acc cstudy on acc dealership network in the city of belgaum

Associate Cement Company ………………………………………………………………………………………………………

KARNATAK LAW SOCIETY’S

INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH.

BELGAUM.

A PROJECT REPORT ON

“Study on ACC Dealership Network in the City Of Belgaum”

At ACC Ltd. Regional Office Belgaum

SUBMITTED TO:

KARNATAK UNIVERSITY DHARWAD

FOR FULFILLMENT OF

MASTER OF BUSINESS ADMINISTRATION

By:

ANIL G. DESAI

MBA04003030

UNDER THE GUIDANCE OF

INSTITUTE GUIDE ORGANISATION GUIDE

Prof. Dr. Poornima Charantimath Mr. Sanjay Pawar

Director KLS’s IMER Asst. Marketing Manager

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DECLARATION

I hear by declare that the project work entitled “Study on ACC Dealership Network in the

City of Belgaum” conducted at ACC Ltd. Regional Office Belgaum, has been prepared by me

during the academic year 2005 – 2006 under the valuable guidance of Mr. Sanjay Pawar.

I also declare that this project is the result of my effort and has not been submitted to any other

university or institution for the award of any degree.

DATE: 03/04/2006

PLACE: Belgaum Anil G. Desai

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KARNATAK LAW SOCIETY’S

INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH, BELGAUM.

(Affiliated to Karnataka University, Dharwad & Recognized by AICTE, New Delhi)

CERTIFICATE

This is to certify that Mr. Anil G. Desai has satisfactorily completed his

Summer in plant training on “Study on ACC Dealership Network in the city of, Belgaum.” at

ACC Ltd. Regional Office Belgaum, in the partial fulfillment of the Requirement of Masters of

Business Administration, during the academic year 2005-06.

DIRECTOR & INSTITUTE GUIDE

(Prof. Dr. Poornima. Charanthimath)

KLS’s IMER-BGM

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ACKNOWLEDGEMENT.

It is my proud privilege to extend words of thanks to those people who have helped and

encouraged me in completing this study successfully.

First and for most, I would like take this opportunity to express my sincere gratitude and

profound thanks to our beloved Director Dr. P. M. Charantimath and also for having instilled in

me much needed confidence.

My heartly thanks to, Mr. Sanjay Pawar; Asst. Marketing Manager of ACC Ltd. Regional Office

Belgaum .Who gave me an opportunity to do this marketing project.

I also thanks Mr. Jai prakash MBA (Marketing) for his valuable advice and timely help given in

all respect carrying the project work with grand success. I extend my sincere thanks to Mr.

Ganesh MBA (Finance) for the kind co- operatiton.Also to all those dealers who encountered

with me and co-operated to complete my project work.

I owe debt of gratitude to my Parents, the salient guides in my life without whose never-ending

support nothing would have been possible.

Last but not the least, I would like to take this opportunity to thanks all my friends and well

wishers who directly or indirectly helped me.

I thank one and all.

Anil G. Desai

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TABLE OF CONTENTS

Chapter 1

1. Executive summary. ……………………………………………………1-2

2. Introduction. ………………………………………………………..3-20

3. Company profile. ……………………………………………………… 21-40

Chapter 2

4. Methodology. ……………………………………………………… 41-43

5. Analysis & Findings. ……………………………………………………… 44-55

6. Suggestions & Conclusion……………………………………………….. ..56-58

.

Chapter 3

7. Bibliography and annexure. ……………………………………………… 59-62

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EXECUTIVE SUMMARY

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Associate Cement Company ………………………………………………………………………………………………………EXECUTIVE SUMMARY

Change is occurring at an accelerating rate today ,It is no like yesterday and tomorrow will

be different from today continuing today’s strategy is risky so exploring for new strategy. As

global forces are going to have greater impact on our business in coming years. Ours economy is

no longer protected economy where in every industry will have to feel the fire from their

counterparts from different part of the world and particularly from China. This is applicable to all

the business.

Today, the cement industry is insulated from imports by the high tariff of custom duties

(40%). As India has accepted the WTO norms of free trade, these duty barriers have to be slowly

and definitely demolished. How the industry will going to survive in the changing scenario will

grossly depend on the competitiveness of the Indian product, vis-à-vis major cement producing

countries in the world like Korea, Indonesia, Japan and others. Our ex-factory price should reach

a level of their Fob price and only then our product would be competitive worldwide.

Considering above point in the coming year it will be the survival of the fittest. The MNCs

will go for price cutting once they are in total control. This will affect the small as well as big

industries. So in the present study I have to analyze how company will build strong network to

overcome these situations with the dealers.

ACC Ltd. The leading player in the cement industry has strong growth in the Belgaum

market, even though it has to be developing its network in this market. An attempt is made in this

study to understand company relations with the dealers, i.e. company’s dealership network.

The primary objective of the study is to find the strategies to strengthen the dealership

network of ACC Ltd. in Belgaum city. Also to find expectations of dealers from the company

and also the strategies to be adopted to increase the sale of the company. This study is restricted

to Belgaum city.

This study provides the company a basis for taking decisions regarding developing

dealer’s network. At the end of the study marketing strategy is suggested in order to facilitate

the strategic decision making for the company.

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INTRODUCTION

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History of Cement

In the 18th century a big efforts started in Europe to understand why some limes have hydraulic

properties. The French Engineer Louis Vicat, began a study of hydraulic limes in 1812 He

reported that in the absence of naturally occurring argillaceous components in limestone, quality

hydraulic limes could be prepared by the calcinations of fixed ratios of clay

proportioned with quicklime.

In 1818 an English patent was granted to Maurice Leger for "Improvement method of making

lime" In 1822, the production of "British Cement" had been started by James Frost at

Swanscombe based on a patent for "a new cement or artificial stone".

The invention of Portland Cement is generally credited to Joseph Aspedin, an English Bricklayer

in 1824 .It involves a double kilning. In 1838 a young chemical engineer, Isaac Johnson,

burned the cement raw material at high temperature until the mass was nearly vitrified producing

the modern Portland cement.

The German Chemist Wilhelm Michaelis proposed the establishment of cement standards in

1875. The chamber kiln was an improved design developed and patented by Mr. Johnson, the

combustion gases from the kiln dried the raw material so that when the kiln was burned out a

new charge of dried material is immediately ready for use.

The time and heat losses resulting from drawing the clinker, recharging the kiln, and then heating

it again led to the design of shaft kiln with continuous burning of the materials, one of the main

problem of the new kiln operation was the difficulty of obtaining an even clinker burning, as

some of the product would be greatly under-burnt and others be much more heavily clinkered.

In 1898 Atlas Portland cement company according to Lewis improved the design by using what

is called a Rotary kiln, this improvement was a big revolution in the cement industry because the

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new kiln could produce 200 cement barrels per day compared to a shaft kiln which produced

only 40 to max 80 barrels per day additional to quick improvement in this new design regarding

the mixing, grinding equipments for raw material, grinding equipments for coal, belt conveyor

using mix kind of fuel such as natural gas

In practice, the operation with the first generation of rotary kiln was very difficult due to problem

of maintaining a sufficient and uniform kiln temperature with excessive balling of raw feed and

sticking on the Frederick lining.

In 1899 Atlas Cement Company improved the technology of the rotary kiln and fuel economy by

replacing fuel oil with powdered coal dust. Furthermore, modifications to the kiln were made by

addition of two auxiliary clinker coolers, in which the first hot discharged clinker was received

as it fell from the kiln and air flowing over it was heated and helped to ignite the coal dust in the

rotary kiln.

