TOPIC - Business Policy On Cement Industry

Opportunities & their Evaluation

By – Shivpal Sharan H. Gupta

Roll No. 8

Submitted to: B.V.L. Narayana

Three Year Evening MBA Programme

Third Semester
Table of Contents

Defining Industry.......................................................................................................................2
Need Analysis...............................................................................................................................2
Five Force & Pest Analysis........................................................................................................2
Selecting the Firm......................................................................................................................2
Identify Opportunity.................................................................................................................2
Input-wise Opportunity.........................................................................................................2
Value-chain wise opportunity................................................................................................2
Expansion-wise Opportunity.................................................................................................2
Picking-up Opportunity..............................................................................................................2
Choosing way towards Opportunity.....................................................................................2
Strategies to expand into North, West and East Indian Market..................................2
Structure of Project Team......................................................................................................2
Scope of Project Team..........................................................................................................2
Project Schedule.....................................................................................................................2
Financial Figures of Company...................................................................................................2
Action Plans – Finance................................................................................................................2
Total Fund Required for Project.........................................................................................2
Cost of Project – Cash flow outward during project period.........................................2
Source of Fund to meet cash outflow of Project............................................................2
Action Plan – Human Resource Policy......................................................................................2
Recruitment..............................................................................................................................2
Performance Management.....................................................................................................2
Training & Development.........................................................................................................2
Employee Satisfaction............................................................................................................2
Action Plan – Marketing Policy.................................................................................................2
Price............................................................................................................................................2
Product/Packing.......................................................................................................................2
Place............................................................................................................................................2
Promotion...................................................................................................................................2
Cost Sheet of Mini Cement Plant with annual capacity of 30,000 mt............................2
Cost Sheet of Grinding Unit with annual capacity of 1 million mt...................................2
Defining Industry

The term Industry and sector are often used to describe a group of companies

that operate in the same segment of the economy or share similar business types.

However, there is slight difference between them, former describe more specific

group of companies operating into highly similar products and services, whereas

later, pertains to their scope and refers to larger segment of economy.

For the purpose of assignment of business policy and to formulate and evaluate

strategies, our group has picked CEMENT INDUSTRY for the study, which come

under the CONSTRUCTION SECTOR of our Indian economy.

Cement industry contain the players engaged in manufacturing of cement i.e.

ordinary portland cement (OPC), for example ACC, Ultertech, India Cements, Shree

Cement, Ambuja Cement etc. Indian cement market is much dominated by the gray

cement and other products of cement have just recent get started to gain their

respective shares.

Need Analysis
 Industry growing @ 10% pa, it is primarily driven by housing sector.

 Cement is a binder that sets & hardens independently & can bind other

materials together.

 Most important use of cement is the production of mortar and concrete – the

bonding of natural or artificial aggregates to form strong building materials

that is durable.

 Cement has low product value.

Five Force & Pest Analysis

Five Force Level Factors that affect PEST

Rivalry High to Credit Policy, Pricing Policy Political

Medium
Level of income Economic
Standard of Living Social
Entry High Cost of Capital, FDI Policy Political
Barriers
Capital or Funds & Process Economic &
Technology
Impact on environment Social
Power of High Raw Material – Coal, Lime Stone Political
Suppliers
Inflation; cost of raw-material, Economic
freight
limited natural resources – no Social
alternate
Power of Low to Low Product Value, Cost of switch Economic
Buyers Medium to alternate is high - CO2, SCo,
mud & etc
Availability Low No alternate available as binding -
of material
Substitute

Selecting the Firm

 “The India Cement Ltd”, 5th largest cement producer in India.

 Installed Capacity –

• Clinker @ 9.9 million metric tone per annum.

• Cement @ 14 million metric tone per annum.

  Market Share of 15.4% in South India.

 Net realization is RS. 3677 & EBIDTA is Rs. 1191 per tone.

 Products –

RMC, 53 grade high strength cement, 43 grade OPC, Blended Cement and

Sulphate resisting Portland Cement.

 Plant location at Sankari, Dalavoi & Sankarnagar, Tamil Nadu;

Chilamakur & Yerragauta, Vishnupuram & Malkapur, Andhra Pradesh

and Banswara Rajasthan.

 Grinding unit at Vallur, TN and Parli Vaijynath, Maharashtra.

 Chennai Super King is the IPL franchise.

