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Internship in Cement Industry

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					                                      TABLE OF CONTENTS


1.EXECUTIVE SUMMARY ................................................................................................. 2

2. INTRODUCTION ............................................................................................................. 4

   INDUSTRY OVERVIEW ............................................................................................................ 5

   COMPANY OVERVIEW ..........................................................................................................27

3. CEMENT – Major Players ........................................................................................ 43

4. PROJECT PROFILE ..................................................................................................... 49

5. RESEARCH METHODOLOGY................................................................................... 50

6. OBSERVATION AND ANALYSIS ............................................................................. 54

7. FINDINGS ....................................................................................................................... 67

8. RECOMMENDATIONS AND CONCLUSIONS ....................................................... 72

9. ANNEXURE .................................................................................................................... 74




                                                                                                                                    1
EXECUTIVE
SUMMARY
            2
EXECUTIVE SUMMARY
It is a general phenomenon that buyers in same market seek products for broadly the same
function, but different buyers have different evaluative criteria about what constitute the right
choice of performing the function. As a consequence different offering will attract different
buyers.


A market segment is explained to mean homogeneous group consisting of buyers who seek the
same offering. In other words Market Segmentation may be defined, as the division of the
market in to groups of segments having similar wants. But wants must be interpreted very
broadly, broader than products characteristics only. Segment may differ also in their needs for
information, reassurance, technical support, service, promotion, distribution and host of other
non-products benefits that are part of their purchases; they may also differ in their capacity for
these differences.


Maihar Cement (Birla Gold) is well-established brand in Bihar region, besides it has market in
Madhya Pradesh, Uttar Pradesh, Orissa and other parts of the Country. One of the major
section, which requires or purchases cement in bulk quantity are engineers, architect, builders
and contractors. This section or segment is known as the non-trader segment. And the retailers,
stockists, whole-sellers are known as trader segment.


I carried out my project concerning “Perception of Trade and Non-trade Segments of BIRLA
GOLD Cement”.
The project was carried out in the market of Satna region in Madhya Pradesh. There are five
major market players in cement industry of these areas. They are Jaypee, Birla Gold, Ultratech,
ACC, and Prism. Apart from these there are few local brands such as Birla Samrat (M.P. Birla
group) in Madhya Pradesh which is selling in the market.
The information about the market was gathered by visiting retailers in the market. Interview of
retailers was taken depending upon there accessibility. Also opinion of engineers, contractors,
architects and builders (who posses knowledge regarding different brands available in the

                                                                                                3
market) has been taken. Survey was done for both trade and non-trade segment to get the
right picture about the market scenario.
While doing the project attempt was made to collect maximum information about the market.
To get actual and correct information, it was not told retailers that the survey is conducted by
Maihar Cement for confidentiality reasons. Large numbers of retailers were visited to get the
actual picture of the market. Again, the retailers of each grade (according to the performance)
were visited, to get each and every detail about the market.


Objectives of my survey are as under:
   1. To know the position of Birla Gold Cement in the trade and non-trade segment
       regarding sale in comparison with the other brands.
   2. To know the reasons behind the selection of a particular brand.
   3. To get suggestions form the trade and non-trade segment in order to improve the sale
       as well as level of satisfaction in them.
To attain the above objectives various other sub objectives were needed to be achieved. These
are listed below:
    To analyze the market share of Birla Gold Cement.
    To know the customers preference for the brands of cement.
    To know the preference of retailer for sorting different brands of cement.
    To understand the effectiveness of various sales promotion activities of cement.
    To know preference of retailers for different gift and incentives.
    To analyze the sales promotion activities of various brands.
    To analyze the transportation facilities for Birla Gold and other cement companies.
    To analyze the frequency of visits of marketing representative of various companies.
Thus my study attempts to find ways to increase market share, to increase customer
satisfaction and thus increase the business prospects.




                                                                                               4
INTRODUCTION

               5
INTRODUCTION
Cement is a binder which sets and hardens independently, and can bind other materials
together. The word "cement" traces to the Romans, who used the term "opus caementicium"
to describe masonry which resembled concrete and was made from crushed rock with burnt
lime as binder. Cement is an essential component of infrastructure development and most
important input of construction industry, particularly in the government’s infrastructure and
housing programs, which are necessary for the country’s socioeconomic growth and
development.


