CHAPTER-1 CEMENT IDUSTRY IN INDIA INTRODUCTION India, being the second largest cement producer in the world after

China with a total capacity of 151.2 Million Tones (MT), has got a huge cement industry. With the government of India giving boost to various infrastructure projects, housin g facilities and road networks, the cement industry in India is currently growin g at an enviable pace. More growth in the Indian cement industry is expected in the coming years. It is also predicted that the cement production in India would rise to 236.16 MT in FY11. It's also expected to rise to 262.61 MT in FY12. The cement industry in India is dominated by around 20 companies, which account for almost 70% of the total cement production in India. In the present year, the Indian cement companies have produced 11 MT cement during April-September 2009. It took the total cement production in FY09 to 231 MT. Industry Background The history of the cement industry in India dates back to the 1889 when a Kolkat a-based company started manufacturing cement from Argillaceous. But the industry started getting the organized shape in the early 1900s. In 1914, India Cement C ompany Ltd was established in Porbandar with a capacity of 10,000 tons and produ ction of 1000 installed. The World War I gave the first initial thrust to the ce ment industry in India and the industry started growing at a fast rate in terms of production, manufacturing units, and installed capacity. This stage was refer red to as the Nascent Stage of Indian Cement Industry. In 1927, Concrete Associa tion of India was set up to create public awareness on the utility of cement as well as to propagate cement consumption. The cement industry in India saw the price and distribution control system in th e year 1956, established to ensure fair price model for consumers as well as man ufacturers. Later in 1977, government authorized new manufacturing units (as wel l as existing units going for capacity enhancement) to put a higher price tag fo r their products. A couple of years later, government introduced a three-tier pr icing system with different pricing on cement produced in high, medium and low c ost plants. Cement industry, in any country, plays a major role in the growth of the nation. Cement industry in India was under full control and supervision of the governme nt. However, it got relief at a large extent after the economic reform. But gove rnment interference, especially in the pricing, is still evident in India. In sp ite of being the second largest cement producer in the world, India falls in the list of lowest per capita consumption of cement with 125 kg. The reason behind this is the poor rural people who mostly live in mud huts and cannot afford to h ave the commodity. Despite the fact, the demand and supply of cement in India ha s grown up. In a fast developing economy like India, there is always large possi bility of expansion of cement industry. Cement Production and Growth Domestic demand plays a major role in the fast growth of cement industry in Indi a. In fact the domestic demand of cement has surpassed the economic growth rate of India. The cement consumption is expected to rise more than 22% by 2009-10 fr om 2007-08. In cement consumption, the state of Maharashtra leads the table with 12.18% consumption, followed by Uttar Pradesh. In terms of cement production, A ndhra Pradesh leads the list with 14.72% of production, while Rajasthan remains

at second position. The production of cement in India grew at a rate of 9.1% during 2006-07 against the total production of 147.8 MT in the previous fiscal year. During April to Oc tober 2008-09, the production of cement in India was 101.04 MT comparing to 95.0 5 MT during the same period in the previous year. During October 2009, the total cement production in India was 12.37 MT compared to a production of 11.61 MT in the same month in the previous year. The cement companies are also increasing t heir productions due to the high market demand. The cement companies have seen a net profit growth rate of 85%. With this huge success, the cement industry in I ndia has contributed almost 8% to India's economic development. Technology Up-gradation Cement industry in India is currently going through a technological change as a lot of up gradation and assimilation is taking place. Currently, almost 93% of t he total capacity is based entirely on the modern dry process, which is consider ed as more environment-friendly. Only the rest 7% uses old wet and semi-dry proc ess technology. There is also a huge scope of waste heat recovery in the cement plants, which lead to reduction in the emission level and hence improves the env ironment. Cement Dispatches Cement industry in India has successfully maintained almost total capacity utili zation levels, which resulted in maintaining a 10% growth rate. In 2006-07, the total dispatch was 155 MT, which rose up to 170 MT in 2007-08. The month of Octo ber 2009 saw a cement dispatch of 12.22 MT, which was almost 9% higher than the total cement dispatch of 11.21 MT in the same month in the previous year. 2008-09 (Apr-Oct) (in MT) 2007-08 (Apr-Oct) in MT Production 101.04 95.05 Despatches (Excluding Export) 100.24 94.33 Export 1.46 2.16 Capacity Utilization (%) 85 93 Major Players in Indian Cement Industry There are a number of players prevailing in the cement industry in India. Howeve r, there are around 20 big names that account for more than 70% of the total cem ent production in India. The total installed capacity is distributed over around 129 plants, owned by 54 major companies across the nation. Following are some of the major names in the Indian cement industry: Company Production Installed Capacity ACC 17,902 18,640 Gujarat Ambuja 15,094 14,860 Ultratech 13,707 17,000 Grasim 14,649 14,115 India Cements 8,434 8,810 JK Group 6,174 6,680 Jaypee Group 6,316 6,531 Century 6,636 6,300 Madras Cements 4,550 5,470 Birla Corp. 5,150 5,113 Mergers and Acquisitions in Cement Industry in India • UltraTech Cement is going to absorb its sister concern Samruddhi Cement to becom e biggest cement company in India. • World's leading foreign funds like HSBC, ABN Amro, Fidelity, Emerging Market Fun

d and Asset Management Fund have together bought 7.5% of India Cements (ICL) at a cost of US$ 124.91 million. • Cimpor, a Cement company of Portugal, has bought 53.63% stake that Grasim Indust ries had in Shree Digvijay Cement. • French cement company Vicat SA bought 6.67% share of Sagar Cement at a cost of U S$ 14.35 million. • Holcim now holds 56% stake of Ambuja Cement. Previously it held 22% of stake. Th e company utilized various open market transactions to increase its stakes. It i nvested US$ 1.8 billion for that. Recent Investments in the Indian Cement Industry • In a recent announcement, the second largest cement company in South India, Dalm ia Cement declared that it's going to invest more than US$ 652.6 million in the next 2-3 years to add 10 MT capacity. • Anil Ambani-led Reliance Infrastructure is going to build up cement plants with a total capacity of yearly 20 MT in the next 5 years. For this, the company will invest US$ 2.1 billion. • India Cements is going to set up 2 thermal power plants in Andhra Pradesh and Ta mil Nadu at a cost of US$ 104 billion. • Anil Ambani-led Reliance Cementation is also going to set up a 5 MT integrated c ement plant in Maharashtra. It will invest US$ 463.2 million for that. • Jaiprakash Associates Ltd has signed a MoU with Assam Mineral Development Corpor ation Limited to set up a 2 MT cement plant. The estimated project cost is US$ 2 21.36 million. • Rungta Mines (RML) is also planning to invest US$ 123 million for setting up a 1 MT cement plant in Orissa. The high quality cement that is manufactured and exported by ACC Ltd is produced in the ACC Ltd. Cement Plants. ACC Ltd is one of the front runners in the cemen t industry in India and produces some of the best quality cement in the country. It has a significant market share in the segments of housing, real estate, infr astructure and other development projects. With more and more developmental proj ects coming up, the profit and the market share of the company is expected to ri se at a considerable rate. The cement plants of ACC Ltd The cement plants of ACC Ltd are located in various regions of the country in a number of states. The gadgets and equipments are of high standards and comply wi th the international standards. Presently, there are around 12 cement plants of ACC Ltd which cater to the different market segments of the country. The cement plants work in coordination with each other and also independently to increase t he share in the market. All the ACC Ltd. Cement Plants use the cutting edge technologies and services wh ich in turn produce high quality cement brands. Set up in the year 1936, ACC has always worked dedicatedly to produce some of the best brands of cement and its business strategy is based on providing the best of products to the changing con sumer market in the country and the world. The following table provides a genera l idea of the ACC Ltd. Cement Plants. Acc Cement Plants In India Name of the Company Location State Process Used ACC Ltd. Gagal Himachal Pradesh Dry ACC Ltd. (G) Tikaria Uttar Pradesh Grinding Unit ACC Ltd. Lakheri Rajasthan Dry ACC Ltd. Kymore Madhya Pradesh Dry ACC Ltd. Chaibasa Jharkhand Chaibasa ACC Ltd. Sindri Jharkhand Grinding Unit ACC Ltd. Jamul Chhattisgarh Dry and Semi-Dry ACC Ltd. Chanda Maharashtra Dry ACC Ltd. Wadi Karnataka Dry ACC Ltd. - New Wadi Karnataka Dry ACC Ltd. Macherial Andhra Pradesh Grinding Unit

ACC Ltd.

