephone.

Secondary Data, on the other hand, includes those data, which are collected in the past for
other research work and are being used in current project work.

Secondary Data, such as procedures of marketing for cement, marketing conditions, brief
details of M/s Maihar Cement and other competitors, price, quality, and other strategy and
planning, specification in relation to other cement companies, all other information which can
be useful to complete this project, was collected for Sales and Marketing Department of Maihar
Cement. Published Documents of Maihar Cement and other competitors’ cement plants have
also been used for collection of secondary data.

NATURE OF SURVEY:

Objective of my study in this project is the discovery of ideas and thoughts from trade and non-
trade segment and is exploratory in nature. Hence instead of probability sampling, a non-
probability sampling procedure has been adopted. Survey was subjective as well as convenient
in nature because I have taken into account those people who are directly related to non-trade
segment.

Accordingly I made a survey based on the questionnaire, which consists of 13 questions. The
mode of survey was direct contacting the people and also on telephone by recording their
response about the questions asked.

53
ASSUMPTIONS MADE:

During the project the data regarding the comparison in among different brands on the basis of
market share were required. For collecting those following assumptions are made-

1. Survey of non-trade segment included engineers, contractors, masons, architects and


builders have been done because it is assumed that only these parties have adequate
knowledge and information regarding cement market situation and they are able to compare
different brands on the basis of attributes of cement.

2. The comparison of different brands was based on retailers’ and dealers perception about
these brands because it has been assumed that they are directly in contact with customers and
they can influence the buying decision of end consumer or buyer.

3. The term quality was assumed to be sum total of setting time strength, treatment color etc.
and the opinion was taken in total terms.

4. Delivery promptness, delivery quality and percentage of defective bags of cement reaches to
retailer are taken into account while we were trying to know their perception about any
particular brand on the basis of delivery.

5. Not only the promotional tools uses by company out also advertisement along with other
support provided by marketing team such as payment terms, credit terms, attention on the
feed back on remarks given by retailers are considered while trying to know about marketing
support.

6. In this survey it is assumed that the response provided by respondents is true, genuine and
free from any bias. Results obtained are based only on the opinion of the respondents.

LIMITATION OF THE STUDY


1. Lack of co-operation from the retailers in regard to giving interview.
2. It was found in some cases dealers showed inclination towards certain brands which
gave them more margins when compared to others.

54
3. It was experienced during the survey that it was difficult to convince or make the
retailers and dealers understand the important of the project.
4. As the retailers and dealers thought that it was unwise for them to give their details of
business as they feared competitors would take advantage.
5. Some time the emotional attachment and brand loyalty of respondents prohibited to
give correct information.
6. The time constraint faced in the project might have affected the comprehensiveness of
its findings.

55
OBJECTIVE OF
STUDY

56
Objectives of my survey are as under:
1. To know the position of Birla Gold Cement in the trade and non-trade segment
regarding sale in comparison with the other brands.
2. To know the reasons behind the selection of a particular brand.
3. To get suggestions form the trade and non-trade segment in order to improve the sale
as well as level of satisfaction in them.

To attain the above objectives various other sub objectives were needed to be achieved. These
are listed below:
 To analyze the market share of Birla Gold Cement.
 To know the customers preference for the brands of cement.
 To know the preference of retailer for sorting different brands of cement.
 To understand the effectiveness of various sales promotion activities of cement.
 To know preference of retailers for different gift and incentives.
 To analyze the sales promotion activities of various brands.
 To analyze the transportation facilities for Birla Gold and other cement companies.
 To analyze the frequency of visits of marketing representative of various companies.

Thus my study attempts to find ways to increase market share, to increase customer
satisfaction and thus increase the business prospects.

57
OBSERVATION &
ANALYSIS

58
OBSERVATION & ANALYSIS
1. Market Position in terms of Sales:

Brand %
JAYPEE-BULAND 35.31
PRISM-CHAMPION 34.11
ACC 13.12
BIRLA-GOLD (MAIHAR) 10.40
BIRLA-SAMRAT (SATNA) 07.06

Total 100%

Jaypee and Prism Cements have a good market share in Satna region. Here people are price
conscious and even aggressive marketing by Jaypee has allowed it to capture a large market
here. Birla Gold should respond by launching innovative marketing campaigns so that it can
increase its market share.