The new clinker produced from the new kiln technology was different than the old clinker

especially from the setting time. The French chemist Pierre Giron solved this problem by adding

gypsum to the cement in order to control the setting time.

After 1900 there was rapid growth in both rotary kiln and auxiliary equipment technology in the

United States. Coal grinding mills were developed and coal burning in cement kilns became the

predominant combustion process in the industry. All the equipments related to cement

production crusher, raw mill, belt conveyors, bucked elevators were improved.

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Product and Raw Materials

Cement is a mixture of limestone, clay, silica and gypsum. It is a fine powder which when mixed

with water sets to a hard mass as a result of hydration of the constituent compounds. It is the

most commonly used construction material.

There are different varieties of cement based on different compositions according to specific end

uses namely Ordinary Portland Cement, Portland Pozolona Cement, Portland Blast Furnace Slag

Cement, White Cement and Specialized Cement. The basic difference lies in the percentage of

clinker used. Limestone is the key raw material and normally, 1.2-1.5 tons are needed for every

ton of cement. The quality of the limestone significantly affects the operating efficiency of the

units. Under normal conditions, to produce 1 ton of cement, 0.25 ton of coal, 120 kwh of power

and 0.05 ton of gypsum is required..

Cement Process

Cement acts as a bonding agent, holding particles of aggregate together to form concrete.

Cement production is highly energy intensive and involves the chemical combination of calcium

carbonate (limestone), silica, alumina, iron ore, and small amounts of other materials. Cement is

produced by burning limestone to make clinker, and the clinker is blended with additives and

then finely ground to produce different cement types. Desired physical and chemical properties

of cement can be obtained by changing the percentages of the basic chemical components (CaO,

Al2O3, Fe2O3, MgO, SO3, etc.).

Most cement produced is Portland cement: other cement types include white, masonry, slag,

aluminous, and regulated-set cement. Cement production involves quarrying and preparing the

raw materials, producing clinker through pyroprocessing the materials in huge rotary kilns at

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Associate Cement Company ………………………………………………………………………………………………………high temperatures, and grinding the resulting product into fine powder. The following detailed

description is borrowed from the World Energy Council (1995).

1. Raw Materials Preparation

Raw materials preparation involves primary and secondary crushing of the quarried material,

drying the material (for use in the dry process) or undertaking a further raw grinding through

either wet or dry processes, and blending the materials. The energy consumption in raw materials

preparation accounts for a small fraction of overall primary energy consumption (less than 5%)

although it represents a large part of the electricity consumption.

2. Clinker Production

Clinker production is the most energy-intensive step, accounting for about 80% of the energy

used in cement production in the United States. Produced by burning a mixture of materials,

mainly limestone (CaCO3), silicon oxides (SiO2), aluminum, and iron oxides, clinker is made by

one of two production processes: wet or dry; these terms refer to the grinding processes although

other configurations and mixed forms (semi-wet, semi-dry) exist for both types.

In the wet process, the crushed and proportioned materials are ground with water, mixed, and fed

into the kiln in the form of a slurry. In the dry process, the raw materials are ground, mixed, and

fed into the kiln in their dry state. The choice among different processes is dictated by the

characteristics and availability of raw materials. For example, a wet process may be necessary

for raw materials with high moisture content (greater than 15%) or for certain chalks and alloys

that can best be processed as a slurry.However, the dry process is the more modern and energy-

efficient configuration.Once the materials are ground, they are fed into a kiln for burning. In

modern kilns, the raw material is preheated (in four to five stages) using the waste heat of the

kiln, or it is pre-calcined. During the burning or pyroprocessing, the water is first evaporated

after which the chemical composition is changed, and a partial melt is produced. The solid

material and the partial melt combine into small marble-sized pellets called clinker.

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3. Finish Grinding

Cooled clinker is ground in tube or roller mills and blended by simultaneous grinding and

mixing with additives (e.g., gypsum, anhydrite, pozzolana, fly-ash or blast furnace slags)

to produce the cement. Drying of the additives may be needed at this stage.

INDIAN CEMENT INDUSTRY

The Indian cement industry with a total capacity of about 152 m tonnes (excluding mini plants)

in FY05, surpassed developed nations like the US and Japan and has emerged as the second

largest market after China. Although consolidation has taken place in the Indian cement industry

with the top five players controlling almost 50% of the capacity, the remaining 50% of the

capacity remains pretty fragmented. The per capita consumption of 115 kgs compares poorly

with the world average of over 250 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.

The present scenario of cement industry is very good in terms of demand and with the prices

going above Rs 160 to Rs 180 everywhere. Most importantly, the gap between the demand and

supply does not exist any longer in any part of the country.

Domestic consumption with 11 per cent increase and exports keeping up with the last year levels,

the Indian cement industry is expected to cross 150 million tonnes in dispatches, including

domestic consumption, and exports during 2005-06 from all plants put together, including mini

cement plants. Mini cement plants everywhere are operating at 100 per cent capacity utilisation.

The margins are improving in line with others.

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Earlier in 2004-05, the housing sector alone consumed 65 per cent of the total domestic

consumption. With the launch of several infrastructure projects, the housing consumption may

come down to 55 per cent as the infrastructure and other sectors are expected to move up to 45

per cent from the present 35 per cent.

Still, the main sector of consumption continues to be housing, including commercial space,

occupying more than 60 per cent. The current demand in the state for 2005-06 is expected to

cross 15 million tonnes (11.5 million tonnes). The development activity in Hyderabad alone will

give rise to an additional demand of 2-3 million tonnes a year with major projects like outer ring

road, satellite townships, international airport creating a huge demand for cement.

Weaker sections’ housing, construction of public toilets, schools in rural areas apart from several

private and public infrastructure projects will also give tremendous boost to the cement

consumption in the state. Most importantly, irrigation projects, worth nearly Rs 1 lakh crore, will

trigger unprecedented demand for the next 5-7 years.

The cement plants in the state are cost competitive vis-a-vis any plants in the country. But there

is always a scope for further modernisation and the industry is doing it. The Indian cement

industry is 70 years old. Some of the latest installations are the best in the world. Unlike in the

past, today the best technology is available for mini cement plants too.

The industry is so cost-efficient that few multinationals can compete without availing the

advantages entailed by a base in the country. So global players have been buying into Indian

companies. France-based Lafarge Cements, the Holcim group and Italcementi from Italy have

entered markets by investing in or buying out Indian companies. Holcim invested in Kalyanpur

Cements in 1990; Lafarge acquired Tata Steel’s plants in 1999; and Italcementi set up shop with

the K K Birla group, acquiring a 50 per cent stake in Zuari Cement in 2000.

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With an overall score of 36 per cent, the Indian cement industry gets a three leaves award — an

above average environment performance. Companies were rated on more than 150 performance

indicators — from assessing the environmental impact of raw material sourcing, through

assessing the environmental performance of the product to assessing their initiatives in corporate

environment and occupational health management.

COMPETITIVE FORCES INFLUENCING THE INDUSTRY

Entry Barriers: Capital cost, raw material availability and distribution network act as the major

entry barriers. Since these components involve huge cost, it is very capital intensive business.

This makes the entry of small players almost impossible.

Threat of substitute: There is no major threat of substitute. Bitumen is a substitute which is

used for concrete in roads.

Competition: There is intense competition within the industry due to intermittent overcapacity.

More than 40 percent of the market is ruled by few major players. Besides, marginal amount of

product differentiation also intensifies competition. This business involves huge storage cost and

high exit barriers in form of huge quantum of investment involved.

Bargaining power of the suppliers : The suppliers enjoy huge amount of bargaining power due

to monopolistic control of external factors like coal, power and railways for transportation.