Madukkarai

Tamil Nadu

Semi-Dry

Features of ACC Ltd. Cement Plants All the cement plants of the company are equipped with advanced technological fa cilities which make them completely environment friendly. The plants use some of the sophisticated pollution control devices in various parts such as raw mills, power plants, cement kilns, coolers and other equipments. In addition, the mini ng technologies that have been implemented in the cement plants of ACC Ltd are a lso based on environment safeguard norms. In its endeavor towards greenery, the company has also started various types of afforestation, horticulture and tree planting programs near its cement plants. I t not only reduces pollution but also helps conserve the mineral resources. The vacant spaces in the mines and the cement plans are being utilized for the purpo se of planting of trees. In some of the ACC Ltd. Cement Plants in places like Ch aibasa, Kymore, Jamul and Gagal, greenery has been added to around 40% of the to tal area which is around 10% more than the normal norms that has been set. The m anagement of these plants has given stress on the green belt development program s. Due to the high production as well as the dedicated effort towards maintaining e cological balance and nature conservation, the company and its cement plans have been the recipient of a number of prestigious awards like: • • Indo German Greentech Environment Excellence Award • Vishwakarma Rashtriya Puraskar trophy for safety in mining • National Award for outstanding performance in rural and agricultural development • Indira Priyadarshini Vrikshamitra Award for extraordinary work in environment pr otection • FICCI Award for pollution control The ACC Ltd. Cement Plants consist of high quality Zero Water Discharge faciliti es which help in proper water management. The water that is used in the plant fo r the process of industrial cooling is recycled by the use of tanks, water ponds and cooling towers. Through this process, the company has successful in water h arvesting.

WITH SPECIAL REFERENCE TO ACC LTD VIZ-VIZ GUJRAT AMBUJA CEMENT LIMITED ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations are Spread throughout the country with 14 modern cement factories, 1 9 Ready mix concrete plants, 19 sales offices, and several zonal offices. It has a workforce of about 9000 persons and a countrywide distribution Network of ove r 9,000 dealers. ACC's research and development facility has a unique track reco rd of innovative research, product development and specialized consultancy servi ces. Since its inception in 1936, the company has been a trendsetter and importa nt benchmark for the cement industry in respect of its production, marketing and personnel management processes. Its commitment to environment-friendliness, its high ethical standards in business dealings and its on-going efforts in communi ty welfare programmers have won it acclaim as a responsible corporate citizen. A CC has made significant contributions to the nation building process by way of q uality products, services and sharing its expertise.

In the 70 years of its existence, ACC has been a pioneer in the manufacture of c ement and concrete and a trendsetter in many areas of cement and concrete techno logy including improvements in raw material utilisation, process improvement, en ergy conservation and development of high performance concretes. ACC’s brand name is synonymous with cement and enjoys a high level of equity in th e Indian market. It is the only cement company that figures in the list of Consu mer SuperBrands of India. The company s various businesses are supported by a powerful, in-house research and technology backup facility - the only one of its kind in the Indian cement i ndustry. This ensures not just consistency in product quality but also continuou s improvements in products, processes, and application areas. ACC has rich experience in mining, being the largest user of limestone, and it i s also one of the principal users of coal. As the largest cement producer in Ind ia, it is one of the biggest customers of the Indian Railways, and the foremost user of the road transport network services for inwar d and outward movement of materials and products. ACC has also extended its services overseas to the Middle East, Africa, and Sout h America, where it has provided technical and managerial consultancy to a varie ty of consumers, and also helps in the operation and maintenance of cement plant s abroad. ACC is among the first companies in India to include commitment to environmental protection as one of its corporate objectives, long before pollution control la ws came into existence. The company installed pollution control equipment and hi gh efficiency sophisticated electrostatic precipitators for cement kilns, raw mi lls, coal mills, power plants and coolers as far back as 1966. Every factory has state-of-the art pollution control equipment and devices. ACC demonstrates the practices of being a good corporate citizen undertaking a w ide range of activities to improve the living conditions of the under-privileged classes living near its factories.

Chapter-2 COMPANY HISTORY of ACC 2.1Heritage Ours has been an interesting story – one that inspired a book. ACC was formed in 1 936 when ten existing cement companies came together under one umbrella in a his toric merger – the country’s first notable merger at a time when the term mergers an d acquisitions was not even coined. The history of ACC spans a wide canvas begin ning with the lonely struggle of its pioneer F E Dinshaw and other Indian entrep reneurs like him who founded the Indian cement industry. Their efforts to face c ompetition for survival in a small but aggressive market mingled with the stirri ng of a country’s nationalist pride that touched all walks of life – including trade , commerce and business. The first success came in a move towards cooperation in the country’s young cement industry and culminated in the historic merger of ten companies to form a cemen t giant. These companies belonged to four prominent business groups – Tatas, Khata us, Killick Nixon and F E Dinshaw groups. ACC was formally established on August 1, 1936. Sadly, F E Dinshaw, the man recognized as the founder of ACC, died in January 1936. Just months before his dream could be realized. ACC stands out as the most unique and successful merger in Indian business histo ry, in which the distinct identities of the constituent companies were melded in

 

to a new cohesive organization – one that has survived and retained its position o f leadership in industry. In a sense, the formation of ACC represents a quest fo r the synergy of good business practices, values and shared objectives. The use of the plural in ACC’s full name, The Associated Cement Companies Limited, itself indicates the company’s origins from a merger. Many years later, some stockbrokers in the country’s leading stock exchanges still refer to this company simply as ‘The Merger’. A strategic alliance The house of Tata was intimately associated with the heritage and history of ACC , right from its formation in 1936 upto 2000. Between the years 1999 and 2000, t he Tata group sold all 14.45 per cent of its shareholding in ACC in three stages to subsidiary companies of Gujarat Ambuja Cements Ltd (GACL), who are now the l argest single shareholder in ACC. This has enabled ACC to enter into a strategic alliance with GACL, a company reputed for its brand image and cost leadership i n the cement industry. Holcim - a new partnership A new association was forged between ACC and the Holcim group of Switzerland in 2005. In January 2005, Holcim announced its plans to enter into a long-term stra tegic alliance with the Ambuja Group by acquiring a majority stake in Ambuja Cem ents India Ltd. (ACIL), which at the time held 13.8 per cent of the total equity shares in ACC. Holcim simultaneously announced its bid to make an open offer to ACC shareholders, through Holdcem Cement Pvt Limited and ACIL, to acquire a maj ority shareholding in ACC. An open offer was made by Holdcem Cement Pvt. Limited along with Ambuja Cements India Ltd. (ACIL), following which the shareholding o f ACIL increased to 34.69 per cent of the Equity share capital of ACC. Consequen tly, ACIL has filed declarations indicating their shareholding and declaring its elf as a Promoter of ACC. Holcim is the world leader in cement as well as being large suppliers of concret e, aggregates and certain construction-related services. Holcim is also a respec ted name in information technology and research and development. The group has i ts headquarters in Switzerland with worldwide operations spread across more than 70 countries. Considering the formidable global presence of Holcim and its exce llent reputation, the Board of ACC has welcomed this new association. 2.2Corporate Profile ACC (ACC Limited) is India s foremost manufacturer of cement and concrete. ACC s operations are spread throughout the country with 14 modern cement factories, 1 9 Ready mix concrete plants, 19 sales offices, and several zonal offices. It has a workforce of about 9000 persons and a countrywide distribution network of ove r 9,000 dealers. ACC s research and development facility has a unique track reco rd of innovative research, product development and specialized consultancy servi ces. Since its inception in 1936, the company has been a trendsetter and importa nt benchmark for the cement industry in respect of its production, marketing and personnel management processes. Its commitment to environment-friendliness, its high ethical standards in business dealings and its on-going efforts in communi ty welfare programmes have won it acclaim as a responsible corporate citizen. AC C has made significant contributions to the nation building process by way of qu ality products, services and sharing its expertise. In the 70 years of its existence, ACC has been a pioneer in the manufacture of c ement and concrete and a trendsetter in many areas of cement and concrete techno logy including improvements in raw material utilisation, process improvement, en ergy conservation and development of high performance concretes. ACC’s brand name is synonymous with cement and enjoys a high level of equity in th e Indian market. It is the only cement company that figures in the list of Consu

 

 

