1.

1 HISTORICAL BACKGROUND OF CEMENT INDUSTRY

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
socio-economic growth and development. It is also the second most
consumed material on the planet (WBCSD 2002). The Indian cement
industry is the second largest producer of cement in the world just behind
China, but ahead of the United States and Japan. It is consented to be a
core sector accounting for approximately 1.3% of GDP and employing
over 0.14 million people. Also the industry is a significant contributor to
the revenue collected by both the central and state governments through
excise and sales taxes.

Evolution of the Indian Cement Industry:

The story of the evolution of the Indian cement industry is rather long,
where it has seen many ups and downs, but finally has arrived in its
maturity stage as it is beginning to gather the benefits of its decontrol by the
government in 1989-90.

Invention of Cement

Ever since civilizations first started to build, the world has sought a man
made bonding material that would bind stones into a solid, formed mass.
The Egyptians discovered lime and gypsum mortar as a binding agent for
building such structures as the Pyramids. The Greeks made further
improvements and finally the Romans developed cement that produced
structures of remarkable durability (Cement Association of Canada 2006).
John Smeaton often referred to as „father of civil engineering‟ in England
concentrated his work in this field and made the first modern concrete by
adding pebbles as a coarse aggregate and mixing powered brick into the

1
cement in 1759. Finally, in 1824 Joseph Aspdin patented the basic process
of slower-setting cement. He addressed this as „Portland cement‟ due to the
fact that in appearance and hardness, it resembled the upper Jurassic rock
found in the region of Portland, in southern England (Lafarge 2004).

Indian Cement Industry Pre Independence

The first endeavor to manufacture cement dates back to 1889 when a

Calcutta based company endeavored to manufacture cement from
Argillaceous (kankar).

But the first endeavor to manufacture cement in an organized way

commenced in Madras. South India Industries Limited began manufacture
of Portland cement in 1904.But the effort did not succeed and the company
had to halt production.

Finally it was in 1914 that the first licensed cement manufacturing unit was
set up by India Cement Company Ltd at Porbandar, Gujarat with an
available capacity of 10,000 tons and production of 1000 installed. The
First World War gave the impetus to the cement industry still in its initial
stages. The following decade saw tremendous progress in terms of
manufacturing units, installed capacity and production. This phase is also
referred to as the Nascent Stage of Indian Cement Industry.

During the earlier years, production of cement exceeded the demand.

Society had a biased opinion against the cement manufactured in India,
which further led to reduction in demand. The government intervened by
giving protection to the Industry and by encouraging cooperation among the
manufacturers. In 1927, the Concrete Association of India was formed with
twin goals of creating a positive awareness among the public of the utility
of cement.

2
Indian Cement Industry Post-Independence

The growth rate of cement was slow around the period after independence
due to various factors like low prices, slow growth in additional capacity
and rising cost. The government intervened several times to boost the
industry, by increasing prices and providing financial incentives. But it had
little impact on the industry.

In 1956, the price and distribution control system was set up to ensure fair
prices for both the manufacturers and consumers across the country and to
reduce regional imbalances and reach self sufficiency.

Period of Restriction (1969-1982)

The cement industry in India was severely restrained by the government

during this period. Government hold over the industry was through both
direct and indirect means. Government intervened directly by exercising
authority over production, capacity and distribution of cement and it
intervened indirectly through price control.

In 1977 the government authorized higher prices for cement manufactured

by new units or through capacity increase in existing units. But still the
growth rate was below par.

In 1979 the government introduced a three tier price system. Prices were
different for cement produced in low, medium and high cost plants.

However the price control did not have the desired effect. Rise in input cost,
reduced profit margins meant the manufacturers could not allocate funds for
increase in capacity

Partial Control (1982-1989)

To give impetus to the cement industry, the Government of India introduced

a quota system in 1982.A quota of 66.60% was imposed for sales to

3
Government and small real estate developers. For new units and sick units a
lower quota at 50% was affected. The remaining 33.40% was allowed to be
sold in the open market.

These changes had a desired effect on the industry. Profitability of the

manufacturers increased substantially, but the rising input cost was a cause
for concern.

Post Liberalization

In 1989 the cement industry was given complete freedom, to gear it up to

meet the challenges of free market competition due to the impending policy
of liberalization. In 1991 the industry was de licensed.

This resulted in an accelerated growth for the industry and availability of

state of the art technology for modernization. Most of the major players
invested heavily for capacity.

To maximize the opportunity available in the form of global markets, the

industry laid greater focus on exports. The role of the government has been
extremely crucial in the growth of the industry.

1.2 INDUSTRY PROFILE

The Indian cement industry is the second largest producer of quality

cement. Indian Cement Industry is engaged in the production of several
varieties of cement such as Ordinary Portland Cement (OPC), Portland
Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil
Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting
Portland Cement, White Cement, etc. They are produced strictly as per the
Bureau of Indian Standards (BIS) specifications and their quality is
comparable with the best in the world.

4
With nearly 300 million tonnes (MT) of cement production capacity, India
is the second largest cement producer in the world. By 2020, cement
production is expected to reach 550 MT. The sector is dominated by private
players. Of the total capacity, 98 per cent lies with the private sector and the
rest with public sector. The cement production capacity was 247 MT in FY
12, and is estimated to touch 550 MT in FY 20.

Cement production in India increased at a compound annual growth rate

(CAGR) of 9.7 per cent to 272 MT over FY 06–13. As per the 12th Five
Year Plan, production is expected to reach 407 MT by FY 17. Currently,
India has 185 large and more than 365 mini cement plants cement plants
spread across all states. Andhra Pradesh is the leading state with 40 large
cement plants, followed by Rajasthan and Tamil Nadu with 20 and 21
plants, respectively.