Market Position of Brands


40
35
30
25
20
15
10
5
0
Jaypee-Buland Prism-Champion ACC Birla Gold Birla Samrat

In the Satna market some area like MAIHAR, Naguad, Singhpur JAYPEE has sales of around 95-
99%. But some area of SATNA Zone like SATNA City market is captured by the PRISM & ACC
Comparitively Birla Gold stands 4th in ranking. It has considerable market share in places such
as Kotar, Birsinghpur, DevendraNagar, Panna.

59
2. Customer Preference of the Brand:

Brand %
JAYPEE-BULAND 29.2
PRISM-CHAMPION 25.3
ACC 18.0
BIRLA-GOLD (MAIHAR) 18.4
BIRLA-SAMRAT (SATNA) 09.1

Total 100%

9.10%

18.40%
29.20%
JAYPEE-BULAND
PRISM-CHAMPION
ACC
BIRLA-GOLD (MAIHAR)
BIRLA-SAMRAT (SATNA)

25.30%

18%

Birla Gold has a decent image in consumers mind. It can increase its market if it increases its
availability by enhancing its dealer network and increasing the number of counters where it
could sell its product. Thus compared to market share Birla Gold has a better Brand Image,
hence by strengthening its marketing and sales efforts it can leverage in this region.

60
3. Purchasing frequency and reasons
According to this survey:

a) In summer i.e. March, April, May about 35% of the cement purchase increases. It is due to
good climatic conditions for starting new construction work.

b) In monsoon i.e. from June to August about 30% of the construction work is decreased due to
rains.

c) 35% purchasing of cement is done according to the availability of work and the purchasing
does not depend upon seasons.

35% 35%

Summer

Rains

Availability of work
30%

Hence attempts need to be done to maximize their sales efforts in summer and launch heavy
marketing during rainy seasons to increase sales. As we know that sales in cement industry are
seasonal, there is a need to launch different marketing campaigns according to season to target
its customers more accurately. Birla Gold can also launch special variety of cement specifically
designed for various seasons. This idea could motivate more customers to buy Birla Gold.

61
4. Decision for selection of brand:

Advertisements- 35%

Contractors, Masons, Engineers advice- 50%

Personal Decision- 5%

Family Referrals, Word of Mouth- 10%

Decision for selection of brand

10%
5% Advertisements

Contractors, Masons, Engineers


35% advice
Personal Decision

50% Family Referrals, Word of


Mouth

It can be seen that customers give the maximum weightage to the advice of masons, engineers
and contractors. Even Advertisements play a major role in their buying decisions. Very few
people take personal decision while buying cement and family referrals also effects their
selection of a brand.

Thus company should make maximum efforts to attract masons, contractors and also launch
innovative advertising campaigns to attract more customers.

62
5. Availability of Promotional Schemes

No. of persons Schemes

58 Availing Promotional Schemes

32 Not Availing any Promotional Schemes

10 Don’t want to disclose their schemes

60

50

40

30

20

10

0
Availing Promotional Not Availing any Don't want to disclose
Schemes Promotion

From the above data I can say that there are abut 32% of respondent who are not availing any
promotional schemes and they are most important for any company to make them their
customer by offering them schemes. Increasing the reach of promotional schemes should be
done by Birla Gold.

Some companies such as ULTRATECH, ACC send their sales representatives to the construction
of the site. This place a very good impression on customers but this is only a marketing gimmick
of cement companies.

63
6. Ranking of Technical Promotion activity of Birla Gold

Technical promotion % of customer Rank


Engineer meet 10 3
Architect Meet / builders meet 30 2
Mason meet 55.7 1
T.S.E. visit 4.3 4
Total 100

4.30% 10%

Engineer meet
Architect Meet / builders meet
30%
Mason meet
T.S.E. visit
55.70%

Most of the respondents gave high ranking to mason meet conducted by Birla Gold, but
complained that company did not conduct ample builders/engineers meet and also complained
that the Technical Sales Executive (T.S.E.) visits are less by the company. This indicates that
Maihar Cement should increase Engineer and T.S.E. visits to strengthen their brand and
increase its awareness in these segments of customers.

64
7. Under the brand promotion re-arrange the importance of the following attempts
done on dealer side.