 

mer SuperBrands of India. The company s various businesses are supported by a powerful, in-house research and technology backup facility - the only one of its kind in the Indian cement i ndustry. This ensures not just consistency in product quality but also continuou s improvements in products, processes, and application areas. ACC has rich experience in mining, being the largest user of limestone, and it i s also one of the principal users of coal. As the largest cement producer in Ind ia, it is one of the biggest customers of the Indian Railways, and the foremost user of the road transport network services for inward and outward movement of m aterials and products. ACC has also extended its services overseas to the Middle East, Africa, and Sout h America, where it has provided technical and managerial consultancy to a varie ty of consumers, and also helps in the operation and maintenance of cement plant s abroad. ACC is among the first companies in India to include commitment to environmental protection as one of its corporate objectives, long before pollution control la ws came into existence. The company installed pollution control equipment and hi gh efficiency sophisticated electrostatic precipitators for cement kilns, raw mi lls, coal mills, power plants and coolers as far back as 1966. Every factory has state-of-the art pollution control equipment and devices. ACC demonstrates the practices of being a good corporate citizen undertaking a w ide range of activities to improve the living conditions of the under-privileged classes living near its factories. 2.3CORPORATE GOVERNANCE The importance of Corporate Governance has always been recognised in ACC. Much b efore Corporate Governance guidelines became applicable and mandatory for listed companies, ACC had systems in place for effective strategic planning and proces ses, risk management, human resources development and succession planning. The A udit Committee in ACC was constituted as far back as in 1986. The Shareholders-I nvestors Grievance Committee was formed way back in 1962 and the Compensation Co mmittee was convened since 1993. The Company’s core values are based on integrity, respect for the law and strict compliance thereof, emphasis on product quality and a caring spirit. Corporate Governance therefore in ACC is a way of life. ACC is a professionally managed Company with a majority of its Directors being I ndependent Directors. The Board of Directors has always consisted of persons who are professionals in their respective fields and with unquestionable integrity and reputation. The role, responsibility and accountability of the Board of Dire ctors is clearly defined. Members of the Board have full freedom to express thei r views on matters placed before them for deliberation and consideration. It is the continuous endeavour of the Board of Directors to achieve the highest standards of Corporate Governance through the adoption of a strategic planning p rocess, succession planning for attracting, motivating and energizing human reso urces, identification of major risks and the way and means to manage such risks, an effective communication policy and integrity of Company’s internal control sys tems. The Board of Directors are also constantly looking at ways and means to en sure that the most effective use is made of the scarce resources at its disposal and that the management and employees have the freedom to take the Company forw ard within the framework of effective accountability. The Annual Reports, press releases and other communication have always made full disclosures on various facets of importance to the stakeholders, particularly w ith regard to information relating to financial matters, company’s operations/perf ormance, stock movements etc. 2.4 Company Vision: Vision is defined as a mental image or foresight. Associated Cement Companies Lt d. say its vision “ACC Pvt. Ltd. enters the next few years with the confidence of a learning knowledge based and happy organization”

 

2.5 MISSION ACC Ltd. drives their mission statements from a particular set of tasks. They ar e called upon to perform in the light of their individual, national or global pr iorities. Indian Cement industry into a Globally strong and competitive industry. 2.6 HUMAN RESOURCES ACC has a large workforce of about 9,000 people, comprising experts in various d isciplines assisted by a dedicated workforce of skilled persons. ACC employees r eferred to as the ACC Parivar, come from all parts of the country and belonging to a variety of ethnic, cultural and religious backgrounds. ACC employees displa y a strong sense of loyalty to the Company and their special stellar qualities a s ‘value-adding’ human capital are well known in the industry. ACC has clearly stated guidelines concerning recruitment, termination, career ad vancement, performance appraisal, professional and employee ethics and code of c onduct. The Company’s personnel policies and processes enshrine equal opportunitie s to all and non-discrimination with regard to gender, caste, creed, ideology or other opinion, whether social, political or religious. Also ensured is a due pr ocess for employee consultation and participation in organizational development and policy formulation. A) Recruitment Recruitment in ACC is a very fair and transparent process with adequate opportun ities to look for suitable candidates internally as well as from outside. Applic ants are generally invited on the basis of specific advertisements in newspapers and websites. A Committee of officers called the Central Recruitment Committee handles the entire recruitment process comprising screening of applications, pre liminary short-listing, interviews and final selection. Every attempt is made to make the selection process as objective as possible by incorporating tests of c ompetence. In some cases, outside consultants are retained. 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 o r at the earliest thereafter. B) Performance management The Company’s performance management system is in itself a benchmark that provides ample opportunities and motivational incentives to employees so as to reward an d retain good talent within the Company. These incentives include Performance Li nked Incentives, Good Work Awards, Letters of Appreciation, Special Increments, Promotions, Nomination to external training programmes in India and abroad, publ ic felicitation and appreciation. Some plants have Best Employee and Employee of the Month Awards and recognition. Competent employees and those who display apt itude are invited to become Trainers themselves and receive Train the Trainer fa cilitation. C) Training and Development Our new Performance Management System incorporates a process called Competency A ssessment and Training and Developmental Needs wherein appraisers are specifical ly called upon to identify and assess training needs of employees at specific in tervals that do not coincide with Performance Appraisals. This is so that traini ng needs can be assessed objectively. Training is imparted to take care of an in dividual’s career development as well as functional and skill enhancement. Compete ncy and Development training inputs include Skill and general performance enhanc

ement, communication skills and Career development. Functional training needs ar e identified and conducted by functional departments while Corporate HR organize s competency and developmental inputs. E) Employee Welfare and Perquisites Employee welfare receives prime attention at ACC. We have several schemes for ge neral welfare of employees and their families. These cover education, healthcare , retirement benefits, loans and financial assistance and recreation facilities. ACC townships have excellent schools that are often the best in the district. Ed ucation at these schools is subsidized for employees’ wards. We offer attractive s cholarship allowances for children studying at places away from their parents, m erit scholarships for outstanding children and financial assistance for employee s’ children to pursue higher professional education. Liberal medical benefits are made available to employees and their family member s by way of reimbursements towards normal medical treatment, domiciliary treatme nts and special sanctions for serious illness. Each of our townships has well-eq uipped health care centers with qualified medical staff and facilities, ambulanc e, referrals and tie-ups with reputed hospitals for specialized treatment. In ad dition, there are regular health checkups, camps and programmes. Employees are eligible to apply for loans and financial assistance for various p urposes such as purchase of assets, residential premises as well as a scheme tha t provides for supply of cement at subsidized rates to those building their own houses. At our cement plants and factories, employees are provided furnished and unfurni shed accommodation based on their entitlements. At many locations, the employees are given free electricity, free water supply and free bus facility for nearby places and schools. These houses are well maintained and periodically upgraded. F) Employee satisfaction In addition to periodic internal Employee Satisfaction Surveys, we participate i n Employee Satisfaction and Work Places Surveys conducted by reputed external ag encies and organizations like Hewitt Associates Grow Talent. And from time to ti me, ACC has also retained reputed firms like Mercer and Boston Consulting Group to study our internal work environment and employee policies and suggest areas o f improvement. We share below salient points of the latest survey of employees: • People are treated fairly regardless of religion and gender • ACC is a safe place to work • Management is competent in running business • Employees feel good about what we do for society • Proud to tell others I work here • Management thinks positively The overall findings show significant job satisfaction at all levels as also dee p respect for the company, its performance management system and its overall bus iness performance. 2.7 IT Infrastructure ACC is one of the first Indian companies to realize the potential and importance of information technology and adopt automation and IT. We started computerizing our systems as early as 1968 - a commitment to progress through the harnessing of relevant available technologies, a habit that continues even today. We have traveled a long way from the days in 1968 when we were using simple keyp unching machines. Significant improvements have been made in the application sys tems and infrastructure. From Batch processing to on-line systems, from IBM1401 to the latest UNIX and Windows 2003 based machines we have made timely transitio ns determined by available technologies and business requirements.