Bargaining power of the buyers : The bargaining power of the buyer is on decline with increase

in retail sales in small quantities and bulk purchases, which was done mainly by the government

is also on decline.

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Governments Policies : Government policies have affected the growth of cement plants in India

in various stages. The control on cement for a long time and then partial decontrol and then

total decontrol have contributed to the gradual opening up of the market for cement producers.

Price and Distribution Controls (1940-1981). During the Second World War, cement was

declared as an essential commodity under the Defence of India Rules and it was brought under

price and distribution controls which resulted in sluggish growth. The installed capacity reached

only 27.9 MT by the year 1980-81.

Partial Decontrol(1982-1988)

In February 1982, partial decontrol was announced. Under this scheme, levy cement quota was

fixed for the units and the balance could be sold in the open market. This resulted in extensive

modernization and expansion drive, which can be seen from the increase in the installed capacity

to 59MT in 1988-89 in comparison with the figure of a mere 27.9MT in 1980-81, an increase of

almost 111%.

Total Decontrol(1989)

In the year 1989, total decontrol of the cement industry was announced. By decontrolling the

cement industry, the government relaxed the forces of demand and supply. By 1992, the pace of

overall economic liberalization had peaked; ironically, however, the economy slipped into

recession taking the cement industry down with it. For 1992-93, the industry remained stagnant

with no addition to the existing capacity.

Government Controls

The prices that primarily control the price of cement are coal, power tariffs, railway, freight,

royalty and cess on limestone. Interestingly, all of these prices are controlled by government.

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Coal

The consumption of coal in a typically dry process system ranges from 20-25% of clinker

production. This means for per ton clinker produced 0.20-0.25 ton of coal is consumed. The

cement industry consumes about 10mn tons of coal annually. Since coalfields like BCCL supply

a poor quality of coal, NCL and CCL the industry has to blend high-grade coal with it. The

Indian coal has a low calorific value (3,500-4,000 kcal/kg) with ash content as high as 25-30%

compared to imported coal of high calorific value (7,000-8,000 kcal/kg) with low ash content 6-

7%.

Electricity

Cement industry consumes about 5.5bn units of electricity annually while one ton of cement

approximately requires 120-130 units of electricity. Power tariffs vary according to the location

of the plant and on the production process. The state governments supply this input and hence

plants in different states shall have different power tariffs. Another major hindrance to the

industry is severe power cuts. Most of the cement producing states like AP, MP, experience

power cuts to the tune of 25-30% every year causing substantial production loss.

Infrastructure

To reduce uncertainty relating to power, most of the leading companies like ACC, Indian Rayon,

and Grasim rely on captive power plants. A few companies are also considering power-

generating windmills.

Limestone

This constitutes the largest bulk in terms of input to cement. For producing one ton of cement,

approximately 1.6 ton of limestone is required. Therefore, the cement plant location is

determined by the location of limestone mines. The major cash outflow takes place in way of

royalty payment to the central government and cess on royalties levied by the state government.

The total limestone deposit in the country is estimated to be 90 billion tons. AP has the largest

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share -- 34%, Karnataka 13%, Gujarat 13%, M.P 8%, and Rajasthan 6.5%. The plants near the

limestone deposit pay less transportation cost than others.

Transportation

Cement is mostly packed in paper bags now. It is then transported either by rail or road. Road

transportation beyond 200 kms is not economical therefore about 55% cement is being moved by

the railways. There is also the problem of inadequate availability of wagons especially on

western railways and southeastern railways. Under this scenario, manufacturers are looking for

sea routes, this being not only cheap but also reducing the losses in transit. Today, 70% of the

cement movement worldwide is by sea compared to 1% in India. However, the scenario is

changing with most of the big players like L&T, ACC and Grasim having set up their bulk

terminals.

Budget 2006-2007: Cement

Budget Measures

Customs duty on cement reduced from 15% to 12.5% in line with the reduction in peak customs

duty.

Budget Impact

The reduction in customs duty on cement would have no impact on the domestic cement sector

as strong international cement prices and lack of adequate port facilities would continue to

protect domestic cement players.

Sector Outlook

There was no major announcement for the cement sector in the Union Budget 2006-07.

Government's initiatives on the infrastructure and housing sector fronts would continue to

remain the key drivers. With no major capacity expansion in the pipeline in the country, the

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demand supply equation is expected to continue to remain favourable for cement manufacturers

and this will help in the improvement of prices. However, since the level of demand supply

mismatch is higher in the southern region, it will take longer to achieve demand supply parity in

that region. We expect average cement price to increase by around 5% to 6% per annum at the

national level in the medium-term owing to fundamental reasons.

Industry Wish List

Cement Manufacturers Association of India (CMA)

• Reduce excise duty on cement from the current Rs 408/tonne to Rs 250/tonne

• Lower royalty on cement grade limestone

• Fully meet coal requirements of the cement industry, reduce import duties on coal/non-

coking coal

• Provide incentives for construction of cement roads, continue the housing sector sops,

prioritise infrastructure projects such as ports, airports, etc.

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Budget over the years

Budget 2003-04 Budget 2004-05 Budget 2005-06Excise duty on cement hiked

by Rs 50 to Rs 400 per

tonne.

Major announcements on

the infrastructure side

including roadways, airports

and convention centres.

Tax breaks on specified

housing projects have been

extended till 2005.

The Finance Minister has proposed to

extend such a measure to other

infrastructure sectors. The IIG

includes the like of IDBI, IDFC,

ICICI Bank, SBI, LIC, Bank of

Baroda and Punjab National Bank.

The consortium will pool their

resources to an extent of Rs 400 bn.

Initially, airports, seaports and

tourism will be the target sectors of

the IIG.

The FM has also emphasized a great

deal on completion of various

irrigation projects and the

development of a multinational

standard port in Kochi.

Additional 2% education cess on all

direct and indirect tax.

Customs duty on pet

coke reduced from 20%

to 10%

Excise duty on clinker

increased to Rs 350 per

tonne from Rs 250 per

tonne.

Customs duty on cement

reduced from 20% to

15% in line with the

reduction in peak

customs duty rate.

Deduction of upto Rs 1

lakh on the repayment of

principal amount of

housing loan.

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Key Positives

Infrastructure spending –

The ongoing road construction project, airport privatization and river linking projects are

fundamental long-term growth drivers for the industry. The Golden Quadrilateral project is

already in its final leg, albeit delayed. Accelerated spending in infrastructure is likely to mute the

cyclicality aspect of the cement business.

Housing demand support-

Cement demand has remained healthy also on account of strong support from the housing sector.

Considering the steep shortfall in dwelling units in the country, prospects for the sector are

promising.

Demand-supply dynamics –

Unlike the last decade, the oversupply situation in the cement sector is likely to reduce, thus

bringing along with it some extent of pricing power. So, the operating profit growth is likely to

be faster than the topline growth in the long-term..

Consolidation trigger –

The industry is lot more consolidated now that it was ever in the past. Top five players account

for almost 50% of capacity. Fragmentation reduces pricing power and consolidated operations

improve efficiency apart from providing pricing power.

Key Negatives

Slow progress of reforms –

Infrastructure spending, in the recent past, has been largely restricted to the government. The

private sector has not been provided with adequate impetus, which impacts the overall growth of

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the economy. Liberalizing FDI in the public infrastructure sector could provide a big fillip. But

this has been slow to come by.

Susceptibility to coal and oil prices –

Cement is a commodity business and any company's ability to maintain margins is dependent on

the pricing environment apart from factors like access to coal and stable transportation cost. The

rise in coal prices and hike in petroleum product prices could pressurise margins.

