Acknowledgement

We take this opportunity to thank a few people who supported us in carrying out this
project:

• We would like to thank our lecturer Mr. Shayam Dissanayake for giving his
fullest cooperation and support to do this project.
• Our friends, who helped us to make this project a success.
• We are bound to thank our parents for supporting us in every possible way,
through out this project.
• And finally APIIT for providing us with the necessary resources to finish this
project on time.
Introduction

The main purpose of this project is to relocate the operations of Holcim Cement
Company in another country. For that we have to decide a country, and check all the
details which is useful for the cement industry, in that specific country.

It’s a larger involvement to relocate a new company in other country. For that we have to
select a suitable country with have all the facilities, and have all the raw material which is
useful for the cement production.

Objectives of the project report

• We have to find a country, and justify why did we chose this country to re locate
this cement industry. So for that we have to find out the availability of the raw
material for cement and the cheapest labour cost, infrastructure, economic issues a
political issues and technology.

• Then we have to identify which part of the country is most suitable for the
industry. We have to analyse which district is most suitable to relocate the cement
industry according to the infrastructure, availability of raw material, economic
background of the city etc.

• As the last Part we have to do the cost benefit analyse for the relocation, the
benefits we gained through relocating it in the selected country and the area.

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Country selection

There are lots of factors that need to be taken in to consideration when selecting a
country to relocate the cement industry. Therefore it is vital to evaluate countries and
select a country that will bring more benefits by relocating the cement industry. Therefore
the countries that will be taken in to consideration to locate the cement industry will be
Pakistan, Bangladesh and India.

Comparative analysis of countries

Bangladesh and India

Bangladesh is known as the People’s Republic and remains one of the world’s poorest,
most densely populated, and least developed nations. Economy is based on agriculture,
mainly jute, rice, sugarcane, tea, tobacco, and wheat. And Bangladesh is known as the
World’s largest producer of jute. Put the GDP rates of Bangladesh

Compared to India, Bangladesh has a good primary road network but the seaports suffer
from inefficient space management and a shortage of handling equipment. Railway
systems are in a poor condition and have an inadequate electricity supply and
telecommunications services but have extensive inland waterways. Moderation and
expansion of airports are planned.

Major barriers to growth in Bangladesh is because of frequent cyclones and floods, the
inefficiency of state-owned enterprises, a rapidly growing labour force that cannot be
absorbed by agriculture, delays in exploiting energy resources (natural gas), inadequate
power supplies, and slow implementation of economic reforms.

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Therefore through this analysis it clearly shows that Bangladesh is not sufficient to
relocate the Cement industry.

Pakistan and India

Pakistan is known as the Islamic republic; textile production is the biggest earner of
foreign exchange and has a small but expanding manufacturing capacity. Agricultural,
sugarcane, rice, cotton lint, corn are the main product in Pakistan. Two significant
seaports in Pakistan are Karachi and Port Qasim. Put the GDP

Compared to India, Pakistan is noted for poor condition of its road system and
Inconsistent utilities provision to private firms. And continues to suffer through a
damaging foreign exchange crisis, therefore the government must cope with long
standing economic liability, inadequate infrastructure, low levels of literacy, and
increasing sectarian, ethnic, and tribal violence.

Put some details as per to doing business.

There exists immense competition between members of the cartel. Critical success factors
of the industry have unanimously become utilization of idle production capacity,
additions to which have started sending threatening signals to market participants.
Cement manufacturers have undertaken counter offensive strategies by introducing
capacity enhancements of their own to capture extra market share and achieve economies
of scale from production activities.

The below chart shows how sufficient is relocating the Cement industry in India
compared to Bangladesh and Pakistan. Therefore as a consultancy group we chose to
relocate the Cement industry in India.

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India
India is a country in South Asia spread over three million square kilometres, located
entirely in the northern hemisphere. It is the seventh-largest country by geographical area,
the second most populous country, and the most populous liberal democracy in the world.
India has a coastline of over seven thousand kilometres, bounded by the Indian Ocean on
the south, the Arabian Sea on the west, and the Bay of Bengal on the east. Indian borders
are Pakistan from the west; China, Nepal and Bhutan from the north-east; and Bangladesh
and Myanmar from the east. In the Indian Ocean, India is in the vicinity of Sri Lanka,
Maldives and Indonesia.