We are currently in the process of making a quantum jump from our current in-hou se developed systems using Oracle 9i and Developer 6i to an ERP based solution. This decision was solely based on our strategic objectives and the business bene fits that we expect to derive from implementing such a solution. With this move we will also align people, business processes and technologies across the countr y. As part of the objective of providing uninterrupted service to the business, we are setting up a primary data centre and a disaster recovery centre to house all the servers related to the ERP solution. These data centers are inter-connected using high speed data links so that the data is always current at both these lo cations. 2.8 SUBSIDIARIES AND ASSOCIATES Subsidiary companies of ACC include the country s first bulk cement distribution terminal in Mumbai. Our experience of several decades in manufacturing and engi neering has helped us acquire skills that have proved useful in other areas. Thr ough subsidiaries, technical collaborations and associations, ACC offers product s and services in fields such as cement machinery, tyre machinery, bulkers. A) Bulk Cement Corporation (India) Limited (BCCI) Situated at Kalamboli, in Navi Mumbai (formerly New Bombay), this company caters to bulk cement requirements of the city of Mumbai and its environs. It has two cement storage silos with a capacity of 5,000 tons each. The plant receives ceme nt in bulk from ACC plants at Wadi. The plant has its own special purpose railwa y wagons and rakes and its own railway siding. The first of its kind in India, B CCI is equipped with all the facilities required by increasingly sophisticated c onstruction sites in a bustling metropolis, including a laboratory, a fleet of s pecialized trucks and site silos for the convenience of customers and is capable of offering loose cement in bulk-tanker vehicles as well as packed cement in ba gs of varying sizes from 1 tonne down to 25 kg bags. BCCI is situated strategica lly on the outskirts of Mumbai, just off the new Mumbai-Pune Expressway. It is a landmark structure spread over 30 acres of land. B) ACC Machinery Company Limited (AMCL) Located in the Butibori Industrial estate ry and equipment for use in chemicals and rters, vertical pre-grinding roller mills cturing machinery such as presses, mixers near Nagpur, AMCL manufactures machine cement industries such as bulk transpo and blowers and tyre and rubber manufa and extruders.

D) Saudi Arabia - Yanbu Cement Company Since 1979 ACC has been operating and managing a large cement plant owned by Yan bu Cement Company (YCC) and located near the port city of Yanbu in the Kingdom o f Saudi Arabia. The Yanbu plant incorporates sophisticated process control syste ms. YCC today has a capacity of over 3.30 million tonnes per annum. Cement produ ction at this plant has continued to exceed the guaranteed quantum stipulated in the contract year after year. D) Nigeria - Dangote Industries ACC has been retained by M/s Dangote Industries, a leading diversified industria l group of Nigeria, to provide comprehensive engineering consultancy for setting up their proposed new green field cement plants of capacity 3 x 7000 TPD (tonne s per day) and for optimisation and upgradation of their existing plants from 2x 2000 TPD to 2x3500 TPD. 2.9 Milestone

 

1936 Incorporation of The Associated Cement Companies Limited on August 1, 19 36. ________________________________________ 1936 First Board Meeting of The Associated Cement Companies Limited held at E splanade House, Mumbai on November 10, 1936. ________________________________________ 1937 With the transfer of the 10th company to ACC, viz. Dewarkhand Cement Com pany, the formation of ACC is complete on October 23, 1937. ________________________________________ 1944 ACC’s first community development venture near Bombay ________________________________________ 1947 India’s first entirely indigenous cement plant established at Chaibasa in Bihar ________________________________________ 1952 Village Welfare Scheme launched ________________________________________ 1955 Sindri cement works used the waste product calcium carbonate sludge from fertilizer factory at Sindri. ________________________________________ 1956 Bulk Cement Depot established at Okhla, Delhi ________________________________________ 1957 Technical training institute established at Kymore, Madhya Pradesh. 1962 Manufacture of Accoproof, a waterproofing additive. ________________________________________ 1965 ACC’s Central Research Station (CRS) established at Thane ________________________________________ 1965 Manufacture of Portland Pozzolana Cement. ________________________________________ 1965 Manufacture of Calundum, a High Alumina Binder; Firecrete, Low Density A lumina Castables and High Alumina Refractory Cement. ________________________________________ 1968 Advent of computers in ACC for data processing and designing management information and control systems. ________________________________________ 1968 ACC supplied and commissioned one-million-tonne iron ore pelletising pla nt ordered by TISCO ________________________________________ 1971 Manufacture of Whytheat Castables A, K, C and Cal-Al-75 ________________________________________ 1973 Take-over of The Cement Marketing Company of India (CMI) ________________________________________ 1977 ACC receives ASSOCHAM first national award for the year 1976 instituted for outstanding performance in promoting rural and agricultural development acti vities. ________________________________________ 1978 Introduction of the energy efficient precalcinator technology for the fi rst time in India. Full scale commercial production based on MFC technology at W adi in 1979. ________________________________________ 1979 ACC wins international contract for operation and management of a new on e million tonne cement plant at Yanbu-Ras Biridi in Saudi Arabia. 1987 ACC develops a new binder for use at sub-zero temperatures, which is suc cessfully used in the Indian expedition to Antarctica. ________________________________________ 1992 Incorporation of Bulk Cement Corporation of India, a joint venture with the Government of India. ________________________________________

1993

ACC starts the commercial manufacture of Ready Mixed Concrete at Mumbai.

________________________________________ 1998 Commissioning of the 0.6 MTPA cement grinding unit at Tikaria, Uttar Pra desh. ________________________________________ 1999 Commissioning of captive power plants at the Jamul and Kymore plants in Madhya Pradesh. ________________________________________ 1999 Tata group sells 7.2% of its stake in ACC to Ambuja Cement Holdings Ltd, a subsidiary of Gujarat Ambuja Cements Ltd. (GACL) ________________________________________ 2000 Tata Group sells their remaining stake in ACC to the GACL group, who wit h 14.45% now emerge as the single largest shareholder of ACC. ________________________________________ 2001 Commissioning of the new plant of 2.6 MTPA capacity at Wadi, Karnataka p lant, the largest in the country, and among the largest sized kilns in the world . ________________________________________ 2002 ACC wins PHDCCI Good Corporate Citizen Award ________________________________________ 2003 IDCOL Cement Ltd becomes a subsidiary of ACC

Chapter-3 RESEARCH AND METHODOLOGY

Research is an ORGANIZED and SYSTEMATIC way of FINDING ANSWERS to QUESTIONS. SYSTEMATIC because there is a definite set of procedures and steps which you wil l follow. There are certain things in the research process which are always done in order to get the most accurate results. ORGANIZED in that there is a structure or method in going about doing research. It is a planned procedure, not a spontaneous one. It is focused and limited to a specific scope. FINDING ANSWERS is the end of all research. Whether it is the answer to a hypoth esis or even a simple question, research is successful when we find answers. Som etimes the answer is no, but it is still an answer. QUESTIONS are central to research. If there is no question, then the answer is o f no use. Research is focused on relevant, useful, and important questions. With out a question, research has no focus, drive, or purpose.

A.

Sample Size:

Sample size is 50. Data was analyzed by surveying dealers and the competitors of ACC limited.

B.

Sample Design:

This part is done through discussing and analyzing with my project guide and ref erring to the subject regarding this topic. It was a random sampling. C. Mode of Analysis: The methods used to analyze the data are as follows: 1) To study the distributors of cement and their involvement in sales of different brands of cement. 2) To find out whether the distributors of cement and to assess the preference o f different brands of cement by the distributors. 3) Interpret and analysis of the data and present it in a proper manner. 4) Uses of Microsoft excel for preparation of graph. The research methodology is the way systematically solve the systematically solv e the research problems. The main objective of the product was to know the marke t condition of ACC Cemejnt and to study the sales promotion activities undertake n by various cement companies. For this, right at the beginning the research pla n was prepared. This includes all the detail of how to go about research work of ACC Cement. RESEARCH PLAN Definition of research problem The research problem can be defined as follows 1. What are the cement being used by various customer in the region of Gujrat and what are their expectation from the cement. 2. What the market trend is of cement and brand awareness of ACC Cement. DATA COLLECTION The descriptive nature of research necessitates collection of primary data from retailers through market survey, personal interview technique was used and inter view was conducted through structured questionnaire the question was asked in pr earranged manner. The market research was conducted over a period of 60 days. Da ta was tabulated, analyzed and suggestion and recommendation were given. RESEARCH INSTRUMENTATS The Research instrument chosen for conducting the survey was structured question naire was pre [pared as show as in the annexure. The questionnaire includes open ended as well as close ended question, few open ended question were included to obtain the perception of the retailers. The questionnaire designed and a pilot survey was made with the questionnaire and then changes were made accordingly wi th the questionnaire. SAMPLE PLAN

