report

(formerly The Associated Cement Companies Limited)

Project on Supply chain Management

INDUSTRY PROFILE

Cement Industry in India is on a roll at the moment. Driven by a booming real estate sector, global demand and increased activity in infrastructure development such as state and national highways, the cement industry has witnessed tremendous growth. Production capacity has gone up and top cement companies of the world are vying to enter the Indian market, thereby sparking off a spate of mergers and acquisitions. Indian cement industry is currently ranked second in the world.

The origins of Indian cement industry can be traced back to 1914 when the first unit was set-up at Porbandar with a capacity of 1000 tonnes. Today cement industry comprises of 125 large cement plants and more than 300 mini cement plants. The Cement Corporation of India, which is a Central Public Sector Undertaking, has 10 units. There are 10 large cement plants owned by various State Governments. Cement industry in India has also made tremendous strides in technological upgradation and assimilation of latest technology. Presently, 93 per cent of the total capacity in the industry is based on modern and environment-friendly dry process technology. The induction of advanced technology has helped the industry immensely to conserve energy and fuel and to save materials substantially. Indian cement industry has also acquired technical capability to produce different types of cement like Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement etc. Some of the major clusters of cement industry in India are: Satna (Madhya Pradesh), Chandrapur (Maharashtra), Gulbarga (Karnataka), Yerranguntla (Andhra Pradesh), Nalgonda (Andhra Pradesh), Bilaspur (Chattisgarh), and Chandoria (Rajasthan).

Cement industry in India is currently going through a consolidation phase. Some examples of consolidation in the Indian cement industry are: Gujarat Ambuja taking a stake of 14 per cent in ACC, and taking over DLF Cements and Modi Cement; ACC taking over IDCOL; India Cement taking over Raasi Cement and Sri Vishnu Cement; and Grasim's acquisition of the cement business of L&T, Indian Rayon's cement division, and Sri Digvijay Cements. Foreign cement companies are also picking up stakes in large Indian cement companies. Swiss cement major Holcim has picked up 14.8 per cent of the promoters' stake in Gujarat Ambuja Cements (GACL). Holcim's acquisition has led to the emergence of two major groups in the Indian cement industry, the Holcim-ACC-Gujarat Ambuja Cements combine and the Aditya Birla group through Grasim Industries and Ultratech Cement. Lafarge, the French cement major has acquired the cement plants of Raymond and Tisco. Italy based Italcementi has acquired a stake in the K.K. Birla promoted Zuari Industries' cement plant in Andhra Pradesh, and German cement company Heidelberg Cement has entered into an equal joint-venture agreement with S P Lohia Group controlled Indo-Rama Cement.

PG Center, VTU, Belgaum



Issues concerning Cement Industry

High Transportation Cost is affecting the competitiveness of the cement industry. Freight accounts for 17% of the production cost. Road is the preferred mode for transportation for distances less than 250km. However, industry is heavily dependent on roads for longer distances too as the railway infrastructure is not adequate.

Cement industry is highly capital intensive industry and nearly 55-60% of the inputs are controlled by the government.

There is regional imbalance in the distribution of cement industry. Limestone availability in pockets has led to uneven capacity additions.

Coal availability and quality is also affecting the production.

Capacity and ProductionThe cement industry comprises of 125 large cement plants with an installed capacity

of 148.28 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum. The Cement Corporation of India, which is a Central Public Sector Undertaking, has 10 units. There are 10 large cement plants owned by various State Governments. The total installed capacity in the country as a whole is 159.38 million tonnes. Actual cement production in 2009-10 was 2.06 million tonnes as against a production of 1.88 million tonnes in 2008-9, registering a growth rate of 8.84%.

Keeping in view the trend of growth of the industry in previous years, a production target of 126 million tonnes has been fixed for the year 2009-10. During the period January – December 2010, a production (provisional) was 21.21 million tonnes. The industry has achieved a growth rate of 4.86 per cent during this period. Exports

Apart from meeting the entire domestic demand, the industry is also exporting cement and clinker. The export of cement during 2001-02 and 2003-04 was 5.14 milliontonnes and 6.92 million tonnes respectively. Export during April-May, 2003 was 1.35 million tonnes. Major exporters were Gujarat Ambuja Cements Ltd. and L&T Ltd.




FACTOR’S RESPONSIBLE FOR THE GROWTH OF THE SECTOR

Technological changeContinuous technological upgrading and assimilation of latest technology has been going on

in the cement industry. Presently, 93 per cent of the total capacity in the industry is based on modern and environment-friendly dry process technology and only 7 per cent of the capacity is based on old wet and semi-dry process technology. There is tremendous scope for waste heat recovery in cement plants and thereby reduction in emission level.

New Investments

Shree Cements will invest almost US$ 244.12 million this year, of which half will be invested towards setting up two grinding units at Rajasthan and Uttarakhand to augment its capacity. The other half will be towards the two power plants in Bangur.

ACC Ltd will spend US$ 575 million on capacity expansion in 2009 and 2010. ACC is expanding capacity by a third to 30 MT by 2010.

Binani Cement has signed a memorandum of understanding with the Gujarat government to set up a 2.5 MTPA Greenfield cement plant in Gujarat at a cost of US$ 169.40 million. Binani Cement has also initiated talks with a few foreign institutional investors (FIIs) to raise US$ 307.99 million for its new projects.

Bheema Cements Ltd is planning to invest US$ 116.42 million in setting up a new manufacturing line of 1.5 MT capacities at its plant in Andhra Pradesh.

Mergers and Acquisitions (M&As)

A growing and robust economy was noteworthy in terms of the total number of mergers and acquisitions (M&A) in India 2007, with the cement sector contributing to 7 per cent to the total deal value.

Holcim strengthened its position in India by increasing its holding in Ambuja Cement from 22 per cent to 56 per cent through various open market transactions with an open offer for a total investment of US$ 1.8 billion. Moreover, it also increased its stake in ACC Cement with US$ 486 million, being the single largest acquirer in the cement sector.




Leading foreign funds like Fidelity, ABN Amro, HSBC, Nomura Asset Management Fund and Emerging Market Fund have together bought around 7.5 per cent in India's third-largest cement firm, India Cements (ICL), for US$ 124.91 million.

Cimpor, the Portugese cement maker, paid US$ 68.10 million for Grasim Industries' 53.63 per cent stake in Shree Digvijay Cement.

CRH Plc, the world's second biggest maker and distributor of building materials, acquired a 50 per cent stake in My Home Industries Ltd for almost US$ 372.64 million.

Vicat SA, a French cement maker acquired a 6.67 per cent stake in Hyderabad-based Sagar Cement for US$ 14.35 million.

Government Initiatives

Government initiatives in the infrastructure sector, coupled with the housing sector boom and urban development, continue being the main drivers of growth for the Indian cement industry.

Increased infrastructure spending has been a key focus area over the last five years indicating good times ahead for cement manufacturers.

The government has increased budgetary allocation for roads under National Highways Development Project (NHDP).

Appointing a coal regulator is looked upon as a positive move as it will facilitate timely and proper allocation of coal (a key raw material) blocks to the core sectors, cement being one of them.

Keeping in mind the global meltdown which is impacting the cement companies in India, the government reimposed the counter-veiling duty (CVD) and special CVD on imported cement in January. This is likely to provide a level playing field to domestic companies.




COMPANY PROFILE

ACC BUILDING THE NATION

ACC has been an interesting story – one that inspired a book. ACC was formed in 1936

when ten existing cement companies came together under one umbrella in a historic merger – the

country’s first notable merger at a time when the term mergers and acquisitions was not even coined.

The history of ACC spans a wide canvas beginning with the lonely struggle of its pioneer F E

Dinshaw and other Indian entrepreneurs like him who founded the Indian cement industry. Their

efforts to face competition for survival in a small but aggressive market mingled with the stirring of a

country’s nationalist pride that touched all walks of life – including trade, commerce and business.

The Associated Cement Companies Limited, (ACC) as it .is popularly known is India’s

largest cement manufacture, with an installed capacity of 18.8million tones per annum, and sales

turnover of over Rs 4000 cores. ACC’s operations are spread throughout the country with 15

modern factories, 11 regional marketing offices, and several zonal offices. ACC’s full name The

Associated Cement Companies Limited, the name itself indicates the company’s origins from this

unique merger. Acknowledged on among the most trusted names incorporate India, ACC is listed

one the super Brands of India.

