birla cement!

BIRLA CEMENT

FLOW OF CONTENT Introduction Company Overview Manufacturing Process Finance Marketing HR Recession Company’s Current Status Future of the Company Conclusion

INTRODUCTION

By Saurav and Amneet

HISTORY OF CEMENT

• Used in ancient world by :i. Egyptians as calcined gypsum.

ii. Romans used crushed volcanic ash.

iii. Britain manipulated its properties for specific application and situation.

• The indigenous Indian cement industry traces its history back in 1914.

• Indian cement manufacture’s association was set up in 1925.

• Before partition India had 24 cement factories out of which it retained only 19th.

CEMENT INDUSTRY

• Decontrol- March 1989.

• Oligopolistic nature of cement industry.

• Main beneficiary of infrastructure boom.

• Indian cement is 2nd largest after china.

• Net profit growth rate - 85%

• Contribution to India’s economic development - 8%

• Presence of few foreign companies.

MAJOR PLAYERS

• ACC Limited

• Gujarat Ambuja

• UltraTech

• JK Group

• India Cements

• Birla Cement

PROSPECTS OF CEMENT INDUSTRY

Import from Pakistan affecting Indian market. Excess over capacity can hurt margins as well

as price. Cement production is cutting down because of

negative pressure on prices. Cheap labour and government subsidy proves

as a leverage for Indian Cement industry.

CURRENT STATISTICS

According to sales of may 2013 shows 14% growth over 2012.

India’s per capita consumption is 170kg. Indian to match its demand have to add another

150 million tones of capacity. Provide 6% of employment to unskilled labour

in southern region. Various subsidy is provided by government for

its growth. In 2013 it has attracted FDI of US$ 2000

million.

SECTORAL CONSUMPTION

COMPANY OVERVIEW

By Preety Jha

ABOUT US

• A metals powerhouse, among the world's most cost-efficient aluminium and copper producers.

• No.1 in viscose staple fibre• No.1 in carbon black• The fourth-largest producer of insulators• The fourth-largest producer of acrylic fibre• Among the top 10 cement producers• Among the best energy-efficient fertilizer plants• The largest Indian MNC with manufacturing

operations in the USA

THE INDIAN SCENARIO

The largest fashion (premium branded apparel) and lifestyle player

The second-largest manufacturer and largest exporter 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 6 BPO companies The largest manufacturer of linen fabric.

VISION AND VALUES

To be a premium global conglomerate, with a clear focus on each of the businesses.

OUR MISSION

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

OUR VALUES Integrity : Acting and taking decisions in a manner

that is fair and honest.

Commitment : On the foundation of Integrity, doing all that is needed to deliver value to all stakeholders.

CONTINUED…

Passion : An energetic, intuitive zeal that arises from emotional engagement with the organization.

Seamlessness: Thinking and working together across functional groups, hierarchies, businesses and geographies.

Speed : Responding to internal and external customers with a sense of urgency.

MANUFACTURING

By Gaurav Vyas

PORTLAND CEMENT

By definition — A hydraulic cement produced by pulverizing clinker consisting essentially of hydraulic calcium silicates, usually containing one or more of the forms of calcium sulfate as an interground addition

Source: PCA, 2003

Raw Materials Necessary for Portland Cement Manufacture Must Provide the Following

Calcium

Silica

Alumina

Iron

Calcium Iron Silica Alumina Sulfate

Alkali wasteAragoniteCalciteCement-kiln dust

Cement rockChalkClayFuller’s earthLimestoneMarbleMarlSeashellsShaleSlag

Blast-furnace flue dust

ClayIron oreMill scaleOre washingsPyrite cindersShale

Calcium silicateCement rockClayFly ashFuller’s earthLimestoneLoessMarlOre washingsQuartziteRice-hull ashSandSandstoneShaleSlagTraprock

Aluminum-ore refuse

BauxiteCement rockClayCopper slagFly ashFuller’s earthGranodioriteLimestoneLoessOre washingsShaleSlagStaurolite

AnhydriteCalcium sulfate

Gypsum

Source: PCA, 2003

TRADITIONAL MANUFACTURE OF PORTLAND CEMENT

1. Stone is first reduced to 125 mm (5 in.) size, then to 20 mm (3/4 in.), and stored.

2. Raw materials are ground to powder and blended.

or

2. Raw materials are ground, mixed with water to form slurry, and blended.

3. Burning changes raw mix chemically into cement clinker.

Source: PCA, 2003

3. Burning changes raw mix chemically into clinker. Note four stage preheater, flash furnaces, and shorter kiln.

PYRO- PROCESSING

4. Clinker is ground with gypsum into portland cement and shipped.

Clinker Gypsum

TYPES OF PORTLAND CEMENT

Normal

Moderate sulfate resistance

High early strength

Low heat of hydration

High sulfate resistance

FINANCE FINANCE

By Nirvick

IS CEMENT INDUSTRY A CYCLICAL STOCK OR A DEFENSIVE STOCK?