¡

A sampling technique was chosen for the study was Random Sampling Technique. Thi s is the most common method of selecting the sample. This is because the retaile rs are localized in different part of the marker a group of retailers are chosen are random from large group. It gives all retailers in a group and equal chance of being selected for the purpose of the survey. SAMPLE SIZE Out of nearly 50 r etailers in cement market of Gujarat and its region around randomly 50% of total population was considered as the sample size. CONTACT METHOD Both personal and telephonic interview methods were used for conducting the market survey. Persona l interview had the benefit one to one communication between the researcher and the respondent. If the respondent is having any doubt or queries in their mind, they can get heir doubts clarified from the researcher on the spot and so superi or of data was collected from the survey was collected from the survey. Tele – int erview was conducted with the structured questionnaire. Tele-interview was less costly and less time consuming but the data could not be collected in detail fro m the respondents. Also any doubt or queries of respondent could not be clarifie d. ANALYSIS AND INFORMATION detailed information was collected for the project m arker survey for retail marketing and sales promotion activities of ACC Cement f or the area of Gujarat market. The information was collected by visiting the ret ailers of cement present inGujarat market. The interview of retailer taken in a friendly atmosphere so as to encourage them to give right information, without a ny hesitation. Because of some inherent limitation of telephonic interview, the method of personal interview was mostly used. ANALYSIS The analysis of the collection information was made in scientific manner. Differ ent manner rank was given to each alternative of particular questions, in the qu estionnaire. A particular rank was given in the following manner, Rank- 1 For th e most favorable alternative Rank- 2 For the moderately favorable alternative Ra nk- 3 For unfavorable alternative Rank- 4 For most unfavorable alternative Rank5 Unfavorable To come at the conclusion, total of each alternative of all the s ample size retailers was made. Thus the “sum of an alternative” having least score c onsidered to be most favorable. In this manner, result is prepared for various i mportant parameters of the survey. With the help of results so obtained, the fin dings are recorded in the form of graphs. The market of cement Changes as the ar ea changes. The demand for particular cement for particular cement is much less. This is because of the crazier Trend of particular market. Thus the demand for the cement is not that price sensitive. Price is not the criterion for selection of rejection of particular brand is adapted on the type of application of cemen t and the brand name in market. Thus the awareness among the customers about the particular cement plays a vital role. The major types of customers are the buil ders and masons. The individual customers are there, but their demand is not mor e. The customers are ready to give slightly high price, but he wants quality cem ent, thus he is quality conscious. The customer perceives quality of cement as g ood quality because of effective marketing. So effective marketing is necessary. The retailer in the marker plays an important role in the sale of the cement. Th ey have some expectation from the cement companies; they expected credit facilit y, good sales promotion schemes, and timely delivery of cement, etc Among the pl astic bag and paper bag of cement, Customer prefer bag. This is because the pape r bag prevents it from moisture and quantity remains intact. In brief cement mar ket is sensitive to marketing. The better & more the marketing the more is possi bility of sales. The observations and findings of the market survey about market share and sales promotion activities are given at the next stage, in the report .

ANALYSIS, PRESENTSTION AND INTERPRETATION 1:Dealers brand preference:-

Company Lafarge Konark 60 Ulteratech Acc 36 Ambuja 14 Century Grasim 8 Duncan 10 Total 200

No of Dealers 24 12% 30% 36 18% 18% 7% 12 6% 4% 5% 100%

percentage

ANALYSIS, PRESENTSTION AND INTERPRETATION 2:- Dealer’s preference for the storage of cements brand:Company No ofDealers percentage Lafarge 40 20% Konark 50 25% Ulteratech 22 11% Acc 24 12% Ambuja 18 9% Century 24 12% Grasim 12 6% Duncan 10 5% Total 200 100% Analysis and Interpretation:- Most of the dealers prefer to store either Lafarge or Konark. 20% of the dealer choice is Lafarge where as 25% of the dealers choi ce is Konark. Remaining 35% of the dealers inclined towards the Acc, Ultratech a nd Century. Remaining 20% of the dealer gives equally importance to the Ambuja, Duncan and Grasim. ANALYSIS, PRESENTSTION AND INTERPRETATION 3:- Customer inclination towards the c ement brand:Company No of Dealers percentage Lafarge 24 12% Konark 60 30% Ulteratech 36 18% Acc 36 18% Ambuja 14 7% Century 12 6% Grasim 8 4% Duncan 10 5% Total 200 100% Analysis and Interpretation:- 78% of the customers are brand loyal. And 22% of t he customers are price sensitive they go with that brand which has fewer prices. In case of brand equity Lafarge lies in No. four. 41 Company Lafarge Konark 2651 Ulteratech Acc 1890 Ambuja 640 Century Grasim 625 Duncan 685 Total 10154 Consumption 1365 13% 26% 1548 15% 19% 6% 750 7% 6% 7% 100% percentage

ANALYSIS, PRESENTSTION AND INTERPRETATION 6:- Company that provides information to the retailer about the price change in the near future:Company No of Dealer Lafarge 15 Konark 10 Ulteratech 21 Acc 22 Ambuja 26 Century 38 Grasim 36 Duncan 32 Total 200 Analysis and Interpretation:- More than 100 of retailers said that Century or Gr asim or Duncan provide the preinformation about the future price change. This he lps them to take precautionary action against the future happenings. Company Lafarge Konark 10 Ulteratech Acc 22 Ambuja 26 Century Grasim 36 Duncan 32 Total 200 No of days 15 21 38

Analysis and Interpretation:- The entire market leaders (Lafarge, Konark, ACC, U ltratech) of cement industries provides relatively less credit period (i.e. less than 50 days) to their stockiest due to which the stockiest are not able to pro vide the sufficient credit in days to their retailers. Where as the newly entere d cement brand provides sufficient credit in terms of quantity as well as in day s to their retailers. That’s why their growth rate is relatively high. 45 Q Maximum profit you get out of selling various brands rank them? ANALYSIS, PRESENTSTION AND INTERPRETATION 8:- Maximum share of profit of retaile rs comes through the selling of the cement:Company Lafarge Konark 45 Ulteratech Acc 37 Ambuja 14 Century Grasim 8 Duncan 6 Total 200 Profit 35 38 17

Analysis and Interpretation:- Only 35 retailers said that their maximum profit c omes through Lafarge. Similarly 45, 38, and 37 retailers said that their maximum profit comes through Konark, ACC, and Ultratech respectively. 46 Q. Rank sales promotion activities according to their effectiveness? Activities Rank Shop Naka & Manson Meet Gifts Incentives

Hoardings Others ANALYSIS, PRESENTSTION AND INTERPRETATION 9:- Retailer’s belief towards the activi ty that influences sales of the cement:Activities Ranks Shops naka and mason 14 Gift 37 Incentive 49 Hoardings 66 Others 34 Total 200 Analysis and Interpretation:- Sixty six retailers out of two hundred which is 33 %, beliefs that Hoardings influence the sales of the cement. Incentives also pla y vital role in the promotion of the goods. 47 Q Rank sales promotion activities according to their effectiveness? Activities Rank Shop Naka & Manson Meet Gifts Incentives Hoardings Others ANALYSIS, PRESENTSTION AND INTERPRETATION 10:- Retailers’ preference towards the g ift:Gifts No of dealers Share 14 Tour 40 Gold 39 White Gold 12 Cheque 29 others 66 Totals 200 Analysis and Interpretation:- Most of the retailers do not want to say about the gift. But after asking again and again their preference are out of the availabl e optioned e.g.:-TV, Camera, cycle, trophy, etc. Out of two hundred 40 preferred tour, 39 preferred gold, 29 preferred cheque, 14 preferred share and 12 preferr ed white gold. 48 Q Give your raking to the cement companies in their sales promotion activities Company Rank Lafarge Konark Ultratech Acc Ambuja Century Grasim Duncan ANALYSIS, PRESENTSTION AND INTERPRETATION 11:- Retailers rank the cement company on the basis of the sales promotional activities:Company Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Total (Retailers) Lafarge 20 40 80 25 35 200 Konark 60 55 47 38 0 200 Ultratech 20 25 32 78 45 200