Over the years, ACC realized that people are as different as they are similar. Different

needs, different lives, different dreams. With its depth of knowledge and width of experience

ACC, today, is poised to fulfill the hopes and aspirations of people across the length and breadth

of the country.




LOCATION

The wadi cement works of ACC was setup in the year 1968 with an installed capacity of 4.0

lakhs tones per annum of ordinary Portland cement clinker, subsequently the capacity was enhanced

in two phases to 27.0 Lakhs tonnes per annum. The current capacity of the commencing of new

plants is 54 Lakhs tones per annum.

The factory is situated at the south mental part of the country in the state of Karnataka. It is

well connected by rail and road. The nearest important railway junction, Wadi, is on the central

railway between Solapur and Guntakal. Wadi stations about 1.5 Kilometer from the plant site. The

plant machineries were originally supplied by M/S. Taylor and M/S. ABL and later have been

renovated and upgraded over the years.

Wadi Cement Works manufactures Ordinary Portland Cement Type 43, 53 grade (latest

version of IS: 269, IS: 8112 & IS: 12269 respectively) and Portland Pozzolona Cement (latest

version of IS: 1489 Part- I) under the brand name ACC SURAKSHA which makes utilization of fly

ash up to 25% thereby helping in maintaining pollution free environment

In this plant, manufacturing of cement is based on “dry process”. The first step is to form

clinker from a fine ground mixture of calcareous and siliceous material with a small amount of

fluxing material, which is heated at high temperature. In the second step, the formed clinker is

ground with gypsum to form ordinary Portland cement. Various additives like Pozzolona; fly ash etc.

may be added at this stage to produce Portland Pozzolona Cement.




WADI: THE PLACE

Wadi is a small town in the Gulbarga district of Karnataka state and has only recently

become a municipal area. It is suitably situated at a distance of about 40 km from the district

headquarters Gulbarga and at a distance of about 200 km from Hyderabad in Andhra Pradesh.

Mumbai Chennai and Bangalore also are only a night journey away. The only major centers, which

are relatively inaccessible from Wadi, are New Delhi and Kolkata with journey times in excess of 30

hrs.

Wadi is a small place and the places of major interest are the ACC plants and colony

themselves and the Wadi railway station which is a junction. The rest of Wadi is rough territorial.

The level of education is fairly good in Main Wadi but poor in the surrounding villages. Health and

hygiene and drinking water are major concerns of the people.

a) Background and inception of the company

ACC was formed in 1936 when ten existing cement companies came together under one umbrella in a historic merger – the country’s first notable merger at a time when the term mergers and acquisitions was not even coined. The history of ACC spans a wide canvas beginning with the lonely struggle of its pioneer F E Dinshaw and other Indian entrepreneurs like him who founded the Indian cement industry. Their efforts to face competition for survival in a small but aggressive market mingled with the stirring 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 cement giant. These

companies belonged to four prominent business groups – Tatas, Khataus, Killick Nixon and F E

Dinshaw groups.

CC 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 history, in

which the distinct identities of the constituent companies were melded into a new cohesive

organization – one that has survived and retained its position of leadership in industry. In a sense, the

formation of ACC represents a quest for 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 Over the years,

ACC realized that people are as different as they are similar. Different needs, different lives, different

dreams.

With its depth of knowledge and width of experience ACC, today, is poised to fulfill the

hopes and aspirations of people across the length and breadth of the country.


F.E. Dinshaw – the founder of ACC



HERITAGE

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, the 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 largest 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 in the cement industry.

ACC's First Board Meeting in 1936 at The Esplanade Sir Nowroji B Saklatvala was the

first chairman of ACC.

The first Board included distinguished luminaries of the Indian business world of the

time – names like J R D Tata, Ambalal Sarabhai, Walchand Hirachand, Dharamsey Khatau, Sir

Akbar Hydari, Nawab Salar Jung Bahadur and Sir Homy Mody among others.




b ) Nature of the business carried

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 cement 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, infrastructure and other development projects. With more and more developmental projects coming up, the profit and the market share of the company is expected to rise at a considerable rate.

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 with 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 the share in the market.

All the ACC Ltd. Cement Plants use the cutting edge technologies and services which 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 consumer market in the country and the world. The following table provides a general 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 DryACC Ltd. (G) Tikaria Uttar Pradesh Grinding UnitACC Ltd. Lakheri Rajasthan DryACC Ltd. Kymore Madhya Pradesh DryACC Ltd. Chaibasa Jharkhand ChaibasaACC Ltd. Sindri Jharkhand Grinding UnitACC Ltd. Jamul Chhattisgarh Dry and Semi-DryACC Ltd. Chanda Maharashtra DryACC Ltd. Wadi Karnataka DryACC Ltd. – New Wadi Karnataka DryACC Ltd. Macherial Andhra Pradesh Grinding UnitACC Ltd. Madukkarai Tamil Nadu Semi-Dry




Some ACC Facts:

Largest Network in India

15 cement Factories

11 Marketing Offices

16 Area Offices

160 Warehouses

9,000 Dealers

Barely three years later, the fledgling company was catapulted into the fiery cauldron of World

War II, and resources were geared to meet that onslaught. Soon after, India gained her

independence. ACC was there - more than an eyewitness to history. Helping to make history.

Helping to build the new India, waiting in the wings… changing the landscape, the very face of

the country. ACC (The Associated Cement Companies Limited) is India's foremost manufacturer

of cement, concrete and refractory products. Its sales turnover in 2002-03 was Rs. 34899 million.

ACC's operations are spread throughout the country with 14 modern cement

factories, 11 regional marketing offices, and several zonal offices. It has a workforce of 9200

persons and a countrywide distribution network of over 9,000 dealers. ACC's research and

development facility has a unique track record of innovative research, product development and

specialized consultancy services. Since its inception in 1936, the company has been a trend-

setter and important 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 community welfare programmes have won it acclaim as a

responsible corporate citizen. ACC has made significant contributions to the nation building

process by way of quality products, services and sharing its expertise. 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 industry. This ensures not just consistency in product

quality but also continuous improvements in products, processes, and application areas.




Today, the company's operations are spread throughout the country - with 14 cement

factories, three refractory plants, 11 regional marketing offices, 16 area offices, and a dedicated

employee band of about 9,200 people from all corners of India. As part of its expertise, ACC has

acquired rich experience in mining, being the largest user of limestone, and it is also one of the

principal users of coal. As the largest cement producer in India, 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 materials and products.




C) Vision, Mission and Quality Policy

ORGANIZATIONL VISION




MISSION

Leadership

Maintain our leadership of the Indian cement industry through the continuous

modernization and expansion of our manufacturing facilities and activities, and through the

establishment of a wide and efficient marketing network.

Profitability

Achieve a fair and reasonable return on capital by prompting productivity thought the

company.

Growth

Ensure a steady growth of business by strengthening our position in the cement sector

and also by diversifying into other areas consistent with the overall corporate objectives.

Quality

Maintain the high quality of our products and services and ensure their supply at fair

prices.

Equity

Promote and maintain fair industrial relations and an environment for the effective

involvement, welfare and development of staff at all level.

Pioneering

Promote research and development efforts in the areas of product development and

energy, and fuel conservation, and to innovate and optimize productivity.

Responsibility

Fulfill our obligations to society, specifically in the areas of interated rural development

and in safeguarding the environment and natural ecological balance.




QUALITY

In all dynamic and versatile companies, R&D forms the hub of new activities, and is a

constant partner, innovator and evaluator. In 1964, a centralized research facility - the Central

Research Station (CRS) was established in Thane. The research station, spread over an area of

8000 sq m has modern labs with the latest equipment and manned by highly qualified scientists

and technologists who carry out research in cement and allied fields.

ACC has effectively pledged its reputation as the market leader in the quality of cement.

Maintaining this lead calls for harnessing the resources and expertise of the company - from

applied research and production to marketing. Accordingly, all ACC factories are equipped with

state-of-the-art process control instrumentation and associated quality control and testing

laboratories. Trained engineers, chemists and technicians man these. The R&D unit at the

Corporate Central Research Station, Mumbai, is used as a reference laboratory and for diagnosis

and resolving specific trouble-shooting cases. As a result of this focus on quality, ACC cement

specifications exceed those set by BIS by a wide margin

Today, 10 of our 13 cement plants already have the ISO 9000 & ISO 14000 certification.

