aditya birla cement

8/3/2019 Aditya Birla Cement

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Amity Business School

UltraTechCement

SUBMITTED BY:-

Mohit Sahni Shailendra Singh

Lohit Sharma

Bhavik Sarin

Anupreet Kharb

Vaibhav Dhir


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Industry Overview

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

Currently India is ranked second in the world with an installed

capacity of 114.2 Million tonnes.

The cement Industry in India comprise of

130 large cement plant

more than 365 small cement plants

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

No. of people employed1,20,000.


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The industry is divided into five regions:-

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

West (Maharashtra and Gujarat);

South (Tamil Nadu, Andhra Pradesh, Karnataka, Kerala,Pondicherry, Andaman & Nicobar and Goa);

East (Bihar, Orissa, West Bengal, Assam, Meghalaya,Jharkhand and Chhattisgarh

Central (Uttar Pradesh and Madhya Pradesh).

Trade between these regions is on a very low scale mainly

because of the transportation bottlenecks and uncompetitive

cost of transportation.


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Growth Trends

Current production capacity300MT

Next year target320 MT

Vision 2020550 MT

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

real estate sector, infrastructure projects like dams, airports,

irrigation projects and national highway development

programs.


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Major Players in the Market

23

20

17

9

7

6

18

Market Share

UltraTech Cement

ACC Cement

Ambuja Cement

Jaypee Cement

JK CementIndia Cement

Others


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PEST Analysis


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

tariffs, freight, royalty & cess on limestone.

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

formation of infrastructure debt funds.

Economical: The infrastructure industry is on boom because of housing

development programmes, promotion of concrete highway & roads

which improve the demand of cement.

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

International players like Holcim has 24 plants in the country &

planning to invest US$ 2.5 billion .


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

that they can renovate the rural areas.

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

stop emission of dust and CO2 from plant.

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

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

of power utilizing waste heat in an Indian cement plant is

being implemented with Japanese assistance.


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Company Overview

Aditya Birla Group is among the top 10 cement producers

globally.

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

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

Grasim acquired management control in July 2004.

Name changed to UltraTech Cement Limited with effect from

14 October 2004.


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

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

one clinkerisation plant in UAE.

UltraTech Cement is the countrys largest exporter of cementclinker.

The export markets span countries around the Indian Ocean,

Africa, Europe and the Middle East.

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

control of ETA Star Cement together with its operations in the

UAE, Bahrain and Bangladesh in September, 2010


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Distribution Channel

Cement in India is primarily sold through a distributor-dealer

network.

The main sales is done through

Dealer network (80%)

Bulk sale to institutional customers (20%)

Managing the distribution network and strong working

relationships with distributors, contractors etc., is critical.


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Transportation Routes

For domestic Market:

For Export:

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

Company

Distributor Retailer Customer


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For Institutional Sales

COMPANY

AGENTS

ORGANIZATION GOVERNMENT


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Total margin for the distribution channel17-18%.

Distributions marginRs. 6-7 per bag

Retailers marginRs. 2-3 per bag

Around 25% of the total cost goes in transportation.


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Marketing Activities

Aditya Birla Group has been the pioneer in promotional

activities when it comes to cement industry and has taken

several innovative marketing initiatives.

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

sponsors to the Indo-Pak series held in Pakistan.

To further strengthen the bonding with the channel partners,

over 400 of them were taken to witness the match.


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UltraTech Cement and IPL

After the 2008 Indian premier League, UltraTech has become

official sponsor for the Jaipur based IPL team.

The coming together of the two brands, is the bringing

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

domain.


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Contd. Chak De India Campaign

The in-film branding

opportunity was used by

UltraTech for the first time

ever in the cement industry.

UltraTech was the sponsor of

womens hockey team.

UltraTech branding was all

over, throughout the movie.


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

to create awareness about the product among the customers

and trade partners.

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

contractors.


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Innovative Marketing

UltraTech has brought in a new concept in cement marketing

UltraTech Building Solutions.

It is a one stop shop for all construction needs.

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

Every customer who walks into UltraTech Building Solutions

outlet recieves guidance on construction related issues as well

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

procedure etc.

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

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


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B2B Sales

Data Collection

The company gets the list of registered builders and contractors from

the concerned government offices.

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

A meeting is organized

The company representatives provides product information to

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

their competitors.

Gifts and mementos are provided to the people attending the

meeting.


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

placement.

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

Market price of a UltraTech cement bagRs. 235

In B2B channelRs.220-225.

The discount given to the client also depends upon the time

taken by the him to make the full payment.


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B2B For Govt. Contractor

Govt. Contractor has to approach to the Ultra Tech distributor

for the cement requirement.

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

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

The distributor forward the requirement to the Ultra Tech

regional office and the company directly send the cement to

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

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

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

as compared to normal order.

aditya birla cement

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