ADITYA BIRLA GROUP

About The Group

A US $35 billion corporation, the Aditya Birla Group is in the League of Fortune 500. It is anchored by an extraordinary force of over 133,000 employees, belonging to 42 different nationalities. This year the Group was declared among the top best employers in India by the Aon-Hewitt Survey and ranked second. It was also ranked among the top employers in the Asia Pacific Region. Earlier, the Group has been adjudged among the top six great places for leaders to work in the Asia Pacific Region (The Hewitt Associates, The RBL Group and Fortune Magazine Study 2009).

Over 60 per cent of its revenues flow from its overseas operations. The Group operates in 33 countries – Australia, Austria, Bahrain, Bangladesh, Brazil, Canada, China, Egypt, France, Germany, Hungary, India, Indonesia, Italy, Japan, Korea, Laos, Luxembourg, Malaysia, Myanmar, Philippines, Poland, Singapore, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, UAE, UK, USA and Vietnam.

Globally the Aditya Birla Group is:

A metals powerhouse, among the world’s most cost-efficient aluminium and copper producers. Hindalco-Novelis is the largest aluminium rolling company. It is one of the three biggest producers of primary aluminium in Asia, with the largest single location copper smelter. No.1 in viscose staple fibre The largest producer of carbon black The fourth-largest producer of insulators The fifth-largest producer of acrylic fibre Among the top 10 cement producers Among the best energy-efficient fertiliser plants

 In India:

A top fashion (branded apparel) and lifestyle player. The second-largest producer of viscose filament yarn. The largest producer in the chlor-alkali sector. Among the top three mobile telephony companies. A leading player in Life Insurance and Asset Management. Among the top two supermarket chains in the retail business. Among the top 10 BPO companies.

Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in the way of the need to keep learning afresh, to keep experimenting.

Beyond business:

Working in 3,000 villages  Reaches out to seven million people, annually through the Aditya Birla Centre for Community Initiatives and Rural Development, spearheaded by Mrs. Rajashree Birla. Focuses on: healthcare, education, sustainable livelihood, infrastructure and espousing social reform. Runs 42 schools, which provide quality education to 45,000 children. Of these, over 18,000 children receive free education. Its 18 hospitals tend to more than a million villagers. In line with its commitment to sustainable development, has partnered with the Columbia University in establishing the Columbia Global Centre’s Earth Institute in Mumbai. To embed CSR as a way of life in organisations, has set up the FICCI – Aditya Birla CSR Centre for Excellence, in Delhi.

Transcending the conventional barriers of business because we believe it is our duty to facilitate inclusive growth.

Integrity. Commitment. Passion. Seamlessness. Speed.

At the Aditya Birla Group we stand for our values. In turn, our values have made us stand tall. No value can take precedence at the cost of the other. It is in the harmonization of all the five that we see a brighter future; for the Aditya Birla Group, our share holders and our customers.

Group Vision

To be a premium global conglomerate with a clear focus on each business.

Group Mission

To deliver superior value to our customers, shareholders, employees and society at large.

UltraTech Cement Limited

UltraTech Cement, known for its impeccable quality, is today changing the face of India. The cement has not only built landmark projects like flyovers, bridges, dams, runways, but has also built everlasting trust in engineers, builders, contractors and individual house builders.

With a manufacturing capacity of 48.8 million MT annually, eleven integrated plants, eleven grinding units and five bulk terminals, UltraTech cement is the 8th largest cement producer in the world.

UltraTech is the country's largest exporter of cement clinker, exporting 2.44 million tonnes p.a. This constitutes 45% of India’s total exports. The export markets span countries around the Indian Ocean, Africa, Europe and the Middle East.

Its composite product portfolio which, along with UltraTech (Grey Cement) includes Birla White (White Cement) and Ready Mix Concrete (UltraTech Concrete). Also, an array of new products : UltraTech Seal & Dry – Total Water Proofing Solution, UltraTech SuperStucco – Easy to apply Polymer Modified mortar , UltraTech Nubric – strong & eco friendly brick , UltraTech FixoBlock – extra fine jointing mortar , UltraTech Readiplast – plaster product makes UltraTech a complete construction solutions company. This ethos is also reflected in UltraTech Building Solutions – its initiative to bring construction solutions to consumers under one roof. With growing demand for cement in the wake of housing and infrastructure boom the company is set to attain newer heights.UltraTech Cement Limited and its subsidiaries have an annual capacity of 52 million tonnes, making it among the top 10 producers of cement globally. UltraTech is also the largest manufacturer of White Cement in India. The company manufactures and markets ordinary portland cement, portland blast furnace slag cement, portland pozzalana cement, ready mix concrete and building products and building solutions.

UltraTech Cement has 11 integrated plants, 15 grinding units, five bulk terminals and 92 RMC plants

UltraTech Cement is also India's largest exporter of cement clinker reaching out to meet demand in countries around the Indian Ocean, Africa, Europe and the Middle East.

The company's subsidiaries are Dakshin Cements Limited, Harish Cements Limited, UltraTech Cement Lanka (Pvt.) Ltd, and UltraTech Cement Middle East Investments Limited, which completed the acquisition of ETA Star Cement together with its operations in the UAE, Bahrain and Bangladesh, and acquired management control.

HISTORY

What started as a small cement plant in the year 1983 has today grown into the eighth biggest cement manufacturer in the world. On the way the company achieved several milestones. Here are a few major ones.

A NATIONAL PRESENCEAs part of the seventh biggest cement manufacturer in the world, UltraTech Cement has eleven integrated plants, one white cement plant, one clinkerisation plant in UAE, 15 grinding units – 11 in India, 2 in UAE, one in Bahrain and Bangladesh each and and five terminals — four in India and one in Sri Lanka.. These facilities gradually came up over the years, as indicated below:

1983-1997     1998-2002     2003-2006

1983-1997

In the year 1983 company went into business with the first Awarpur Cement Works Plant. In the year 1987 the second plant was set up. In the year 1993 Jharsuguda grinding unit was set up. In the year 1994 Hirmi Cement Works plant got operational. In the year 1996 Gujarat Cement Works Plant I got operational. 1998 – 2002

Andhra Pradesh and Gujarat Cement Works (II) Plants were set up. In the year 1999 the Ratnagiri Cement Works plant got operational. In the same year Narmada Cement Company Limited was bought over. Bulk cement terminals were built is Mangalore, Navi Mumbai and Colombo.  In the year 2001 Grasim acquired 10 per cent stake in L&T and subsequently increased stake to 15.3 per cent by October 2002 Durgapur grinding unit was also set up. 2003 – 2006

In the year 2003 the board of Larsen & Toubro Limited (L&T) decided to de-merge its cement business into a separate cement company (CemCo).Grasim decided to acquire an 8.5 per cent equity stake from L&T and then made an open offer for 30 per cent of the equity of CemCo, to acquire management control of the company.  In the year 2004 the implementation process to de-merge the cement business of L&T was completed. In the same year Grasim acquired controlling stake in the newly formed company UltraTech.  In the year 2006 Narmada Cement Company Limited amalgamated with UltraTech Cement Ltd.