MERGER ‘N’ ACQUISITION

 Grasim Industries and UltraTech Cement- merging.

UltraTech Cement was acquired from L&T.

In 2013, Aditya Birla Group acquired Jaypee’s Gujarat cement unit for an enterprise value of Rs 3,800 crore.

Birla said the acquisition will be funded through equity of Rs 150 crore, debt worth Rs 2,000 crore and the remainder of Rs 1,650 crore through internal accruals.

CURRENT FINANCIAL STATUS

UltraTech Cement Q3 net profit dips 38 pct to Rs 370 cr. Profit dip due to subdued selling price of building materials

amidst poor demands.  It had clocked Rs 601 crore net profit in the corresponding

quarter of last fiscal. Ultratech Cement's net sales also marginally declined to Rs

4,786 crore during the quarter from Rs 4,857 crore a year earlier.

Total expenses increased to Rs 4,267 crore from Rs 4,072 crore a year ago.

Freight costs rose to Rs 1,119 crore against Rs 1,059 crore.

• In the next 10 years, India will become the main exporter of clinker and gray cement to the Middle East, Africa and other developing nations

• Many foreign players are also expected to enter the cement sector in the next years.

PROFIT AND LOSS REPORT

Mar '13 Mar '12 Mar '11 Mar '10 Mar '090.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

Total IncomeTotal ExpensesOperating ProfitReported Net ProfitShares in issue (lakhs)

FINANCIAL RATIOS

 Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

Current Ratio 0.96 0.87 1 0.97 0.71

Quick Ratio 1.23 1.35 1.1 1.11 1.54

Debt Equity Ratio

0.53 0.72 0.61 0.8 1.2

Inventory Turnover Ratio

7.37 7.31 6.07 6.41 7.51

Debtors Turnover Ratio

4.34 5.92 6.96 6.1 5.81

Asset Turnover Ratio

0.97 0.91 0.76 0.57 0.62

STOCK MARKET

MARKETING

By Yukti Taneja

SOURCES OF COMPETITIVE ADVANTAGE

ABG acquired L&T cement in 2003 and named it as UltraTech Cement.

Also possessed Grasim Cement which was later merged into UltraTech Cement industry.

Sourcing of raw materials

STPS Segmentation:

i. Geographical segmentation.

Targeting:

i. Differentiated target marketing.

Positioning:

i. Product differentiation.

ii. Image differentiation.

BRANDING

Represents expertise, strength and modernity. In-film branding with “Chak de India”. IPL connect with Rajasthan Royals and

Deccan Chargers. Also associated with Business India exhibition-

“A celebration of Architecture”. Has also been honoured with the title,

“SUPERBRAND” by Superbrands Council for years 2011 and 2012.

MARKET LEADERSHIP

Largest domestic M&A deal of Rs. 3800 cr. which will increase the capacity of UltraTech cement to 59 mtpa.

Installed capacity is projected to go up to 70 mt by 2015.

HR POLICY

By Priyanka Chandgothia

HUMAN RESOURCE MANAGEMENT

Recruitment

STRATOS (On Campus)

i. Flagship competition for management students. 

ii. Open only for reputed colleges.

Training / Leadership Program

The program is currently offered at the following levels:

GIP :  Group Internship Program 

LEAD : Leadership Program for the Experienced

LEAP :  Leadership Associate Program

HRLP :  Human Resources Leadership Program

FLP :  Finance Leadership Program

HUMAN RESOURCES LEADERSHIP PROGRAM

Post-training period: Career path that an HRLP participant is

expected to take: The first role - HR/IR in a manufacturing

location. The second role - HR generalist in a

manufacturing or service business. The third role - HR specialist in Group HR

or corporate HR of a business.