Acc Ambuja Century Grasim Duncan

20 12 50 30

71 14 13 68 62

57 45 45 58 82

27 68 68 24 26

25 61 52 200 200

200 200 22

200

Analysis and Interpretation:From the interpretation of the data, we come to know that Konark and ACC are on no.1 and no.2 respectively. Lafarge cement is on no.3. Because 30% of the retail ers believe that Lafarge is on no three. Century, Grasim, and Duncan are making extra effort to penetrate the market. Every retailer mentioned their name and me ntioned their considerable effort. Q What is the general price gap (BP-RP) betwe en the following companies? ANALYSIS, PRESENTSTION AND INTERPRETATION 12:- The profit on per bag of cement:Company Lafarge Konark 5 Ultratech Acc 6 Ambuja 7.5 Century Grasim 10 Duncan 10 price gap on per bag 6 6 8

Analysis and Interpretation:Lafarge charges competitive price to the customer. Some of the company charges p remium price like OCL where as some of the brand has very less price like Grasim , Cemtury and Duncan. Price of Lafarge is always equal to the price of Ultratech , ACC. ANALYSIS, PRESENTSTION of the transportation Company Rank 1 Lafarge 70 Konark 23 25 Ultratech 40 Acc 20 67 Ambuja 15 14 Century 85 Grasim 80 75 Duncan 95 62 AND INTERPRETATION 13:- Companies are ranked on the basis facility provided by them:Rank 2 Rank 3 Rank 4 Rank 5 Total (Retailers) 65 28 25 12 200 15 72 65 200 70 65 25 0 200 90 20 3 200 45 90 36 200 78 37 0 0 200 38 7 0 200 43 0 0 200

Analysis and Interpretation: - Transportation facility is a very vital factor fo r a brand to be successful in the market; Lafarge cement has proved itself in th is area as they are having the best reach in the urban area not in the rural are a. Q Rank the companies on the basis of their cement delivery time? Company Rank Lafarge Konark Ultratech Acc Ambuja Century Grasim Duncan

SWOT –Analysis SWOT-analysis is done to understand the external and internal envir onment of the organization. SWOT, which is acronym for strength, weakness, oppor tunity and threats is also known by TOWS-analysis. Though such an analysis, is s trength and weakness exist within an organization can be matched with the opport unity and threats operating in environment , so that an effective strategy can b e formulated. An effective organizational strategy, therefore, is one that capit alizes on the opportunity through the use of strength and neutralizes the threat s by minimizing the impact of weakness. Below is the SWOT- analysis of Lafarge I ndia Pvt. Ltd. in cement market. SWOT ANALYSIS Strengths High quality cement Good packaging Strong distribution network Advanced technologies Eco friendly. Weakness Need of more market expansion. Need of international marketing Not able to use foreign technologies in full swing. Opportunities Acquisition of DLF cement and ACC ‘s stakes With increase in G.D.P. growth rate country will need more roads ,ports , houses etc. They get a chance to set up their plants at the nearest area of mines. Special Awards Ranked as 4TH best managed company in India by Asiamony,in 1996. National quality award for outstanding pollution control. Cement national award for best energy performance in industry. Special expert awards in 1995 and 1996. Various other productivity and mines safety awards. Threats Lenders unwilling to find new cement plant Drought of many parts of the country has reduced demand from 21% to 11%. Production cost increases:-due to increases in price of power ,freight ,coal, di esel etc. Other cement manufacturer company i.e. ACC, L&T etc.

Environmental Analysis Porter’s Model

Chapter- 4. MARKETING IN ACC 4.1 Basic concept: “Marketing is a basic that, it can’t be consideration a separate function. It is th e whole business seen from the point of view”. The world economy has undergone a radical transformation in the last two decades . Geographical and cultural distance have shrunk significantly with the improvem ent in the production, transportation and communication. These advances have per mitted companies to widen substantially both these markets and their suppliers s ources. And thus the role of marketing becomes wide. Marketing is the specialization subject of BBA Curriculum. When aflood of consum er product are coming into the market, every company needs people specialized in marketing to promote their product. “ Marketing is to convert social needs into profitable opportunity” The 21st century is the era of Advertising, Marketing and sales promotion. Marke ting is to convert social needs into profitable opportunities. As it is said “Mark eting thinking starts with the needs and wants”. Apart from basic necessities of air, water, shelter, and clothing, every person has some desire of recreation and entertainment. They have strong preference for parttcular brand of basic services. Marketing serves as the link between the so ciety’s needs and its pattern of industrial response. 4.2 Market: It is important to note that the how of the term market is not on the place, rat her it is on the meeting of buyer and seller. Since, conventionally the buyers u sed to meet the sellers at a physical location, the term market to buyers used t o meet the sellers at the physical location, the term market began to acquire us ed to refer to a place, however, it is not correct to do so. Buyers & sellers ca n conduct business without meeting at a place, by telephone, mail, and now Inter net. 4.3 Customer: Market is not possible without customers or buyers. Customers refer to the peopl e or organization that seek satisfaction of their needs and wants. 4.4 Marketers or Seller:

If the customer is the seeker at satisfaction, the marketer is the deliverer or provider of satisfaction. In the normal usage, the provider of goods or services , called seller. 4.5 Marketing: The important elements for a marketing exchange to take place are: • Presence of an at least two parties: Buyer and seller or customer and marketer o r offeror and taker. • Both parties must have something viewed valuable by each other. • Both parties are free to accept or reject the offer. • Each party is capable to communication and delivery. 4.6 Business Concept: Marketing efforts may be guided by different philosophies like: A) Production Concept Some firms believe that potential exchange would be realized when the products a re in expensive and are widely available. B) Product Concept The product concept propose that the way to realizing business goals lies in mak ing products that are of high quality.

C) Selling Concept Some firms organize their efforts according to selling concept. It holds that cu stomers if left alone would not buy or not buy enough of a firm’s products. D) Marketing Concept The pillars of the marketing concept are: • Identification of market or customers who chosen as the target of the marketing efforts. • • • E) Understanding needs and wants of customer in the target market. Development of product and services for satisfying needs of the target market. Doing all this at profit. Societal marketing concept

The marketing concept is extended to include the social goals in the need satisf action process. That is , the firm must perform marketing in a fashion that well being is enhanced.

4.7 MARKETING MANAGEMENT Marketing management seeks to make marketing a corporate way of life and philoso phy of business organization and operation. It is done to help customers solve t heir diverse consumption problems in ways compatible with the objectives of the firm. 4.8 MARKETING AND SELLING In common, parlance people often take marketing and selling to be the same. Sell ing and marketing differ in terms of their goals and the means to be employed in achieving them. If some one wants to find out whether a player in the market is a seller or marketer then his goal and how he tries to achieve the same need to be ascertained. 4.9 FUNCTIONS OF MARKETING Marketing helps the firm to realize its profit goal by actualizing potential exc hange with the customers. More especially the following are function involved in marketing. 1) 2) 3) 4) 5) 6) 7) Marketing research Product planning Buying and assembling Packaging Storage and warehousing Transportation Promotion and selling.

4.10 THE MARKETING MIX The marketing mix refers to the ingredients or the tools or the variables, which the marketer mixes in order to interact with a particular market. a) Product mix When a firm introduces a number of product over time gradually its offerings bec ome many. that is the firm becomes a multi product company. The total number of product and items that a particular marketer offers to the market is called pro duct mix. • • • • • Branding Brand Name Strategies Trade Mark Packaging Labelling

b) PRICE MIX In a marketing exchange, price is the value, which a buyer passes on to the sell er in lieu of the product or service provided. The factors that must be taken in to consideration are: • Organizational Objectives

• • • •

Cost Competition Customer Demand Pricing Strategies

c) PLACE MIX Place in the context of marketing mix refers to a set of decisions that need to be taken in order to make the product available to the customers for purchase an d consumption. If the products are not made available to the customets at the ri ght place, in right quantity and in right time, the customers would not be able to buy them. • • • 1. 2. 3. • • 1. 2. 3. 4. Channel of Distribution Channel Levels Factors determining choice of channels Market related factor Product relater factors Company related factors. Physical distribution Decisions in physical distribution Transportation Inventory Warehousing Order Processing

d) PROMATION Once the product has been manufactured, priced rightly and is distributed, the n ext task of the marketers is to inform potential customers about the product and persuade them to buy the same. It concern with the activities that are undertak en to communicate with the both customers and the participants. • 1. 2. 3. 4. 5. 6. • Media Selection Newspapers Magazines Television Radio Out door Display Internet Sales Promotion

1. Rebates 2. Discounts 3. Refunds 4. Premiums 5. Quantity Deals 6. Sampling 7. Contests 8. Free in Mail Premium 9. Packaged Premium 10. Container Premium