Dealer Level %of customer Rank


Dealer Meet 40 1
Sub- Dealer 20 3
Gift Item 25 2
Foreign journey 2 5
Van program 5 6
New year calendar& Diary 8 4
Total 100

Dealer Meet Sub- Dealer Gift Item


Foreign journey Van program New year calendar& Diary

2 8
5
40

25

20

Most of the counters are said that all type of programs provided by the company is utilized by
dealers and sub-dealers are using most of the facility what is given by the company. In many
counters I found that company gives gift items to the Dealers to distribute it to customer and
mason like diary, calendar, pen, stickers, bags etc.

65
8. Place these mass publicity media on the basis of its importance under brand
promotion.

Advertisement Media % of customer Rank


Hoarding 10 4

Wall painting 30 1

T.V. advertisement 8 5

Advertising in Newspaper 25 2

Radio advertisement 5 6

Banners 22 3

10%
22%
Hoarding
Wall painting
T.V. advertisement
5% 30%
Advertising in Newspaper
Radio advertisement
Banners

25%
8%

Wall painting is playing important role in mass publicity; this observation is done by large
amount of customers and is thus given higher priority. News paper advertisement is in second
position and Banner is in third rank in for mass publicity. Hence maximum priority is to be given
for promotional activities.

66
9. Factors affecting selection of a Brand:

In the questionnaire respondents were asked to rate the reasons that why a particular brand is
preferred by them. Ranking to different reasons was given and a chart was prepared.

Points A B C D E F G H I J
(Price) (S.P.S) (Pers.) (C.P.) (Advt) (Qlty) (Ava.) (Ass.) (G.I.C) (S.R.)

1 - - - - 44 - 12 - 40 -
2 - 12 - - 12 4 8 34 16 -
3 4 12 - 14 20 - 2 26 16 -
4 - 16 9 10 16 2 18 16 - -
5 - 38 6 20 2 - 20 6 6 -
6 - 18 30 28 - - - - 4 10
7 6 - 30 18 2 8 8 6 4 16
8 14 - - 10 - 12 8 8 10 34
9 16 - 4 4 - 28 - - - 30
10 40 - 2 2 - 42 - 1 - 6

A (Price) = 00+00+12+00+00+00+42+112+288+400 =854

B (Sales Promotion Schemes) = 00+24+36+64+190+108+00+00+00+00 =422

C (Personal Contact) = 00+00+00+36030+180+210+00+72+40 =568

D (Credit Period) = 00+00+42+40+100+168+126+80+36+20 =216

E (Advertisement) = 44+24+60+64+10+00+14+00+00+00 =840

F (Quality) = 00+08+00+08+00+00+56+96+252+420 =840

G (Availability) = 12+16+6+72+100+00+56+64+00+00 =326

H (After Sales Service) = 00+68+78+64+30+00+42+64+00+00 =346

I (Goodwill & Image) = 80+32+48+00+30+24+28+48+00+00 =282

J (Structural Requirement) = 00+00+00+00+00+60+112+272+270+60 =714

67
Calculation Procedure is given in appendix

From the above results I prepare a list of rankings of factors that affect the decision of
customers to select a particular brand. The list is as follows:

Ranking Reason Points


1 Price 854
2 Quality 840
3 Advertisement 840
4 Structural Requirement 714
5 Personal Contact 568
6 Sales Promotion Schemes 422
7 After Sales Service 346
8 Availability 326
9 Goodwill & Image 282
10 Credit Period 216

1. Price:

Birla Gold’s price is economic as compared to all the established brands i.e. ACC, ULTRATECH,
etc. But competitors such as Jaypee and Prism provide cement at lower prices. Respondents in
Satna area rated the price factor as 1st preference. This shows the importance of price factor in
the selection of brand. Most of the respondents suggested that the company must reduce the
price of the product and control over price hike. So the company has to adopt a suitable price
policy to increase its sale.

2. Quality:

In this region Birla Gold is an established name. But people perceive Birla Gold to contain more
Fly-Ash which reduces quality. Respondents’ ranked quality as 2nd. Birla Gold should try to
project that it provides one of the best quality cement.

68
3.Advertisement:

In my survey this attribute is rated 3rd. So according to the survey most respondents gave this
attribute not much importance for selecting the brand of cement. So the company should try to
improve services rather than spending more on advertisement.

4. Structural Requirement:

This factor is rated 4th. People perceive ACC to be the best while giving foundations/roofing to
any structure. Similarly they consider Birla Gold to be optimal while building walls, light
construction, etc. Company should strive hard to educate people to use its cement in different
structural requirements.