OVER VIEW

STRONG AND STURDY

UltraTech Cement Limited and its subsidiaries have an annual capacity of 52 million tonnes, making it among the top 10 producers of cement globally. UltraTech is also the largest manufacturer of White Cement in India. The company manufactures and markets Ordinary Portland Cement, Portland  Slag Cement and Portland Pozzalana Cement, Ready Mix Concrete (RMC), White Cement, Building Products and offers Building Solutions.

UltraTech has 11 integrated plants, 15 grinding units, five bulk terminals and 92 RMC plants – spanning India, UAE, Bahrain, Bangladesh and Sri Lanka.

UltraTech Cement is also India’s largest exporter of cement clinker reaching out to meet demand in countries around the Indian Ocean, Africa, Europe and the Middle East.

UltraTech's subsidiaries are Dakshin Cements Limited, Harish Cements Limited, UltraTech Cement Lanka (Pvt.) Ltd, and UltraTech Cement Middle East Investments Limited, which completed the acquisition of ETA Star Cement together with its operations in the UAE, Bahrain and Bangladesh, and acquired management control.

FACT FILE

o The Aditya Birla Group is among the top 10 cement producers globallyo Incorporated on 24 August 2000 as L&T Cement Limitedo Cement business of Larsen & Toubro Limited demerged and vested in company in 2004o Grasim acquired management control in July 2004o Together with Grasim, one of the largest cement producers in Indiao Name changed to UltraTech Cement Limited with effect from 14 October 2004o Narmada Cement Company Limited amalgamated with UltraTech in May 2006o Cement business of Grasim demerged and vested in Samruddhi Cement Limited in May 2010o Samruddhi Cement Limited amalgamated with UltraTech Cement Limited in July 2010o UltraTech Cement Middle East Investments Limited, a wholly owned 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

Ultratech Cement

Background and plant locationsUltraTech was formed following the de-merger of L&T’s cement division in 2003. As a result, UltraTech became a 54.8% subsidiary of Grasim. UltraTech has five composite plants and six grinding units located largely in west and south India. It has grinding units at Ginigera (Kar), Magdalla (Guj), Arakkonam (TN), Jharsuguda (Orissa), Durgapur (WB) and Ratnagiri (Mah), which serve as effective sourcing points for nearby target markets.

Capacity addition in south IndiaUltraTech expanded capacity by 6.3 million tonnes since FY07 to 23.1 million tonnes at present thorough a 4.9 million tonnes expansion at Tadipatri (AP). These expansions were primarily in Andhra Pradesh and Karnataka to capitalize on the high demand growth in the region. However, the recent slump in consumption in Andhra Pradesh and Karnataka from 15-20% YoY in Mar’09 to 4% fall in Aug’09 has impacted realizations. The 4.9 million tonnes expansion at Tadipatri (AP) will service AP and Karnataka markets.

Regional share of volumesGujarat, Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh account for ~70% of UltraTech’s volumes and West Bengal, Orissa and Chhattisgarh account for 20%. UltraTech has seven grinding units at Arakonam (TN), Ginigera (Kar), Magdalla (Guj), Jharsuguda (Orissa), Durgapur (WB), Jafrabad (Guj) and Ratnagiri (Mah) to facilitate faster time-to-market in these regions. We expect capacity expansion at Tadipatri to flow into the southern and western markets. Andhra Pradesh accounts for only ~6-7% of total sales volumes. However, declining prices in Andhra Pradesh will prompt more sales in neighboring states thereby triggering a price fall in those states.

PRODUCTS:

Ordinary Portland cement Portland blast furnace slag cement Portland Pozzolana cement Cement to European and Sri Lankan norms Ready Mix Concrete (RMC)

UNIQUE PRODUCT MIX

UltraTech is India's largest exporter of cement clinker. UltraTech Cement has 11 integrated plants, 15 grinding units, five bulk terminals and 92 RMC plants – spanning India, UAE, Bahrain, Bangladesh and Sri Lanka. Most of the plants have ISO 9001, ISO 14001 and OHSAS 18001 certification. In addition, two plants have received ISO 27001 certification and four have received SA 8000 certification. The process is currently underway for the remaining plants. The company exports over 2.5 million tonnes per annum, which is about 30 per cent of the country's total exports. The export market comprises of countries around the Indian Ocean, Africa, Europe and the Middle East. Export is a thrust area in the company's strategy for growth.

UltraTech's products include Ordinary Portland cement, Portland Pozzolana cement and Portland blast furnace slag cement.

Ordinary Portland cement Portland blast furnace slag cement Portland Pozzolana cement Cement to European and Sri Lankan norms

Ordinary Portland cementOrdinary portland cement is the most commonly used cement for a wide range of applications. These applications cover dry-lean mixes, general-purpose ready-mixes, and even high strength pre-cast and pre-stressed concrete.

Portland blast furnace slag cementPortland blast-furnace slag cement contains up to 70 per cent of finely ground, granulated blast-furnace slag, a nonmetallic product consisting essentially of silicates and alumino-silicates of calcium. Slag brings with it the advantage of the energy invested in the slag making. Grinding slag for cement replacement takes only 25 per cent of the energy needed to manufacture portland cement. Using slag cement to replace a portion of portland cement in a concrete mixture is a useful method to make concrete better and more consistent. Portland blast-furnace slag cement has a lighter colour, better concrete workability, easier finishability, higher compressive and flexural strength, lower permeability, improved resistance to aggressive chemicals and more consistent plastic and hardened consistency.