The cement industry in India dates back to 1914, with the setting up of its first unit in
Porbunder. It is considered as one of the core infrastructure industries. It is the second largest
producer of cement in the world just behind China, with industry capacity of over 200 million
tonnes. It is consented to be a core sector accounting for approximately 1.3% of GDP and
employing over 0.14 million people. Also the industry is a significant contributor to the revenue
collected by both the central and state governments through excise and sales taxes.


Encouraged by the positive response of the industry to the policy liberalization in the cement
industry, Government decontrolled the industry fully on 1st March 1989. With the Industrial
Policy Statement made by the Government on 24th July 1991, the cement industry stands de-
licensed. Indian cement industry has thus been one of the pioneering industries in introducing
policy reforms. After the liberalization measures and globalization of Indian economy, the
cement industry has been growing rapidly at an average rate of 8 per cent except for a short
period in 1991-92 when the industry faced demand recession. The country is now the second
largest producer of cement in the world. India has also started exporting large quantities of
cement and clinker.




                                                                                                6
INDUSTRY OVERVIEW: INDIAN CEMENT INDUSTRY

Cement is the preferred building material in India. It is used extensively in household and
industrial construction. Earlier, government sector used to consume over 50% of the total
cement sold in India, but in the last decade, its share has come down to 35%. Rural areas
consume less than 23% of the total cement. Availability of cheaper building materials for non-
permanent structures affects the rural demand.


The Indian Cement industry is the second largest cement producer in the world. The industry
has undergone rapid technological upgradation and vibrant growth during the last two decades,
and some of the plants can be compared in every respect with the best operating plants in the
world. The industry is highly energy intensive and the energy bill in some of the plants is as high
as 60% of cement manufacturing cost. Although the newer plants are equipped with the latest
state-of-the-art equipment, there exists substantial scope for reduction in energy consumption
in many of the older plants adopting various energy conservation measures.


There are around 11 different types of cement that are being produced in India. The production
of all these cement varieties is according to the specifications of the BIS (Bureau of Indian
Standards). Some of the various types of cement produced in India are:
    Clinker Cement
    Ordinary Portland Cement
    Portland Blast Furnace Slag Cement
    Portland Pozzolana Cement
    Rapid Hardening Portland Cement
    Oil Well Cement
    White Cement
    Sulphate Resisting Portland Cement




                                                                                                 7
CHARACTERISTICS-
State wise Capacity
As cement is a low value commodity, freight costs assume a significant proportion of the final
cost. Transporting costs render the prices of cement in distant destinations uncompetitive. For
instance, it is financially infeasible to transport cement by road over 250 kms. Railways are
mostly used to transport cement over longer distances. However, its bulky nature and
infrastructure bottlenecks render even rail transport unviable over very long distances (that is
why Madras Cements or India Cements, located in the south, can hardly make a difference to
the fortunes of west-based companies like Gujarat Ambuja). Therefore, manufacturers tend to
sell cement at the nearest market first and sell in distant markets only if additional realization is
greater than freight costs incurred. This highlights the regional nature of the cement industry.


The Indian cement industry has to be viewed in terms of five regions:-
       North (Punjab, Delhi, Haryana, Himachal Pradesh, Rajasthan, Chandigarh, J&K and
       Uttaranchal);
       West (Maharashtra and Gujarat);
       South (Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Pondicherry, Andaman &
       Nicobar and Goa);
       East (Bihar, Orissa, West Bengal, Assam, Meghalaya, Jharkhand and Chhattisgarh);
       Central (Uttar Pradesh and Madhya Pradesh).
South accounts for 33.03% of cement production capacity of the country, with Andhra Pradesh
accounting for 15.27% of the total production capacity of India. It has an installed capacity of
around 20mn tons of cement and ranks first in the country, followed by Tamil Nadu with 9.94%
of the total production capacity.
North accounts for 18.02% of the total production capacity, with Rajasthan at 12.55% of the
total production capacity of the country.
West accounts for 16.85% of the total production capacity. Maharashtra and Gujarat have
production capacity of 6.89% and 9.96% respectively.



                                                                                                    8
East and Central Regions account for 16.33% and 15.77% of the total production capacity of the
country respectively.
Production & Dispatches (Region-wise):
During the month of December 2008 the cement industry posted excellent growth in
production mainly from the northern and the eastern region of the country. The demand
continued to be strong as can be evident from the capacity utilization levels in all the major
regions. Increase in installed capacities by some players also contributed to improved
production growth.
    The central region of the country achieved the highest capacity utilization rate of 98%
    The northern region and the eastern region had a capacity utilization rate of 93%
       respectively.
    The western region and the southern region had a capacity utilization level of 95% and
       86% respectively.
The overall cement production and dispatches increased by 11% to 15.82 million metric tonnes
and 15.81 million metric tonnes respectively during the month of December 2008 as compared
to the same period last year. Excess dispatch implies that there is strong demand as inventories
are being disposed off quickly. The production and dispatches were higher by 10% and 11%
respectively as compared to the previous month.
The following graph gives a clear indication of the increase in production (Region wise) in
December in comparison to the previous month.