5. Personal Contact:

In this survey personnel contact is rated as 5th position. Personnel Contact has an everlasting
effect on the relationship among individuals, so the company should try to maintain healthy
personnel relationship with stockists, dealers, engineers and contractors.

6. Sales Promotion Schemes:

In the non-trade segment Sales Promotion Schemes are effective tools to increase the sales. In
my survey sales promotion schemes are rated at 6th position. This aspect should be given more
consideration and should provide more sales promotion schemes for those who are not availing
it and also for potential buyers.

7. After Sales Services:

According to the survey After Sale Service factor is rated at 7th position. To increase the sale
company should have to try to handle the complaints of customers immediately and try its level
best to satisfy the customers.

Service Engineers should be deployed for this and routine checkup of construction site of
customers should be made.

69
8. Availability:

Availability is rated 8th as per the survey. The company must improve its distribution channels
and dumps should be formed in Satna region in order to meet the demands of customers as
soon as possible. In this world where the time is very precious, the delivery of cement must be
immediate. It is an important key for every business to succeed.

9. Goodwill and Image of the Company

Goodwill is an important asset for every company and it requires years to form it. The goodwill
and image factor is ranked 9th according to the survey.

Birla Gold has its biggest attribute in the form of ownership owned by prestigious Birla Group,
so it has earned good image in the market but further brand upliftment exercise is also
required. By giving the technical assistance in the form of making necessary information
available regarding their product and its proper usage can increase the goodwill in the non-
trade segment. Company also can conduct seminars and Masons’ meeting to improve the
goodwill of the company.

10. Credit Period:

In this survey the factor, the respondents rate credit period as 10th preference. The customers
demanded the duration of the credit period should be of minimum 90 days, but it is not
advisable; keeping in view the risk involved and is not feasible from the industry’s aspect.
However by seeing the competition with other brands and the market trend of other building
materials as well as goodwill of customers, credit facility can be extended for a reasonable
period.

70
10. In the questionnaire respondents are asked to give suggestions to the company
so that it can improve its sales in the non-trade segment.

Out of 50 respondents:

20 [40%] Are suggested that the company is to interact [improve the personal relations] with
engineers, contractors, builders, and architects.

17 [34%] Are suggested that the company have to reduce the price and minimize the price
variations and also improve and maintain the quality of the cement.

13 [26%] Are suggested that the company have to promote the non-traders by introducing
promotional schemes and the company must give more and more technical assistance to them.

11. Level of satisfaction

The respondents have made various suggestions that how a company can improve level of
satisfaction in a customer-

a) Giving more emphasis on better quality.

b) More personal relationship between company and customer.

c) Giving promotional schemes to their customers in the form of technical assistance.

d) The recent changes in manufacturing technology should be known to customer through


representatives of the company.

71
FINDINGS

72
FINDINGS
SWOT ANALYSIS
STRENGTH:
1) Marketing team of Maihar Cement is having good relations with its channel partners
hence they are able to understand their problem and provide best possible support.
2) People ask for bleakness in cement and Maihar Cement has this.
3) Maihar Cement is having best packaging in comparison to other brands.
4) Due to its delivery promptness and effective delivery system Birla Gold scores over
other brands of cement.

WEAKNESS:
1) The competitors are doing much promotional activity rather than Birla Gold that’s why it
facing more problems in selling of product in the market. Players such as Jaypee, Prism,
Ultratech and Lafarge are spending heavily in advertising compared to Maihar Cement.
2) Company is not having the best demand, as it is not perceived as of better quality than
ACC, Ultratech.
3) Company is not having good image in comparison to few leading brands, as company is
not projecting its image through advertisement.
4) Lack of awareness program for consumers. They think Birla Gold contains more FLYASH.

OPPORTUNITY:
1) Rapid growth is taking place in Bihar and Madhya Pradesh. People are opting for more
stable structures and intensive use of cement is taking place, even government is
spending heavily on infrastructure projects. Thus, this is the right time to fully tap these
markets.
2) As Indian core industry is also growing at rate of nearly 10% per annum, Birla Gold is
having a good future.
3) Foreign direct investment in infrastructure sector going to increase in coming years,
which will increase the demand of cement.

73
4) Roads are undergoing through the transformation process through which the traditional
method of road building will be replaced by modern concrete roads.