Portland Pozzolana cementPortland pozzolana cement is ordinary portland cement blended with pozzolanic materials (power-station fly ash, burnt clays, ash from burnt plant material or silicious earths), either together or separately. Portland clinker is ground with gypsum and pozzolanic materials which, though they do not have cementing properties in themselves, combine chemically with portland cement in the presence of water to form extra strong cementing material which resists wet cracking, thermal cracking and has a high degree of cohesion and workability in concrete and mortar.

Manufacture of Cement

Portland cements are made by grinding a mixture of limestone, clay and other corrective materials, viz. Laterite, Bauxite,etc. Essential constituents mainly are Lime, Silica, Alumina and Iron Oxide. The process of manufacturing consists of grinding of raw materials into fine powder, mixing them intimately and burning in a kiln at about 1400 deg. C. The resultant product is called Clinker. Clinker is cooled, ground to fine powder with gypsum. The end product is cement.

Storage of cement

The binding property and strength of cement depends upon its capacity for chemical reaction, which can take place in the presence of water. Cement tends to absorb moisture, and react with it chemically.

Basic requirement is that cement should not come in contact with water or moisture till it is put to use. If it comes in contact, it will react and form lumps. Then it loses its reactivity and this in turn will result in less strength. The site engineer should bear in mind that even the atmospheric moisture is sufficient for deterioration of cement. Hence cement should be stored in such a manner that no moisture or dampness is allowed to reach cement either from the ground or from the environment.Cement loses strength as it ages.

Approximate reduction in strength with age (in standard water tight storage condition)

S no Age in months Loss of strength in %

1 3 5 to 10

2 6 20-30

3 12 30-40

Note: BIS prescribes that cement should be used within 90 days of its production. In case it is used at a later date then it should be tested before use.

Good axioms of proper inventory management are:• Buy only the quantity required for the week or for the fortnight• Please see that cement bag is not torn• No windows/ventilators should be allowed in godown, if unavoidable, it should be kept closed

all the time• Do not allow workers to use hooks or sharp tools to lift the bags• Do not allow workers to use hooks or sharp tools to lift the bags• The cement should be stored in a godown built with minimum 300mm plinth height• Check whether the roof of the shed leaks, if so, repair it• Always store cement away from the wall• Do not store cement directly on the floor. Use wooden planks/pallets or polythene sheets• Place cement bags one layer lengthwise and one layer widthwise (header and stretcher style) for

better stability of the pile• Always adopt first in first out approach (FIFO system).• Sometimes, when the cement bag is brought down, it may appear hard (pack lumps) because of

the load of the bags above it. Roll the bag two to three times before opening it.

COMMUNICATION (PROMOTION):

2005 saw one of the high profile brand launches in the country. The launch was significant and different because it was the launch of a cement brand. Another uniqueness was that it was a rebranding exercise. L&T's cement business was acquired by Aditya Birla Group in 2004 for Rs 2200 crore making Grasim the 8th largest cement producer in the world.

Grasim was having cement brands like Birla plus and Birla super in the 150 mn TPA Cement market in India. L&T was a leading brand in the premium segment of the cement market. The acquisition gave Grasim an entry into the premium segment of the market.

L&T cement which enjoyed leadership position in the premium cement market epitomized engineering prowess, technology quality and modernity. This has enabled the brand to command a premium over the other cement brands. Grasim was allowed 8months to use the L&T brand.

Grasim was faced with a tough task. The time was short and there were two choices, merge the L&T brand with existing Grasim brands or launch a new brand . The company decided on the later and did it with style.

The name Ultratech was chosen after careful marketing research. Since L&T does not mean anything by virtue of the brand name, Grasim wanted the new brand name to portray significant intrinsic value of the brand. Hence the name Ultratech was chosen. Since Grasim did not want to dilute the premiumness that L&T enjoyed, a high decibelad blitz was launched to announce that L&T is now Ultratech. The campaigns wasbacked with direct marketing where the company officials met the 5500 odd stockistsand authorised dealers explaining the new brand and company policies.

The campaign had lot of significance.1. It had to make sure that the new brand did not lose the qualities of L&T2. The new brand should be able to command the same level of premium of L&T.3. Time was short4. It was a risky affair.

Ultratech was positioned as the ' Engineer's choice" cement emphasizing on thequalities such as Quality, Modernity and technology. The gamble has paid off well for Aditya Birla group and Ultratech was able to carry the legacy of L&T cement.

COMPETITION (BRANDS):

The basic Overview of the cement industry is given as below which clearly shows that the market for the new comers is not so easy to survive unless and until they have a competitive advantage over others.

Cement Companies (nos.)52Cement Plants (nos.)130Installed Capacity (Million Tonnes)165Cement Production (Million Tonnes)152Exports (Million Tonnes)9.5Turnover (Mn. USD)9700

MAJOR COMPETITORS:

There are as we saw above a huge competition in this sector and thereby Ultratech Cement Ltd. has to be more strategic but the major competitors of Ultratech are:

ACC AMBUJA CEMENT BINANI CEMENT INDIA CEMENT SHREE CEMENT

DISTRIBUTION NETWORKS:

UltraTech's distribution network is very widely spread out in the country with over 5,500dealers and 30,000 retailers. It enjoys a leadership position in all the markets that it serves. We are committed to preserving the brand's premium and its market share. The company has enlisted the support of all of its business associates.

This includes dealers, stockists, retailers, builders and engineers, among others. UltraTech Cement Limited proposed to unveil 200 Building Solutions Retail Stores(UTBS) across India before the end of this calendar year, according to the Chief Marketing Officer of the company. The concept was unique in the construction industry and would advocate a "plan, build and support" philosophy, seeking an enhanced shopping experience for consumers, he said. Inaugurating four UTBS in nearby towns of srirangam, Mannachanallur, and Thuraiyur recently, he said UTBS could help a plot owner get information on how to choose and buy quality construction material.

Customers can also get a list of recommended outlets offering construction products like wood, paint, fittings, sand, bricks and others. Besides, UTBS offer free consultancy services on legal opinion, obtaining plan approvals and clues from Vaasthu Sastra. UTBS would also offer complete support through tests at the construction site, ensuring quality standards, he said. Such stores were already functioning successfully at Rajkot and Gurgaon, he said. The group has 11 composite plans, seven split grinding units and four bulk terminals that include one in Sri Lanka and 40 ready mix concerete plants. The UltraTech distribution network will now be pan-India with over 14,000 dealers and60,000 retailers, he added.

CUSTOMERS:

The customers in the cement industry are generally larger clients such as Retail Industry, Construction Sectors, etc.