The Government of India is focusing on infrastructure development to boost

economic growth. It plans to increase investment in infrastructure to US$ 1
trillion in the 12th Five Year Plan (2012–17). Infrastructure projects such as
Dedicated Freight Corridors as well as new and upgraded airports and ports
are expected to further drive construction activity. All this brings about a
tremendous scope for the cement industry in the country.

The North Eastern (NE) region in India has consistently been in cement
deficit for several years. Cement manufactured locally is inadequate to meet
the local demand for cement, and the deficit is met through cement
purchased from other parts of India. Thus, there is a vast opportunity in this
region for the cement industry to flourish. Also, the major policy and fiscal
initiatives are expected to catalyze infrastructure and industrial development
in the region, driving the demand for cement.

5
Domestic Cement Consumption

The domestic cement consumption is expected to increase at a CAGR of

10.2 per cent during FY11-17 and reach 398 million tonnes.

Figure 1.1 : CAGR 2011-17

Source: Indian Cement Review

Major Cement Demand Drivers

Housing sector accounts for 64 per cent of the total cement demand in
India.
Figure 1.2 : Cement Demand in India

Source: Indian Cement Review

6
Production of Cement
Cement production increased at a CAGR of 9.7 per cent to 272 million
tonnes over FY06–13.
Figure 1.3 : Cement Production FY06-13

Source: Indian Cement Review

Structure of the Indian Cement Industry

 It is a fragmented industry. There are 70 cement companies in India,

operating 185 large and more than 350 mini plants, where majority
of the production of cement (94%) in the country is by large plants.

 One of the other defining features of the Indian cement industry is

that the location of limestone reserves in select states has resulted in
it‟s evolving in the form of clusters.

 Since cement is a high bulk and low value commodity, competition

is also localized because the cost of transportation of cement to
distant markets often results in the product being uncompetitive in
those markets.

 Another distinguishing characteristic comes from it being cyclical in

nature as the market and consumption is closely linked to the
economic and climatic cycles. In India, cement production is
normally at its peak in the month of March while it is at its lowest in

7
 the month of August and September. The cyclical nature of this
industry has meant that only large players are able to withstand the
downturn in demand due to their economies of scale, operational
efficiencies, centrally controlled distribution systems and geographical
diversification.

 The Industry recorded an exponential growth with the introduction

of partial decontrol in 1982 culminating in total decontrol in 1989.

 India ranks second in world cement producing countries.

 The Industry has been facing a chronic problem of insufficient

availability of the main fuel coal, driving the manufacturers to resort
to use of alternatives at steep cost.

 Taxes and Government levies on cement are high compared to

countries in Asia pacific region.

 Cement Industry, which was branded as the highest polluter of

environment, now meets the pollution standards.

 Contributes to environmental cleanliness by consuming hazardous

wastes like Fly Ash (around 30 Mn.t) from Thermal Power Plants
and the entire 8 Mn.t of Slag produced by Steel manufacturing units.

 As a part of Corporate Social Responsibility (CSR), the Cement

Industry employs around one lakh people and takes care of the social
needs not only of the employees but also adopts several villages
around the factories providing free drinking water, electricity,
medical and educational facilities.

 The Cement Industry produces a variety of cement to suit a host of

applications matching the world's best in quality.

 Exports Cement/Clinker to around 30 countries across the globe and

earns precious foreign exchange.

8
 The core sector Cement Industry deserves due support from the
Government by avoiding imposition of high levies and duties,
making available various inputs like fuel, power, transport etc. at
reasonable prices and in required quantities and help its growth and
improve competitively both in domestic and international markets.
Government Initiatives
The housing segment accounts for a major portion of the total domestic
demand for cement in India. The Government of India is strongly focused
on infrastructure development to boost economic growth and plans to
increase investment in infrastructure to US$ 1 trillion in the 12th Five Year
Plan (2012–17). During the Plan, the industry is estimated to add a capacity
of 150 MT.
Some of the major initiatives taken by the Government of India to boost the
Indian cement industry are as follows:
 An expert appraisal committee under the Ministry of Environment,
Government of India, has given its approval to India Cements to
double its capacity and set up a 40 megawatt (MW) power plant at
one of its facilities in Tamil Nadu. The proposed expansion project
will come up at Dalavoi in Ariyalur district.
 The Competition Commission of India (CCI) has approved the
proposed acquisition of cement plants of Jaypee Cement Corporation
Ltd, comprising an integrated cement unit at Sewagram and grinding
unit at Wanakbori in Gujarat by Ultratech Cement Ltd.
 Giving impetus to green initiatives, Goa State Pollution Control
Board (GSPCB) has signed a memorandum of understanding (MoU)
with Vasavadatta Cement, a company with its plant in Karnataka.
The cement manufacturer will use the plastic waste collected from
Goa as fuel for its manufacturing plant.

9
1.3 FUTURE TRENDS

India's potential in infrastructure is huge. The country is expected to

become the world's third largest construction market by 2025, adding 11.5
million homes a year to become a US$ 1 trillion a year market, according to
a study by Global Construction Perspectives and Oxford Economics.

In November 2012 the India Brand Equity Foundation (IBEF) said that it
expected double-digit growth in the cement industry for the 2013 and 2014
fiscal years, which end on 31 March 2013 and 31 March 2014
respectively. It reported that the cement industry would increase production
by around 71Mt/yr. over the same time-frame to reach over 300Mt/yr. in
2014.