Identify Opportunity

 Generally, Opportunity lies in –

 Cost Reduction – inputs

 Value Chain – vertical or horizontal

 Expansion – new market or diversified segment

 Inputs – coal, limestone, power, freight & product.

 Value chain – mining, construction, logistic & RMC.

 Expansion – geographical, product line.

Input-wise Opportunity

 Use plastic waste as fuel because

 Chennai city generate daily 150 tones of plastic waste, where as on

pan India it is 5600 tones.

 Help’s in waste magt. of country.

 Where as, coal is regulated by government.

 Use Fly ash, Iron & Steel Slag with Limestone

 Slag is by-product of melting ore to purify metals.

 This slag is same that is derived from lime to feed cement kilns that

produce clinkers and.

These combinations replace up to 30% of Lime.

 Captive power plant

 National grid rate per unit is Rs. 4.50 per kilowatt.

 Captive power plant base on gas and other waste as fuel efficient in

cost reduction by Rs. 2.75 per kw.

 Production of PBFSC instead of OPC -

 PBFSC required 75% less energy.

 Slag cement i.e. PBFSC, is good product than OPC in terms of concrete

workability, strength and more hardened consistency.

Value-chain wise opportunity

 Sea route is most cheapest way of transportation, its cost effect when

product value is low.

 Bulk transportation is most popular in world, and it reduce cost of

packing and freight too.

 Cement before grinding is clinker and transport those clinker at mini pant in

various location

 Clinker has shelf life of 12 months, while finished cement has 3

months shelf in normal condition.

 this would reduce wastage of cement at site & in transit.

 E-commerce i.e. B2B and B2C

 In now days, internet is most popular form of business.

 It reduce the middle channel and is cost effective in terms of

coverage with same resources.

 Direct Customer Relationship

 Huge project required large quantity of cement, here firm can help

them in material i.e. direct delivery, waste management, adjusting to

their schedules etc.

 Mining of coal & lime stone

 To have the mining of both raw materials, would make company in solid
 position.

 As these two prime raw material for cement, therefore it would assure

supply and cost for acquiring them would be low.

 Construction field

 Ultimate user of cement is construction sector, therefore to be in

field of construction would help company as itself is producing cement.

Expansion-wise Opportunity

 Expanding to New Market

 In 2009-10 demand would be 208 mmt;

 south - 66 mmt and north & west – 59 mmt each.

 Export to Middle East & Southern Asia account for 30% of world

cement export and proximity in distance with them is advantage for

us.

 South-East Asia & Africa, especially eastern portion has huge demand

of cement due to growing economies.

 Export of cement in deficit region.

 Expansion in Product Line –

 As we have propose to produce Slag cement as this company doesn’t

have product in their portfolio.

  Manufacturing of Slag cement is process easy as compare to grey

cement and its required less energy too.

 Company also deals in RMC, our suggestion is to expand this product to

large extent, because they are eco-friendly, reduce wastage on site,

storage & procurement free, quality check etc., are benefits to

customer against OPC.

Picking-up Opportunity

 In case of mining in India is regulated by govt. and no private sector is

allowed to do so.

 Additionally, construction required huge money and have long gestation

period.

 Further, to add Slag cement in portfolio it required a whole new plant that

requires huge investment & time period too.

 Similarly, rest of other does have some pits and falls, but they are good

opportunities.

We want investment should be small, but it should add good revenues.

 Looking to them along with company profiles and economy growth.

 We have chose opportunity to expand in other markets because -

 Compound growth rate 11%.

 Less investment huge revenue growth.

  Leverage existing assets & experience.

 Organic growth/expansion.

 Certain markets have just born like Africa.

Choosing way towards Opportunity

 To expand into other market, we have following strategies –

 We would be expand into market into phases, first to enter into Indian

market than into South-East Asian & East African market

simultaneously.

 Further, we will setup new mini cement plant and grinding mills to cater

new market with support of exiting manufacturing & grinding units.

 Even, RMC plants will set up with mini plants.

Strategies to expand into North, West and East Indian Market.

 As north-west Indian market, are highly competitive in nature but they are

growing by nearly 15% per annum.

 To setup 5 mini plant with 30,000 mtap location would be,

 Near to lime stone reveres and connected by railway line.

 Setup 2 grinding mills with capacity of 1 mmtap connected by rail line.

 RMC plant would be with mini plants.

 Further, company would form Project Team, head by Director/VP, to look

after the whole project.

 This project would carried out into phases –

 First phase would be 3 mini plants with RMC and 1 grinding unit.