PRICE:

Ultratech would benefit from lower imported coal cost/pet coke cost in its cement business, whereas its VSF business would benefit from lower sulphur prices. As a result, we estimate Rs5-6/bag savings in cement cost and Rs10/kg savings in VSF cost. Also with the excise cut the rate of bag cement has come down to Rs 2-3/bag. This is really going to have an impact of the sale of the cement in the coming quarter.

TECHNOLOGY:

When it comes to Technology, Ultratech isn’t far behind. The Latest e-CMS Cash Collection system which they are implementing in collaboration with HDFC bank has increased their savings to a greater extent.

There are certain areas which should be taken care of in order to increase the savings, to make the working process flexible and the market

More Promotional Campaigns in eastern and some parts of northern areas. Educating Zones about web CMS facility. Customerization of banks MIS as per our Accounting System.

SERVICES

UltraTech Cement offers a plethora of services to its customers to ensure that they get the best from the products that they buy. It also provides technical training to engineers, builders, contractors and even masons.

Technical The technical team comprises experienced civil engineers who act as a link between customers, the sales team and manufacturing, coordinating on issues relating to the technical aspects of cement and its application.

Cement is used as a raw material in construction and its good performance can be ensured only if workmanship is good. The team enhances the quality of construction by giving technical

inputs to users such as masons and contractors

Customers are guided on selection of cement and its economic use and, if necessary, site supervision and field visit services are offered free of cost

Regular contact with consultants is established to understand their requirement and feedback is obtained for continual improvement in product quality and services

Knowledge-sharing and customer supportEducating masons and customers on all aspects of the product and building construction. The support includes:

Training masons and site supervisors on good construction practices by organising workshops in association with professional institutions

Organising technical presentations for civil engineers, consultants, builders and contractors to provide updated information in the field of construction

Educating civil engineering students from universities

Conducting awareness programmes for consumers through seminars, exhibitions and workshops

Research and project assistance on cement and concrete

Laboratory servicesUltraTech Cement Lanka is the only cement plant/bulk importer in Sri Lanka operating an international standard sophisticated in-house laboratory to ensure quality and also to provide value-added services.

The company’s laboratory services include customer care and guidance through quality monitoring and application research. A dedicated in-house laboratory managed by experienced industry professionals ensures desired testing for cement and concrete.

In-house facility ensures all mandatory procedures of the Sri Lanka Standards Institution (SLSI) have been strictly followed

Regular testing of all available cement in the industry and its analysis for benchmarking, continual improvement and proper guidance to customers

Application-based research for guidance to customers on crucial applications.

Testing services for customers on cement as well as concrete, as sometimes they face the constraints of good testing facilities in the construction industry.

Product Quality and Customer services:

UltraTech Cement has obtained multiple certification including ISO 9001-2008 certification for quality management, ISO 14001-2004 certification for environmental management system and OHSAS 18001 certification for occupational health and safety management system.

Product quality and relevance to customers Cement is a vital ingredient for the construction sector and its chemical and physical properties are crucial in deciding the overall quality and durability of construction. UltraTech Cement ensures that the customer gets the best combination of strength and durability on a consistent basis.

The distinct features of UltraTech cement include:

Higher compressive strength

Optimal fineness

Balanced physical and chemical properties

Low level of chlorides

High soundness

Consistency in quality

These distinct features ensure numerous advantages to customers including: Higher workability

Lower consumption

Enhanced durability

Quicker construction

High soundness

Overall economy

Its superior quality and multi-dimensional use make UltraTech cement suitable for a range of applications:

All kinds of construction including concrete (reinforced, pre-cast and pre-stressed), masonry and plaster

Roads, bridges, water-retaining structure

Cement-based products such as pipes, tiles, blocks, poles, etc

Ready Mix Concrete (RMC), high-performance concrete, slip form construction, etc.

TECHONOLOGY

Plant and Machinery

UltraTech Concrete is manufactured at state-of-the-art computerized automatic batching & mixing plants with contemporary technology. Some of the special features of our plants are:

1. Entire process is fully computerized, leaving no scope for human errors. All the control systems are Windows based. 2. Cement and other raw material are checked as per our quality plan.3. All the raw materials are stacked in separate bins and are stored under cover so that aggregates are not exposed to direct sunlight and environment pollution.4. Cement, Fly ash, Slag etc. are stored in separate silos for better control on recipe.5. Handling of fly ash and slag are done from closed bunkers to silos directly. 6. Separate weigh-batchers are provided for each ingredient like cement, water, admixtures and aggregates. The weighing is done on sophisticated electronic weigh batchers. Precise weighing of all materials is done through electronic load cells made up of special alloys.7. Homogeneous mixing of concrete is ensured by use of special high-efficiency mixers like pan-type or turbo-twin shaft mixers.8. A fully equipped onsite plant laboratory is available at each plant.9. A Sprinkler system is installed to ensure temperature control of aggregates in hot weather.

10. In line with Group’s focus towards environment and eco-friendliness all silos are installed with bag filters and level indicators to avoid any kind of pollution.11. Processes are in place for effective and periodic maintenance and calibration of all critical components.12. Laser sensor and moisture control are used for a stringent quality assurance.13. Well trained and experienced engineers are available at every plant to take care of the quality of concrete.

SUSTAINABILITY

“As a Group we have always operated and continue to operate our businesses as Trustees with a deep rooted obligation to synergise growth with responsibility."

— Mr Kumar Mangalam Birla, Chairman, Aditya Birla Group

The cement industry relies heavily on natural resources to fuel its operations. As these dwindle, the imperative is clear — alternative sources of energy have to be sought out and the use of existing resources has to be reduced, or eliminated altogether. Only then can sustainable business be carried out, and a corporate can truly say it is contributing to the preservation of the environment.

UltraTech takes its responsibility to conserve the environment very seriously, and its eco-friendly approach is evident across all spheres of its operations. Its major thrust has been to identify alternatives to achieve set objectives and thereby reduce its carbon footprint. These are done through:

:: Waste management

:: Energy management

:: Water conservation

:: Biodiversity management

:: Afforestation

:: Reduction in emissions

Importantly, UltraTech has set a target of 2.96 per cent reduction in CO2 emission intensity, at a rate of 0.5 per cent annually, up to 2015-16, with 2009-10 as the baseline year. This will also include CO2 emissions from the recently acquired ETA Star Cement and upcoming projects.