Region                                   Increase %              Production in million tonnes

Central                                       13                              2.31
Northern                                      22                              3.74
Southern                                       9                              4.94
Western                                        2                              2.51
Eastern                                        9                              2.32
                              Region-wise production of cement




                                                                                               9
Source: Capitaline


CONSUMPTION:
Southern region continued its trend of higher consumption with the total consumption
reaching a level of 4.58 million tonnes thus registering a YoY growth rate of 9.3%. Andhra
Pradesh and Tamil Nadu were the dominant consumers in the southern region accounting for
1.59 and 1.3 million tonnes respectively. Following South is the Western region with a
consumption of 3.02 million tonnes. The following graph gives a clear indication of the region
wise consumption and their YoY growth percentage.
Table 1 : Region-wise Cement Consumption

Region                                     Consumption                 YoY growth %

Central                                       2.38                           25
Northern                                      3.21                           11.7
Southern                                      4.58                           9.3
Western                                       2.46                           14.1



                                                                                           10
Eastern                                      3.02                             8.3




Source: PL Research
Trade between these regions is on a very low scale mainly because of the transportation
bottlenecks and uncompetitive cost of transportation. This apart, there are other factors that
determine the location of a cement plant. Proximity to limestone deposits, availability of coal
and power and the markets the plants cater to, are some of the critical factors that determine
the viability of a cement plant.


Seven Clusters:
Cement and its raw materials namely coal and limestone, are all bulky items that make
transportation difficult and uneconomical. Given this, cement plants are located close to both,
sources of raw materials and markets. Most of limestone deposits in India are located in
Madhya Pradesh, Rajasthan, Andhra Pradesh, Maharashtra and Gujarat, leading to
concentration of cement units in these states. This has resulted in ‘clusters’. There are seven
such clusters in the country and account for 51% of the cement capacity. There is a trade-off
between proximity to markets and proximity to raw materials due to which some cement
plants have been set up near big markets despite lack of raw materials.

                                                                                            11
CLUSTER                                    CAPACITY
Satna, MP                                       11.77 mntpa
Chandrapur, Maharashtra/ AP                     9.59 mntpa
Gulbarga, Karnataka/ AP                         6.83 mntpa
Yerranguntla, AP                                 1.9 mntpa
Nalgonda, AP                                    5.85 mntpa
Bilaspur, MP                                     9.7 mntpa
Chandoria, Rajasthan/ MP                        7.03 mntpa



Cluster-wise capacity of various regions (7 major clusters)



Factors Affecting Cement Industry:

LIMESTONE RESERVES

Limestone is the main raw material for manufacture of cement. For manufacture of one tonne
of cement, a quantity of 1.5 tonne of limestone is required. India is endowed with large
deposits of limestone. The estimated total reserves of cement-grade limestone are 95.623
billion tonnes. However, the limestone deposits are not uniformly distributed in all the States.
There is a concentration of about 73 per cent of the total reserves in five States, namely,
Andhra Pradesh, Karnataka, Gujarat, Rajasthan and Madhya Pradesh. This concentration is
about 48 per cent in South Zone, 23 per cent in North Zone, 21 per cent in West Zone and the
remaining 8 per cent in East Zone.



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. This
contributes 35-40% of the production cost. 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

                                                                                              12
(7,000-8,000 kcal/kg) with low ash content 6-7%. Lignite is also used as a fuel by blending it
with coal. However this process is not very common.



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.


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.


