aditya birla cement

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    Amity Business School

    UltraTechCement

    SUBMITTED BY:-

    Mohit Sahni Shailendra Singh

    Lohit Sharma

    Bhavik Sarin

    Anupreet Kharb

    Vaibhav Dhir

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    Industry Overview

    Cement Industry is estimated at around Rs. 18,000 crores.

    Currently India is ranked second in the world with an installed

    capacity of 114.2 Million tonnes.

    The cement Industry in India comprise of

    130 large cement plant

    more than 365 small cement plants

    The industry is expected to grow at a rate of 11%.

    No. of people employed1,20,000.

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    The industry is divided into five regions:-

    North (Punjab, Delhi, Haryana, Himachal Pradesh, Rajasthan,Chandigarh, J&K and Uttranchal);

    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).

    Trade between these regions is on a very low scale mainly

    because of the transportation bottlenecks and uncompetitive

    cost of transportation.

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    Growth Trends

    Current production capacity300MT

    Next year target320 MT

    Vision 2020550 MT

    The reasons for the growth can be attributed to the growth in

    real estate sector, infrastructure projects like dams, airports,

    irrigation projects and national highway development

    programs.

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    Major Players in the Market

    23

    20

    17

    9

    7

    6

    18

    Market Share

    UltraTech Cement

    ACC Cement

    Ambuja Cement

    Jaypee Cement

    JK CementIndia Cement

    Others

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    PEST Analysis

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    Political: The price of cement is depend on coal rates, power tariffs, railway

    tariffs, freight, royalty & cess on limestone.

    In the Union budget 2011-12 govt. introduce of tax free bonds,

    formation of infrastructure debt funds.

    Economical: The infrastructure industry is on boom because of housing

    development programmes, promotion of concrete highway & roads

    which improve the demand of cement.

    In the recent years, Indian cement industry attracted a huge FDI.

    International players like Holcim has 24 plants in the country &

    planning to invest US$ 2.5 billion .

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    Social: They provide cement bags on discounted price to rural areas so

    that they can renovate the rural areas.

    They do complete and time to time monitoring of their plant to

    stop emission of dust and CO2 from plant.

    Technology: Presently 93% of the total capacity in the industry is based on

    modern and environment friendly dry process technology. Under the Green Aid plan one of the project for co-generation

    of power utilizing waste heat in an Indian cement plant is

    being implemented with Japanese assistance.

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    Company Overview

    Aditya Birla Group is among the top 10 cement producers

    globally.

    Incorporated on 24 August 2000 as L&T Cement Limited.

    Cement business of Larsen & Toubro Limited demerged andvested in company in 2004.

    Grasim acquired management control in July 2004.

    Name changed to UltraTech Cement Limited with effect from

    14 October 2004.

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    UltraTech Cement Limited has an annual capacity of 52million tonnes.

    The company has 11 integrated plants, one white cement plant,

    one clinkerisation plant in UAE.

    UltraTech Cement is the countrys largest exporter of cementclinker.

    The export markets span countries around the Indian Ocean,

    Africa, Europe and the Middle East.

    UltraTech Cement Middle East Investments Limited, a whollyowned subsidiary of the Company has acquired management

    control of ETA Star Cement together with its operations in the

    UAE, Bahrain and Bangladesh in September, 2010

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    Distribution Channel

    Cement in India is primarily sold through a distributor-dealer

    network.

    The main sales is done through

    Dealer network (80%)

    Bulk sale to institutional customers (20%)

    Managing the distribution network and strong working

    relationships with distributors, contractors etc., is critical.

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    Transportation Routes

    For domestic Market:

    For Export:

    Cement is transported via roads/railways to the nearest portand then transferred to the importing country.

    Company

    Distributor Retailer Customer

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    For Institutional Sales

    COMPANY

    AGENTS

    ORGANIZATION GOVERNMENT

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    Total margin for the distribution channel17-18%.

    Distributions marginRs. 6-7 per bag

    Retailers marginRs. 2-3 per bag

    Around 25% of the total cost goes in transportation.

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    Marketing Activities

    Aditya Birla Group has been the pioneer in promotional

    activities when it comes to cement industry and has taken

    several innovative marketing initiatives.

    Cricket has a strong following in our country, so UltraTechcement started with in-stand branding, then moved on to be co-

    sponsors to the Indo-Pak series held in Pakistan.

    To further strengthen the bonding with the channel partners,

    over 400 of them were taken to witness the match.

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    UltraTech Cement and IPL

    After the 2008 Indian premier League, UltraTech has become

    official sponsor for the Jaipur based IPL team.

    The coming together of the two brands, is the bringing

    together of two champions. Both UltraTech and Rajasthan Royals are champions in their

    domain.

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    Contd. Chak De India Campaign

    The in-film branding

    opportunity was used by

    UltraTech for the first time

    ever in the cement industry.

    UltraTech was the sponsor of

    womens hockey team.

    UltraTech branding was all

    over, throughout the movie.

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    A lot of ground events are also taken up by way of road shows

    to create awareness about the product among the customers

    and trade partners.

    Technical meets are organized for dealers, stockists, retailers,individual house builders, engineers, architects and

    contractors.

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    Innovative Marketing

    UltraTech has brought in a new concept in cement marketing

    UltraTech Building Solutions.

    It is a one stop shop for all construction needs.

    It offers a wide spectrum of end-to-end home buildingsolution.

    Every customer who walks into UltraTech Building Solutions

    outlet recieves guidance on construction related issues as well

    as value added services like Vastu, usage of budget software toestimate cost involved for contruction, paper clearance

    procedure etc.

    After the success in Rajkot, the company is planning to come-

    up with more such outlets in other parts of the country.

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    B2B Sales

    Data Collection

    The company gets the list of registered builders and contractors from

    the concerned government offices.

    They are then divided on the basis of districts and then the list isprovided to the Area Sales Manager.

    A meeting is organized

    The company representatives provides product information to

    the clients, their offerings and how their product is better than

    their competitors.

    Gifts and mementos are provided to the people attending the

    meeting.

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    Company has a 100% cash payment policy at the time of order

    placement.

    But this may vary depending upon the relation with the client.

    Market price of a UltraTech cement bagRs. 235

    In B2B channelRs.220-225.

    The discount given to the client also depends upon the time

    taken by the him to make the full payment.

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    B2B For Govt. Contractor

    Govt. Contractor has to approach to the Ultra Tech distributor

    for the cement requirement.

    The contractor has to send the copy of work order and the

    requirement of the cement which is to be attested by the PWDengineer of concerned office .

    The distributor forward the requirement to the Ultra Tech

    regional office and the company directly send the cement to

    the contractor. The mode of payment is generally Demand Draft which is

    made in the favor of Ultra Tech not in the name of distributor.

    The amount of margin that a distributor gets here is quite less

    as compared to normal order.