Environment initiatives UltraTech has taken several environment-related initiatives as part of its sustainability campaign. These include:

:: 2.88 per cent of net specific CO2 emission has been reduced during the period 2008-2010

:: 1.6 million gigajoule (GJ) of energy has been produced through alternative fuels (excluding pet-coke) during 2008-2010

:: Waste materials constitute 14.64% of the total Raw Materials consumed in 2009-10

:: 8.5 hectares of mining land has been reclaimed in the Jaffrabad plant in Gujarat, along a freshwater lake, by planting many varieties of trees and shrubs

:: A 6.51 hectare freshwater lake has been created in the mined-out pits after the extraction of limestone in Jaffrabad

:: Afforestation programme has been initiated on 19.6 hectares of land at the Kovaya plant in Gujarat

Community programmes

:: 4,16,415 beneficiaries of UltraTech's health and medical facilities from the camps and awareness programmes conducted between 2008-2010

:: 75,769 students benefitted from the organisation's education and training activities during the reporting period

:: 371 houses built for the poor during 2008-2010

In the true spirit of sustainability, any feedback that can help make the organization’s sustainability report better is genuinely appreciated.

SWOT ANALYSIS

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. A SWOT analysis must first start with defining adesired end state or objective. A SWOT analysis may be incorporated into the strategic planning model.

Strengths: attributes of the person or company that are helpful to achieving the objective(s). This should include not only the are as that our business or products are good at, but also high profit margins, successful current marketing campaigns and similar strengths

Weaknesses: attributes of the person or company that are harmful to achieving the objective(s). This should include theareas that we feel our business could improve on, or are limitingour quality or expansion.

Opportunities: external conditions that are helpful to achieving the objective(s). Opportunities are almost always external, although they may rely on internal strengths 

Threats: external  conditions which could do damage to the objective(s).Identification of SWOTs are essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated.

Internal and external factors

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories:

Internal factors : The strengths and weaknesses internal to the organization.

External factors : The opportunities and threats presented by the external environment to the organization.

The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix.

SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats

SWOT ANALYSIS

Strengths:-

Strong brand image. Better quality. Long relationship with customer. Maintains a world class infrastructure. Market share. Large distribution network. Proper research and development. Strong financial backing.

Weaknesses:-

Delay in supply. Inconsistency of Supply. Insufficient manpower.

Opportunities:-

It can develop new marketing areas. It can sign more MOUs with government regarding supply of cement for government work. Maintain the position of competition in the market.

Threats:-

It has strong competitors like ACC, LAFARGE, AMBUJA Etc., Although the Brand Equity Of ULTRATECH CEMENT is AT PAR with ACC and LAFAGE, to maintain the same continuous follow-up in all respect is necessary

RECOMMENDATIONS

The company must improve its supply so as the demand for the cement can easily be met. It should organize seminars with the dealers and the sub dealers frequently so the current market

related news can be reviewed. Pre/post sells services should be improved. Part payment facilities should be available in the case of small and medium business house. It must target the rural markets as they are providing a good marketing opportunity these days.

STRATERGY

2005 saw one of the high profile brand launches in the country. The launch was significant and different because it was the launch of a cement brand. Another uniqueness was that it was a rebranding exercise. L&T's cement business was acquired by Aditya Birla Group in 2004 for Rs 2200 crore making Grasim the 8th largest cement producer in the world.

Grasim was having cement brands like Birla plus and Birla super in the 150 mn TPA Cement market in India. L&T was a leading brand in the premium segment of the cement market. The acquisition gave Grasim an entry into the premium segment of the market.

L&T cement which enjoyed leadership position in the premium cement market epitomized engineering prowess , technology quality and modernity. This has enabled the brand to command a premium over the other cement brands. Grasim was allowed 8 months to use the L&T brand.

Grasim was faced with a tough task. The time was short and there were two choices, merge the L&T brand with existing Grasim brands or launch a new brand . The company decided on the later and did it with style.

The name Ultratech was chosen after careful marketing research. Since L&T does not mean anything by virtue of the brand name, Grasim wanted the new brandname to portray significant intrinsic value of the brand. Hence the name Ultratech was chosen. Since Grasim didnot want to dilute the premiumness that L&T enjoyed, a high decibel ad blitz was launched to announce that L&T is now Ultratech. The campaigns was backed with direct marketing where the company officials met the 5500 odd stockists and authorised dealers explaining the new brand and company policies.

The campaign had lot of significance.1. It had to make sure that the new brand did not lose the qualities of L&T2. The new brand should be able to command the same level of premium of L&T.

3. Time was short4. It was a risky affair.Cement is basically viewed as a commodity and the industry is fragmented with around 50 players. So inorder to command a premium, the brand had to show a significant differentiation.

Ultratech was positioned as the ' Engineer's choice" cement emphasizing on the qualities such as Quality, Modernity and technology. The gamble has paid off well for Aditya Birla group and Ultratech was able to carry the legacy of L&T cement.

Ultratech is a classic case of Marketing a commodity.

ARTICLES ON ULTRATECH CEMENT @ http://www.ultratechcement.com/

 

With the re-christening of L&T Cement as UltraTech Cement, the Aditya Birla Group is pulling out all the stops to establish itself as not only the best domestic player but also among the global leaders in cement.

On the surface it appears to be only an ornamental change. L&T Cement has been rechristened UltraTech Cement. While O.P. Puranmalka, Group Executive President, Grasim Industries, and Chief Marketing Officer, UltraTech Cement Ltd., also insists that nothing except the name has changed, the truth is that with the unveiling of this new brand, the US$ 6.5 billion Aditya Birla group is implementing one of the largest brand transition exercises in India.

L&T had earlier demerged its cement division to create UltraTech Cement Ltd. Grasim, part of the Aditya Birla group, acquired a majority stock in the company for around Rs. 2,200 crore. Subsequently, Grasim, which has cement brands Birla Plus and Birla Super, was allowed to use the L&T Cement brand till 31 March 2005. Explaining the strategy behind the new brand name, Mr. Puranmalka says: "UltraTech has been the outcome of an in-depth research across the country. We wanted to capture the gene code of L&T in the new brand name. So we commissioned a research on customer perception about the L&T Cement brand. Of course, we were very sure in our mind that L&T Cement epitomised engineering prowess, technology quality and modernity."