 Then, second phase would be remaining plants and units.

 North, West, Central India is first phase, then East India is second

phase.

 In first phase, plant at Chirawa, Rajasthan, Sindkhed – Maharastra,

Dhanradaghra, Gujarat and grinding unit at Nagri, Madhya Pradesh would be

constructed.

 Then second phase of construction would start at Chhota Dongar,

Chhattisgarh, Srungavarapukota, AP and grinding unit at Sanchi, Jharkhand.

 For manpower planning, higher position will be taken by existing employee

depending their performance, experience and Qualification.

 Where as, lower position will filled by hiring people from markets.

 RMC plants will be operated through wet lease.

 Sales & Distribution would be done by agency system.

 Using good will of IPL franchise as marketing symbol.

Structure of Project Team

Scope of Project Team

 Team would be responsible for whole project; from Planning, development of
strategies and Action plan to execution.
 Activities of Team –
 Planning of Plant Layout, Selection of Places and etc.
 Calling for Tenders.
 Awarding Contracts after consulting BODs.
 Inspecting work in progress.
 Prepare Project Schedule & Budgets.
 Strategies & Action Plans.
 PROJECT SCHEDULE

PHASE & ACTIVITY Months/ SCHEDULE

CONTROL DDESCRIPTION Calendar 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
LEVEL Oct Nov Dec Jan Feb Mar Apr May Jun Jul- Aug Sep Oct Nov Dec Jan Feb
Years -10 -10 -10 -11 -11 -11 -11 -11 -11 11 -11 -11 -11 -11 -11 -12 -12
PLANNING
Formation of project team for
Board of mini cement plant and RMC
Directors
PLANNING Preparation of preliminary
general arrangements planning
Project Team bid documents and invitation of
bids.
PLANNING
Award of consultancy contract
Project Team to build the plant

PLANNING
Award of civil work contract
Project Team

PLANNING
Award of contract for
engineering and machinery
Technical Team
supply for mini plant
(Civil)
CONSTRUCTIO
N
Construction of civil works
Technical Team
(Civil)
CONSTRUCTIO
Supply of engineering and
N
machinery for mini cement
M/s Laxmi
plant
Engineers
 ACTIVITY Months / SCHEDULE
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
PHASE DESCRIPTION Calendar
Oct Nov Dec Jan Feb Mar Apr May Jun Jul- Aug Sep- Oct Nov Dec Jan Feb
Years -10 -10 -10 -11 -11 -11 -11 -11 -11 11 -11 11 -11 -11 -11 -12 -12
CONSTRUCTION
Erection & installation of
Technical Team machines
(E&M)
COMPLETION
Commencement of production in
Project team & mini cement plant
Plant Incharge
PLANNING
Award of contract for civil
Project team (civil) works for RMC

PLANNING
Placement of order for RMC
Project team machines and loaders
(Maintenance)
CONSTRUCTION
Erection of machines for RMC
M/s Electromech plant
Technical services
COMPLETION

Project team & RMC production to start and

Plant Incharge ready to supply to customers

CONSTRUCTION
Supply of RMC loaders
M/s Ashoka
Leyland Ltd.
 Project Schedule
Schedule Contract Phase Description
Oct10 PLANNING Formation of project team for mini cement plant and
Board of Directors RMC
Nov10 – PLANNING Preparation of preliminary general arrangements
Dec10 Project Team planning bid documents and invitation of bids.
Jan11 – PLANNING
Feb11 Project Team
Award of consultancy contract to build the plant
Feb11 – PLANNING
Mar11 Award of civil work contract
Project Team

Mar11 – PLANNING
Award of contract for engineering and machinery
May11 Technical Team
(Civil)
supply for mini plant
May11 – CONSTRUCTION
Oct11 Technical Team Construction of civil works
(Civil)
Jul11 – CONSTRUCTION
Supply of engineering and machinery for mini cement
Oct11 M/s Laxmi Engineers plant
Oct11 – CONSTRUCTION
Nov11 Technical Team Erection & installation of machines
(E&M)
Dec11 – COMPLETION
Jan12 Project team & Plant Commencement of production in mini cement plant
Incharge
Oct11 – PLANNING
Nov11 Award of contract for civil works for RMC
Project team (civil)
Sept11– PLANNING
Oct11 Project team Placement of order for RMC machines and loaders
(Maintenance)
Dec11 – CONSTRUCTION
Jan12 M/s Electromech Erection of machines for RMC plant
Technical services
Jan12 – COMPLETION
Feb12 Project team & Plant RMC production to start and ready to supply to
Incharge customers

