ambuja
TRANSCRIPT
GUJARAT AMBUJA CEMENT LTD.
A case study
mukul kumar kushwahaGuru prasad mandal mistu banerjee
sonu gupta
EVOLUTION
1981- ambuja cements private limited established by Narotam satyanarayan sekhsaria
1983-changed to gujrat ambuja private limited,public issue, inception of first plant at ambujanagar(MD-sekhsaria, chairman-suresh neotia)
1986-Ambuja Cements' first cement manufacturing plant at Ambujanagar, Gujarat worth 0.7 million tonnes capacity commences production
1987-GIIC sold stakes inGACL to sekhsaria.1993-guratambuja 2nd plant, 1MTPA
1995-3rd plant- ambuja cements himanchal unit
1996-Cement ambuja international limited, mauritius
1996- ceylon ambuja pvt ltd,srilanka
3rd unit at ambujanagar1MTPA
Grinding and packing units at panvel and ropar
1997- aquired sick unit of modi cements, raipur 1.4 MTPA
1998- nadikudi and proddatur limestone mines, andra pradesh
1999-got 51% stake in DLF cements delhi(1.4 MTPA), made the forth largest manufacturer in india. Also 7.2% stake inACC
2001-plant at chandrapur ,maharashtra(2 MTPA)
questions
Some statisticsIndian Cement Industry - Companies and their Marketshare (2001)
REGION EAST SOUTH NORTH WEST TOTAL
(Mkt. Size in
million tonnes) 14 23.8 28.1 24.6 90.5
Grasim-L&T
Combine 20 21 13 37 22
GACL-ACC 24 10 36 23 24
JK Group - - 16 - 5
India Cements - 22 - - 5
Madras Cements - 22 - - 5
Lafarge 23 - - - 3
Others 33 35 35 40 36
Some statistics Cement Companies - Operating Margins
(%) FY97 FY98 FY99 FY00 FY01
Grasim NA NA 14 13 17
L&T NA NA 11 15 17
ACC 14 11 7 9 16
India Cements 25 24 25 23 24
Madras Cements 35 33 31 31 31
GACL 36 36 36 36 37
Some statistics Cement Companies - Capacity Utilization (1996-97)
Company (in %)
Grasim 79
L&T 87
ACC 95
India Cements 94
Madras Cements 98
GACL 102
Reasons behind the success
• Operational excellence and cost cutting• Aggressive productivity improvement
Operational excellenceLOCATIONS PLANNING
• GACL's units in the states of Gujarat, HP and Punjab also received sales tax incentives
• GACL continually expanded capacities in Gujarat and Punjab.
• Himachal Pradesh plant had the advantage of prioritized power supply
• Himachal Pradesh region was cement deficit at that point of time. Also, the plant was closer to the mines and the Punjab grinding unit
• H P had huge limestone deposits
questions
Operational excellenceTRANSPORTATION
• 3 HILLS BETWEEN QUARRIES AND PLANT AT HP
• IN HOUSE BUILDING OF CONVEYOR(REDUCED DIST. FROM 17 TO 2.8 KMS{800TPH})
questions
Operational excellenceTRANSPORTATION
• GUJRAT TO MUMBAI• PLANT SITE• SHIPPING TERMINAL• SILOS• SHIPS• PUMPED TO
TANKERS(FLUIDISATION)• RAILWAY SIDING• Rs 400/tonne VS
Rs1800/tonne• Reduced packaging cost• Quality increased
cost
Aggressive productivity development
• Sent its engineers to australia for safety practices in mining
• Surface miner used(efficient both in extraction and energy)
• Kiln operations• Preheaters• Computerised process
control system
• Yielded 0.17MTPA more• Improved capacity
utilisation by 24 hr monitoring systems(143%)
• Zero error electronic rotary packing m/c
• Investment in dust suppression systems
• Own captive power, better utilisation
Aggressive productivity developmentfuel
• Coal sources and plant location
• Quality of coal• Import• (96 kwh compared to
industry norm of 115kwh)
• Substitute• Groundnut husk in
saurashtra
• Crushed sugarcane• Saved 3% coal• Flat belts to reduce
energy consumption
QUESTIONS FOR DISCUSSION• Study the evolution of GACL from a start-up to a cement
major over the years. how far do you think the company's success can be attributed to its project location, design and implementation decisions?
• 'GACL's cost management focus was the biggest factor responsible for its success.' Critically comment on the above statement and examine the company's approach to cost reduction and productivity enhancement. How did this approach help it gain a competitive advantage and emerge a leader in the commoditised industry?
• Do you think that GACL's efforts were more driven by market compulsions than a strategic cost focus? Will GACL be able to sustain its superior performance in the years to come? Give reasons to support your stand.
ANY MORE QUERIES???