HUMAN RESOURCE MANAGEMENT

Learning and Development GyanodayaContinuous EducationE-learningLeadership programs

Performance ManagementMeritocracy360 Degree Appraisal

HUMAN RESOURCE MANAGEMENT

Benefits Talent Management– Employee as well as

FamilyHappiness At Work

Recognition:i. ABG awards

a. Individual awards

b. Team awards

ii. Pride awards

IS CEMENT INDUSTRY RECESSION FREE?

By Pallavi

• Effect of global recession on real estate and infrastructure.

• Demand and supply gap, overcapacity.

• Increasing cost of production.

• High interest rates.

Recession In Cement Industry

Cement : Demand and Growth

COMPANY’S CURRENT STATUS

By Shreysee

Current Status Of Birla Cement

• Ultratech Cement is India’s largest white cement producer.

• Among the top 10 producer of Grey Cement in the world.

• Present in 5 Countries- India, UAE, Srilanka,

Bangladesh and Bahrain.

• 1 white Cement plant and 1 Clinkerisation in UAE.• 15 Grinding Units- 11 in India, 2 in Bahrain and 2

Bangladesh• 2 Rail Bulk Terminals in India. • 4Coastal Terminals- 3 in India and 1 in Srilanka • 101 Concrete Plants around the world.

• Market Cap over 500 billion and Annual Capacity of 53.9 million tonnes.

• India’s largest Cement Clinker Exporter.

• Given the title of “Superbrand” by the Super brands Council and Consumer Selected “Powerbrand” by Powerbrands India.

• Given the title of “Superbrand” by the Super brands Council and Consumer Selected “Powerbrand” by Powerbrands India.

• More than 200 sales office across the country.

• It provide a range of products:

i. UltraTech Cement engineer choiceii. UltraTech Concrete (RMC)iii. UltraTech Building Productsiv. UltraTech Building Solutionv. Birla Whitevi. Star Cement

News• Ultratech acquire Jaypee's cement unit in

Gujarat in nearly 3,800 crores.

• Ultratech Cement reported a 38.43% dip in net profit for the October-December quarter at Rs. 370 crore.

• Net sales declined 1.5% to Rs 4,786 crore in the quarter ended December 2013 from Rs 4,857.4 crore in a year ago period.

• EBIDT dropped 25.4% to Rs 764 crore.

• Finance cost of the company jumped 73.6% on yearly basis to Rs 90.45 crore while tax expenses dropped 45 percent to Rs 139 crore compared to a year ago period.

FUTURE OF THE COMPANY

By Atrayee

FUTURE ASPECT OF CEMENT INDUSTRY

•Production of cement is expected to cross 400 million tonnes in the next few years

•Demand for cement is increasing at 8-10 per cent

•Players can increase their capacities from 210 million tonnes to 500-600 million tonnes every year

•Greater thrust on agriculture and suggested “second green revolution” will increase the use of cement in this industry.

• In the next 10 years, India will become the main exporter of clinker and gray cement to the Middle East, Africa and other developing nations

• Many foreign players are also expected to enter the cement sector in the next years.

FUTURE ASPECT OF ULTRA-TECH CEMENT

Amidst near-term weakness, the UTCEM management is optimistic on the long term growth prospects of the Indian Cement industry.

Focus on market share and leadership. Aggressive capex to expand and improve

efficiencies. Ongoing expansion would increase capacity by

20% over FY14-16 to 64.45MT. Adopted multiple operating efficiency

enhancement measures to combat cost pressure.

CONCLUSION

By Aditya

SWOT ANALYSIS

STRENGTH OPPORTUNITY1. Technological excellence 1. Increasing

urbanization

2. Growing international presence 2. Industrial growth

3. Product innovation 3. Emerging e commerce

4. Strong brand recognition business

WEAKNESS THREAT

5. Long process chain 1. Loss of sale to substitute

6. Complexity of operation 2. Fluctuation in foreign

market

Aditya Birla ultra tech cement (UNIT OF RAJSHREE CEMENT) incepted in 1983 since then Birla cement has been doing business very well .

Birla cement has tolerated many market thrust but still the company is standing with its glory and a huge goodwill .

INDIA has 4th largest economy in the world in that Birla plays an important role to building the India

CONCLUSION

BIRLA always enjoy the loyalty of their customer this would be possible only Birla maintain their future scope

INTEGRITY Honesty in every stage

COMMITMENT Deliver on the promise

PASSION Energized action

EMPATHY Creating social belongingness

Basically company providing a strong base structure to the country and their people creating the hope which everyone wants