This demonstrates our tradition of providing reliable and consistent quality through the

application of modern technology, and justifies the preferences of a nationwide customer base.

QUALITY POLICY OF THE COMPANY

Build quality in; do not sort bad quality out.

Manufacture and sell quality products.

Satisfy customer fully and continuously.




d) PRODUCT PROFILE

ACC manufactures the following types of cement, in addition to which, it provides Bulk Cement

and Ready Mix Concrete.

Ordinary Portland Cements

43 Grade Cement (OPC 43 Grade)

ACC Cement is the most commonly used cement in all constructions including plain and reinforced cement concrete, brick and stone masonry, floors and plastering. It is also used in the finishing of all types of buildings, bridges, culverts, roads, water retaining structures, etc.

What is more, it surpasses BIS Specifications (IS 8112-1989 for 43 grade OPC) on compressive strength levels.

ACC Cement is marketed in specially designed 50 kg bags.

53 Grade Cement

This is an Ordinary Portland Cement which surpasses the requirements of IS: 12269-53 Grade. It is produced from high quality clinker ground with high purity gypsum.

ACC 53 Grade OPC provides high strength and durability to structures because of its optimum particle size distribution, superior crystalline structure and balanced phase composition.

It is available in specially designed 50-kg bags.

Blended Cements

Fly-ash based Portland Pozzolona Cement

This is special blended cement, produced by inter-grinding higher strength Ordinary Portland Cement clinker with high quality processed fly ash - based on norms set by the company's R&D division. This unique, value-added product has hydraulic binding properties not found in ordinary cements.





What is special about ACC Fly-ash based PPC?

ACC Fly-ash based PPC is made by intergrading high strength clinker with specially processed flyash. This imparts a greater degree of fineness to ACC Fly-ash based PPC cement, improved workability properties while mixing, and makes concrete more corrosion resistant and impermeable. All of this makes for better long-term strength and improved corrosion resistance and therefore, greater life for your constructions. ACC Fly-ash based PPC is an eco-friendly cement

What are the advantages of using ACC Fly-ash based PPC?

In concrete made from ordinary cements, moisture reacts with calcium hydroxide in concrete to form calcium bicarbonate, which leaches out of the concrete, leaving pores that reduce its strength. ACC Fly-ash based PPC has ingredients which react with calcium hydroxide to form CSH gel, to provide additional strength, which actually makes the concrete grow in strength over the years. It also produces less heat of hydration and offers greater resistance to the attack of aggressive waters than normal Portland cement.

Can ACC Fly-ash based PPC be used for all jobs in construction?

ACC Fly-ash based PPC easily replaces OPC and provides additional advantages for practically all types of construction applications - commercial, residential, bungalows, complexes, foundation, columns, beams, slabs and RCC jobs. It is especially recommended for mass concreting work, and where soil conditions and the prevailing environment take heavy toll of constructions made with ordinary cements.

How ACC Fly-ash does based PPC stand up to corrosive environments?

Due to its inherent characteristics, ACC Fly-ash based PPC makes very corrosion resistant concrete that is superior to concrete made with OPC. It is more impermeable to oxygen, CO2, chlorides, etc. Leaching of alkalis is reduced and the alkaline environment around steel is maintained.

Portland Slag Cement

This is a slag-based blended cement that imparts strength and durability to all structures. It is manufactured by blending and inter-grinding OPC clinker and granulated slag in suitable proportions as per our norms of consistent quality. PSC has many superior performance characteristics which give it certain extra advantages when compared to Ordinary Portland Cement





What is special about ACC PSC?

Compared to OPC, ACC PSC imparts some important additional advantages

Reduction in free lime leaching. Ultimate higher strength. Improved workability reduced bleeding as well as segregation and corrosion. Denser, less permeable concrete and mortar. Better resistance to sulphates, chlorides, and CO2 and alkali-aggregates reaction. Less heat, reduced plasticity and drying shrinkage. Increased static modulus of elasticity. Increased serviceability with less deflection of members and micro cracks and reduced cost of

construction and maintenance.

All these factors make for a strong, durable, and longer lasting construction. ACC PSC benefits the structure, protects the environment by reducing CO2 emissions and helps conserve energy. Which is why it is often referred to as an eco-friendly cement.

The Federation International de la Precontrainte (FIP) Guide to Good Practice for "concrete constructions in hot weather," states that if concrete is likely to be exposed to an environment of sulphate-bearing water or soil, it is preferable to use a proven type of blended cement containing ground granulated blastfurnace slag. Concrete made with ACC PSC has a higher density than concrete made with OPC, and hence it improves the durability of concrete structures.

It can, therefore, be used for all purposes where OPC or PPC is used.




e) Area of operation

ACC cement operations today span the length and breadth of India, with 14 cement plant, 11

RMC unit and also 11 cement marketing offices. Leveraging the strong equity and goodwill of

the house mark, the company has a portfolio of national brands such as ACC Super, ACC Samrat

and ACC Suraksha etc.

ACC’S Plant- wise Capacity:

Name of the Plant Location Capacity (MTPA)

Bargarh Cement Work Bargarh 0.96Tikaria Cement Grinding And Packing Plant

Tikaria 2.00

Lakheri Cement Works Lakheri 0.60Kymore Cement Works Kymore 1.70Chaibasa Cement Work Chaibasa 0.87Sindri Cement Work Sindri 0.60Jamul Cement Work Jamul 1.58Chanda Cement Work Chanda 1.00Wadi Cement Work Wadi 2.11New Wadi Cement Work Wadi 2.60Madukkarai Cement Work Madukkarai 0.96

f) Ownership pattern

Ownership & Shareholding Pattern

The house of TATA was intimately associated with ACC up to 1999, after which the Tata Group sold all 14.45% of its shareholding in ACC in three stages to subsidiary companies of Gujarat Ambuja Cements Limited (GACL). In January 2005, the Holcim Group of Switzerland announced its plans to enter into a long-term strategic alliance with the Ambuja Group by acquiring a majority stake in Ambuja Cements India Ltd. (ACIL), which at the time held 13.8% 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 majority shareholding in ACC. An open offer was made by Holdcem Cement Pvt. Limited along with Ambuja Cements India Ltd. (ACIL), following which the shareholding of ACIL increased to 34.69% of the Equity share capital of ACC.




The shareholding pattern in ACC (as on March 31, 2010) was as follows: Promoters & Persons in ControlAmbuja Cement India Private Limited, Mumbai 45.92 %

Holderind Investments Limited, Mauritius 0.29%

46.21%

Institutional Shareholders 32.61%Non-institutional Shareholders 20.78 %Shares against Depository Receipts 0.40%

TOTAL 100.00 %

g) Competitors Information

Major Player’s of the Industry

There are a number of players prevailing in the cement industry in India. However, there are around 20 big names that account for more than 70% of the total cement 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

h) Infrastructural Facilities

IT Infrastructure




ACC was among the first Indian companies to adopt automation of information technology. We started computerizing our systems as early as 1968 - a commitment to progress through the harnessing of relevant available technologies, a practice that continues even today.

We have traveled a long way from our early days when we were using simple keypunching machines. Significant improvements have been made in application systems and infrastructure since then - from Batch processing to on-line systems, from IBM 1401 and Data General system to the latest Linux/UNIX and Windows 2003 based machines. We have made timely transitions determined by available technologies and business requirements.

In February 2007 the company made a quantum jump from in-house developed systems using Oracle 9i and Developer 6i to an ERP (SAP) based solution. This decision was based solely on our strategic objectives and the business benefits that we expect to derive from implementing such a solution. With this move we also aligned people, business processes and technologies across the country.

The Company has an Intranet Portal called ‘Accelerate’ which is dedicated to employees. The portal’s content is based on Personal information relating to Human Resource matters, Performance Management, as well as other information of use to employees such as the latest news on company affairs, developments on sustainable development, house magazines and newsletters.

Being a large organization with a countrywide network of manufacturing, marketing and R&D centers, we have invested in the creation of a comprehensive infrastructure that allows free flow of information across the organization. This enables almost instant communication between all levels in the organization. A hybrid WAN network connects each of our 275 plus locations. A judicious mix of VSAT and VPN links ensure adequate connectivity between these locations. Each manufacturing location has a well designed LAN to meet its needs.

IT in ACC is well placed to master future expansions of our core businesses.