THREATS:
1) Large number of players in cement industry makes it more competitive for Maihar
Cement to carefully price its product and at the same time satisfy its dealers and
customers.
2) Players such as Jaypee Cement, Prism Cement, and Birla Samrat are eating up
considerable market share of Birla Gold in Satna region.
3) Due to India’s exponential growth many new international cement companies are
expected in coming years which will bring a tide of change and can start price war.
4) The emergence of small players in this market may increase the competition and start
the malpractices, and heavy discounts to retailers. They can also influence many
retailers by giving better profit margin, and other benefit.

REASONS STATED BY RETAILER FOR BRAND PREFERENCE:-

MAIHAR CEMENT (Birla Gold)


 Good relationship with the company people
 Price is low and affordable for people
 Low price helps to sell easily
 Quality is good
 More profit selling the brand

LAFARGE (Concreto)
 Better quality
 Good name in the market
 Timely available
 Immediately respond on the competitors’ strategy
 Relatively less price

74
 Better packaging
 Good offers

ACC (Suraksha)
 People ask for ACC, it is having a good image and brand loyalty among consumers
 Service is good
 “Dhalai karne ke liye” people ask for ACC
 Perceived to be of very superior quality cement when compared to others
 Selling form the very first day the shop came in to being & sells easily
 They have same price prevailing for wholesale at dealers/stockiest retailers end.

PRISM CEMENT (Champion)


 Customers preference
 Good cement, plastering work is good
 Price is suitable as per customers pocket
 Rate & profit

JAYPEE CEMENT (Buland)


 Rate and profit
 Price is suitable as per customers pocket
 Service is good
 Good relationship with the people Jaypee

ULTRATECH
 Good name in the market as it carries the goodwill of L&T
 High Brand awareness among customers
 Good Advertisements
 Famous Brand
 Stable price

75
PROBLEM FACED BY-
1. STOCKISTS
 None of the stockists had any complains about any brands, in regards to the
price, transport, service etc
 Dispatch being closed at the start of the month is a ”trump card“ for them to
play in the market to push the sale
 Stockists are satisfied with the companies’ service

2. RETAILERS
 The stockists occasionally inform about the price change in the market
 They do not make personal visits to the counters frequently
 Price should be stabilized in the market
 Price stability in regard to the price set by the company as well as wholesalers
(i.e. all the wholesalers should have the same price offered in the market)
 Dispatch being closed every start of the month is a problem is a problem for
them to stick to the commitments made by them to the customers
 Small quantity ordered is not furnished on time
 Pressurize them for taking more quantity for more quantity for transportation
facility
 Maihar Cement now does not give any gifts at the counters

3. CUSTOMERS
 Large quantity of cement is not readily available
 Cracks in structures
 Low Brand Awareness
 Less number of people advise to use Birla Gold
 A stable pricing strategy has to be adopted

76
Based on these the major findings are stated as below:
1. ACC was perceived as the brand with best quality followed by Ultratech and then
Maihar Cement.
2. Maihar Cement is having best packaging perceived by the respondents.
3. Maihar Cement is having best delivery system and terms among all cement brands in
respondents perception followed by ACC and Lafarge.
4. Marketing team of Maihar Cement is providing best support to its channel partners.
5. Jaypee Cement is investing a huge amount on advertisement in order to address
consumers. And also its supply is very fast, that's why it’s becoming extremely popular.
6. Maihar Cement is in more demand due to the reputation of its dealers & credit facilities
given to the customers.
7. Word of Mouth publicity and Reference publicity are very important media that affects
the sales in cement industry.
8. Buying decision of the end customer is heavily dependant on recommendation from the
mason, engineers and contractors. Hence there is a need to maintain good relationship
with them.
9. At present cement consumer is flooded with choices due to the existence of numerous
brands in the market. Hence the cement companies need to carefully monitor their
prices and execute dynamic advertising campaigns to attract the customer.
10. Maihar Cement is very popular in price-sensitive segment of customers.

77
RECOMMENDATIONS
AND CONCLUSION

78
RECOMMENDATIONS AND CONCLUSION
In this modern era when globalization and liberalization has brought a tide of change and only
those companies can survive, which will ride on it or which will keep them isolated and let the
tide go. No company can be untouched from the storm of change and the pace of adaptive-ness
will decide its success. The market share of company will be decided from the value it gives to
the customer, the relations it has with its channel partners and end consumers, the number of
innovative products it has in its basket and its position in consumers mind.