With a GDP growth rate of 9.2%, the Indian economy is among the fastest growing in the
world. It is the world's fourth country with a GDP growth rate of 9.2%. However, when
measured by USD exchange-rate terms, it is the twelfth largest in the world, with a GDP
of US$785.47 billion. A developing country, is fairly uneven, with the top 10% of
income groups earning 33% of all income. India's per capita income of US$3,400 is
ranked 122nd in the world. India has a labour force of 496.4 million, 60% of which is
employed in agriculture or agriculture-related industries. The service sector accounts for
23% of GDP; the agricultural and industrial sectors make up 22% and 17% respectively.
Major agricultural crops include rice, wheat, oilseed, cotton, jute, tea, sugarcane, and
potatoes. Major industries include textiles, chemicals, food processing, steel,
transportation equipment, cement, mining, petroleum, and machinery. More recently,
India has capitalised on its large pool of educated, English-speaking people to become an
important outsourcing destination for multinational corporations. India has also become a
major exporter of software as well as financial, research, and technology services. India's
most important trading partners are the United States, the European Union, Japan, China,
and the United Arab Emirates.

India is one of the key emerging markets in the world. The country's skilled managerial
and technical manpower match the best available in the world. Its middle class, whose
size rivals the population of the USA or the European Union, lends India a distinct

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cutting edge in global competition. GE Capital terms it 'unique', PepsiCo finds it one of
the fastest growing and Motorola is sure it will turn into a major sourcing centre. Indian
operations have occupied centre stage in these giants' global networks.

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Reasons for relocating the Cement factory in India

• India has the fifth largest electricity generation capacity in the world which we
widely need for the Cement Industry.
• India's foreign exchange reserves stand at US$ 160.677 billion.
• India is the fifth largest telecom services market in the world; US$ 17.8 billion
revenues in FY 2005. It helps the cement company to communicate with the
mother company as well as with the other countries for a cheaper rate.
• India has an extensive road network of 3.3 million km – the second largest in
the world.
• Indian ports handled cargo of 510 million tonnes in 2004-05, 10.8 per cent
increase over 2003-04.
• India has 125 airports; of these 11 are designated international airports.
• In 2004-05, Indian airports handled 60 million passengers and 1.3 million
tonnes of cargo.
• Petroleum & Natural Gas constitutes over 16 per cent of GDP and includes
transportation, refining and marketing of petroleum products and gas.
• India is one of the ten largest retail markets in the world.
• India is the leading destination for providing IT and IT Enabled Services, with
revenues of US$ 28.2 billion in 2004-05. IT Services and Software constituted
59 per cent, IT Hardware about 21 per cent and ITeS about 20 per cent.
• India has been ranked as the top destination for retailers in A T Kearney's
Global Retail Development Index (GRDI).

(Data are from: The quick facts by IBEF)

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Advantages in choosing India to relocate

• India is a large market of about 300 million in population. Thus exploiting such a
market would do well for the company in comparison to the 20 million population
of Sri Lanka.(population)
• With the world's fourth largest economy in purchasing power and the second
fastest growing large economy, India has made rapid progress in the last decade,
most notably in information technology.(second largest growing country)

• Due to a high rate of population in India, there is a large sum of unemployment.

Thus labour costs, and available in abundance. Thus we are able to reduce the cost
of production in India because Sri Lanka is known as to have the highest rate of
labour costs in the SAARC region.

• Labour, raw materials are cheaper and available in abundance in India than other
countries.
• The government support foreign investors.
• India is one of the largest markets in South Asia, representing a vast, yet largely
untapped market for many western-type goods and services. Therefore it helps to
capture foreign market through India.
• In the future, India is projected to be one of the world’s largest economies in
terms of GDP, at purchasing power parity. So it helps the cement company to
have a rapid growth as well.
• Electricity availability and road networks of India help to reduce the production
cost as well as to get the raw materials on time for the production.
• Compared to Sri Lanka India is more advantages in technology, therefore we will
be able to get high technology machinery for a cheaper rate to produce cement
and it helps us to reduce the production cost than in Sri Lanka.

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State/ District and Site chosen

Region/ Community Locational Decision

The decision of selecting a region and a site suitable for the cement company was carried
out by performing a research on India which is one of the most developing countries and
excellent for industrial investments. By performing a research on India we came to the
conclusion of situating our cement factory at Coimbatore which is 511 kilometers from
Chennai, and 352 kms from Tuticorin which is the nearest port. Coimbatore is the third
largest and one of the top most industrialized cites of Tamil nadu. The city is situated on
the banks of the River Noyyal. The first mill that came up as far back as 1888 was a
textile mill and now there are over a hundred industrial mills in this district. Coimbatore
is 7469 sq. km in area and has a population of 4,271,856. Traveling from Coimbatore is
extremely easy since Peelamedu Airport is approximately 10 Kilometers from the centre
of the city.

Rail: Coimbatore Junction is well connected by trains from all major cities. Other nearby
train stations includes Podanur Junction and North Coimbatore.

Bus: The State Transport Corporation and a lot of private bus operators ply bus from
Coimbatore aswell.

http://www.mapsofindia.com/maps/pocketmaps/chennaicoimbatore.htm

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