Other infrastructure facilities:

1. Quarters for the Employees

2. Hygiene Environment

3. Canteen

4. Joggers Parks

5. Club

I) Achievement/Award

ACC – ACHIEVEMENTS




Year Achievement

1936 The Associated Cement Companies Limited incorporated on August 1st

1947 India's first entirely indigenous cement plant installed at Chaibasa.

1955 ACC Sindri uses waste material - calcium carbonate sludge -from fertilizer factory at Sindri to make cement

1956 Bulk Cement Depot established at Okhla, Delhi

1961 Blast furnace slag, (a waste by-product from steel) from TISCO used at ACC Chaibasa to manufacture Portland Slag Cement.

1961 Oilwell Cement manufactured at ACC Shahabad for cementation of oilwells upto a depth of 6,000 feet.

1961 Manufacture of Hydrophobic (waterproof) cement at ACC Khalari.

1965 Manufacture of Portland Pozzolana Cement using naturally available materials. An eco-friendly cement using an eco-friendly process.

1966 ACC inducts use of pollution control equipment and high efficiency sophisticated electrostatic precipitators for its cement plants and captive power plants decades before it becomes mandatory to do so.

1978 Introduction of the energy efficient pre-calcination technology for the first time in India.

1982 Commissioning of the first 1 MTPA (million tonne per annum) plant in the country at Wadi, Karnataka.

1984 ACC achieves a breakthrough in import substitution by developing and supplying a special G type of oil well cement to ONGC.

1987 ACC develops a new binder, working at sub-zero temperature, which is successfully used in the Indian expedition to Antarctica.




1992 Incorporation of Bulk Cement Corporation of India, a JV with the Government of India.

1993 Commercial manufacture of ready-mixed concrete at Mumbai.

2001 Commissioning of the new Wadi plant of 2.6 MTPA capacity in Karnataka, the largest in India, 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

2004 IDCOL Cement Limited is renamed as Bargarh Cement Limited (BCL).

2004 ACC raises US $ 100 million abroad through Foreign Currency Convertible Bonds (FCCB’s) for US$ 60 million and Global Depository Shares (GDS’s) for US $ 40 million. Both offerings are listed on the London Stock Exchange.

2004 ACC named as a Consumer Superbrand by the Superbrands Council of India, becoming the only cement company to get this status.

2004 GreenTech Safety Gold and Silver Awards awarded to Madukkarai Cement Works and Katni Refractory Works by Greentech Foundation for outstanding performance in Safety Management System.

2005 ACC receives the CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar Certificate of Merit – 2004 from Council For Fair Business Practices.

2005 Holcim group of Switzerland enters strategic alliance with Ambuja Group by acquiring a majority stake in Ambuja Cements India Ltd. (ACIL) which at the time held 13.8 % of the total equity shares in ACC. Holcim simultaneously makes an open offer to ACC shareholders, through Holdcem Cement Pvt. Limited and ACIL, to acquire a majority shareholding in ACC. Pursuant to the open offer, ACIL’s shareholding in ACC increases to 34.69 % of the Equity share capital of ACC.

2005 Commissioning of Modernisation and Expansion project at Chaibasa in Jharkhand, replacing old wet process technology with a new 1.2 MTPA clinkering unit, together with a captive power plant of 15 MW.

2005 Financial accounting year of the company changed to calendar year January-December

2006 Subsidiary companies Damodhar Cement & Slag Limited, Bargarh Cement Limited and Tarmac (India) Limited merged with ACC

2006 ACC announces new Workplace policy for HIV/AIDS

2006 Change of name to ACC Limited with effect from September 1, 2006 from The Associated Cement Companies Limited.




2006 ACC receives Good Corporate Citizen Award 2005-06 from Bombay Chamber of Commerce and Industry

2006 New corporate brand identity and logo adopted from October 15, 2006

2006 ACC establishes Anti Retroviral Treatment Centre for HIV/AIDS patients at Wadi in Karnataka– the first ever such project by a private sector company in India.

2007 ACC partners with Christian Medical College for treatment of HIV/AIDS in Tamil Nadu

2007 Sumant Moolgaokar Technical Institute completes 50 years and reopens with new curriculum

2008 Ready mixed concrete business hived off to a new subsidiary called ACC Concrete Limited.

2008 ACC Cement Technology Institute formally inaugurated at Jamul on July 7.

2008 First Sustainable Development Report released on June 5.

2008 ACC wins CNBC-TV18 India Business Leader Award in the category India Corporate Citizen of the year 2008

2008 Project Orchid launched to transform our Corporate Office, Cement House into a green building.

2009 ACC received the Jamanalal Bajaj "Uchit Vyavahar Puraskar" of Council for Fair Business Practices

2009 ACC is allotted coal blocks in Madhya Pradesh and West Bengal.

2009 ACC's new Grinding plant of capacity 1.60 million tonnes inaugurated at Thondebhavi in Karnataka.

2010 Kudithini Cement Grinding Plant inaugurated in Karnataka on January 4, 2010 with a capacity of 1.1 MTPA of Portland Slag Cement.

2010 ACC acquires 100 percent of the financial equity of Encore Cements & Additives Private Limited which is a slag grinding plant in Vishakhapatnam in coastal Andhra Pradesh. This company became a wholly-owned subsidiary of ACC in January 2010.

Awards & Accolades in 2010




J) WORK FLOW MODEL


ACC wins EPC World Awards 2010 for "Outstanding Company in the Cement sector."

2010 IMA CFO Award for Excellence in Cost Management from International Market Assessment India Private Limited (IMA)

Kymore receives Safety Innovation Award 2010 from The Institution of Engineers (India), New Delhi

ACC Sustainable Development Report 2009 wins Association of Business Communicators of India award in the category Environment Communication.

Leadership in Energy & Environmental Design (LEED) India NC, New Construction Gold Rating to ACC for its headquarters building Cement House by World Green Building Council (WGBC)

National Safety Award for 2008 from Government of India Ministry of Labour & Employment to ACC Gagal and Tikaria

National award for excellence in Energy Management from Confederation of Indian Industry (CII) to ACC Lakheri and Wadi

Pollution Control Excellence Award from State Pollution Control Board, Orissa to ACC Bargarh

9th Annual Greentech Safety Platinum Award to ACC Tikaria, Gold Award to ACC Jamul and Sindri ; Silver Award 2010 to ACC Lakheri, Madukkarai and Wadi Expansion Project

Institute of Cost and Works Accountants of India (ICWAI) Good Performance Award by Institute of Cost and Works Accountants of India

Institute of Chartered Accountants of India (ICAI) award for Excellence in Financial Reporting for Annual Report 2008

Financial Express-Emergent Ventures India (EVI) Green Business Leadership award

off



k) Future growth and prospectus:

ACC’S strategy in regard to capacity addition has been to add capacity to maintain its

Market leadership in the company’s score and strategic markets. In line with this during the year

the capacity at Kymore, Lakheri and Gagal cement plants was together enhanced by around 9

Lakhs tones to serve the markets of North India including U.P. The commissioning and

stabilization of captive power plant at Kymore and Jamul in Madhya Pradesh, has ensured

uninterrupted production at both these plants which will allow further strengthening of the

company’s position in Bihar and West Bengal so that the market leadership of ACC in both these

markets is maintained.

With the commissioning of the new 20 lakhs tone production line at Wadi, Karnataka,

ACC’s market share in Maharashtra and Karnataka is expected to rise significantly, with the

commissioning of this line. Wadi plant with the annual capacity of 40 lakhs tones will have the

distinction of being one of the largest cement plants in the country at one site. The expansion of

the plants at Chanda, Maharashtra, will enhance the capacity to 9 Lakh tones annually and

improve its cost competitiveness. The company will then be in a better position to services the

markets of vidharbha and marathwada in the state of Maharashtra. The expansion of cement

plant at Madukkarai, Tamil Nadu, will allow the company to reach a production level of 9.6 lakh

tones annually to maintain its market leadership in North Kerala.

Being the old cement company, the company had to contend with the disadvantages of

the higher cost in manpower and other operational areas. Increased share of blended cement in

total production in expected to improve the coat competitiveness of some of the plants.

Distribution costs for cement are planned to be future reduced by 5%. With all the above

measures, the company is aiming to achieve increased production at lower cost.

Cement demand during the year is expected to register, a normal growth of 8-10% on

the back of the high growth in the previous year. This scenario is likely to lead to a reasonable

balance is supply and demand resulting in remunerative price in the market place.