Dec11 – CONSTRUCTION
Jan12 M/s Ashoka Leyland Supply of RMC loaders
Ltd.
Board of directors has given time frame of three years to project team to complete the
construction of plants and mills.
Financial Figures of Company
Particulars Figures of Figures are
2010 in Rs.
Sales & Other Income 422169 In Lakhs
Profit Before Tax 53132 In Lakhs
Cash Generated (Internally) 72087 In Lakhs
Fixed Assets (Net) 462151 In Lakhs
Loan & Advance 186919 In Lakhs
Reserves & Surplus 318019 In Lakhs

Shareholder’s Funds 348736 In Lakhs

Net Worth per Equity 113.53 In Rupees
EPS 12.49 In Rupees
Debt Equity Ratio 0.6x

Below is Map of India showing location of proposed sites of Plants & Mills
Action Plans – Finance
 Costing of Grinding & Mini Plants–
 Cost of Grinding Plant with 1 million mtpa capacity would be Rs. 140
crores.
 Cost of mini plant with 30,000 mtpa would be Rs. 167 laces.

 Cost of RMC Plant would be costing to Rs. 8 to 10 crores.

 Cost of RMC loaders would be Rs. 50 laces

 Cost land to be added to this figure, roughly it would be Rs. 5 crores

for 10 hectors.

 Costing of Railway Freight–

 Cost of transporting cement clinker is Rs. 100 per tones.

 Cost of Electricity –

 Generally 100 KWH/Tones is requirement of electricity and Rs

4.50 KWH is rate of electricity supply by national grid.

 Total KWH consumption of one mini plant would be 8,76,000

 While grinding mill consume 28.7KWH/tones for close-circuit

milling.

 http://salvanews-nishant.blogspot.com/2010/01/indian-railways-to-
hike-freight-rates.html

 http:// google.com/books?isbn=0750662565…….
Total Fund Required for Project

Particulars Internal Calculation Total Amount

Grinding Unit (1 mmtap) Unit 2 X 140 Crores 280 Crores

Mini Plants ( 30000 mtap) Units 5 X 167 lakhs 8.35 Crores
Land Units 5 X 5 Crores 25 Crores
RMC Plant Units 5 X 9 Crores 45 Crores
RMC Loaders Units 25 X 50 lakhs 12.50 Crores
Total Fixed Assets Amounts 370.85 Crores
Railway Freight (in MT) 21,50,000 X Rs 100/Tone 215 Crores

Electricity Consumption (in 7,24,00,000 X Rs. 4.50 32.58 Crores

KWH) KWH
Working Capital (For all) 104.25 Crores
General & Contingency 37.75 Crores
Expenses
Total Funds required 760.43 Crores
Cost of Project – Cash flow outward during project period

Cost of Project In Laces

Fund required for Capital 37,085
.23
Working Capital 10,425.
50
General & Contingency Expen 3,775
.25
51,285
.98
Administrative Expenses No.
of
for Project Completion Person
s
Project Manger 500000 180 1
pm .00
Other Categories
Finance 100000 3 1
pm 6.00
Legal 100000 3 1
pm 6.00
HR 100000 3 1
pm 6.00
Technical 100000 108 3
pm .00
39
6.00
Staff Under them
Coordination Team 45000 4 3
pm 8.60
Finance Team 45000 3 2
pm 2.40
Legal Team 45000 3 2
pm 2.40
HR Team 45000 3 2
pm 2.40
Technical 45000 9 6
pm 7.20

243.00
On Site Personnel
Supervisor at three site 15000 pm 6 12
4.80

64.80
Other expenses
Stationary
7.48
Advertisement 90000 14 16
aver. .45
Tender Publishing
2.55
Other Expenses 45
0.00

474.48

52,4
64.26
Duration of Project is 3 years as
per BODs time frame
Source of Fund to meet cash outflow of Project

Cost (%) Name of Instrument Amount Remarks

Raised
- Reserves & Surplus 380.22 This is surplus money
Crores converted in equity
10% Private Placement (R C 75.00 Crores There are Investment
Preference Share 75 banks for Private
Laces of Rs. 100 Each) Funds & they charge
2.5% +
10.30% Bank Lending 130.22 Commercial Loan
Crores
8% Non-Convertible 100.00 Same as PP, but
Debentures of Rs. 100 Crores amount req. &
business model matter
for negotiation
5.5% Internal cash 75.00 Crores Rate is decided upon
generation ( Relatives, call-money market, it
Friends, Directors & So good for small reqt.
on)
4.635% Total Fund Raised 760.44 Average Capital
(Avr. Crores Structure of 1:1
Interest)

Action Plan – Human Resource Policy

 Unlocking potential of employee.