5.1 MAJOR PLAYERS AND THEIR STRATEGY The key players in the country include ACCL limited, Larsen& Turbo, Grasim Indus tries, Gujarate Ambuja Cement and India cement Limited. The major players in the cement industry have posted encouraging numbers for Q’3 FY’06 riding on the buoyant demand for cement consumption due to resurgence of the construction activities across the country post mansoon period. Robust volume growth as well as apprecia tion of the cement prices in almost all parts of the country helped the industry to record a strong performance. Fig no. 1 Group-wise installed capacity in (Million tons) of Companies

5.2 NATURE OF MARKET COPETITION AND STRATEGIES A cement industry was profitable one time many businessmen changed their product line to cement industry looking at the profit of the cement company. At that st age many cement companies came into existence to meet the requirement. As this w as a long-term investment in the industry so many companies are facing close com petition in the particular scenario. To sustain in the market many companies are reducing their price and giving value added products to keep intact with their costumers. Continuous technological upgrading and assimilation of latest technol ogy has been going on in the cement industry. Presently 93% of the total capacit y in the industry is based on modern and environment – friendly dry process techno logy and only 7% of the capacity is based on cold wet and semi – dry process techn ology to reduce down their manufacturing cost. Maintaining this lead calls for h arnessing the resources and expertise of the company – from applied research and p roduction to marketing. ACC Limited has high efficiency state-of –art pollution control equipments and dev ices. Each of its manufacturing units has a separate environment section managed by a qualified environmental engineer and supporting staff. Our plants, mines a nd townships demonstrate the company’s successful endeavors in greening activities as aforestation, tree planting, horticulture, vegetable and cultivation apart f rom basic landscaping designed to enrich and beautify the environment. Cleaner m ining techniques have helped safeguard and conserve mineral resources. In additi on, we have taken other positive measures such as topsoil conservation, efficien

t water management system and the treatment of wastes, sewage and effluents. Som e of our plants have become near self reliant in their water requirements. ACC h as achieved spectacular results in the utilization of two hazardous and pollutan t industrial waste – namely slag from steel plants and fly – ash from thermal power stations – to make blended cements that have conserved lime stones resources. Over the years, ACC has won several prizes and certificates of merits for environmen tal measures undertaken at its various plants and mines. In particular for progr ams involving greening, forestation, rehabilitation of mines, noise abatement an d other visible measures such as tree plantation and water management.

5.3 NATURE OF THE INDUSTRY India is the world’s second largest cement producing country after China. The indu stry is characterized by high degree of fragmentation that has created intense c omparative pressure on price realizations. Spread across the length and breath o f the country, there are 120 large plants belonging to 56 companies with an inst alled 135 million tons as on march 2002. Group-wise Installed Capacity (approx.) Companies Mn tons L&T 16.00 ACC 18.00 Grasim Industries 13.00 Gujarat Ambuja 12.5 Indian Cement 8.06 J.K. Group 5.87 Lafarge India Ltd. 44.49 Madras Cement 4.82 Century Textiles 4.70 Jaypee Cement 4.20 Birla Corp. Ltd. 4.11 CCI Ltd. 3.85 Zuari Agro 3.15 U.P. State Cement 2.59 Mehta Cement 2.36 Kesorma industries 2.10 Mysore Cement 2.10 Orient Paper Ind. 2.00 Andhra Cement 1.24 Mangalam Cement 1.00

5.4 Quality Policy • Satisfy Customer fully & continuously by supplying products as per their require ment. • Comply all relevant requirements of quality management system. • Provide framework for establishing quality performance. • Continual improvement in quality performance by periodic evaluation and review o f quality policy and objectives for continuing suitability. • Comply with all relevant rules and regulations pertaining to product.

Questionnaire of Market Survey HELP US TO SERVE YOU BETTER

Name of the firm: Ownership Type & Name: Contact Details: Mobile No: 1.Type of Outlet: Cement / Non-cement 2.Dealer’s Classification: A) B) C) D) E) F) ACC (Exclu) Non-ACC (Excl) ACC (MB) Non-ACC (MB) Sub Dealer (Excl) Sub Dealer (MB)

3. How many years you have spent in this cement business? MICRO MARKET POTENTIAL A) Rate the location of the Shop? 1.) 2.) 3.) B) 1.) 2.) 3.) POOR AVERAGE GOOD Rate cluster Growth Rate: LOW AVERAGE HIG

INFRASTRUCTURE DETAILS Manpower Details: A.) How many people do you have/as for? 1. Collection 2. Shop Management 3. Laborers B.) Other Recourses (Plz give nos.): 1. Trucks 2. 2Whlrs 3. VAN

4. 5. 6.

THELA AUTO Other

4. Do you have a home delivery system from yours counter/ Godown or your custome r picks up himself (in %)? 1. 2. Pickup Delivery

5.What are the other construction products you are dealing with? 1. 2. 3. 4. 5. 6. 7. Bricks Aggregates Sand Tiles Paint Hardware Other

6. Please Rank the top three profit giving products you deal with: A. ____________________ B. ____________________ C. ____________________ 7. How much does cement contributes to your total sales (in %)? _________________________________________________ 8. Customer type you are dealing with and their lifting (Tns/Month): 1. 2. 3. 4. IHB Projects Sub-Project Others

9.You are the Authorized Dealer for: 1. 2. 3. 4. 5. 6. ACC AMBUJA UTCL BIRLA PLUS LARAGE Others

10. Please give a brief on present and past sales performance Brand wise: Avg.tns/mt 2004 W/S RE 2005 W/S RE 2006 W/S RE 2007 W/S RE ACC

AMBUJA LARAGE BIRLA+ UTCL Others Total

11. How many Sub Dealers you are supplying to at this time? __________________________________________________ 12.What factor is more important to you? (give 1 as most important & 5 as Least Important in the scale of 1to5) 1. 2. 3. 4. 5. 6. 7. 8. Brand Pull Sales Force Support Cash Incentives Non-Cash Incentives Services Logistic Support Marketing Initiatives Credit Support

13. Out of 10 Customers coming to your counter demand of: 1. 2. 3. 4. 5. 6. ACC AMBUJA LAFARGE UTCL BIRLA+ OTHER

14. What are the problems you visualize with ACC? AREA PRODUCT CREDIT TERMS MKTG INITIATIVES RANK COMMENTS PRICING NON CASH BENEFITS LOGISTIC SUPPORT

15.What are the competitors doing differently?( Give the ranking on a scale of 1 to 6 taking 1 to be highest focus and 6 is to be lowest ) AREAS PRODUCT CREDIT TERMS MKTG INITIATIVES RANK PRICING NON CASH BENEFITS LOGISTIC SUPPORT

16. How can ACC improve its sales? RANK FOCUSED AREA PRODUCT CREDIT TERMS PRICING NON CASH INCENTIVES

LOGISTIC SUPPORT MKTG. INITIATIVES

ANALYSIS AND INTERPRETATION

Q 1. Type of Outlet: Cement / Non-cement

1.1 Graph shows outlet of Cement Analysis and interpretation It shows 60% of the dealers of the company are deals with cement outlet and 40% of the dealers using Non-cement outlet. Q 2. Dealer’s Classification: A) B) C) D) E) F) ACC (Exclu.) Non-ACC (Excl) ACC (MB) Non-ACC (MB) Sub Dealer (Excl) Sub Dealer (MB)

1.2 Graph Shows Classification of dealers Analysis and interpretation This Graph Shows the Classification of Dealers, 30% Dealers are comes under cate gory of ACC (Exclusive) these dealers deals with only ACC cement and 20% Dealers comes under the category of Non-ACC (Exclusive) they deals with other brands ex cept Acc Cement. 20% Dealers comes under Non-ACC (MB) and 15% dealers comes under Non-ACC (MB), t hese dealers deals with Mixed brand of Acc Cement and they also deals with other brands.

Another classification of dealers are Sub-Dealer (Exclusive), after analyzing i t is 10% and the Sub-Dealers Mixed Brand is 5%. 3. How many years you have spent in this cement business? 1.3 Graph Shows number of years spent in cement business Analysis and interpretation This graph shows classification of duration of Dealers in Cement Business, 25% B usinessmen doing their cement business between 0-3 years and where 33% Businessm en doing their Cement business between 4-7years. On the other hand 22% Businessmen continuing their business under 8-10 years and 20% businessmen doing their business Above 10 years.