Meanwhile, the Indian Government's 12th Five-Year Plan, which runs for
2013 to 2017, states that India will require a cement capacity in the region
of 480Mt/yr. by the end of 2017.12 It states that a further 150Mt/yr. of
capacity will be required to accomplish this. Separately, ACC expects India
to have a capacity of 500Mt/yr. by 2020. The government promises
significant investment in infrastructure, although bureaucracy has hampered
such investments in the past.

With prices remaining low due to overcapacity and low demand, the
potential for future collusion between producers and the difficulty of setting
up new capacity, it is possible that producers, under pressure to meet the
expectations placed on them by the Five-Year Plan, will see increased
pressure on margins in the next few years, especially if fuel prices continue
to rise.

In the midst of this, smaller companies are likely to suffer more than most,
possibly making them acquisition targets for better-equipped multinationals.
Indeed, in January 2013 Prism Cement, one of India's smaller cement

10
producers, actually reported a net loss for the quarter to 31 December
2012. It cited low demand, high fuel costs and increased electricity prices.
How long can such producers continue as the Ultratechs, ACCs and
Ambujas of this world keep adding new capacity?

An academic report carried out for the Competition Commission of India in

2012 hints at this possibility of future consolidation in the industry. The
study found that, despite capacity utilisation falling across all cement
producers in India from 2006 to 2011, it was those with the smallest market
share that experienced by far the worst reduction. Binani Cement, for
example, recorded utilisation rates of only around 55-60%. Conversely
mega-players like Ultratech have been more stable, with rates of 80-95%. In
January 2013 India Ratings reported that smaller businesses were less likely
to benefit from the expected improvement in the industry.

Smaller local producers are less well equipped to deal with expansion and
their relative size will gradually diminish compared to the top 12 producers.
As this happens, it is likely that they will become the acquisition targets of
the larger firms.

1.4 RULES AND REGULATION FOR WORKING CONDITIONS

Industrialisation poses a challenge for an entrepreneur in the form of

management of the resources. The management and effective and efficient
deployment of the resources of the organisation is the factor which decides
the profitability and viability of any organisation.

Labour is one of the basic resources of any industry and has an important
bearing on the performance and goals of the organisation. In India we have
a plethora of Laws which deals with issues concerning Labour
administration, labour welfare, regulation of industrial relations between the
management and the workers. For the effective and efficient management

11
of labour in an industry or an organisation it is necessary to have a complete
knowledge of the Laws, bye laws, regulations and ordinances applicable to
the industry in general and to the company or organisation specifically. The
laws and bye laws applicable to labour issues and interests provides for
various compliances in accordance with procedures laid therein.

The labour welfare work, thus, covers a wide range of activities and in its
present form is widely recognised and is regarded as an integral part of the
industrial system and management.

The following are the different working conditions as per, The Factories
Act, 1948 (Act No. 63 of 1948), as amended by the Factories (Amendment)
Act, 1987 (Act 20 of 1987).

Health:

Section 11. Cleanliness:

(1) Every factory shall be kept clean and free from effluvial arising from
any drain, privy or other nuisance, and in particular

(a) accumulation of dirt and refuse shall be removed daily by

sweeping or by any other effective method from the floors
and benches of workrooms and from staircases and passages
and disposed of in a suitable manner;

(b) the floor of every workroom shall be cleaned at least once in

every week by washing, using disinfectant where necessary,
or by some other effective method;

(c) where a floor is liable to become wet in the course of any

manufacturing process to such extent as is capable of being
drained, effective means of drainage shall be provided as
maintained;

12
 (d) all inside walls and partitions, all ceilings or tops of rooms
and all walls, sides and tops of passages and staircases shall -

(i) where they are 'painted otherwise than with washable

water paint or varnished, be repainted or re-varnished
at least once in every period of five years;

(i-a) where they are painted with washable water paint, be

repainted with at least one coat of such paint at least
once in every period of three years and washed at least
once in every period of six months;

(ii) where they are painted or varnished or where they have

smooth impervious surfaces, be cleaned at least one in
every period of fourteen months by such methods as
may be prescribed;

(iii) in any other case, be kept whitewashed, or colour

washed, and the whitewashing or colour washing shall
be carried out at least once in every period of fourteen
months;

(dd) all doors and window-frames and other wooden or

metallic framework and shutters shall be kept painted
or varnished and the painting or varnishing shall
carried out at least once in every period of five years;

(e) The dates on which the processes required by clause (d) are
carried out shall be entered in the prescribed register.

(2) If, in view of the nature of the operations carried on in a factory or

class or description of factories or any part of a factory or class or
description of factories, it is not possible for the occupier to comply
with all or any of the provisions of sub-section (1), the State

13
 Government may by order exempt such factory or class or
description of factories or part from any of the provisions of that sub-
section and specify alternative methods for keeping the factory in a
clean state.

Section 12. Disposal of wastes and effluents:

(1) Effective arrangements shall be made in every factory for the

treatment of wastes and effluents due to the manufacturing process
carried on therein, so as to render them innocuous, and for their
disposal.

(2) The State Government may make rules prescribing the arrangements
to be made under sub-section (1) or requiring that the arrangements
made in accordance with sub-section (1) shall be approved by such
authority as may be prescribed.

Section 13. Ventilation and temperature:

(1) Effect and suitable provisions shall be made in every factory for
securing and maintaining in every workroom -

(a) Adequate ventilation by the circulation of fresh air, and

(b) such a temperature as will secure to workers therein

reasonable conditions of comfort and prevent injury to health;
and in particular,

• walls and roofs shall be of such material and so

designed that such temperature shall not be exceeded
but kept as low as practicable;

• Where the nature of the work carried on in the factories

involves, or is likely to involve, the production of
excessively high temperature, such adequate measures

14
 as are practicable shall be taken to protect the workers
there from, by separating the process, which produces
such temperature from the workroom, by insulating the
hot parts or by other effective means.