Rise in interest rates –

Interest rates are showing signs of hardening. The impact of this on housing demand will play a

crucial role on the future prospects of the sector. The importance of the housing sector in cement

demand can be gauged from the fact that it consumes almost 75%-80% of the country's cement.

If this support wanes, it could tilt the odds against the cement manufacturers.

Cement Sector 2005

Indian cement industry witnessed an unprecedented growth as a sequel to the liberalization

policies that the Government initiated with partial decontrol in 1982 culminating in total

decontrol in 1989. Indian cement industry finds itself amongst the best in the world in terms of

quality, technology, efficiency and productivity parameters. Indian cement industry is built

indigenously by using domestically sourced inputs.

Hits of 2005

Technological change: Continuous technological up gradation and assimilation of latest

technology has been going on in the cement industry. Presently 94 per cent of the total capacity

in the industry is based on modern, energy-efficient and environment-friendly dry process

technology and only 6 per cent of the capacity is based on the old wet and semi-dry process

technology.

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Export growth: The year saw Indian cement becoming more competitive in the export market.

Cement exports at 4.07 million tonnes registered an impressive rise.

Production: The overall production of cement in the country registered an increase of 6.9 per

cent from 117.50 million tonnes in 2003-04 to 125.56 million tonnes in 2004-2005.

Consumption: The housing construction sector saw increased activity as a result of which there

was further improvement in the domestic demand for cement.

Energy conservation: The industry has been successful in its endeavor in seeking more energy

efficient processes by embracing new methods of production. A noteworthy achievement in this

connection is the manner in which the industry has created captive power generating capacity.

Environment friendly practices: The Indian cement industry is doing well in environment

conservation too by continuing to manufacture blended cements using hazardous industrial

wastes such as fly ash, industrial slag.

Marketing methods: Sales and marketing techniques adopted by the industry have undergone a

lot of change. The industry has given up the dated commodity style approach and is practising

market-focussed style.

Misses of 2005

Not a big exporter: Despite being the second largest cement industry in the world, Indian

cement industry has not ranked anywhere on the export front. Exports account for barely 3.2 per

cent of the total cement production, although considerable strides have been made during the last

two years.

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Associate Cement Company ………………………………………………………………………………………………………Cost hitting competitiveness: High cost structure is one of the prime concerns of the industry.

Because of this, the industry, even after considering the recent improvement in world prices, is

not competitive enough in the international market.

Unbalanced growth: The cement growth patterns differed from region to region with the East

recording the highest growth, the lowest growth being accounted for by the South.

Taxes: Indian cement industry continues to bear the burden of high taxes with cement being one

of the most taxed commodities attracting various levies such as excise, sales tax, royalties, and

cesses. A large share of manufacturing and distribution costs is dependent on Government

administered inputs, such as power, diesel, rail freight and coal. The overall tax burden on

cement represents 30 to 35 per cent of the end price paid by the consumer which is quite

disproportionate as compared to selling prices of other building materials and commodities. This

heavy burden undermines the industry's competitiveness and growth.

Returns: Even though the prices are reasonably stable, the industry is not able to realise selling

prices to assure adequate returns on capital employed.

Challenges in 2006

Domestic demand: Demand for cement is likely to grow at a healthy rate with greater focus on

building the country's infrastructure and the continued upward trend in housing.

Export potential: With a world-class product and a large production base, India is strategically

located to be a major exporter of cement - especially to countries of the SAARC region, those

around the Indian Ocean, in the Middle East and Africa.

Taxes & levies: There is one critical area that is a cause for concern for the cement industry as a

whole and that is taxes and levies. Industry surely needs government support in this regard. With

lower taxes industry will become more competitive both in domestic and global markets.

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VAT: It is unfortunate that various factors stand in the way of letting the VAT taxation system

cover the entire country. VAT works best in a unified market with a uniform sales tax structure.

If the few states that have not adopted VAT, adopts it in the coming year, industry is bound to

benefit from it.

Price stability: Cement prices are cyclical and generally the trend has been downwards. With no

significant addition to capacity, the industry is likely to enjoy stable prices.

No demand-supply mismatch: With no significant additional cement capacity in the pipeline,

the gap between demand and supply has narrowed down appreciably. Industry expects this trend

to continue in the coming year.

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COMPANY PROFILE

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THE ASOCIATED CEMENT COMPANIES LTD.

The history of ACC begins in 1936. War clouds were gathering over Europe; the economy of the

western world was deep in recession; and an Indian industry was reeling under severe

difficulties. But one man, undaunted by the times, was building a vision for the future. The man

was F.E. Dinshaw – a man of tremendous forsight and outstanding initiative. The vision was to

build a strong and unified cement industry that would not only withstand all difficulties but also

fulfill its responsibilities to the nation. The result was the amalgamation of ten of the existing

cement companies – belonging to four large industrial houses of that time, viz., the house of tata,

khatau, Dinshaw and kellick Nixon – to form the nucleus of what is today known as the

Associated Cement Companies Ltd. (ACC).

Barely three years later, the fledging 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 three – 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.

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 bredth of the

country.

For more than six decades now, ACC has been forging a pioneering path in making cement.

Along the way, it sharpened its expertise on the transplanting – to meet the specifics of local

operating parameters. In the process – setting standards, innovating, not just meeting needs, but

anticipating them.

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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 formost user of the road

transport network services for inward and outward movement of materials and products.

ACC has also extended its services overseas to the Middle East, Africa, and South America,

where it has provided technical and managerial consultancy to a variety of consumers, and also

helps in the operation and maintenance of cement plants abroad. Currently it is extensively

involved in the operations of the Yanbu Cement Works in Saudi Arabia for last 22 years.

The house of Tata was intimately associated with the heritage and history of ACC, roght 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 is a professionally managed company ascribing value to responsible values to responsible

actions, responsive leadership and ethical corporate conduct. It is one of the top 30 most valuable

companies in India, known and respected across the country. It is also one of the top ranked

organizations on various performance parameters.

Manufacturing and marketing of cement, ready-mix concrete, refractories and refractory

products are the main business of ACC. Further the company is also into consultancy and

engineering services. ACC's manufacturing base consists 14 cement plants spread well all over

India, two refractory plants one each at Maharashtra and MP and 6 RMC plants near to four

metros of India and Bangalore.

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In Jan. 1999, the company came out with a rights issue to fund its capex projects involving

modernizations/ expansion of existing plants and creation of new capacity at Wadi. The company

meets around 83% of its power requirements from its captive power plants. The captive power

plant at Jamul and Kymore with an capacity of 25 MW each was commissioned in Nov 1999.

The 15 MW captives power plants at Chanda, Tikaria and Madukkarai were commissioned

during the year 2002-03.In 2000, Tata group has exited from the company by divesting their

14% equity stake in favour of Gujarat Ambuja group. Notably, Gujarat Ambuja group is the

most efficient and aggressive cement group in India. The disinvestment was done in phases at Rs

370 per share.

ACC has completed the modernization and expansion of the Chanda and Madukkarai cement

plants for increasing their capacities to around 1 MTPA each. These plants started production

from 1 September 2000 and 1 October 2000 respectively. The de-bottlenecking at Chanda, Gagal

and Madukarrai plants have added 1 MT to ACC's installed capacity. The 2.6 MTPA Cement

plant at Wadi with largest Kiln in the country has started its commercial production from Oct

2001.The Company has decided to exit from the non-core businesses in an optimal manner. The

company has completed divestment of its stake in Float glass India Ltd ([13% stake] in 2001-02),

International Ferrites Ltd.([35% stake] in 2002-03) and Bridgestone ACC India Ltd.([19% stake]

in 2002-03). Further it has also sold its stake (5, 00,000 shares) in Tata Industries in 2001-02.