1. The company is having quality products but it is unable to harvest it because they haven't
projected their advertisement on quality hence company should project its image through
advertisement. Quality accreditation and awards got by the company can be projected.

2. Company is having one of the best marketing supports, delivery term and packaging with
which can tap the new opportunity thrown in market buy loss of market share of ACC, as well
as Jaypee.

3. Company should increase its reach hence it should increase its numbers of dealer and
emphasis on retailing has to be done. But company should be careful in doing so because it may
bring dissatisfaction among existing dealers.

4. Company should increase the meets for reference groups like Engineers, Architects, and
Builders & Constructions companies as they play major role in influencing buyers purchasing
decision.

5. Company should give stress on the quality of cement.

6. The reach to the rural market need to be strengthened and transportation to rural areas
need to be strengthened, a significant amount of business is lost because of this.

7. Effective Branding needs to be done. Cement is merely the means to an end—a dream home.
The challenge, therefore, is to develop an identity or personality for the product that
consumers can relate to. Hence innovative advertisements should be used to stand out in the
crowd.

79
Based on my research I would like to suggest 2 lateral strategies for the company to adopt-

1) “Micro-lending” in Rural areas:

People in the rural regions of Madhya Pradesh are less affluent. Their inability to secure credit
emerged as a primary obstacle to financing construction projects. I discovered that in these
regions communities would conduct lotteries in which a group of families contribute a specific
sum each month to a pool and one lucky family would win the entire amount at the end of the
month. The winnings are then diverted to purposes such as Weddings and celebration of
festivals.

I will recommend that working with the local leaders, Maihar Cement should help community
organizers establish similar financing pools in which, instead of cash, the winners can receive
building materials, including cement. In addition, Maihar Cement can provide construction
advice and blueprints to the winners.

Hence this program can be aimed to these potential customers by appealing to their aspirations
and thus provide them psychological satisfaction through financial benefits. This program can
create loyal customers and will enhance the image of the company.

2) “Retailing” in Urban Areas:

Maihar Cement can strengthen its hold over distribution, by its foray into retailing. It can
increase cement usage in these areas by providing building solutions to retail consumers. It can
thus open company- owned retail outlets.

The company can tap the segment where customers are keener to build their homes rather
than buy a pre-built flat. This is evident in Tier II cities and smaller towns. As Bihar and M.P.
have no major metropolitan cities, this concept can work well here. Here flat culture isn’t
popular and individuals still build their homes through local contractors and laborers. Each
retail outlet can have a qualified civil engineer who will assist customers. This will help Birla
Gold to establish loyalty among its urban customers.

80
LEARNING
OUTCOME

81
Following are the learning outcomes of the study-

1. Understand the Market demands and offerings

What are the market demand and its corresponding offering in cement sector? How market
demands and offerings influence this sector. Market demand is when the market is being
backed by the buying power then there wants become their demand so understanding the
market demand is one of the learning outcome of this project, similarly market offerings is the
combination of products, services, information, or experience ordered to the market to satisfy
the needs and wants. One of the major learning outcomes of this project is the understanding of
the Market demand and offering.

2. How Marketing and Branding has become immensely important even for a commodity such as
cement
As Indian economy is growing, there is tremendous increase in consumption of cement. This has
led to the emergence of many players in this sector. Increased competition leads to higher
efforts to distinguish their brand and this sector which used to seldom market and advertise its
offering has suddenly increasing its spending on advertisements and endorsements to improve
its brand recognition. Now cement is being pushed to customers as a brand, appealing to the
emotive side of the audience. Emotive appeals take their cue from packaged goods strategies,
and help cement majors stand out in a crowd. Brands in this category are largely dissipated in
their individual imageries and are crying for awareness. Further, many operate in the space of
the quasi-brand and even more operate with tough competition from the space of commodities.
Vivid brand building adds power to the expansion drive of cement companies entering newer
markets. The goal is to prevent pricing becoming the only determinant of a purchase decision.
Hence I can say that “Cement is merely the means to an end—a dream home. The challenge,
therefore, is to develop an identity or personality for the product that consumers can relate to.”