(2) The State Government may prescribe a standard of adequate

ventilation and reasonable temperature for any factory or class or
description of factories or parts thereof and direct that proper
measuring instruments, at such places and in such position as may be
specified, shall be provided and such records, as may be prescribed,
shall be maintained.

(3) If it appears to the Chief Inspector that excessively high temperature

in any factory can be reduced by the adoption of suitable measures,
he may, without prejudice to the rules made under sub-section (2),
serve on the occupier, an order in writing specifying the measures
which, in his opinion should be adopted, and requiring them to be
carried out before a specified date.

Section 14. Dust and fume:

(1) In every factory in which, by reason of the manufacturing process

carried on, there is given off any dust or fume or other impurity of
such a nature and to such an extent as is likely to be injurious or
offensive to the workers employed therein, or any dust in substantial
quantities, effective measures shall be taken to prevent its inhalation
and accumulation in any workroom, and if any exhaust appliance is
necessary for this purpose, it shall be applied as near as possible to
the point of origin of the dust, fume or other impurity, and such point
shall be enclosed so far as possible.

15
(2) In any factory no stationary internal combustion engine shall be
operated unless the exhaust is conducted into the open air, and no
other internal combustion engine shall be operated in any room
unless effective measures have been taken to prevent such
accumulation of fumes there from as are likely to be injurious to
workers employed in the room.

Section 15. Artificial humidification:

(1) In respect of all factories in which the humidity of the air is

artificially increased, the State Government may make rules,-

(a) prescribing standards of humidification;

(b) regulating the methods used for artificially increasing the

humidity of the air;

(c) directing prescribed tests for determining the humidity of the

air to be correctly carried out and recorded;

(d) prescribing methods to be adopted for securing adequate

ventilation and cooling of the air in the workrooms.

(2) In any factory in which the humidity of the air is artificially

increased, the water used for the purpose shall be taken from a public
supply, or other source of drinking water, or shall he effectively
purified before it is so used.

(3) If it appears to an Inspector that the water used in a factory for

increasing humidity which is required to be effectively purified
under sub-section (2) is not effectively purified he may serve on the
manager of the factory an order in writing, specifying the measures
which in his opinion should be adopted, and requiring them to be
carried out before specified date.

16
Safety:

Section 22. Work on or near machinery in motion:

(1) Where in any factory it becomes necessary to examine any part of

machinery referred to in section 21, while the machinery is in
motion, or, as a result of such examination, to carry out -

(a) in a case referred to in clause (i) of the proviso to sub-section

(1) of section 21, lubrication or other adjusting operation; or

(b) in a case referred to in clause (ii) of the proviso aforesaid, any

mounting or shipping of belts or lubrication or other adjusting
operation, while the machinery is in motion, such -
examination or operation shall be made or carried out only by
a specially trained adult male worker wearing tight fitting
clothing (which shall be supplied by the occupier) whose
name has been recorded in the register prescribed in this
behalf and who has been furnished with a certificate of his
appointment.

(2) No woman or young person shall be allowed to clean, lubricate or

adjust any part of a prime-mover or of any transmission machinery
while prime-mover or transmission machinery is in motion, or to
clean, lubricate or adjust any part of any machine if the cleaning,
lubrication or adjustment thereof would expose the woman or young
person to risk of injury from any moving part either of that machine
or of any adjacent machinery.

(3) The State Government may, by notification in the Official Gazette

prohibit, in any specified factory or class or description of factories,
the cleaning, lubricating or adjusting by any person of specified parts
of machinery when those parts are in motion.

17
Section 31. Pressure Plant:

(1) If in any factory, any plant or machinery or any part thereof is

operated at a pressure above atmospheric pressure, effective
measures shall be taken to ensure that the safe working pressure of
such plant or machinery or part is not exceeded.

(2) The State Government may make rules providing for the
examination and testing of any plant or machinery such as is referred
to in sub-section (1) and prescribing such other safety measures in
relation thereto as may in its opinion, be necessary in any factory or
class or description of factories.

(3) The State Government may, by rules, exempt, subject to such

conditions as may be specified therein, any part of any plant or
machinery referred to in sub-section (1) from the provisions of this
section.

Section 36. Precautions against dangerous fumes, gases, etc:

(1) No person shall be required or allowed to enter any chamber, tank,

vat, pit, pipe, flue or other confined space in any factory in which
any gas, fume, vapour or dust is likely to be present to such an extent
as to involve risk to persons being overcome thereby, unless it is
provided with a manhole of adequate size or other effective means of
egress.

(2) No person shall be required or allowed to enter any confined space

as is referred to in sub-section (1), until all practicable measures have
been taken to remove any gas, fume, vapour or dust, which may be
present so as to bring its level within the permissible limits and to
prevent any ingress of such gas, fume, vapour or dust.

18
Section 38. Precautions in Case of Fire:

(1) In every factory, all practicable measures shall be taken to prevent

outbreak of fire and its spread, both internally and externally, and to
provide and maintain -

(a) safe means of escape for all persons in the event of a fire, and

(b) the necessary equipment and facilities for extinguishing fire.

(2) Effective measures shall be taken to ensure that in every factory all
the workers are familiar with the means of escape in case of fire and
have been adequately trained in the routine to be following in such
cases.

(3) The State Government may make rules, in respect of any factory or
class or description of factories, requiring the measures to be adopted
to give effect to the provisions of sub-sections (1) and (2).