 Employed experienced people from other companies

 More stress was on enthusiasm not on experience

 Motivating factor was empowerment to perform than monetary factor

 Free access to senior official

  Communication meeting on regular basis to discuss & sort out grievance.

 Preference to existing employees for higher position.

Recruitment

 A very fair and transparent process with adequate opportunities to

look for suitable candidates internally as well as from outside.

 A Committee of officers called the Central Recruitment Committee

handles the entire recruitment process comprising screening of

applications, preliminary short-listing, interviews and final selection.

 All decisions of the recruitment committee are recorded in respect of

each candidate.

 Candidates are informed of their short-listing and selection

immediately after the interview or at the earliest thereafter.

Performance Management

 This system provides ample opportunities and motivational incentives

to employees so as to reward and retain good talent within the

Company.

 These incentives include Performance Linked Incentives, Good Work

Awards, Letters of Appreciation, Special Increments, Promotions,

Nomination to external training programme in India and abroad, public

felicitation and appreciation.

  Competent employees and those who display aptitude are invited to

become Trainers themselves and receive Train the Trainer facilitation.

Training & Development

 The system incorporates a process called Competency Assessment and

Training and Developmental Needs wherein appraisers are specifically

called upon to identify and assess training needs of employees at

specific intervals that do not coincide with Performance Appraisals.

 This is so that training needs can be assessed objectively.

 Training is imparted to take care of an individual’s career development

as well as functional and skill enhancement.

 Competency and Development training inputs include Skill and general

performance enhancement, communication skills and Career

development.

 Functional training needs are identified and conducted by functional

departments while Corporate HR organizes competency and

developmental inputs.

Employee Satisfaction

 In addition to periodic internal Employee Satisfaction Surveys,

 We should participate in Employee Satisfaction and Work Places

Surveys conducted by reputed external agencies and organizations like

Hewitt Associates Grow Talent.

Action Plan – Marketing Policy

 Marketing is design by Marketing Mix model i.e. 4 P’s of market –

 Price

 Product

 Place

 Promotion

 Company is market leader in South India, so it would required good

marketing policy which leverages it existing assets.

Price

 No difference in product as such except brand differentiation.

 Thus, better pricing policy is introductory price policy and 1% cash discount

would be good strategy.

 Price Range would be Rs. 215 to 218 per bag depending upon market price

range of Rs. 225 to 230 per bag.

 RMC rate would be Rs. 2750 per cubic meter against market rate of Rs. 3250

per cubic meter.

Product/Packing

 In market there is no difference in product offering by cement industry, but

brand differentiation do exists.

  Thus, it would be better have different packing i.e. bag and color the bag.

 Packing of Cement HDEP Plastic Bags and bag color would white and yellow.

 In front, Brand name Coromandel, Sankar, Raasi.

 In back side, it should carry IPL Super King Symbol.

Place

 Distribution of cement by way of dealership or agency system.

 Goodwon facilities would be hired in nearby localities of plants.

 There shall be no direct sales point at this stage.

 Inventory level at each godwon and plant would be 5,000 tone.

Promotion

 Brand shall be promoted by Chennai Super King Team to create awareness

among customer.

 Advertisement means would be Radio, Regional Newspaper and TV Channels.

 Banners at prime location like railways station and bus stands.

 Hoarding at main road and market areas.

 Promotion Team – surveyors and representatives should be visiting at various

locations for promotion & data collection.

Cost Sheet of Mini Cement Plant with annual capacity of 30,000 mt.

Mini Cement Plant with annual

capacity of 30,000 mt.
Operating Cost One Tone In Rs.