3. Knowledge about cement sector


Working in a cement factory and having a practical experience in this sector exposed me to gain
knowledge about various operations right from Manufacturing to Sales. I being in the sales and
marketing department was to know about the competitors standing in the market and follow
their strategies closely. It helped me know the intricate details how this sector has seen

82
tremendous shift in terms of advertising and how difficult it has become to distinguish your
product offering. Suddenly companies are spending heavily on endorsements such as Jaypee
selecting Sachin Tendulkar, Binani Cements choosing Amitabh Bacchhan and Lafarge Cement
using M.S. Dhoni as their Brand Ambassador. Maihar cement is also planning to launch an
innovative advertising campaign using mobile phones as its medium. Promotion activities have
exponentially increased in recent times.

4. How to interact with customers effectively

One of the major learning outcomes from this project was how to interact with the customers
effectively. It gives the experience that how to deal with the customers and convincing them by
explaining and by giving presentations. Customers generally have a wide range of queries which
have to be answered patiently and convincingly, as a consequence that will satisfy the customer.
So to deal with customers is a fine art which has been learned from this project.

83
REFERENCES

84
REFERENCES
Sources of On-line Journals and Write ups:
1. www.articlenext.com
2. www.capitaline.com
3. www.maiharcement.co.in
4. www.economywatch.com
5. www.globusz.com
6. www.ibef.org
7. www.mospi.nic.in
8. www.rbi.org.in
9. www.researchandmarkets.com

The following reports were referred to


L. G. Burange and Shruti Yamini (2008), “Performance of Indian cement industry:
The competitive landscape”, University of Mumbai, Department of Economics.
Anupam Rastogi (2007), The Infrastructure Sector In India.
Economic Advisory Council, Review of the Economy 2008/09
Reserve Bank of India Trends and Progress Reports
‘Industry Analysis Service, Economic Intelligence Service and Prowess’- Centre for
monitoring Indian Economy Pvt. Ltd (CMIE) Database.
ICRA Report on Cement Industry.
Annual Report of Century Textile, 2007-08.

85
ANNEXURE

86
ANNEXURE
CALCULATION PROCEDURE

1. All the reasons are given points according to their ranking.


For example: The reason which is ranked 1st by the non-traders is given 10 points and
the reason ranked 2 is given 9 points like this allotment of points is made to all the
reasons (‘k’ to ‘t’).
2. Division of all the reasons is made separately according to their ranking.
3. To calculate the total points of each reason, all the ranking is multiplied with its points
and then their addition is made.

Total points for each factor is calculated as:

A = ak + al + am + an + ao + ap + aq + ar + as + at

B = bk + bl + bm + bn + bo + bp + bq + br + bs + bt

C = ck + cl + cm + cn + co + cp + cp + cr + cs + ct

D = dk + dl + dm + dn + do + dp + dp + dr + ds + dt

E = ek + el + em + en + eo + ep + ep + er + es + et

F = fk + fl + fm + fn + fo + fp + fp + fr + fs + ft

G = gk + gl + gm + gn + go + gp + gp + gr + gs + gt

H = hk + hl + hm + hn + ho + hp + hp + hr + hs + ht

I = ik + il + im + in + io + ip + ip + ir + is + it

J = jk + jl + jm + jn + jo + jp + jp + jr + js + jt

Abbreviations:

a = Price

b (S.P.S) = Sales Promotion Schemes

c (Porc.) =Personal Contact

d (C.P.) =Credit Period

87
e (Advt.) = Advertisement

f (Qu.) = Quality

g (Aval) =Availability

h (A.S.S.) = After Sales Service

i (G.I.C.) = Goodwill and Image of the Company

j (S. Req.) = Structural Requirement

The survey was conducted in Satna City (Prem Nagar, Pateri Road), Kothi Road,
Dhawari, Unchehra, Maihar, Devendra Nagar, Panna, Nagaud, Singhpur, Kotar,
Birsinghpur, MadhavGarh, Sajjanpur and Rampur regions of Satna area.

QUESTIONNAIRE:

Name: ………………………………………………………………………………………………………….

Name of the Business (in case of stockist/dealer): ..……………………………………….

Address: ………………………………………………………………………………….…………………..

Contact Details: Ph. …..………………… Mob: …….………………… Fax: ……………...……...

E - mail: ……………………………………………………………………………………………………….