(4) Notwithstanding anything contained in clause (a) of sub-section (1)

or sub-section (2), if the Chief Inspector, having regard to the nature
of the work carried on in any factory, the construction of such
factory, special risk to life or safety, or any other circumstances, is of
the opinion that the measures provided in the factory, whether as
prescribed or not, for the purposes of clause (a) of sub-section (1) or
sub-section (2), are inadequate, he may, by order in writing, require
that such additional measures as he may consider reasonable and
necessary, be provided in the factory before such date as is specified
in the order.

Section 40. Safety of Buildings and Machinery:

(1) If it appears to the Inspector that any building or part of a building or

any part of the ways, machinery or plant in a factory is in such a

19
 condition that it is dangerous to human life or safety, he may serve
on the occupier or manager or both of the factory an order in writing
specifying the measures, which in his opinion should be adopted and
requiring them to be carried out before a specified date.

(2) If it appears to the Inspector that the use of any building or part of a
building or any part of the ways, machinery or plant in a factory
involves imminent danger to human life or safety he may serve on
the occupier or manager or both of the factory an order in writing
prohibiting its use until it has been properly repaired or altered.

Section 41G. Workers' Participation in Safety Management:

(1) The occupier shall, in every factory where a hazardous process takes
place, or where hazardous substances are used or handled, set up a
Safety Committee consisting of equal number of representatives of
workers and management to promote co-operation between the
workers and the management in maintaining proper safety and health
at work and to review periodically the measures taken in that behalf.
Provided that the State Government may, by order in writing and for
reasons to be recorded, exempt the occupier of any factory or class
of factories from setting up such Committee.

(2) The composition of the Safety Committee, the tenure of office of its
members and their rights and duties shall be such as may be
prescribed.

1.5 QWL IN THE INDUSTRY

Quality of work life in India at infant stage where there is a huge

opportunities to adopt social innovation in workplace development
structure. In order to improve competitiveness and productivity it is
desirable to address workplace and social innovation in multiple shape

20
namely flexible ways of organizing, modern employment relations, external
collaboration, participatory adopted changes in an organization‟s practice.

Quality of work life is a critical concept with having lots of importance in

employee‟s life. QWL indicates a proper balance both in work and personal
life which also ensure organizational productivity and employee‟s job
satisfaction.

The work on QWL had begun in India four decade ago with differences in
the social, cultural, political and economic spheres. Most of the work in
Indian setting dealt with the QWL in theoretical and descriptive framework,
or mostly in an action research context to bring about some desirable
change in the design of work system. No specific studies have been
conducted to understand factor affecting quality of work life that is working
towards the development of cement industry. There is a lack of intensive
research with respect to the level of quality of work life pertaining in the
industry. Absence of QWL index in the industry also makes it difficult to be
measured and compared.

However, there are a number of Indian Labor Legislations that provide the
basis for such services, facilities and amenities as may be established in or
in the vicinity of undertakings to enable the persons employed in them to
perform their work in healthy, congenial surroundings and to provide them
with amenities conducive to good health and high morale.

Labor welfare includes all the Statutory and Non-statutory measures to be

taken care of by an employer to provide adequate working environment.
The other legislations are Factories act, Employees‟ Pension Scheme,
Maternity Benefit Act, Employee State Insurance (ESI) Act, Payment of
Gratuity Act, Provident Fund (PF) Act, Workmen‟s Compensation Act etc.
These are discussed in detail in further chapters.

21
1.6 ABOUT SHREE CEMENT LTD. AND JK LAKSHMI CEMENT LTD.:

SHREE CEMENT LTD.

Shree Cement Ltd. is an energy conscious & environment friendly

business organization. It has nine directors on its board under the
chairmanship of Shri. B.G. Bangur, the policy decisions are taken under the
guidance of Shri. H.M. Bangur, Managing Director. Shri. M.K.Singhi,
Executive Director of the Company, is looking after all day-to-day affairs.
The company is managed by qualified professionals with broad vision who
are committed to maintain high standards of quality & leadership to serve
the customers to their fullest satisfaction. The board consists of eminent
persons with considerable professional expertise in industry and field such
as banking, law, marketing & finance.

History and Background of Shree Cement Ltd.

Shree cement a leading cement manufacturer of North India, has been

participating in the infrastructure transformation for India for over two
decades. It started operation in 1985 and has been growing over since. Its
manufacturing units are located in Beawar, Ras in Rajasthan. It also has
grinding unit at Khuskera near Gurgaon. It has 3 brands under its portfolio
viz Shree Ultra Jung Rodhak cement, Bangar Cement and Tuff cement.

Shree always strives to sustain it reputation as a respected corporate citizen.

It acknowledges that its operation have multiple impacts on the
environment and communities in which it operates. Its business strategies
and performance demonstrate a high level of commitment to preservation of
environment and social development apart from economic success.

The Company was incorporated on 25th October, 1979, at Jaipur. The

Company was promoted by members of the Bangur family and others.
Shree Digvijay Cement Co. Ltd., Graphite India, Ltd. and Fort Gloster

22
Industries, Ltd. took active part in the promotion of the Company. The
Company manufacture's cement & cement products.

SCL, belonging to the house of Bangurs, is one of the largest cement

manufacturers in North India, having the installed capacity of 2 million
tonnes. Its plants are located in Rajasthan. The new plant was set up at
Beawar with the capacity of 1.24 million tpa in Rajasthan. Unit I and Unit II
of the company received National Award for 'Best Electrical Energy
Performance' and 'Best Thermal Energy Performance' in the Cement
Industry for the year 2000-01. Since 2006, it has more than quadrupled its
production capacity both by expanding into new areas and increasing the
capacities of the existing plants. Plants are located in Beawar, Ras,
Khushkhera and Suratgarh in Rajasthanand Laksar (Roorkee) in
Uttarakhand.It also produces and sells power under the name Shree Power
(Captive Power Plant) and Shree Mega Power (Independent Power Plant).