The company is making all efforts to hive off the ACC Nihon Casting, a 100% subsidiary of

ACC manufacturing alloy steel casting but has not met success yet. At the same time of existing

from non-core businesses the company has not failed to invest in core activities it has acquired

76.01% stake in Eternit Everest from Etex Group in Feb 2002.

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Wadi cement works, Gulbarga, Karnataka

The Wadi cement works at 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 20.0 lakhs plant is 40 lakh tones per annum. The factory is situated at

the south central part of the country in the state of Karnataka. It is well conceived by rail and

road. The nearest important railway junction, wadi is on the central railway between Solapur and

Guntkal. Wadi station is about 1 kilometer from the plant site. The plant machineries were

originally supplied by M/s. Taylor & M/s. ABL and later have been renovated and upgraded over

the years.

Geographically the site extends from East longitude 76 57’ 16” to 76 59’ 26” and north latitude

17 4’5”. The nearest village is wadi at a distance of about 1.5 km from the site on East-South-

East direction. The existing colony of ACC wadi is at a distance of about 1.2 km east of the site.

The nearest railway station is wadi at a distance of about 1.5km. Wadi is a main junction on the

broad guage line, connecting wadi with Mumbai, Hyderabad, Chennai and Bangalore.

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

from the 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.

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Wadi, The place

Wadi is a small town in the Gulbarga District of Karnataka and has only recently becomes a

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

– Gulbarga and at distance of about 200 Km from Hyderabad in Andhra Pradesh. Mumbai,

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

relatively inaccessible from wadi, are New Delhi and Kolkatta, with journey times in excess of

30 hours.

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 terrain. The level of

education is fairly good in main wadi but poor in the surrounding villages. Health and Hygiene

and drinking water are major concern of the people.

The region is a Limestone rich belt leading to the establishment of other cement units and

ancillary industries. There are Rajashree and Vasavadatta Cement units at Malkhed and Sedum

Respectively, both places at a relatively short distance from wadi. Alstom Boilers Limited has a

unit at Shahabad.

Employment Profile for Wadi Cement Works

Wadi works directly and indirectly provides livelihood to 10000 people. It employs about 1600

people as permanent employees and about 500-800 as contract labour. In addition there are

people working as transporters, Drivers, Cook etc. Apart from these there are a large number of

businesses flourishing on account of ACC – these are as diverse as Tailoring to pan shops to

STD booths, etc.

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Employee and Community Welfare

Employees and community welfare is an integral part of the activities of the organization. It is

committed to being an ethical and responsible corporate citizen operating with well-defined

safety and Health Policy as well as Environmental policy to take care of health, Safety, and

environmental concerns for its employees as well as others who might be affected by its

operation. These policy guidelines bind the management as well as employees of wadi works.

ACC has been working closely with village panchayat and other local bodies in providing better

facilities to the people. It runs a decent Dispensary/Hospital for its employees and their family

members and organizes health camps; polio immunization programmes, and conducts regular

eye camps for the benefit of the local population. In association with various Government and

Non-Government agencies. It also takes care of the Drinking water problems of the people in

difficult times.

ACC has played a pivotal role in local development by constructing concrete roads in and around

Wadi. It has built 10,000 meters of concrete road in recent times. It is involved in building public

toilets, providing free cement for construction of temples and mosques, constructing water tanks,

Panchayat buildings and other similar activities.

It conducts training programmes on safety as well as Quality of life to bring about changes in its

employees. In addition to the above, activities like sports, cultural programmes, and celebration

of important festivals are carried out regularly to improve the quality of life at Wadi.

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COMPANY PROFILE WITH RESPECT TO 7’S

McKINSEY’S 7s MODEL

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Strategy

Skills

Staff

Structure

Shared Values

System

Style


GOALS AND SHARED VALUES

The shared values are those which guide all the employees in a similar way. These values are

practiced by the employees irrespective of profitability. These values are not formal set of

objectives. These values determine the image of the organization in the society.

The goals are not the formal goals. These are the goals which go beyond the written set of goals

and objectives. The values and goals adopted ACC are:

• Providing quality of cement to the customer

• Continuous improvement of quality of the product

• Customer satisfaction

• Striving for the overall development of the products

• Image on competitive market

STRATEGIES

Strategy is the choice of direction and company adopts to achieve its objectives in a competitive

situation. Any statements on overall are functional strategy that the company may wish to share.

Strategy in general is an art of planning and directing an operation in a war or campaign. It is a

skill in planning or managing any affair well. It is a policy or plan design for a particular

purpose.

Strategy of the company:

Marketing team will put greater accent on qualitative selling encompassing various facets of

marketing viz price, collection, reconciliation bring up correspondences up to date.

Quality Control:

Modern analytical methods ensure that only the best quality cement is used to construct. ACC is,

perhaps, one of the first companies to include its commitment to environmental protection as one

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Associate Cement Company ………………………………………………………………………………………………………of its corporate objectives. It has won several prizes and certificates of merit for the best

environmental measures undertaken at its various mines - particularly for its programs involving

'greening,' reclamation and rehabilitation, afforestation, top soil management, noise abatement

and vibration analysis, general aesthetic beauty, and overall performance.

The environmental protection program, undertaken on an all-ACC basis, encompasses areas such

as non-mineralized lands and safety zones, waste dumps in mines and in villages. In addition to

such aesthetic protection, rehabilitation and reclamation programs - designed to better manage

the environment - ACC pioneered the use of sludge-, fly ash -, and slag-based blended cements.

Wherever required, Environment Impact Assessment (EIA) and Environment Management Plan

(EMP) are prepared for mines and plants.

The environment division has a multidisciplinary team of technologically strong and technically

competent professionals to plan and administer various environmental protection jobs not only

for ACC but also for clients. Its capability and expertise include consultancy services for a

variety of programs and projects.

STRUCTURE

Structure refers to the organizational arrangements for performing the tasks and activities. The

structure could be functional, regional, product wise etc. it also establishes the interrelationship

between various functions.

While these groups form the core management team that frames and guides corporate policy,

ACC is proud of its manpower strength of about 9,000 people, who comprise experts in various

disciplines assisted by a dedicated workforce of skilled persons. Quite a number of them have

logged many years of service with the organization. They come from all parts of the country and

belong to a variety of ethnic, cultural and religious backgrounds. Because of such a cosmopolitan

make-up, ACC can rightly be said to embrace within its fold a family that forms a 'mini-India'.

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ORGANIZATION STRUCTURE

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CHAIRMAN

Non-Executive Nominees Dir Investors Comite

Joint Mgr project

Executive Dir Audit comitte

Mgr Engr

Finance Mgr Prod Mgr Mrkt Mgr Research Mgr HRD MgrTech Mgr

Asst Mgr Asst Mgr

Asistants

Electric Mgr Insrtument Mgr

Assistants Assistants


STAFF

Success of every company depends on the ability of its staff. To have right person at right job, a

proper selection process has to be carried out. Training and Development programs are very

much essential to improve the Competitiveness of the existing staff. This section contains the

process by which employees are recruited, deployed and developed. It includes Recruitment,

Appointment, Induction, Training, Increment, and Counseling.

An enterprise like ACC is part of the national community with responsibilities towards a wide

range of institutions and individuals. And the one closest to ACC is its concern to train

manpower for the cement industry as well as in specialized trades and subjects for various

industries.