8,8
Lime Stone 196.2 294.3 29,000.00

5,6
Coal 750 187.5 25,000.00

3
Gypsum 250 12.5 75,000.00

14,829,000.00

16,20
Electricity 4.5 120Kwh 0,000.00

Freight 100 1 tonne

7
- Coal 7500 50,000.00

4,5
- Lime Stone 45000 00,000.00

1
- Gypsum 1500 50,000.00

36,429,000.00

Administrative

12,0 1
General Manger 1 00.00 44,000.00

5, 1
Accountants 2 000.00 20,000.00

Accounting Clerks 2 3,
 000.00 72,000.00

4,
Store Man 1 000.00 48,000.00

3,
Store Clerk 2 000.00 72,000.00

8,
Personnel Officer 1 000.00 96,000.00

4,
Messenger 1 000.00 48,000.00

3, 2
Guards 6 000.00 16,000.00

4,
Drivers 2 000.00 96,000.00

9
Sub total of employee 17 12,000.00

Production & Technique

9, 1
Plant Manger 1 000.00 08,000.00

6, 2
Supervisors 3 000.00 16,000.00

5,
Instrument Engineer 1 000.00 60,000.00

5,
Mechanical Engineer 1 000.00 60,000.00

3, 2
Technicians 6 500.00 52,000.00
 3, 1,4
Operators (skilled) 40 000.00 40,000.00

2, 9
Un Skill workers 30 500.00 00,000.00

4,
Chemist 1 500.00 54,000.00

3, 1
Lab technicians 3 000.00 08,000.00

3,1
Sub total of employee 86 98,000.00

8
Benefit (20% of the total) 22,000.00

Total Number of Workmen 103 4,932,000.00

39,00
Packing Bags 50 Kg 6000000 0,000.00

@Rs 6.5
per bag

Total Cost before

Sale/Marketing Expenses 80,361,000.00

3,0
Freight of Cement 100 30000 00,000.00

Office Furniture & Equipment

 20000 per 2
Computer 10 pic 00,000.00

Printers 3 30,000.00

1,2
Furniture 50,000.00

4
Others 50,000.00

1,930,000.00

Marketing Over head

8,
Marketing Manger 1 000.00 96,000.00

6, 2
Sales officer 3 000.00 16,000.00

4, 4
Sales man 9 000.00 32,000.00

744,000.00

1
Benefit (25% of the total) 86,000.00

Total Amount 930,000.00

Advertisement expenses of
 6
Banners & Hoardings 50,000.00

86,871,00 13,03
Other or Contingent Expenses 15% 0.00 0,650.00

80,361,00 8,0
Excise duty 10% 0.00 36,100.00

10
Cost of Production of 30,000 7,937,750.00

tone of Cement 3597.93 per tone

22,86
Profit 17.48% 2,250.00

13
Sale Price 4306 30000 0,800,000.00

@ Rs 218
per bag

Above calculation shown is of

One Mini Plant with an annual
capacity of 30,000 Mt.

Now, 5 plant shall be operated

22,862,2 114,311
Profit would be 5 50 ,250
Cost Sheet of Grinding Unit with annual capacity of 1 million mt.

Grinding Unit with

capacity of 1 million
annually

Operating Cost In Rs.

Gypsum 250 12.5 12,500,000.00

Electricity 4.5 28.7 Kwh 129,150,000.00

Frieght 100 tonne

- Gypsum 50000 5,000,000.00

- Clinkers 1000000 100,000,000.00

246,650,000.0
0

Staff Workers Avr. Salary

Administrative 37 66,551.35 2,462,400.00

Production & Technique 188 45,928.72 8,634,600.00

11,097,000.
00

257,747,000.0
Expenses at Factory 0

Inputs

- Clinkers Rs 2639 1000000 2,639,000,000.00

rate of providing cement

Clinkers is US$ 58 per
tonne

Exchange rate 45.50

Cost of Producing
Cement 2,896,747,000.00

Packing ( 50 kg) @ Rs 6.50 20000000 130,000,000.00

Other Expenses 25% 2896747000 724,186,750.00

Frieght of Cement 100 1000000 100,000,000.00

Cost of Cement after

packing 3,850,933,750.00

Profit 10.57 % 455,066,250.00

Selling Cement 4306 1000000 4,306,000,000.00

@ Rs. 218
per bag

Shown above is cost

sheet of one grinding mill
with annual capacity of 1
million mt.

Now, we has 2 grinding

mills

Profit would be of 2 mills 2 455,066,250 910,132,500.00

Final outcome of this project

Profit from Cement Plant 5 X 22,862,250 = Rs. 11,43,11,250.00

Profit from Grinding 2 X 455,066,250 = Rs. 91,01,32,500.00

Units

Less –

760.44 crores X 4.635% Rs. 35,23,00,000.00

Interest on funds

borrowed for project

Total amount of net

Rs. 67,21,43,750.00
profit is