Shree Mega Power

It has two 150 MW units in Beawar (2 km from the existing Cement Unit).
This unit has a world record for fastest erection and commissioning (21
months, earlier record was 27 months) and also the smallest area to plant
capacity ratio, utilizing the land. This unit has the largest and first air cooled
condenser for such a capacity.

Shree Power

The company has installed 120 MW captive power plants split into two
locations (Beawar & Ras) to meet the complete power needs of a 15 million
tonne Integrated Cement Plant.

Vision of Shree Cement Ltd.

The vision of Shree Cements Ltd. Is to drive and sustain industry leadership
of the company within a global context by developing individual leadership

23
competencies at every level, through a robust backbone of trust, support,
innovation and reward.

Mission of Shree Cement Ltd.

The following points can sum up the mission statement of Shree Cements
Ltd.:

 To harness sustainability through low carbon philosophy

 To sustain its reputation as one of the most efficient manufacturers

globally

 To continually have most engaged team

 To drive down cost through innovative practices

 To continually add value to its products and operations meeting

expectations of all its stakeholders

 To continually build and upgrade skills and competencies of its

human resource for growth

 To be a responsible corporate citizen with total commitment to

communities in which it operates and society at large

At SCL, they foster a family culture and seek to strengthen the relationship
with their people. They believe that higher employee performance forms the
baseline of organizational success and that an employee‟s belief in the
organization can play a significant role in establishing competitive advantage.
The top management thus formulates policies and practices which help create
work-life balance for employees. Their Human Resource Vision is focused
on employee happiness leading to employee productivity.

Current Brands and Products of Shree Cement Ltd.

The current brands and products of the company are as follows:

24
Shree Ultra

Shree Ultra is the flagship brand of Shree, contributing to more than half of
their sales volume and is the first manifestation of their strategic move from
commodity to brand marketing. Its two variants, Shree Ultra OPC and
Shree Ultra Jung Rodhak Cement are distinctly positioned in the market.
Shree Ultra Jung Rodhak Cement through its unique rust prevention
properties, has high acceptance amongst brand influencers (masons etc.)
and high brand recall value.

Bangur Cement

Bangur Cement, launched as a premium brand in the market, is designed to

meet the high end market segment. Its unique brand tagline "Sasta Nahin,
Sabse Achcha", gives it the status of 'top of the market' value brand.

Rockstrong Cement

Rockstrong Cement is the youngest brand from the Shree stable. It has
recorded the highest year on year growth amongst the three brands of Shree
in 2009-10. Its holds a position in the market on the promise of high
performance and ability to withstand exceptionally harsh environment
conditions.

Awards received

 2012-13 Golden Peacock Business Excellence Award for the year 2013

 2012-13 Best Corporate Social Responsibility Practice Award by BSE

 2012-13 Global HR Excellence award for organization with

Innovative HR practices at World HRD congress

 2012-13 Global HR Excellence award for HR research of the year at

World HRD congress

25
 2012-13 International Green Apple Gold award and Green Hero
Title by Green Organization, London

 2012-13 Financial Express – Emergent Venture India Green

Business Leader Award, 2011-12

 Greentech HR Gold for outstanding achievement in Best Strategy-2012

 2011-12 Greentech HR Gold award for best Strategy in HR practices

2011-12

 2011-12 CII-ITC sustainability award commendation certificate for

significant achievement.

 2011-12 First prize for overall performance in 25th Mines Safety Week
under Director General of Mines safety, Ajmer region to Ras mines.

 Greentech HR Excellence Silver Award in best Strategy – 2010.

Challenges and Opportunities

SCL has been very aggressive and innovative in its functioning approach.
As a result, it has been facing a number of challenges in its path towards
success. The environment a company operates in is dynamic with fast
changing underlying factors. Persistent high inflation and high interest rates
have been adversely affecting private consumption leading to slowdown in
growth.

Materials Management is a complex function that entails procuring and

providing the production units with a supply of raw materials that matches
their demands. Any shortcomings in supply can drastically affect the
production. So the matching of production requirements and the
procurement must be done in the most cost-effective manner possible, so as
to gain competitive advantage by reducing input expenses.

26
Dealers are the immediate persons available in the market after a product is
moved out of factory premises. As such, building strong relationship with
them is of prime importance as they are the via media to pass on our
messages to the ultimate consumer.

The Company should focus on building relationships with dealers by

moving beyond price propositions.

Extra focus on providing customer support should be highlight of Shree‟s

marketing strategy. The customer should be able to extract the most value
of the supplies if it is received by him at the right time, when needed.

It is essential to build an entrepreneurial spirit in the employees. This makes

them take responsibility and to think and act like owners. As a natural
outcome of having the freedom to give ideas on any area of business,
people would love to take responsibilities.

It is important that Shree creates a work environment which provides

people with newer challenges to invigorate the mind and also gives them
the freedom to pursue these challenges with an open mind.

As per SCL management team, those who cling to usual routines often find
themselves getting swept away by the changes and difficult to survive. So,
they constantly seek to break the mould of perception based decisions and
take unusual steps which take them forward.

J K LAKSHMI CEMENT LTD.

One of the established names in the cement industry, JK Lakshmi Cement

Ltd has state-of-the-art plant at Jaykaypuram, dist. Sirohi, Rajasthan. With
the capacity expansion and further commissioning of a split location
grinding unit at Motibhoyan, Kalol (Gujarat), the combined capacity of the
Company today stands at 4.75 Mn. MT per annum. With the use of the
latest technology from M/s Blue Circle Industries and modern equipments

27
from M/s Fuller International of USA, the Company is going from strength
to strength.