The research findings threw up the same qualities, but the name itself was not associated with anything because L&T was not by itself a meaningful word. Moreover, the group wanted a new brand image which portrayed the intrinsic premium value of the brand - on cue from the findings of the survey. The outcome was UltraTech Cement. Says Mr. Puranmalka: "The name UltraTech with the signature line 'the engineer's choice' admirably captures the premium nature of the brand and its salience."

According to Mr. Puranmalka, excellent product quality and customer care will remain the hallmark of UltraTech. So while the emphasis remains on the essential quality of the established brand, the makeover is essentially to bring the Birla touch to the brand after its acquisition last year.

A strong bond While some rivals would like to believe that this is only old wine in a new bottle, the brand

transition is actually part of a large makeover keeping the quality unchanged. The Aditya Birla group is planning to invest Rs. 200 crore on enhancing the market through new capacities and bringing in higher volumes, adding 2.5 million tonnes largely by removing bottlenecks. The company has plans to maximise operational efficiencies and to sweat the assets and grow aggressively.

At the moment, the group has no plans of making changes in the existing production plants. While the cement plants at Kovaya and Jaffarabad in Gujarat, Awarpur in Maharashtra, Hirmi in Chattisgarh and Tadipatri in Andhra Pradesh provide unmatched quality, the grinding units at Durgapur, Jharsaguda, Arakkonam, Magdalla and Ratnagiri support them. Besides, there are packaging terminals set up at Mangalore, Mumbai and Sri Lanka. These facilities are managed by the same team of excellent and resourceful technocrats and backed up by the same marketing team, explains Mr. Puranmalka.

With the acquisition of L&T's cement division, the Aditya Birla group had made its intention of growing the cement business very clear. UltraTech Cement enjoys the position of a market leader in all the regions where it is present. Over 42 per cent of its domestic sales arise from the western region. Moreover, its plants and markets complement those of Grasim. With these two brands, the group's cement capacity is in excess of 31 million tonnes per annum (tpa) -- of which 17 million tpa comes from UltraTech -- cementing its position as the ninth largest player in the world. Today, the group has 11 composite plants, seven split-grinding units, four bulk terminals, including one in Sri Lanka, and eight ready-mix concrete plants.

The Aditya Birla Group has initiated measures to bring about operational synergies between Grasim's cement business and UltraTech Cement. Initiating the process, the group has started joint procurement of raw materials. "We are eyeing synergies between the group's cement businesses. This will help us save costs," says Saurabh Misra, Chief Executive Officer, UltraTech Cement. The group is exploring the option of extending the joint efforts to other areas like logistics once the brand transition exercise is complete.

Besides, the company is looking at the option of achieving full capacity utilisation in Narmada Cements, a fully owned subsidiary.

Export initiativesUltraTech Cement recently bagged an award for being the highest exporter of the year from CAPEXIL for the eighth time in a row for its sterling performance during 2003-2004. A leading cement exporter, its plants have also received various awards for environment protection, social awareness, safety and management of better industrial relations.

The company has been credited with boosting its exports of cement and clinker last year by 25 per cent to 3.5 million tonnes from 2.8 million tonnes in 2002-2003. According to a company official, stringent quality control and testing in the best laboratories ensure that cement and clinker produced from its plants conform to and surpass international standards. The laboratory is equipped to test cement as per ASTM, British and Euro standards. All the plants are ISO 9001 certified for the latest production process and 14001 certified for environmental management. The cement plant in Gujarat has an additional OHSAS 18001 certification as well for occupation hazards and safety parameters.

The company has a captive jetty at the Gujarat plant. The jetty length of 337 metres and width of 23 metres is capable of handling ships of 45,000 DWT with 11 metres draft. Loading of cement and clinker onto the ship is carried out by a shiploader, which is fed by a four km long conveyor belt that connects the plant to the jetty. UltraTech Cement is the first and only Indian cement company to obtain an EC certification for this plant. The accreditation, given by Bureau Veritas, is a pre-requisite to supply cement to EC member countries. UltraTech is one of the few Asian cement companies to receive this recognition.

The Hirmi Cement Works in Chattisgarh and the Jharsuguda Cement Works in Orissa make them ideal locations for export of cement and clinker to Nepal and Bangladesh. With captive railway sidings to facilitate loading of railway rakes and a high-tech production facility for cement and clinker, UltraTech Cement has found wide acceptance in these neighbouring countries.

Elaborating his growth strategy, Mr. Puranmalka says: "We will leverage synergies and further strengthen our ability to compete in the Indian and the overseas markets. We expect UltraTech to grow faster than the market and to improve the market shares. At the same time, developing beachheads overseas through a profitable exports business is a priority for all of us."

Mr. O.P. Puranmalka, Group Executive President, Grasim Industries and Chief Marketing Officer, UltraTech Cement, both part of the Rs. 27,000 crore Aditya Birla Group, started his career with Grasim as an industrial management trainee. This cement industry expert recently successfully initiated the brand transition of L&T Cement to UltraTech. In an exclusive interview with Business Barons, Mr. Puranmalka shares his experience in the brand transition and new business strategy of UltraTech. Excerpts:

The transformation of the L&T Cement brand name to UltraTech has been successful. What strategy did you adopt to achieve such a seamless transition? Puranmalka: The L&T Cement brand commanded a strong presence in the marketplace, standing for technology, quality, modernity and engineering excellence. These perceptions were validated and reinforced by research findings initiated to understand the brand. The biggest challenge that was faced by our team was that since only the brand name was being changed, the brand transition process had to be designed and in such a manner that none of the attributes and values that L&T Cement stood for were either diluted or modified in transition. Another challenge was that time available to the team was very limited to complete the process. Ideally, for a brand as big and with huge national spread, the transition process should have been spread over a period of two to three years. However, we are allowed to use the brand name L&T Cement till March 2005. The process had to be completed within nine months. However, we took the challenge and our marketing team worked on a war footing to complete the task. That's how the brand transition has been going on smoothly.

The geometric growth in the housing sector and the government's thrust on infrastructure is expected to help speed up the growth in the cement industry. How will this contribute to the growth of UltraTech's business?Puranmalka: The rise in per capita consumption would be fuelled by the strong growth in the housing sector and the government's thrust on infrastructure development This is expected to translate into a growth of close to eight to nine per cent annually. UltraTech is uniquely positioned

to capitalise on these developments given its unique brand values and customer orientation, backed admirably by the best trade partners possible.