The Sumant Moolgaokar Institute (SMEI) - is an eloquent testimony to the ACC commitment to

training. It provides exhaustive training in various trades like electricians, instrument mechanics,

diesel mechanics, fitters, machine tool operators, welders, and foremen in various disciplines.

The institute has turned out a vast number of artisans and foremen who are manning senior

positions in cement and other industries.

ACC's commitment to training, and the company's philosophy of sharing expertise by training

manpower for the cement industry as a whole is very well known. It has been substantiated by an

allocation by the World Bank/DANIDA groups of a grant to the Regional Training Center

(RTC), at the ACC plant at Jamul, for the benefit of cement plants in central and eastern India.

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SYSTEM

Systems do not refer to hard copy reports and procedures but also to informal mechanism such as

meetings and conflict management routines. It is important that systems emphasis key themes,

but at the same time it should permit discretion and exception. Systems are powerful influences

of behaviour. System includes all the rules, regulations and procedures, both formal and informal

that complements the organizational structure. Major existing systems for it like marketing,

finance, HRM, operations, quality should be documented.

ACC sells its product

• Directly to the customer

• Through the dealers

SKILLS

These are the qualities or characteristics of the individuals. The skills can be acquired by

learning, observation and experience.

ACC has the following skills in its employees in key positions

• Leadership

• Good knowledge of the market

• Visualization

• Coordinating

• Technical skills

The analytical skills development program (ASDP) helps management trainees improve thought

processes and analytical ability in order to uncover and examine problems more effectively.

Deputy Managers are put through a managerial skills development program (MSDP) to instill the

skills required for responsible leadership and analytical business situations. A management

competency development program (MCDP) supports this with niche training for managers in

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their respective fields. And the cross-functional skills development program (CFSD) helps

broaden their outlook. Finally, the general management course (GENMANCO), and the strategic

leadership development program (SLDP) for senior managers and vice presidents, respectively,

help them to develop responsiveness towards the current and future challenges by sharpening

managerial skills.

STYLE

STYLE OF LEADERSHIP

It refers to the leadership style of the management of the organization. Organization culture also

depicts the style of the organization. Style is one of the seven levers, which top managers can use

to bring about organizational change.

Every employee of ACC will strive for customer satisfaction by providing quality of product at

competitive rates and timely delivery through continual improvement.

PRODUCT PROFILE

ACC's range of cements and blended cements are marketed through a network of 11 regional

marketing offices, 16 area offices, and 160 warehouses. This is backed by a countrywide

network of over 9,000 dealers who, in turn, are assisted by their sub-dealers. Such an all-

pervasive marketing network has enabled ACC to consolidate itself with a national presence.

And the customer is assured of being able to get quality ACC products when and where he wants

them.

Complementing this is a unique customer services cell comprising qualified civil engineers, who

assist and advice customers with prior and post sales service. This service begins with selection

of type and grade of cement (where applicable) to troubleshooting and on-site assistance.

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Keeping pace with changing times and an ever-growing need for specialized services, ACC has

begun offering its marketing expertise and distribution facilities to other producers in cement and

related areas. However, a precondition of all such agreements is quality control supervision to be

carried out by an ACC expert located at the franchisee's plant. ACC has franchising agreements

for cement marketing with Alcon Cement Company, Goa.

ACC also exports cement to SAARC nations, especially Nepal and Bangladesh on a regular

basis. Besides Ordinary Portland Cement, these exports include custom-tailored cements.

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

and Ready Mix Concrete.

Ordinary Portland Cements

ACC Cement (OPC 43 Grades)

ACC SAMRAT (53 Grade OPC)

Composite Cements

ACC SURAKSHA (A Composite Cement)

ACC SUPER (Slag-based Blended Cement)

Special Cements

Sulphate Resisting Portland Cement (SRPC)

Oil Well Cement (OWC)

Low Alkali Cement

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http://www.acclimited.com/newsite/en/cement_products_en.asp#lac%23lac

http://www.acclimited.com/newsite/en/cement_products_en.asp#owc%23owc

http://www.acclimited.com/newsite/en/cement_products_en.asp#srpc%23srpc

http://www.acclimited.com/newsite/en/cement_products_en.asp#super%23super

http://www.acclimited.com/newsite/en/cement_products_en.asp#SURAKSHA%23SURAKSHA

http://www.acclimited.com/newsite/en/cement_products_en.asp#SAMRAT%23SAMRAT

http://www.acclimited.com/newsite/en/cement_products_en.asp#opc43%23opc43


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 with golden yellow bands along the sides.

ACC SAMRAT (53 Grade OPC)

ACC SAMRAT is the brand name for a product developed recently by our Research and

Consultancy Directorate. It 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 SAMRAT 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 with oxford-blue bands along the sides.

COMPOSITE CEMENTS

ACC SURAKSHA (Composite Cement)

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Associate Cement Company ………………………………………………………………………………………………………This is new, specially composite cement, produced by intergrinding 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. It is available in specially designed 50-kg bags with parrot-green bands along the sides.

ACC SUPER

ACC SUPER 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.

It matches 43 grade strength levels and has superior performance characteristics when compared

to Ordinary Portland Cement.

It is available in specially designed 50-kg bags with chrome-orange bands along the sides.

SPECIAL CEMENTS

Sulphate Resisting Portland Cement (SRPC)

The action of soluble sulphates on OPC results in softening, enormous expansion, and finally,

disintegration of the concrete structure.

Sulphates attack the tricalcium aluminate (C3A) phase of Portland cement. This reaction leads to

cracking and disintegration of concrete. Concrete can be protected by using ACC SRPC, which

conforms to IS: 12330-1988.

Oilwell Cement (OWC)

OWC is used for cementing gas and oil wells at high temperatures and pressures. This cement

has a class G recognition from the American Petroleum Institute.

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Associate Cement Company ………………………………………………………………………………………………………Oil well cement, used in the petroleum industry for cementing gas and oil wells.

Low Alkali Cement

Low Alkali cement is used to prevent alkali-silica reaction and consequent deterioration of

concrete. This cement produces a safe concrete when the aggregates contain reactive silica. The

standards prescribe a limit of 0.6 % of total alkalis for this purpose.

ACC produces low alkali cement with an alkali content that is very much lower than 0.6 %. The

cement conforms to BIS and ASTM specifications. The compressive strength of this cement

surpasses 43 grade levels.

Plant and Facilities

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.

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Associate Cement Company ………………………………………………………………………………………………………Apart from considerably strengthening its core business of cement, ACC is, today, India's largest

refractory manufacturer and supplier, the largest research and consultancy organization in the

Indian cement sector, and one of the pioneers in the area of advanced materials.

Over the years, there have been several improvements in manpower productivity, thermal and

electrical energy efficiencies. In particular, power and fuel consumption have been at

considerably reduced levels of 97 kwh/ton as against 112 kwh/ton in 1991, and 800 Kcal/kg

clinker as against 1114 Kcal/kg clinker in 1991 respectively. The improved manpower

productivity is evident through a very significant reduction in man-hours/ton of cement from 4.3

in 1991 to 1.5 in 2001.

In order to achieve further improvements, ACC recently adopted the most advanced TPM, TQM,

and benchmarking practices.

The dedication to consistent product quality is ensured by online monitoring systems. Nine of

our 12 cement plants already have the ISO 9000 certification. In addition, two units have

obtained the ISO 14000 certification for environment friendly production.

Architects of success

The ACC Board comprises executive, non-executive, and nominee directors. This group is

responsible for determining the objectives and broad policies of the Company - consistent with

the primary objective of enhancing long-term shareholder value. The Board meets once a month.