Structure:

A company’s structure affects its strategic planning and its ability to change. A

company’s structure may have a customer or geographical focus. It contains the salient features

of the organizational chart and interconnections within the organization.


MCKINSEY’s 7S framework

Works Manager

Manager HumanServices

Manager HRD

Manager Finance

Senior Manager

Senior Vice President

Manager Instruction

Manager Diesel

Manager Mine

Manager Maintenance

ManagerProduction

Manage Engineering



ORGANISATION STRUCTURE




Skills:

Closely related to staff are the distinctive abilities and talents that a company possesses.

Skills may range from ability of a staff to speak Spanish to an understanding of Statistics to

computer literacy etc.

Style:

Culture or Style is the aggregate of behaviors, thoughts, beliefs and symbols that is

conveyed to the people throughout an organization over time. Since it is very hard to change a

company’s ingrained culture, it is important to bear in mind when developing a new strategy.

In The Associated Cement Companies Limited. They follow participative style; Decision

Making is mostly made by the top level management. In the top to down manner. Day to day

decisions are taken by top level management & meddle management. The supervisors do not

have any authority in decision making.

Strategy :

Strategy refers to those actions that a company plans in response to or in anticipation of

changes in its external environment, its customers and its competitors. It is a plan or course of

action leading to the allocations of an organization’s finite resources to reach identified goals.

Push Strategy: In this type of marketing strategy the activities are incentives, gifts etc are

given to dealers to introduce them to enhance the sale of cement to end users. The marketing

activity is not implied upon end users in this case, the idea is to push the product through the help

of the dealers and other intermediates.

Pull Strategy: Here the marketing activities are focused on the end users by providing them

with gifts, incentives; mason meet engineers meet, etc. so that demand is created in the market

and is sold to dealers in lieu of demand created in the market by end users.




Systems :

The procedures both formal and informal, by which an organization operates and

gathers information constitutes the systems of the company. This model is concerned with the

systems that allocate and control money and materials as well as gather information

Staff :

Staff means the human resource systems which include appraisals, training, wages and

the intangibles such as employee motivation, morale and attitude. With a motivated workforce

companies are able to adapt well and compete.

Shared Value:

Shared values refers to the core values and ideas espoused and shared by key Members

of the organization studies by Hage and Dewer (1979) and Khandwalla (1984) suggest that

shared values importantly determine the cultural orientations of an Organization




SWOT ANALYSIS

STRENGTHS

The main strength of ACC is

Having largest network in India.

It has its own power plant in wadi plant.

Having 11 marketing offices in India.

It is having over 9000 dealers throughout the country.

Production of ACC cement has been increasing yearly. After merging with Holcim group of

Switzerland in 2005

It has15 Cement Production Factories throughout the country

It has 21 Area Offices&160 Warehouses throughout the country.

It gets fly ash at free of cost from Raichur power plant

Trade mark of ACC

Certification by ISO-9001

Own railway wagons to transport. ACC has constructed its own siding which connects to the

railway junction.

Finally the good understanding between Management and Employees.

WEEKNESS

The operating expenses of the company are comparatively high which may affects in its

profit earning capacity.

The technology used in the old wadi plant is not latest one compared to new wadi plant

The old wadi plant is not modernization compared to new wadi plant




OPPORTUNITIES

The ACC Company has the opportunity to become the market leader in cement industry

It is also have opportunity to expand its market share by introducing new products with

reasonable price.

It has opportunity to increase its production by adopting latest technology.

THREATS

Competition with other cement industry

Changes in technology level may affects the company

Fluctuation in Government polices may affects the company




LEARNING EXPERIENCE

To experience as to how a manufacturing concern work, it was a great experience to undergo

Inplant training at ACC Ltd. Wadi. Inplant training has created a sense of practical exposure and to

what actually an organization is and how theoretical concepts are practiced in reality. Even came to

know many things about the functioning of the company in accordance with the present market

trends. The interaction with the company gave me an insight and a firsthand experience of the

industrial scenario in the competitive environment outside the realms of the institute.

ACC is one of the largest cement manufacturing companies in India. While in the

process of Inplant training, I have learnt various aspects of management from different

department, mainly like raw mails, Kiln department and cement mill and the importance of each

department and their contribution towards the achievements of the company’s objectives.

Human relation was realized, the importance of group effort when compared to

individual effort in getting things done through. Employees/workers with different skills, talents,

abilities and attitudes are being coordinated and utilized in good way to achieve organization

goal.

I learnt that cement is treated as commodity and not as a product in the market by

marketers and dealers. During four weeks, I learnt a lot about the Indian cement industry and

also about how cement is manufactured, how it is transported and distributed to dealers. It was

totally a new experience entering into the organization. I spent most of my time in visiting

various units and various departments, interacting with people. Employees from every

department helped me in getting the required information for the successful completion of this

Inplant training. They cooperated very well when I has to disturb them with so many queries in

my mind to be cleared from the concerned person of the respective departments which helped me

in acquainting with the practical knowledge about the overall functioning of the organization.

Hence, I would like to say that Inplant training has guided me in improving my skill,

talent ability, attitude for future in contributing to the organization and nation.




PART- B




EXECUTIVE SUMMARY

A study has been conducted on the Supply Chain Management in the ACC Limited,

Wadi. ACC Limited is the number one company in cement industry of India. This project

was conducted to study the supply chain management of ACC Limited, Wadi. The study

makes use both secondary data and primary data.

The Indian cement industry is of 153 million tones capacity. This being highly affected

by the recent price hike of 20%, India is the world’s second largest producer of cement.

ACC contributes to the 12.6% of the total production of cement in India. The company’s

production capacity has already reached 1.79 million tonnes per year. The company is

striving hard to explore new markets for its products.

The company has a planned and systematic distribution network the company has both

type of distribution network namely direct selling and indirect selling. The indirect

selling is done through distributors. The retailers, wholesalers and dealers do not play any

role in the distribution network, because it is not consumer product. It every territory the

company has appointed one marketing executive and a distributor.




Introduction

The Indian cement industry with a total capacity of about 190 m tonnes in financial year-2008 is the second largest market after China. Despite the fact that the Indian cement industry has clocked production of more than 100 m tonnes for the last five years, registering an average growth of nearly 9%, the per capita consumption of around 150 kgs compares poorly with the world average of over 260 kgs and more than 450 kgs in China. This, more than anything underlines the tremendous scope for growth in the Indian cement industry in the long term .Although consolidation has taken place in the Indian cement industry with the top five players controlling almost 50% of the capacity, the balance capacity still remains pretty fragmented. Cement, being a bulk commodity, is a freight intensive industry and transporting cement over long distances can prove to be uneconomical. This has resulted in cement being largely a regional play with the industry divided into five main regions viz. north, south, west, east and the central region.

While the southern region always had excess capacity in the past owing to abundant availability of limestone, the western and northern region is the most lucrative markets on account of higher income levels. However, with capacity addition taking place at a slower rate as compared to growth in demand, the demand supply parity has been restored to some extent in the Southern region for the medium term. Considering the pace at which infrastructural activity is taking place in different regions, the players have lined up expansion plans accordingly.

Despite the growth of the Indian cement industry, India’s per capita production of 115 kilograms per year lags the world average of over 250 kgs and China’s production of more than 450 kgs per person. Clearly there remains room for tremendous growth in the industry in India. But if India is to reach its potential, the free hand of the market must be left unfettered. For this to happen, the Indian government must make sure that foreign companies that have a history of price fixing and market collusion receive appropriate regulation. If market shares get fixed, India will be the loser and the gap between India and China will only grow in the race to become the next economic superpower.




OBJECTIVE S OF THE STUDY

To know about the procurement process of raw material.

To study about the cement industry in general.

To study the Production process of cement.

To study the distribution channel of company.

To know the dealers opinion about the supply of cement product.

SCOPE OF THE STUDY

A number of procedures are involved in the procurement of raw materials, storage and manufacturing procedure. Moreover transportation of the finished product is also an important aspect of the supply chain. The scope of the study conducted by me covers the following aspects of the supply chain.

Choosing the supplier and receiving the raw materials. Inspection and storage of the received goods. Transfer of the stored raw materials for manufacturing process. Storage of the finished product. Sending the stock to distributers.

