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.
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