History and Background of J K Lakshmi Cement Ltd.

J. K. organization owes its name to Late Lala Juggilal Singhania and his son
Late Lala Kamplapat Singhania. Late Lala Kamplapat Singhania founded
J.K. Organization in the 19th Century. JK Lakshmi Cement, member of
the JK Organisation is a bluechip cement company that was launched in
1982. It is a public company listed on the Bombay Stock Exchange.

JK Lakshmi Cement Ltd has state-of-the-art plant at Jaykaypuram, dist.

Sirohi, Rajasthan. With the capacity expansion and further commissioning
of split location grinding units at Motibhoyan, Kalol (Gujarat) & Bajitpur,
Jhajjar (Haryana) the combined capacity of the Company today stands at
5.60 Mn. MT per annum. With the use of the latest technology from M/s
Blue Circle Industries and modern equipments from M/s Fuller
International of USA, the Company is going from strength to strength.

The company management includes Bharat Hari Singhania - Chairman &

Managing Director, Vinita Singhania - Vice Chairman & Mng.Director, S
Chouksey - Whole Time Director, S K Wali - Whole Time Director, B V
Bhargava - Director, N G Khaitan - Director, K N Memani - Director, Raghupati
Singhania - Director, Pradeep Dinodia - Director, Ravi Jhunjhunwala - Director.

JK Lakshmi Cement Ltd is the first cement producer of Northern India to be

awarded an ISO 9002 certificate and be accredited by NABL (Department
of Science & Technology, Government of India) for its Lab Quality
Management systems.

Its wide network of 70 cement dumps and over 2200 dealers spread across
the states of Rajasthan, Gujarat, Delhi, Haryana, U.P., Uttaranchal, Punjab,
J&K, Mumbai & Pune and the vast pool of highly trained & dedicated

28
marketing and technical service team helps the Company to service it's
customers at their doorstep.

The First Cement Manufacturer in Northern India to introduce coloured

bags, JK Lakshmi Cement‟s Technical Service Cell provides construction
solutions to its customers & carries out regular & innovative contact
programmes with Individual House Builders, Masons and Business
Associates to keep in tune with their needs and requirements.

Keeping in touch with the global construction trends & changing needs of
customers, the company has introduced state-of-the-art Ready Mix
Concrete (RMC) with the brand name” JK Lakshmi Power Mix”. Currently,
the company has 10 fully operational plants in Western & Northern regions
of the country and is further expanding in this area. „JK Lakshmiplast‟ the
first premium branded Plaster of Paris (POP) in Northern India is another
value added product launched by the Company for discerning customers.

As one of the large manufacturers in the Indian cement industry, JK

Lakshmi Cement has acquired the ultra modern equipment from Fuller
International of the United States of America, and electronic packers from
Ventomatic in Italy.

Vision of J K Lakshmi Cement Ltd.

To be A Profitably growing innovative and Caring Company, Aspiring to

Double the market share and be among top 7 in the Indian Cement Industry

Mission of J K Lakshmi Cement Ltd.

The following are the major points of consideration under the mission
statement of JK Lakshmi Cement Ltd.:

 Achieve Operational Excellence

29
 Create superior value for customer through Premium Products &
Brand Positioning

 Be a workplace of choice-Attract, Retain and grow Talent Pool

 Continuously enhance shareholders‟ wealth and be a preferred

portfolio among investors

 Socially Responsible Corporate Decision

Current Brands of J K Lakshmi Cement Ltd.

The cement manufacturing technology used by JK Lakshmi ensures that the

final product adheres to globally accepted standards of quality and
performance.

JK Lakshmi Cement comes in three variants:

 Cement 53 Blended

 53 Grade OPC

 43 Grade OPC

53 Blended Cement

JK Lakshmi Cement 53 (blended) has a minimum guaranteed strength of 53

MPa, and is used for critical applications that require the maximum level of
strength and durability.

53 Grade OPC

JK Lakshmi's 53 Grade O.P.C. with superior compressive strength is ideal for:

 High-rise buildings
 All types of R.C.C. works
 Industrial works
 Pre-stressed concrete work like bridges, silos, etc
 Pre-cast elements such as Railway sleepers and concrete poles

30
43 Grade OPC

Some applications of JK Lakshmi's 43 Grade O.P.C. are:

 Commercial Buildings

 Industrial Constructions

 Multi-storeyed complexes

 Cement concrete roads

 Heavy Duty Floors

Awards received

 The Company was awarded the “Excellence Award” in “Cement”

Sector, instituted by the Rajasthan Chamber of Commerce &
Industry.

 GreenTech HR Awards 2012, under the category “Innovation in

Employee Retention strategy”. “Energy Conservation Award”,
Certificate of Merit.

 Star News HR & Leadership Award under the category “Learning &
Talent Initiative Excellence”.

 „Energy Conservation Award 2011‟ for being First amongst Cement

Industry of Rajasthan.

 JK Lakshmi Cement Ltd has been awarded for the fourth time with
“Rajasthan Productivity Excellence Award”.

 JK Lakshmi Cement has been awarded with “Best Employer Award”

third time in a row from The Employer‟s Association of Rajasthan.

 JK Lakshmi Cement has been presented with the Golden Peacock

HR Excellence Award 2011.

31
Challenges and Opportunities

Strongly challenged on several fronts, the Indian economy did not fare well
during last fiscals years. The economy is burdened by large trade, as well as
fiscal and current account deficit, which is becoming difficult to sustain as a
result of the plunging GDP growth. Geopolitical conflicts, reversal of
quantitative easing by U.S. etc. have further exacerbated the situation.