Category: Contractors/Engineers/Builders/Institutions (non-trader)

1. Name the Brand of Cement you sell:

a. Jaypee Buland
b. Birla Gold
c. ACC

88
d. Prism Champion
e. Birla Samrat
f. Ultratech

2. Which Brand do you prefer?

a. Jaypee Buland
b. Birla Gold
c. ACC
d. Prism Champion
e. Birla Samrat
f. Ultratech

3. Is your decision influence by anyone?

o Yes
o No

4. If yes then by whom?

 Engineers or Architects
 Masons
 Advertisements
 Personal Discussion
 Contractors
 Brand Image of the company

89
5. Name the different promotion schemes offered by different companies
known to you

6. Under the brand promotion Re-arrange the importance of the following


attempts done on dealer side?

a. Dealer meet
b. Sub-Dealer meet
c. Gift item
d. Foreign tour
e. Van program
f. New year Calendar and Dairy

7. Rate the following attempts done for mass publicity on the basis of its
importance under the brand promotions.

a. Hording
b. Wall panting
c. TV advertisement
d. News paper Advertisement
e. Radio advertisement
f. Hoarding and Banner

8. Do you get any technical assistance from any company? If Yes, How?

90
9. What according to you the company does to increase its sales in this
segment?

10. During which month/period your purchasing is

 Maximum, Reason?
 Minimum, Reason?

11. Do you have any complaint with any company?

o Yes
o No

12. Are you satisfied with the service given by the company regarding
complaint resolution?

o Yes
o No

13. How a cement company can improve the level of satisfaction of you?
Please explain.

Thank you for your support…….!

91
List of traders surveyed in Satna Zone-

Dealer/Sub-Dealer
Survey Area Name of the shop Contact Number
Name
Nitin Yadav Rameshwara Traders 9300114276
Satna City:
1. Prem Nagar R.M. Tiwari Piyush Traders 07672-227320
2. Pateri Road Ghanshyam Shukla Palak Traders 9993866985
Imran Khan Kareem Traders 9827716157
Munna Mishra Baba Traders 9893881141
Kothi Road
Rahul Gupta Rahul Steel Traders 07672-405103
Gyan Singh Singh Traders 07672-227644
Vinya Singh Vishveshwara Traders 9826935669
Anand Tiwari Anand Traders 9303320831
Dhawari Ashok Sharma Prabha Traders 07672-237569
Satya Prakash Singh Sudhanshu Traders 9406727771
Vijay Bahadur Singh Shubham Traders 07672-23860
Pushpraj Singh Ram Traders 9425841685
Santosh Tambrakar Santosh Traders 9893825178
Unchehra
Ashok Pandey Ashok Traders 9425842216
Shatrugan Chaurasiya Chaurasiya Traders 9893065520
Upendra Singh Pushkar Traders 9993827742
Bhola Agarwal B.K. Traders 07672- 233090
Maihar Laxmandas Raj Steel Agency 07672- 234103
Sanjay Gupta Sainath Traders 9827585260
Abdul Raheem Puja Traders 9827270883
Sunil Rewa Iran Enterprises 07672- 233882
Sajjanpur Anil Agarwal Deep Traders 9907003449
Vijay Pathak Lucky Traders 07672- 32174
Premchandra Ganesh Traders 9425837547
Sanjeev Jain Jain Traders 9425168326
Sanjeev Jaiswal Sanjeev Traders 07672- 272476
Devendra Nagar
Pawan Shukla Ruchi Traders 9424356851
Ram Prakash Mamta Traders 9425839941
Harish Jain Lucky Traders 07672-272589
Shirish Agarwal Agarwal H/W 9826998095
Vinod Gupta Gupta Traders 07672- 252878
Panna Shiv Khare S.K. Enterprises 9425167029
Neeraj Jain Jain Agency 07672- 252407
Rohit Jain Singhal Traders 9893817427
Arvind Agarwal Agarwal Traders 9425470762
Manoj Mishra Mishra Traders 9826616422
Arunesh Pathak Pathak Traders 9977520824
Nagaud
Dharmendra Singh Baba Traders 982693567
Vinod Agarwal Vinod Traders 9826958757

92
Chotelal Pathak Anshu Traders 9926686805
Rajmani Bagari Ajay Cement Store 982634123
Madhav Garh
C.S. Namdev Namdev Agency 9893760874
Pradeep Singh Jagdamba Traders 9425470571
Prabhakar Gautam Gautam Traders 9977113253
Singhpur
Badrish Pandey Badrish Traders 9993499118
Sandeep Agrawal Mittal Traders 9934927689
Kotar Shri Ram Shukla Shriram Traders 9993203629
Satyabhan Patel Patel Traders 9993078503
Birsinghpur B. L. Dwivedi Ankur Traders 9993220825

93