METHODOLOGY USED

A research design is a method and procedure for acquiring information needed to solve the problem. A research design is a basic plan that helps in data collection or analysis. It specifies the type of information to be collected, the source and collection procedure. A good research decision will ensure that the data collected is relevant to the objectives to be achieved.

Data type

The data is of primary data as well as secondary data collected through structured and unstructured interviewing and in depth discussion with several authorities of the company.




The methodology followed in this study includes the procedure of Supply Chain Management and relation with the dealers, which includes the distribution procedure to be followed by the company.

RESEARCH DESIGN

Research is a systematic and intensive study directed to words a more complete knowledge of the subject studied. Research design is a framework for conducting the marketing research project. It specifies the details of how the project should be conducted. In the preliminary stage of the research work unstructured, undisguised exploratory was carried out. Analysis of primary and secondary data which is collected from a group of Managers and Dealers was made to find about the process of supply chain management which is carry out in the factory and outside the factory.

Limitations of the Study

1. It is only one time study.2. The study is restricted to ACC Wadi plant and the findings may not be applicable to any

other plant.3. Non-coverage error – because of inadequacies in the sampling frame 4. Opinions may different from the actual.5. Vague responses from the respondents




Basic Concepts of Supply Chain Management

Supply chains encompass the companies and the business activities needed to design,

make, deliver, and use a product or service. Businesses depend on their supply chains to provide

them with what they need to survive and thrive. Every business fits into one or more supply

chains and has a role to play in each of them. The pace of change and the uncertainty about how

markets will evolve has made it increasingly important for companies to be aware of the supply

chains they participate in and to understand the roles that they play. Those companies that learn

how to build and participate in strong supply chains will have a substantial competitive

advantage in their markets.

The practice of supply chain management is guided by some basic underlying concepts that have

not changed much over the centuries. Several hundred years ago, Napoleon made the remark,

“An army marches on its stomach.” Napoleon was a master strategist and a skillful general and

this remark shows that he clearly understood the importance of what we would now call an




efficient supply chain. Unless the soldiers are fed, the army cannot move. Along these same

lines, there is another saying that goes, “Amateurs talk strategy and professionals talk logistics.”

People can discuss all sorts of grand strategies and dashing maneuvers but none of that will be

possible without first figuring out how to meet the day-to-day demands of providing an army

with fuel, spare parts, food, shelter, and ammunition. It is the seemingly mundane activities of

the quartermaster and the supply sergeants that often determine an army’s success. This has

many analogies in business.

The term “supply chain management” arose in the late 1980s and came into widespread use in

the 1990s. Prior to that time, businesses used terms such as “logistics” and “operations

management” instead. Some definitions of a supply chain are offered below:

“A supply chain is the alignment of firms that bring products or services to market.”—from

Lambert, Stock, and Ellram in their book Fundamentals of Logistics Management.

“A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer

request. The supply chain not only includes the manufacturer and suppliers, but also transporters,

warehouses, retailers, and customers themselves.”— from Chopra and Meindl in their book

Supply Chain Management: Strategy, Planning, and Operations.

“A supply chain is a network of facilities and distribution options that performs the functions of

procurement of materials, transformation of these materials into intermediate and finished

products, and the distribution of these finished products to customers.”—from Ganeshan and

Harrison at Penn State University in their article ‘An Introduction to Supply Chain’.

If this is what a supply chain is then we can define supply chain management as the

things we do to influence the behavior of the supply chain and get the results we want. Some

definitions of supply chain management are:

“The systemic, strategic coordination of the traditional business functions and the tactics across

these business functions within a particular company and across businesses within the supply




chain, for the purposes of improving the long-term performance of the individual companies and

the supply chain as a whole.”—from Mentzer, DeWitt, Deebler, Min, Nix, Smith, and Zacharia

in their article Defining Supply Chain Management in the Journal of Business Logistics.

“Supply chain management is the coordination of production, inventory, location, and

transportation among the participants in a supply chain to achieve the best mix of responsiveness

and efficiency for the market being served.”—from Essentials of supply chain management.

(John Wiley & Sons)

There is a difference between the concept of supply chain management and the traditional

concept of logistics. Logistics typically refers to activities that occur within the boundaries of a

single organization and supply chains refer to networks of companies that work together and

coordinate their actions to deliver a product to market. Also traditional

logistics focuses its attention on activities such as procurement, distribution, maintenance, and

inventory management. Supply chain management acknowledges all of traditional logistics and

also includes activities such as marketing, new product development, finance, and customer

service.

In the wider view of supply chain thinking, these additional activities are now seen as

part of the work needed to fulfill customer requests. Supply chain management views the supply

chain and the organizations in it as a single entity. It brings a systems approach to understanding

and managing the different activities needed to coordinate the flow of products and services to

best serve the ultimate customer. This systems approach provides the framework in which to best

respond to business requirements that otherwise would seem to be in conflict with each other.

Taken individually, different supply chain requirements often have conflicting needs. For

instance, the requirement of maintaining high levels of customer service calls for maintaining




high levels of inventory, but then the requirement to operate efficiently calls for reducing

inventory levels. It is only when these requirements are seen together as parts of a larger picture

that ways can be found to effectively balance their different demands. Effective supply chain

management requires simultaneous improvements in both customer service levels and the

internal operating efficiencies of the companies in the supply chain. Customer service at its most

basic level means consistently high order fill rates, high on-time delivery rates, and a very low

rate of products returned by customers for whatever reason. Internal efficiency for organizations

in a supply chain means that these organizations get an attractive rate of return on their

investments in inventory and other assets and that they find ways to lower their operating and

sales expenses.

There is a basic pattern to the practice of supply chain management. Each supply chain

has its own unique set of market demands and operating challenges and yet the issues remain

essentially the same in every case. Companies in any supply chain must make decisions

individually and collectively regarding their actions in five areas:

1. Production—What products does the market want? How much of which products should be

produced and by when? This activity includes the creation of master production schedules that

take into account plant capacities, workload balancing, quality control, and equipment

maintenance.

2. Inventory—What inventory should be stocked at each stage in a supply chain? How much

inventory should be held as raw materials, semi-finished, or finished goods? The primary

purpose of inventory is to act as a buffer against uncertainty in the supply chain. However,

holding inventory can be expensive, so what are the optimal inventory levels and reorder points?

3. Location—Where should facilities for production and inventory storage be located? Where

are the most cost efficient locations for production and for storage of inventory? Should existing

facilities be used or new ones built? Once these decisions are made they determine the possible

paths available for product to flow through for delivery to the final consumer.




4. Transportation—How should inventory be moved from one supply chain location to another?

Air freight and truck delivery are generally fast and reliable but they are expensive. Shipping by

sea or rail is much less expensive but usually involves longer transit times and more uncertainty.

This uncertainty must be compensated for by stocking higher levels of inventory. When is it

better to use which mode of transportation?

5. Information—How much data should be collected and how much information should be

shared? Timely and accurate information holds the promise of better coordination and better

decision making. With good information, people can make effective decisions about what to

produce and how much, about where to locate inventory and how best to transport it.

The sum of these decisions will define the capabilities and effectiveness of a company’s

supply chain. The things a company can do and the ways that it can compete in its markets are all

very much dependent on the effectiveness of its supply chain. If a company’s strategy is to serve

a mass market and compete on the basis of price, it had better have a supply chain that is

optimized for low cost. If a company’s strategy is to serve a market segment and compete on the

basis of customer service and convenience, it had better have a supply chain optimized for

responsiveness. Who a company is and what it can do is shaped by its supply chain and by the

markets it serves.




ANALYSIS/DESIGN

Purchasing Of Raw Material

RAW MATERIALS Raw materials are the major input into an organization and from the bulk, which gets converted into output .As any break in the supply of raw materials will keep the production lives idle, their importance can be easily visualized.

The importance of raw material inventory is to act as buffer between procurement and manufacturing .there are two important factors, which determine the size of the raw material inventory .those depend on the production technology .One is the consumption rate and the other is the critically or importance of the item. General in gradients use for manufacturing cement are as under: Limestone. Additives aluminous late rite, hematite. Gypsum chemical salt plant and mineral.

RAW MATERIALS: PURCHASED FOR WADI PLANTI. Fuel - Coal

Coal is purchased from nationalized coal mines from Singarenni Collieries, (A.P) Western Coal fields (Maharashtra)

II. Gypsum

Mineral Gypsum is purchased from Rajasthan state mines. Marine Gypsum is purchased from Tuticorin Roshan Trading C., phospo Gypsum is

by product of fertilizers plant, and is purchased from Rastriya Fertilizer and Chemicals, Mumbai.