Recent measures by the Government to bring much-needed reforms give

positive indications and are likely speed up pending investment projects.
This will provide boost to the investment cycle and also bring confidence to
internal and external investors, which in turn should help in invigorating
industrial activity.

At JK Lakshmi Cement the vision and their optimism in the future of the
country has been strengthened further, which has led to the reinforcing of
their pledge to play a humble part in creating a better tomorrow.

The company expects to commission their new cement plant at Durg,

Chattisgarh in the current financial year besides having recently expanded
our cement grinding capacities at Jhajjar in Haryana and Jaykaypuram in
Rajasthan. They also offered a futuristic construction material, AAC Blocks
that will now have a bigger market space to operate in.

All of the above can only be achieved with a determined work force.
Leaders should strive to build an environment where people feel spirited
to take on newer challenges and think unusual to achieve their targets.
They should build a culture where people are empowered to take
responsibility and think and act like owners. This can be taken care of by
the leaders through continuous and successful demonstration of the
benefits of unusual practices.

32
Various multi-skill training programs must be arranged to help the
employees acquire cross-functional expertise. These can be put to use
through job enlargement and increased responsibilities. It leads to an all-
round development of the employees. It helps them gain valuable insight
into latest technologies and alternative methods of working, and remain
updated with current happenings.

Company‟s brands and helps strengthen its market position, besides

yielding increased volumes. So, besides creating separate brands, the
marketing teams should focus also focus on being distinctively separate
from each other – having different set-ups, different dealer network,
different marketing and promotion strategy, etc.

At JK Lakshmi, regular experimenting and conducting detailed analysis

must be done to ensure how processes and equipment can be further
optimized, whether new technology deployment is beneficial and how
maximum capacity can be utilized.

CONCLUSION

The Indian cement industry is large, growing and, with consumption of just
185kg/capita/yr in 2011 (compared to global average of ~300kg/capita/yr)
the country itself has the capacity to demand significantly more cement as it
develops.

However, the industry is at a tricky point in its development. Capacity is

way ahead of actual consumption. However, cement producers are keen to
maintain their market share and so expand to secure future demand.
Producers in this situation should bear in mind the Indian cement industry
of the early 20th Century, when companies expanded, lowered prices and,
in many cases, went out of business. Some have cautioned against rapid
capacity addition in the coming years.

33
It is foreseeable that the Indian cement industry will see consolidation over
the coming years. Producers that can differentiate their cement from others
or can make savings on production costs by, for example, using alternative
fuels, will be able to take advantage of increasing demand while remaining
ahead of their competitors.

34
REFERENCES

1. Back issues of 'Global Cement Magazine,' PRo Pubications

International Ltd., Epsom, UK, January 2012.

2. Business Standard website, 'Cement makers may decelerate

expansion pace in 12th plan, 'http://www.business-standard.com/
india/news/cement-makers-may-decelerate-expansion-pace-in-12th-
plan/182084/on.

3. Cement Information System, Department of Industrial Policy &

Promotion, Government of India, Ministry of Commerce & Industry,
http://eaindustry.nic.in/cement

4. Cement Manufacturers' Association website, 'Historical Development,'

http://www.cmaindia.org/portal/static/Dynamic History.aspx

5. CIA World Factbook, 'India,' https://www.cia.gov/library/ publications/

the-world factbook/geos/in.html.

6. 'Global Cement Directory 2013,' PRo Publications International Ltd.,

Epsom, UK, November 2012.

7. Global Cement website, 'Cement industry in India,' http://www.ibef.

org/industry/cement-india.aspx, Updated November 2012.

8. Global Cement website, 'India fines cement firms US$1.1bn over

Cartel, 'http://www.globalcement.com/news/item/1003-india-fines-
cement-firms-us$11bn-over-cartel.

9. Global Cement website, 'Indian producer records loss in three

months to December 2012,' http://www.globalcement.com/news/
item/1394-indian-producer-records-loss-in-three-months-to-
december-2012, 25 January 2013.

35
10. India Online website, 'Fragile recovery unlikely to benefit smaller
cement players : India Ratings,' http://www.indiainfoline.com/
Markets/News/Fragile-recovery-unlikely-to-benefit-smaller-cement-
players-India-Ratings/5582688342.
11. Kuara, K. / ACC Ltd. Presentation at 'Motilal Oswal investor
conference, 'http://www.acclimited.com/newsite/finance/Investor_
Presentation_august_12.pdf, August 2012.
12. Monappa, Arun. 1995. Industrial Relations (New Delhi, Tata
McGraw Hill)
13. MyIris website, 'All India cement consumption grew 7.5% in FY12
& 4.4% in FY11:
14. ICICIdirect', http://myiris.com/newsCentre/storyShow.php?fileR=20
120622160303102&dir=2012/06/22&secID=sector.
15. PRN Sinha, Indubala Sinha, Seema Priyadarshini Shekhar: “Industrial
Relations, Trade unions and Labour Legislations”. P.246-249
16. Singh, S.P. 'Assessment of competition in cement industry of India,'
Competition Commission of India & Vinod Gupta School of
Management, IIT, Kharagpur,
17. The Factories Act, 1948 (Act No. 63 of 1948), as amended by the
Factories (Amendment) Act, 1987 (Act 20 of 1987)(INDIA)
18. United States Geological Survey, Various Reports, http://minerals.
usgs.gov/minerals/pubs/country/asia.html#in.
19. World Bank Indicators website, 'GDP per capita (current US$),
'http://data.worldbank.org/indicator/NY.GDP.PCAP.CD.
20. World Business Council for Sustainable Development, Cement
Sustainability Initiative website, 'Global cement database on CO and
energy information', http://wbcsdcement.org/index.php?Itemid=74.

36