What are UltraTech's plans to maximise operational efficiencies across its plants nationwide? Puranmalka: UltraTech plans a capital expenditure of Rs. 200 crore. Through this, efficiencies will be improved and removing of bottlenecks will generate an additional 2.5 million TPA of capacity. We also plan to cut operational costs and improve the efficiency at our plants. .

What are the key markets for L&T Cement in different parts of India? What are the new markets that UltraTech is planning to tap?Puranmalka: UltraTech Cement enjoys a leadership position in practically all the markets in which it is present. Close to 70 per cent of its volumes comes from the southern and western states. We plant to consolidate our leadership position in these markets and complete the process of the transition to UltraTech in the next few months. Thereafter, we will look at expansion opportunities and decide accordingly. .

Could you tell us about your distribution network?Puranmalka: UltraTech's distribution network is very widely spread out in the country with over 5,500 dealers and 30,000 retailers. It enjoys a leadership position in all the markets that it serves. We are committed to preserving the brand's premium and its market share. The company has enlisted the support of all of its business associates. This includes dealers, stockists, retailers, builders and engineers, among others.

Have we seen the future? At UltraTech Cement, we see it in the Bandra-Worli Sea Link – an eight lane bridge that is going to make a difference to millions of commuters.

This 5.6 km marvel situated in Mumbai was opened to vehicular traffic on June 30 2009. The bridge is set to ease the quality of life for Mumbai commuters, enabling speedy travel between Bandra and Worli – one of Mumbai’s busiest suburbs.

Officially named as the Rajiv Gandhi Setu, the bridge will provide an alternative route to south Mumbai from the western suburbs.

Construction of such a monumental landmark comes with a host of challenges where quality and precision are non-negotiable. As a preferred supplier to the Bandra-Worli Sea Link, UltraTech has played an integral role in the project. Our high quality cement befitted the stringent essentials of this demanding project, like the numerous other projects we do across India.

This resplendent steel structure over the Arabian Sea unquestionably puts UltraTech to the foreground.

So, when you look at Mumbai's newest landmark, see us in it!

Marketing Strategy Of UltraTech Cement

UltraTech Cement Is Rajasthan Royals Principal Team Sponsor For IPL-5

UltraTech Cement, a division of the Aditya Birla Group, on 6th March announced that they would be the principal sponsor for Rajasthan Royals in the 5th edition of Indian Premier League (IPL-5), 2012.

The organization has been connected with the squad since the 1st edition of IPL as main sponsor in 2009 and 2010 editions and as an on-ground associate in 2008 and 2011 editions.

The Rajasthan Royals also unveiled the new jerseys of the team on the eve and introduced their new line up, which includes 5 players who were signed in February’s IPL Auction.

CEO, Rajasthan Royals, Raghu Iyer said, “We are very pleased with the on-going association of UltraTech cement with us. They have been genuine associates and have shown their encouragement to the Royals all through the IPL journey till now. I would like to convey sincere thanks to UltraTech Cement for showing their faith in the team and I believe we can succeed jointly this season.”

“Cricket in our nation is in fact a national game, irrespective of gender, age and geography. And when two big brands that have same values are together, it will be surely a succeeding combination! The Royals in 4th Edition of IPL stood for their stimulated leadership, professionalism and innovation. Lead by a group of strategic and professional thinkers, UltraTech being a champion brand and a market leader, places huge importance in all these aspects too,” said O P Puranmalka, Business Director, UltraTech.

Shilpa Shetty of Rajasthan Royals said, “We are happy to have UltraTech Cement as the Rajasthan Royal’s principal team sponsor. I am sure that with their encouragement, the team, with the thrilling new additions under a new captain in the squad can show our fans so much to cheer about this IPL edition. As a factor to our home city we have also developed a new training jersey.”

Puranmalka and Shetty together launched the Rajasthan Royals’ official jersey in the attendance of team members at the dazzling ceremony that observed the use of revolutionary video projection mapping to reveal their new jersey. The video projection was used to reveal the Royals’ cherishing moments of pride and victory throughout the previous IPL seasons.

Designed by Royals’ official kitting partner, Puma, the jersey is made up of lightweight mesh back polyester and is designed to offer higher breatheability during summer’s high temperatures. With exceptionally styled numbers and names emblazoned in dazzle gold, the team’s blue jerseys possess cut and sew panels with dazzle inserts. Along with this, a training jersey dedicated to the team’s home city, Jaipur was revealed at the ceremony.

CASE STUDY ANALYSIS

Indian Cement Industry: Can UltraTech be the next Market Leader?

This analyzes UltraTech's present position in the market and its strategies to enhance its presence in the cement industry. An industry analysis followed by the resource based view of UltraTech highlights UltraTech's strengths and areas of improvement. Thereafter, a financial comparison of UltraTech with its main competitor ACC provides an insight into its cost structure. Through in depth analysis, this article seeks to provide specific recommendations on what UltraTech must do in order to achieve market leadership.

Cement demand in India has increased due to the increasing expenditure by the Indian government in infrastructure. As a result, the participation of larger companies in the sector has also increased. There are a total of 125 large cement plants and more than 300 small cement plants operating in the country presently. The cement industry is a homogenous industry with similar nature of raw materials, rising power costs, similar manufacturing and processing units. The nature of the product makes it difficult for any player to differentiate in order to corner a large share of the market. This leads to low margins and makes the industry unattractive.

On 17 June 2003, the Aditya Birla Group (ABG) acquired management control of L&T Cement and renamed it UltraTech. The acquisition brought in new competitive dynamics. The company has since grown rapidly. It is currently the second largest cement producer and is third in terms of profitability.

The Cement Industry

The cement industry is an interesting one to analyze as on one hand the similarity of raw materials and processing units makes differentiation difficult, while on the other hand large companies are acquiring smaller ones, changing industry dynamics.

Competitors: The Indian cement industry has a large number of fragmented firms. There is also a dearth of new players as incumbents have already procured key raw material sources, like limestone reserves on long-term leases. Further, large firms are continuously consolidating by acquiring smaller ones that find it difficult to attain minimum efficient scale of production.

Product: Cement is a bulk commodity and a low value product. It is sold in 50 kg packs as OPC grade 33, 43, and 53. It is used in all construction activities as a primary constituent of concrete. Due to similar raw material inputs and production processes, there is no significant differentiation in the cement produced across firms.