Albright Murarji.III. Lime stone and Red Shale:

Company is having its own minesIV. Iron ore Fines (Hematite)

This is purchased from various suppliers from Hospet, Bellary and Amingad.

V. Packing Materials




HDPE bags are purchased from

Ashirwad, Bangalore. Tusin NEC Bangalore. Balaji Polymers, pondycherry R.K Polysack, Gulbarga

Source of Power:

It has own power plant. Purchased power from KPTCL From Tata Electric Company Diesel Generation (DG) Set Power.




Production Department The production department is concerned with the planning and organization of the

production system .It is responsible with the overall situation of the plant and the machinery. Production planning and organization as well as overall capacity utilization. ACC has been in operation for over six decades, and each year has enabled it to garner rich experience that has given it strength to improve efficiency in operations and management.

In the short span of the last six years ACC has modernized to world standards approximately 50 percent of its manufacturing capacity, retired about two million tons per year cement capacity consisting of obsolete assets, increased cement capacity from seven to 16 million tons per year, secured insurance from unreliable power supplies up to 80 percent of its requirements, and introduced new value-added products like ready mixed concrete (RMC), bulk cement, and tunnel form technology. The new assets created compare with the best in their class in India and the rest of the world. Selective investments were also made in refractories, advanced materials, etc. These measures entailed a massive capital expenditure of over Rs. 20000 Million since 1991.

ROUTING SCHEDULING As per plant is running round the clock shift system requires. In our plant the schedule are as under: 1. ‘A’ Shift 8.00 AM to 4.00 PM2. ‘B’ Shift 4.00 PM to 12.00 PM3. ‘C’ Shift 12.00 PM to 8.00 AM4. General Shift 8.00 AM to 5.00 PM (1-hour lunch)




MANUFACTURING PROCESS OF ACC WADI PLANT




I ) QUARRY

The major raw material for cement production is limestone. The limestone most suitable for cement production must have some ingredients in specified quantities i.e., calcium carbonates, silica, alumina, iron, etc. Typically, cement plants locations are based upon the availability of good quality limestone in the vicinity. The quarrying operations are done by the cement producer using the open cast mining process. Quarrying is done through drilling and subsequently, using heavy earth moving equipment such as bulldozers, pay-loaders and dumpers. The quarried raw material is then transported to the cement plant, using mechanical conveying equipment such as ropeways or belt conveyors, or by vehicles like wagons and trucks. Lime stone mining is the first phase of cement manufacturing process. Ours is open cast, mechanized mining. After removing 2 to 3 Miters, of over burden clay, grades will be classified (I bench low grade: 8 to 10 Miters, in depth. II and III bench high grade 10 to 12 Miters, in depth) then drilling and blasting will be done. The material will be loaded by shovels and transported to Crusher by Dumpers. This is the first Phase in the cement manufacturing process. In this department there are around 112 employees are working these includes 20 company grade officers and others are workers. This department works 24 hrs of the day with the capacity of 20,000 tons per day. In this department there are two crushers are installed one is for new plant and other one is for old plant with the capacity of 1000 and 850 tons per hr respectively. The department having the 7 dumpers almost all dumpers fitted with Air Conditioner. It has capacity over 80 to 85 tones.

II ) LIMESTONE CRUSHING

The quarried limestone is normally in the form of big boulders, ranging from a few inches to meters in size. These varying sizes of limestone need to be crushed to a size of about 10 mm in order to be prepared for finish-grinding. There are mainly two types of crushers available for this purpose- compression type or impact type crushers. There are many types of compression type crushers such as jaw crusher, gyratory crusher, cone crusher, roll crusher. The impact technology is used in hammer crusher/impact crusher. Crushing is done either in two stages or in a single stage. In the two stage crushing system, a compression type crusher is used in the first stage for raw crushing, followed by impact/hammer crusher in the second stage. In single stage crushing, an impact type crusher is used. The selection of the crusher depends mainly on the characteristics of the raw materials. This selection is further guided by the particle-size distribution requirements of the down-stream equipment such as raw mills and lastly by financial considerations.




III ) RAW MILL This is second and main department of the cement manufacturing process. The department mixes the raw material such as Hematite Bauxite specified by the laboratory and limestone will mixes by the holder of the raw mill.

Additives Storage Hopper In order to get the required composition of raw material, certain additives such as iron

ore, bauxite, literate, quartzite and fluorspar are added in required quantities. These additives are stored at the plant in separate hoppers and are extracted using belt conveyors in conjunction with belt-weighing equipment. This ensures that only the required quantities are extracted and added to the raw material. There are 4 hoppers used in this department; One hopper is used for low grade lime stone One hopper is used for high grade lime stone One hopper is used for bauxite One hopper is used for hematite

There are total six raw mill is there in which five mills are installed in old and other one is installed in new plant with the capacity of 60, 70, 70, 120 in old plant mill and new plant raw mill capacity is more than 500.first, second and third raw mill controlled by the in this department only and fourth and fifth are controlled by kiln department. The raw material is finish-ground before being fed into the kiln for clinkering. This grinding is done using either ball mills or vertical roller mills (VRM). The raw material is simultaneously dried. Blending and Storage Silo

Normally there are various sources of limestone, each with different qualities, which are added with various additives to get the required composition of raw mix. As there are various sources of raw materials, it becomes necessary to blend and homogenize these different materials efficiently to counteract fluctuation in the chemical composition of the raw meal.

The variations in the composition of kiln feed have very adverse impacts on the efficiency of the kiln. It results in undesired coating and ring formation inside the kiln. In order to blend and homogenize the raw materials properly, continuous blending silos are used.

IV ) PRE-HEATER The most important activity in cement manufacturing is clinkering of raw material.

Clinkering takes place in the kiln and the preheater system. Preheater systems offer heat transfer from the hot kiln gases.

Gas Conditioning Tower and ESP




The conditioning tower is used to reduce the temperature and to increase the moisture level of the dusty exhaust gas from the kiln, before it is passed through the bag house and ESP’s. It is called a conditioning tower because it conditions the hot gas, thus making it more suitable for the ESP and bag house to extract dust from it. The Electrostatic Precipitators are used in cement plants particularly for removal of dust from the exit gases of cement kilns and from the exhaust air discharged by dryers, combined grinding and drying plants, finishing mills and raw mills through water injection. Through ESP’s, the dust-laden gas is made to flow through a chamber usually horizontally, during which it passes through one or more high voltage electric fields formed by alternate discharge electrodes and plate type collecting electrodes. By the action of electric field, the dust particles, which have become electrically charged by negative gas ions which are formed at the discharge electrodes and attach themselves to the particles, fly to the collecting electrodes and are deposited there. V) KILN

Kiln is the heart of any cement plant. It is basically a long cylindrical-shaped pipe, and rotates in a horizontal position. Its internal surface is lined by refractory bricks. Limestone and additives are calcined in this. The output of the kiln is called clinker.

Kiln is department in which the raw material will burn. There are total 4 kilns are installed the first kiln was installed in the year 1965 with the Capacity of 600 tonnes now its capacity is around 1250 tonnes per day, third Was established in the year 1983 with the capacity of 3000 tonnes per day now its capacity is around 4800 tonnes per day. The fourth kiln is installed in new plant in the year 2002 with capacity of 7000 tonnes per day.

In the kiln the raw materials are burn in the temperature of 1500 degree Celsius and raw material will be converted into clinker and send this clinker to the cooler and cooled clinker will be stored in the clinker silo. In the kiln department there are around 150 employees are working including the officers.

VI) COOLER The clinker coming out of the kiln is hot. It is cooled in a set-up called a cooler. In the

cooler, cold air is blown to effect heat exchange between hot clinker and cold air.

VII ) CLINKER SILO




The clinker silo is a silo where clinker will be stored .The output of the kiln is stored before it is fed to the cement mill for conversion to cement. This storage is called clinker storage, if it is used for clinker storage purpose. The capacity of silo is over 10000 tonnes.