MICRO MARKET POTENTIAL A) Rate the location of the Shop? 1. 2. 3. POOR AVERAGE GOOD

1.4 Graph Shows location of shop

Analysis and interpretation This Pie Chart clearly shows the location of shop in percentage that deals with cement product. In this 43% dealers shop are located in Average Location, 37% de alers shops are located in good location and 20% dealers shop are located in poo r place. B) Rate cluster Growth Rate: 1. 2. 3. LOW AVERAGE HIGH

1.5 Graph Shows growth rate of cement sales

Analysis and interpretation This Pie Chart clearly shows the GROWTH RATE of shop in percentage that deals wi th cement product. In this chart 45% dealers shop have high growth rate, 30% dea lers shops have average growth rate and 25% dealers shop are located in poor pla ce have low growth rate.

INFRASTRUCTURE DETAILS Manpower Details: A.) How many people do you have/as for? 1. 2. 3. Collection Shop Management Laborers

Analysis and interpretation Number of people engaged in shop is depends on the capacity of godown and market for different brands of cements, on the basis of their requirement they employe e persons for collection, shop management and laborers. There is no specific num ber is mentioned collection, shop management and laborers. B.) Other Recourses (Plz give nos.): 1. 2. 3. 4. 5. 6. Trucks 2Whlrs VAN THELA AUTO Other

1.6 Graph shows resources of communication through transportation takes plac e

Analysis and interpretation This tally bars clearly shows other sources of Godowns in which for transportati on of cement and delivery they uses 30% through Trucks, 20% through Thela and Au to, on the other hand 2Wheelers and other sources is 15% and finally Van is 10%. 4. Do you have a home delivery system from yours counter/ Godown or your custome r picks up himself (in %)? 1. 2. Pickup Delivery

1.7 Graph Shows Pickup & Delivery system of cement Analysis and interpretation This Outdoor Bars shows delivery system of Godowns form counter to customer, Aft er analyzing the data of delivery and pickup from counter , recorded 60% of tot al sales of cement is delivered by dealers to customers destination on the other hand 40% of total sales is pickup by customers him self. 5. What are the other construction products you are dealing with? 1. 2. 3. 4. 5. 6. 7. Bricks Aggregates Sand Tiles Paint Hardware Other

1.8 Graph shows other construction product in which dealers are dealing Analysis and interpretation This Pie Chart shows that other Construction Products in which dealers are deali ng 30% Dealers are deals with hardware, 20% with Bikes with cement, 15% Dealers deals with Aggregates with cements and on the other hand 8% are deals with paint s, 10% deals with Tiles and 12% dealers are dealing with other product also alon g with cement.

6. Please Rank the top three profit giving products you deal with: A. ____________________ B. ____________________ C. ____________________

Analysis and interpretation

Top three profit making products are as follows: • • • 1st Cement 2nd Bricks 3rd Hardware

7. How much does cement contributes to your total sales (in %)? _________________________________________________

Analysis and interpretation Cement contributes 60% in our total sales.

8.You are the Authorized Dealer for: 1 2 3 4 ACC AMBUJA UTCL BIRLA PLUS

Analysis and interpretation I am authorized dealer of ACC Limited, but I am also dealing with Ambuja cement, Birla plus and some mini plant cements.

9. Please give a brief on present and past sales performance Brand wise: Avg.tns/mt 2004 W/S RE W/S RE W/S RE W/S RE ACC 800 AMBUJA 400 LARAGE 700 BIRLA+ 500 UTCL 450 Others 600 Total 3400

2005 2006 2007 500 300 400 200 250 300 1950 950 800 900 750 800 700 4900 600 400 350 400 300 500 2550 900 700 950 800 850 700 4900 400 500 600 550 400 300 2750 1000 800 950 875 850 900 5375 600 550 600 450 500 700 3300

1.9 Table shows present and past sales performance brand wise of individual dealers Analysis and interpretation Table shows four years performance of different brands e.g. 2004, 2005, 2006 and 2007, in which sales are classified in two different heads: Wholesale and Retai

l (Sales of all brands are in Avg.tns/mt). Comparison of all four years shows th ere is stiff competition in market after analyses of sales record of individual dealers, we find that there is competition between ACC Limited, Ambuja, Lafarge and Birla+. In spite of all these ACC Limited maintains their sales record from 2004 to 2007 , there is hues increment in sales of Acc cement in 2007, all these are possible only due to proper distribution of cement product, adaptation of flexible polic ies, analysis of market demand and quality of product.

SUGGESTIONS ACC should come out with such an advertisement, which can block the customers mi nd and can change the customer’s perception about the product. In the new market scenario price is considered as the main attribute of a produc t, which can stimulate maximum number of customers. More improvement is required in the distribution network in the out skit and in the remote areas, because in the peak season the small dealers are taking goods twice or thrice and in between if the distributors could not supply them, the co mpetitors will get the opportunities to supply the goods. Salesmen should have good interaction with dealers, which result company in incr eases sales. Company executives should visit the counter on weekly basis. Executive should take the feedback from the dealers about the services of the sa lesman and distributors. The entire ACC product should be displayed at one place so that the customer can be aware about the different types of cement. The company has to take serious step for changing its packaging style as many lo cal companies are imitating the same and confusing the customers. Regular visit of sales force is required to solve the problem of dealers in the market at the right time. Chapter-5 CONCLUSION The conclusion of this project report is that ACC Limited company 7 its product are the profitable not only in India but also in the whole world. Its main compe titor is Lafarge. In Duopoly market cement product has 65% market share. Keeping pace with changing times and an ever-growing need for specialized services, ACC has begun offering its marketing expertise and distributaries facilities to oth er producers in cement and related areas. However a precondition of all such agr eement is quality control supervision to be carried out by an ACC expert located at the franchisee’s plant. Each of the regional Marketing offices has a customer services cell that is manned by qualified civil engineers. These, in addition to handling after-sales servicing, function as advisory bodies that can help custo

mers, make the right choice of cement for a specific area of application. ACC ca n provide expert advice on getting the best value from cement and offer assistan ce on related issues in civil construction projects. Besides this, technical books/booklets on cement, concrete and building construc tion and maintenance are regularly must be available for the benefit of the cust omers. In addition to this, ACC also publish free booklet, which profiles the la test information on concrete research, design, construction and maintenance. Most outlet owners are experienced and old hand in this business. The scope for increasing the presence (Channel Members) exists for all companies through ACC a nd JP are in a relatively comfortable position here. No. of dealers of ACC is mo re in comparison to other cement brand. Even if JP is at per with ACC. Generally companies are using one level of channel of distribution. But sometime zero lev el is used also.e.g. Manufacturer – Dealer – End-user Manufacturer – End-user Zero level is any possible when marketing department gives order to end-user to take their cement from manufacturing unit. The co. ( A.C.C or about cement brand ) produce facilities to his channel members such as provision for settlement of claims regarding quality, less wt. Of packages and lumps formation of the produ ct for a particular period of time. ACC is preferred because it is the market l eader amongst the cement while JP is preferred due to market demand. JP does the maximum sales promotion (i.e advertisement) in the opinion of dealers. But ACC does not give more advertisement to promote sales. Mode of transportation of cem ent by road is better one in the dealers whose shop are near to railway godown. Minimum order acceptance by every company is 9 tonnes i.e. one truck company of any cement don’t accept less then 9 tonnes. From selling point of view ACC brand is no 1, JP has got 2nd rank and TATA has g ot 3rd rank. It means that selling ACC brand cement is easier to other.

LIMITATIONS OF THE STUDY In order to have a clear-cut idea of the market activities in ACC limited, Gujar at unit, I surveyed dealers and customers during my course of study. I prepared a questionnaire, which has been included in the Annexure at the end of this repo rt. While preraring this questionnaire, I tried my level best to cover all the a spects of the marketing activities.

. BIBLIOGRAPHY

Books: BOOKS 1. Research Methodology: C.K. Kothari Wishwa Prakashan Darayaganj New Delhi 2nd Edition-1995 2. Marketing Management: Philip Kotler Prentice- hall of India Pvt. Ltd. New Delhi-110001 8th Edition -1995 Kotler, Philip.” Marketing Management” Prentice hall of India. Edition-IX Drucker, Peter. “ Management Function & Behaviour”, BPB, Edition-III Journal: Singh, S.K.” A view across global marketing”. India Journal of commerce. Vol-54 Indian management ( All India management Association ), Jan 2006 issues.

Web-Sites: www.Acclimited.com.in www.askACC.com www.channelmgt.com

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