Two other small groups of directors - comprising Shareholders'/Investors' Grievance Committee

and Audit Committee of the Board of Directors - also meet once a month on matters pertaining

to the finance and share disciplines.

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Associate Cement Company ………………………………………………………………………………………………………During the last decade, there has been a streamlining of the senior management structure that is

more responsive to the needs of the Company's prime business. A Managing Committee -

comprising, in addition to the Managing Director and the two executive directors, the presidents

representing multifarious disciplines: finance, production, marketing, research and consultancy,

engineering and human resources - meets once a week.

Besides these bodies, there are senior executives and other regional managers - based at the

Company's corporate office and at its marketing offices and manufacturing units - who

contribute to the development and operation of the various functions.

While these groups form the core management team that frames and guides corporate policy,

ACC is proud of its manpower strength of about 9,000 people, who comprise experts in various

disciplines assisted by a dedicated workforce of skilled persons. Quite a number of them have

logged many years of service with the organization. They come from all parts of the country and

belong to a variety of ethnic, cultural and religious backgrounds. Because of such a cosmopolitan

make-up, ACC can rightly be said to embrace within its fold a family that forms a 'mini-India'.

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RESEARCH METHODOLOGY

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Research Methodology

Title Of The Project:”Study of ACC DEALERSHIP NETWORK in the city of Belgaum”

Scope of the Study :

The scope of the present study was limited to the dealers in Belgaum city.

Purpose of the study:

The main purpose of the project was to know dealership network of ACC cement.

Objectives of the Study:

Primary objective:

To find the strategies to strengthen the dealership network of ACC Ltd. in Belgaum city.

Secondary objectives:

• To understand and measure the satisfaction level of dealers.

• Understand dealer’s expectation from the company.

• To know customer loyalty regarding ACC Ltd. From dealers.

• Benefits delivered to dealers from ACC Ltd.

• Strategies to be adopted for increasing the sales of ACC Ltd.

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Methodology

In order to fulfill the study objectives a research methodology is developed. A descriptive

research is conducted in order to know the cement market based on the following findings.

Survey Profile:

The information is gathered through the survey of dealers. The survey was conducted

through a structured questionnaire.

The response was collected from 18 dealers. The research was basically a survey of all the

ACC cement dealers in Belgaum region.

Based on company needs, requirements and objectives of the study a detailed questionnaire

is designed.

The initially developed questionnaire is tested for checking the effectiveness of the

questionnaire finally the survey was conducted in Belgaum region

Limitations Of the study:

The up most care has been taken in completing this research work, but some of the limitations of

the project which are beyond my control. These limitations are in no way draw back of the

project, because of the Information is gathered from the persons who have got the first hand

experience of the consumers buying behavior.

• Study is limited to Belgaum city.

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• Number of dealers surveyed are 18

• Findings are based on the information from the dealers.

• Some dealers might not have given the each information due to various reasons.

• Time for the study is less.

ANALYSIS AND FINDINGS

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Analysis and Findings

Reason for opting ACC Brand:

Observation: A best service for particular brand has influenced 73% of dealer to deal with this

brand. Other 16% dealer says higher commission influenced them in choosing the brand to deal.

Another 11% opted this brand because of greater popularity in the minds of the consumer.

Table-1: Shows why dealers opted ACC brand.

Particulars No. of Dealers % PercentageHigher Commission 3 73%Greater Popularity 2 16%

Services 14 11%Total 18 100

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Reason for choosing the brand to deal.

32

14

0

2

4

6

8

10

12

14

16

Higher Comission Greater Popularity Best Services

Factors

Inference: Once dealers get a best service from the company they will never switch to another

company brands.

Cements available with the dealers:

Observations: From the survey, type of cements the dealers dealing in market is

50% of blended cement

34% of pozolana Portland cement

16% ordinary & standard cement

Table-2: Shows types of cement dealers dealing

Type of Cement No. of Dealers % percentageBlended 9 50%O.P.C. & S.R.C. 6 34%P.P.C. 3 16%Total 18 100

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Types of Cement Dealing

O.P.C., 3S.R.C., 3

P.P.C., 8

P.S.C., 0

Blended, 9

Inference: Blended cement has captured almost half of the market. This can be marketed more

by maintaining the strength and improving the packing.

Extra facilities provided to dealers:

Observations: On asking what type of special facilities provided by the company. The response

was as follows

58% of the dealers have quality completion redressal facility.

21% of the dealers have credit facilities.

14% dealers have transportation facilities.

7% dealers have location facilities

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Extra Facilities Povided by ACC

Quality Completion Redressal

58%

Credit Facilities

21%

Transportation14%

Location7%

Inference: As the company has provided certain facilities to dealers to retain them. This relation

can be improved by providing some more facilities especially location facilities to attract new

dealers to deal.

Advertisement satisfaction of dealers

Observations: Out of the total surveyed dealers 88% of dealers are satisfied with the

advertisement made by the company. But there is still promotional advertisements needed to

increase the awareness and volume of sales of the cement brands, says 12% of the dealers.

Table-3 shows how many dealers are satisfied with the advertisements.

Opinion No. of dealers % percentageYes 16 88%

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Associate Cement Company ………………………………………………………………………………………………………No 2 12%Total 18 100

Advertisement Satisfaction

16

2

02468

1012141618

Yes No

Response

Level

of

sati

sfa

cti

on

Inference: More advertisements create more awareness regarding the brand, which will in turn

help the company to increase its sales volume.

Dealers opinions in regard to ACC cement :

Observation:

Brand name: Out of the total respondents 88% of the dealers feels brand name is most popular.

remaining 12% dealers feels it is popular.

Price: 84% of the dealers says Compare to other brands in the market the ACC cement is

costly .whereas 16% says moderate.

Quality: Quality as compare to other brands is superior says 84% of the respondents and the

remaining 16% says better.

Availability: Out of the total surveyed respondents 80% dealers get the cement delivery easily;

remaining 20% dealers should wait for the delivery of cement.…………………………………………………………………………………………………KLS’s IMER BGM

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Associate Cement Company ………………………………………………………………………………………………………Packing: 56% of the dealers surveyed says the packing of cement is in fine condition whereas

remaining 44% says packages are available in good condition.

Credit Facilities: Major portion of 56% dealers are not provided credit facilities, 28% of

dealers are partial to credit and remaining 16% dealers are fully benefited by credit facilities.

Dealers Opinion

2

15 1514

10

3

16

3 34

8

5

0

10

02468

1012141618

BrandName

Price Quality Availability Packing CreditFacilities

Factors

Resp

on

se

Inference: Even though the brand name is most popular and quality is superior, the sales can

be improved by providing credit facilities and by maintaining same or reducing the price, as of

the leading brands.

Regular customers: The following table shows the regular customers information. Who

regularly visit the dealers for cement, in need.

Table-4: Shows regular customers of cement.

Customers % PercentageDirect Party/People 51%Private Builders/Contractors 39%Govt. Institutions 10%

Observation: It seems from the survey that the dealers come in contact with direct party

regularly. About 51% of direct party is regular customers. 39% are private builders. And the

remaining 10% are Govt. institutions.

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Associate Cement Company ………………………………………………………………………………………………………Inference: It seems that the dealers have to face direct party regularly. So to maintain the

relations with them, it is necessary to offer them best services by dealers.

Attributes like by customers: The following information is collected from the dealers to

understand what customer more like in the cement.

Observation: The study shows 73% of the customers come to buy ACC cement for its

availability i.e. it is easily available and strength the cement has. Remaining 16% come for the

price as compare to other prices. An 11% come for better setting time.

Table-5: Shows attributes like by customers in percentage.