Environmental Issues: Greenhouse gas emissions from cement manufacturing pose a serious environmental threat. Currently, the cement industry generates 5% of India's total carbon-dioxide emissions. With stringent emission norms, the production process needs to be made environmentally sustainable. The cost of implementing new production processes that help reduce emissions can be offset by trading certified emission reductions (CERs). CERs are a component of national and international emissions trading schemes, implemented through Clean Development Mechanism (CDM) projects, in an attempt to mitigate global warming.3 Credits obtained through implementation of such projects can be traded in international markets.

Having studied the cement industry and identified the main issues facing the firms, we engage in an in depth analysis of the firm's resources to identify the sources of sustainable competitive advantage

UltraTech's Sources of Competitive Advantage

The key players in the cement market are Holcim Group, Lafarge Group, ACC and J K Cement. ABG that possessed the Grasim cement unit acquired management control of L&T cement in the year 2003. The acquisition of L&T Cement (later named as UltraTech) turned the group into one of the largest players in the market.

Value chain analysis helps in identifying sources of competitive advantage in a systematic manner, and thus we use this framework. The cement industry value chain comprises (1) sourcing of raw materials and fuel from quarries and mines (2) the manufacturing process, and (3) distribution of the product to the markets.

The sources of competitive advantage identified for UltraTech are:

UltraTech's capabilities in identifying, and leasing, higher quality raw material quarries results in significant cost savings for them.

Sourcing of Raw Materials: UltraTech's greatest strength is its raw material sourcing. Limestone quarries are usually leased from the government on a long-term basis (usually at least 25-30 years). UltraTech's capabilities in identifying, and leasing, higher quality raw material quarries results in significant cost savings for them. This source of long-term competitive advantage is due to their people skills which aid in identifying the sources and their terms of leasing which lock in these resources for the long term. Clearly, this resource is valuable and rare.

Fuel used in Manufacturing Process: The manufacturing process offers no distinct competitive advantage to UltraTech or its largest competitor ACC, though ACC enjoys lower fuel cost. However, this is not sustainable, and since UltraTech has already started switching to coal, ACC's advantage is likely to be neutralized in the near future.

Financial and Human resource advantage: UltraTech, being a part of the Aditya Birla Group, has access to the deep pockets of its promoters, as well as human capital of the highest quality. While financial resources may be rare and inimitable, non-substitutability is debatable. Evidence suggests that in the long term others like the Holcim group can match the financial resources of ABG. Higher quality of human capital might be more valuable in the long run, and given their astute knowledge of the Indian market, ABG might be able to leverage this resource better than their foreign counterparts.

A final point to note is that UltraTech has higher operating leverage than ACC. This by itself is neither a source of competitive advantage nor a disadvantage. In the long run, the gains during the 'up' years will be smoothened by the 'down' years of the cement cycle.

UltraTech V/s ACC - A Financial Analysis

The objective of this financial analysis is to identify specific advantages enjoyed by UltraTech vis-a-vis its major competitor ACC, their relative magnitude and sustainability.

The last few years of this decade have been good for cement companies as prices have remained high, and hence profits have been good. In the same period, UltraTech and ACC have shown the

same trends of increasing sales growth and capacity utilization although UltraTech has done marginally better, and succeeded in closing the gap with its rival.

In a post-mature industry such as cements, first movers' advantage in terms of differentiated products is easily negated thereby necessitating the need for Ultratech to establish itself as a cost leader.

The cement industry is a "post-mature" industry - an old industry where change is slow and marginal, first movers' advantage in terms of differentiated products is minimal and any advantage is likely to be fleeting and parity would be restored soon enough. In such an industry, the only way for UltraTech to be the number one is to be a cost leader. Thus, it is imperative to analyze the cost advantages, which ACC and UltraTech have relative to the each other.

A detailed analysis of the cost structure (Exhibit 1) reveals stark differences between ACC and UltraTech in raw material and power costs. A comparison of raw material costs showed that UltraTech had a huge advantage (nearly double) over ACC due to greater access to better quality quarries. For the same quantity of cement produced, UltraTech spent less on mining, and got better quality limestone, than ACC.

A comparison of power costs revealed a different picture with ACC enjoying a cost advantage over UltraTech. This is due to the higher cost of Naphtha and Fuel Oil based Power Plants used by UltraTech (in addition to coal fired plants) while ACC used only coal based plants. UltraTech wanted to spread the risks of prices and availability of fuel, but the strategy backfired as coal remained a much cheaper alternative (detailed cost breakups shown in Exhibit 1).

Exhibit 1 Comparison of costs between ACC and UltraTech

UltraTech - Looking Ahead

We look at the trends emerging in this sector and analyze how UltraTech can leverage these to its advantage in the light of its competitive advantages.

Cost leadership: Striving to become a cost leader by means of setting up captive power plants, and/or up-gradation of technology to enhance productivity, is increasingly becoming critical for large cement players in this sector.

Rising Exports: Due to the increasing construction activity in the Middle-East, exports will constitute a major sales driver. Hence, the coming years would see companies scrambling for bases on the Western coast to minimize their export transportation costs.

Retail Stores: A unique concept, which Ultra Tech is experimenting with in recent times, and one that is important for the future, is to continue setting up retail stores. Other companies like Asian paints, and most recently Tata Steel have tried a similar concept.

Relationship Management: UltraTech should focus on managing its relationships with importers, exporters, distributors, warehouse providers, wholesalers, retailers and dealers for their long-term profitability.

Synergies with Grasim: The two companies under the ABG banner can exploit operational synergies in raw materials procurement, manufacturing, common branding, dealer networking, logistics, and exchange of key personnel.

Ready Mix Concrete: Finally, one of the recent trends in this sector is the focus on ready-mix concrete. Therefore, an early technology and capacity building in this area would determine the strategic moves of cement companies in the future.

Conclusion

This has succinctly analyzed the present state of affairs at UltraTech cement and thus identified its strengths and problem areas through a variety of tools. While its raw material sourcing, financial and human resource pools are sources of competitive advantage, UltraTech has to improve in terms of fuel costs in order to beat ACC to the top position in the low margin industry. This can also be achieved by leveraging futuristic trends like branded retailing, exports and new products like ready concrete mix.

BIBILOGRAPHY

www.google.com

www.ultratcement.com

SUPPLY CHAIN MANAGEMENT – Sunil Chopra, Peter Meindl, D.V. Kalra