VIII ) CEMENT MILL

Clinker, along with additives, is ground in a cement mill. The output of a cement mill is the final product viz. Cement. In a cement mill, there is a cylindrical shell lying horizontal which contains metallic balls and as it rotates, the crushing action of the balls helps in grinding the clinker to fine powder. The bag house is used to remove dusty particles from discharge of different equipment such as cement mill, coal mill and kiln. In a bag house system discharge gas containing dusty particles is passed through a series of bags made of strong fabrics. There are five cement mills are installed in wadi cement plant The capacity of these cement mills is 40 tonnes per hour for first three cement mills, 110 tonnes per hour for fourth and fifth cement mills. The main function of the cement mills is converting the raw material into cement and transfer cement to packinghouse silos.

X) PACKING Cement is extracted from the silo and filed in Packer Hoppers, from where the material will flow to the Packer Machine through bucket elevator and air slides. The cement will be packed in the cement bags as per the specification of the company and dispatch these cement bags according to the order of the cement in the market with six packers in each plant. The department works 24 hrs in day with the total of 310 employees including officers. (Per shift around 100 employees). There are total 12 cement silo in that ten cement silos are installed in old plant and other two silos are installed in new plant, with the capacity of 2000 tones for first six cement silos and around 4000 tonnes for next four cement silos in the old plant and in the new plant 4000 tonnes for other two cement silos.

X) DISPATCH

This is last process of the cement-manufacturing department. The cement is packed with the help of a rotary packer finally the 50 Kg. Cement bag is transported by belt conveyor and stacked inside the Wagon/truck with the help of Wagon Loading and Truck Loading Machines. Finally dispatched to the market. The Acc wadi plant dispatch the cement through Road transport as well RailwayRoad Transportation

ACC has assigned to various transporters




Ragoji transport, KCB transport, United transport

Railways

ACC has constructed its own siding which connects to the railway junction. Bulk cement in transported through special wagons.

Material Handling System:

The material handling systems are as follows. Belt convey or Pay loader. Tipper. Dozer

DISTRIBUTION CHANNEL NETWORK




The distribution of product takes place in two ways in the organization.

1. Rail or Wagon supply: Cement is being distributed through wagon to its depots, which are situated across the country. The freight is low compared to road transport. The 70% of the distribution is done through wagon or rail transportation.

2. Road or Lorry supply: 25.30% of distribution is carried out through the road or lorry supply. The distribution is made to its depots. Freight in case of road transportation is paid to the respective transporter on the production of acknowledgment from the depots or dealers or by customers. At the unit at regular intervals.

REGIONAL MARKETING OFFICES OF ACC Bangalore Bhopal Chandigarh Coimbatore Kanpur Kolkata Mumbai New Delhi Patna Pune Secunderabad

ANALYSIS AND INTERPRETATIONS




Hypotheses

Null Hypotheses

HO 1) At least 95% of the dealers agree that the quantity is shipped as per the order.

HO 2)At least 95% of the dealers agree that the increase in the price of cement has

adversely affected their sales.

HO 3) At least 80% of the dealers agree that demand from the customers is the reason for

PPC grade to make highest sales.

Alternate Hypotheses

H1 1) Less than 95% of the dealers agree that the quantity is shipped as per the order.

H1 2) Less than 95% of the dealers agree that the increase in the price of cement has

adversely affected their sales.

H1 3) Less than 80% of the dealers agree that demand from the customers is the reason

for PPC grade to make highest sales.

INTERPRETATIONS

1. Do you have your own warehouse?




Do you have warehouse?Frequency %

Valid YES NO

455

9010

Total 50 100

.

YES NO0

10

20

30

40

50

60

70

80

90

100

Warehouse

Interpretation:

From the above graph it can be interpreted that out of 50 respondents (Dealers) 90% of respondents have their own Warehouse and the remaining 10% do not have Warehouse

2. Is the quantity of cement shipped by the company as per order?




The quantity of cement shipped is as per order? Frequency %

Valid YES NO

482

964

Total 50 100

YES NO0

20

40

60

80

100

120

Interpretation:

From the above graph it can be interpreted that out of 50 respondents (Dealers) 96% respondent agree that the quantity of the cement is shipped as per the order and only 4% dealers not happy with the quantity of the cement is shipped as per the order.

3. Is delivery always done on time?




Is delivery always on time?Frequency %

Valid YES NO

4010

8020

Total 50 100

YES NO0

10

20

30

40

50

60

70

80

90

Delivery of Cement

Interpretation:

From the above graph it can be interpreted that out of 50 respondents (Dealers) 80% of the dealers say that there is delivery of cement is always on time. 20% disagree on the delivery of cement on time.

6. Up to what extent the customers are satisfied with the promotional measures?




Up to what extent the customers are satisfied with the promotional measures.Frequency Percent

Highly Satisfied 15 30Satisfied 25 50

Dissatisfied 10 20Total 50 100

Highly Satisfied Satisfied Dissatisfied0

10

20

30

40

50

60

Promotional Measures

Interpretation:

From the above graph it can be interpreted that out of 50 respondents (Dealers) 50% of the dealers are satisfied, 20% are highly dissatisfied and the remaining 30% of the respondents are highly satisfied with promotional measures given to customers.

7. Does the buyer ask for delivery?




Frequency %Valid YES NO

464

928

Total 50 100

YES NO0

10

20

30

40

50

60

70

80

90

100

Delivery

Interpretation:

From the above graph it can be interpreted that out of 50 respondents (Dealers) 92% of the dealers are asked for delivery, 8% are not asked for delivery.

8. Does the buyer ask for replacement is case of damage?




Does the buyer ask for replacement is case of damage?

Frequency %Valid YES NO

491

982

Total 50 100

YES NO0

20

40

60

80

100

120

Replacement

Sales

Interpretation:

From the above graph it can be interpreted that out of 50 respondents (Dealers) 98% of the dealers ask for replacement in case of damage,2% do not ask for replacement.

9. Which different grades of cement do you keep in your warehouse?




Frequency %Valid OPC 43 Grade OPC 53 Grade Pazzolana Cement

211811

423622

Total 50 100.0

OPC 43 Grade OPC 53 Grade Pazzolana Cement0

5

10

15

20

25

30

35

40

45

Grades of cement

Interpretation:

From the above graph it can be interpreted that out of 50 respondents (Dealers) 42% of the dealers stock OPC 43 Grade, 36% stock OPC 53 grade and remaining 22%stock Pazzolana cement.




CONCLUSION

ACC is first Cement Company to get Super brand name. Now it has merged with

Holcim cements of Switzerland, which is world leader in cements, ACC is going for major

expansions and modernization of cement plants across the country. The company has

increase its production to 2.06 million tonnes January 2011 compared to 1.88 million tonnes

January 2010. And it is expected to increase in the coming years. SAP is going to be installed

in the coming August-06, by which all the departments will work efficiently. This

technology will help in increasing the production and reduction in cost of operating. The

company has the opportunity to become market leader in cement industry throughout

globally. As ACC was the leader, is the leader and it will be the leader in India.

ACC has the largest supply chain network in India comprising of 15 cement factories 160 warehouses and 9,000 dealers.

Railway and road transport used for inward and outward movement of materials and products.

The raw materials are procured preferably from the nearby areas so as to reduce the transportation cost, though not at the cost of quality.

If necessary raw material like Mineral Gypsum is purchased from as far as Rajasthan.

Company uses Third Party Logistics (3PLs) for road transport.




SUGGESTIONS

They should still improve their packaging so as to prevent damage to cement

especially during the rainy season.

They should reduce the loading and unloading time from railway wagons so as to

avoid penalty from railways.

They can further reduce the transport cost of raw material by finding suppliers in

nearby areas or even establishing their own mines.

The company should promote the workers according to their ability.

The company should motivate each and every employees

The company should use new technological electrostatic precipitator to reduce the

pollution, as its atmosphere is full of dusty.

The company should try to use latest technology to increase in their production.

The company should compensate to the injured person.

The company should place the person according to his qualification but not according

to the seniority.

The company should minimize the wastages.




BIBLIOGRAPHY

COMPANY’S OFFICIALS WEB-SITE : www.acclimited.com

SEARCH ENGINE : www.google.com

MARKETING MANAGEMENT : Philip Kotler.

HUMAN RESOURCE MANAGEMENT : K. Ahwathappa.

FINANCIAL MANAGEMENT : Prasanna Chandra.

PRODUCTION AND OPERATION : K. Ahwathappa.

MANAGEMENT


report

Documents

export of cement

raasi cement

ultratech cement

white cement

large cement plants

mini cement plants

cement corporation of

actual cement production