Attributes % PercentageAvailability & strength 73%Price 16%Setting Time 11%

Inference: The strength and availability traps the almost market but, the price and setting time

causing more difficulty to attract the customers. It can be improved by decreasing or maintaining

the same price as compare to the leading brands.

Schemes provide by ACC company: The following chart shows the schemes provided to

the dealers on there sales performance.

Observations: Out of the total surveyed dealers 45% of the dealers get regular schemes from the

company on there sales performance. Remaining 55% won’t get regular schemes from the

company

Table-6: Shows No, of dealers who get regular schemes.

Response No. of dealers % PercentageYes 8 45%No 10 55%Total 18 100

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Schemes Provided by ACC

8

10

0

2

4

6

8

10

12

Yes No

Inference: It seems that most of the dealers didn’t get regular schemes. By providing them more

promotional schemes sales target can be achieved and which helps in developing dealership

network.

What click the dealer more:

Observations: Nearly 43% want more profit per bag, and they don’t want any schemes from

the company. The 27% dealer says they would like to have commission on sale per month.

Another 15% want to go for holidays trips to foreign on company’s expenses. Remaining 15%

are not very clear about there expectations from the company.

Table-7: Shows expectation of schemes by dealers.

Expected Schemes % PercentageMore Profit per bag 43%Commission on sales 27%Foreign Trips 15%Others 15%

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Expectation of Schemes

Foreign Trips15%

More Profit43%

Commission27%

Others15%

Inference: The most of the dealers are interested much in the promotion schemes. They want

more profit for these businesses. As there are numerous brands are in the market, there is also

competition between dealers of same brand they have doing business on very low margin.

Sales of ACC:

Observations: The sale of ACC cement seems to be growing from the survey. About 88%

dealers say sale of ACC is very good. And the remaining 12% dealer’s response was moderate

sales. It was good to see from the study, no one says the sale was low.

Table-8: Shows how the sales of ACC from dealers view.

Sales No. of dealers % PercentageVery Good 16 88%Moderate 2 12%Low 0 0%Total 18 100

The following chart provides the information about the sales of ACC cement.

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Sale of ACC

16

2

00

2

4

6

8

10

12

14

16

18

Very Good Moderate Low

Inference: Even though the sale is very good, there is still aggressiveness is needed to increase

the sales.

What is needed to increase the sale of cement: Following table shows the response

from the dealers for increasing the sale.

Table-9: shows dealers response to increase the sales.

Strategies % PercentageMore promotional schemes to dealers 33%

Advertisements 16%Decreasing the price 24%

Maintaining the same price 27%

Observations: The 33% of the dealers want attractive schemes to increase the sale from the

company.27% says the sale will increase by maintaining the same price as of the leading brands.

The 24% feel that, as this brand is costly in the market as compare to the leading brands it will be

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Associate Cement Company ………………………………………………………………………………………………………more helpful to increase the sales volume by decreasing the price. Another 16% dealers says

more aggressive advertisements are needed to trap the market and improve the sales volume.

FINDINGS

The following are the findings as a result of the survey on dealers.

• Most of the dealers have chosen ACC brand because of the good services provided by the

company. And they are dealing with large amount of blended cements.

• Company has provided various facilities to there dealers, like quality completion

redressal is one among them. Were most of the dealers are enjoin the benefits.

• The company is making better advertisements to attract the consumers and to create

brand awareness in the minds of the customers.

• Brand name seems to be most popular in dealer’s perspective, quality of cement is

superior as compare to other brands, and also the company provides on time delivery to

its dealers.

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• Even though the sales of ACC are very good, there are certain factors which become

barriers to the growth of sales, like higher prices as compare to other leading brands, and

the packing of bags.

• Credit facilities also causes problem for dealers to deal with the customers. As most of

the customers take cements on credit basis.

• Consumers come to buy ACC cement because it is readily available in the market and as

compare to others it is strengthier in nature.

• Most of the dealers are getting foreign trips on there sales performance, they are

expecting more profits per bag and commission on sales per month.

SUGGESTIONS & CONCLUSION

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SUGGESTIONS

• Company has to avail a credit facility to the dealers, so the Dealers will avail the credit

facility to the customer.

• Take the consent of the dealer with respect to the marketing policy this will help to

enhance the relationship between dealer and the company

• To try to provide more and more profit to the dealers, and Conduct counseling for

dealers.

• Doing performance appraisal of each dealer and find out the reason for decrease in sales.

• Organize meetings in Belgaum office for dealers once in two months. It helps to build

good company dealer relationship…………………………………………………………………………………………………KLS’s IMER BGM

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• It is suggested to reduce the price or maintain the same as compare to the leading brands,

so that the dealers will not face the problem of dealing the brand.

• Even though advertisement is up to the satisfaction it is suggested to do it on regular basis

to refresh the consumer mind.

• Packing standard has to be improved, and it is better to use good quality of packing bags.

CONCLUSION

ACC offering high quality products for customers. The company has high goals and objectives.

The company has made sincere efforts to achieve its goals and objectives over the years. The

Present level of performance of the company is good.

Thus from the findings in the study it can be fairly concluded that, ACC has good market

potential and image. Brand awareness and distribution channels are still the best which their

competitors lack right at present. ACC has very good sales in urban as well as in rural. Steps

have to be taken in creating awareness among people. And company should concentrate more on

developing dealership network.

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BIBLIOGRAPHY AND ANNEXURE

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Bibliography

• Marketing Management - Philip Kotler

• Marketing Research - Tull and Howkins

• Marketing Research - D D. Sharma

• www.acclimited.com

• www.google.com

• www.bma-india.com

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http://www.google.com/

http://www.acclimited.com/


Sir/Madam.

I am a student of MBA fourth semester studying in KLS IMER. I am undertaking a concurrent project on

cement dealers in the partial fulfillment of my course. I request your good self to spare me five minutes of

your valuable time to fill this questionnaire.

Name of the dealer:___________________________________

Address:_______________________________________________ _______________________________________________

1) The brand/brands you are dealing with.I)_______________________II) ______________________III) _____________________

2) You have opted this brand because ( Please tick )

Higher commission Greater popularity services

3) What types of cements are available with you? ( Please tick )

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O.P.C. S.R.C. P.P.C. PSC Blended

4) What are the extra facilities provided to you by the company?

Quality completion redressal Location/Shop

Credit facilities Transportation

5) Are you satisfied with the advertisements made by the company?

Yes No

If No give reasons___________________________________________________

6) What is your opinion about following factors with respect to ACC cement.?

Brand name : Popular Most popular

Price : Costly Reasonable Cheap

Quality : Superior Better

Availability : Readily available Waiting

Packing : Fine Good

Credit facilities : Yes Partial No

7) Who are your regular customers?

Govt.Institutions Private builders/contractors Direct party/people

8) What attribute of ACC are most like by customers?

Price Strength Availability Setting time

9) Has the company provided you any schemes?

Yes No

If Yes, Please mention____________________________________________

10) What types of scheme you would like to have from ACC Ltd.

Sponsoring of foreign trips More profits per bag

Reasonable commission on sales per month Others

11) In your opinion how the sale of ACC is cements?

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Very good Moderate Low

12) What is needed to increase the sales of any cement brand?

More promotional scheme for dealers

More advertising is necessary

Significantly decreasing the price comparing to leading brands

Maintaining the same price as of the leading brands.

13) Any special suggestions emerging out of your experience.

To manufacturers_______________________________________________

“Thank you for your valuable time”

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acc cstudy on acc dealership network in the city of belgaum

Education

belgaum anil

marketing project

project work

acc dealership network

marketing manager of

city of belgaumat acc

words of thanks

profound thanks