TECHNOLOGY:
Cement Industry has been in existence in India for over eight decades. From the initially
available wet process technology the industry has travelled through semi-dry and the latest
energy efficient dry process technology. Recent plants have been erected with state-of-art
technology comparable to those available in the world. The earlier cement plants that came
into existence were mostly of small kiln capacities of 300 to 600 tpd based either on wet or dry
process; however, the new plants set up later were of the order of 3000 tpd or more exclusively
of dry process. Kilns of the capacities 5000 to 7000tpd are also in operation now. At present

                                                                                              13
91% of the total kiln capacity comprise dry process, 7% wet process and the remaining 2% on
semi-dry process based technologies.
Indian cement industry has been actively pursuing various avenues to improve its productivity
and energy efficiency. There has been all-around upgradation of technology in all sections of
the plant like mining, process, equipment and machinery, packaging and transportation.
Adoption of modern techniques like photo-grammetry and remote sensing has enabled the
industry to discover virgin limestone. Advanced equipment like hydraulic excavators, surface
miners, large wheel loaders and mobile crushers have helped the industry in increasing its
productivity considerably. The modern raw material evaluation and management system starts
from computerized mine planning through on-line bulk material analysis to automated X-ray
analysis and process computers to control the weigh feeders. Expert systems based on ‘fuzzy
logic’ are used to control the operation of kilns and mills to ensure that the process systems
operate at optimum levels of energy efficiency all the time. Energy efficient technologies are
being adopted for a new as well as for retrofits, modernization and expansion of existing plants.
A number of cement plants in the country are now equipped with double string pre-heater
towers with pre-calciners, vertical roller mills, roller presses, high efficiency fans and motors
with slip power recovery systems. Besides this, the software approach involving detailed
process diagnostic studies and energy audits are used successfully by almost every large and
medium sized cement plant in the country.


ENERGY CONSERVATION
The cement industry is an energy intensive industry by virtue of high temperature reactions and
various physical operations involved in its manufacture. The industry uses both coal and power
as energy inputs. The cost of energy accounts for about 45% of the total production cost.
Energy management in modern cement plants in India meets the standards comparable with
the best in the world. Energy studies of cement plants are being carried out in a large number
of plants on a continuing basis by the National Council for Cement & Building Materials (NCB).
NCB has a mobile energy diagnostic unit (Energy Bus) equipped with necessary instrumentation
and on-board computer with relevant software for conducting the energy studies on systematic


                                                                                              14
and accurate manner. NCB has been giving National Awards for Energy Efficiency in Indian
Cement Industry to the best performing cement plants on annual basis since 1986. Based on
the recent data of 51 participating plants, the weighted average energy consumption is: -

                                        Thermal Energy           Electrical Energy
                                          Consumption          Consumption (kWh/t
                                        (Kcal/kg Clinker)            Cement)

        Dry Process Plants                    763                      96.88

    Overall (Combined for all                 769                      96.86
           Processes)




POLLUTION CONTROL
The main source of pollution in cement industry is dust emission. The industry’s achievement in
controlling particulate emission has been quite satisfactory. Considerable progress has been
made in installing Electrostatic Precipitators (ESPs) and bag houses/fabric filters in various
sections of cement plants, especially after the promulgation of the environment legislation in
1981 and 1986. The Central Pollution Control Board has fixed standards for particulate
emissions from stacks as under: -


            Capacity                      Protected Area                Other Area
          200 tpd & less                    250 mg/Nm3                  400 mg/Nm3
          Above 200 tpd                     150 mg/Nm3                  250 mg/Nm3
                             Particulate Emission Standards from Stacks


However, the State Pollution Control Board have authority to make the limits more stringent, if
required and accordingly the following States have formulated particulate emission for general
area as under :-




                                                                                            15
                                                  Permissible particulate emission levels for
                     States                                        general area
 Madhya Pradesh                                                    150 mg/Nm3
 Gujarat                                                           150 mg/Nm3
 Andhra Pradesh                                                    115 mg/Nm3
 Himachal Pradesh                                                  150 mg/Nm3
 Rajasthan (some parts)                                            150 mg/Nm3




PRODUCTION COSTS:
Cement companies reported 10 per cent growth in their revenues, while their net profit
declined by 21 per cent on compression of margins, last year. Almost all cement companies
faced margin pressures on account of an increase in their overall production costs. Coal which
accounts for almost 35-40 per cent of the cost of production of cement is in short supply. Coal
prices increased by over 100 per cent in the last one year. This has lead to an overall increase in
the cement prices, thus affecting the demand for it.




                                                                                                16
Cement industry in India is currently going through a consolidation phase. Some examples of
consolidation in the Indian cement industry are: Gujarat Ambuja taking a stake of 14 per cent in
ACC, and taking over DLF Cements and Modi Cement; ACC taking over IDCOL; India Cement
taking over Raasi Cement and Sri Vishnu Cement; and Grasim's acquisition of the cement
business of L&T, Indian Rayon's cement division, and Sri Digvijay Cements. Foreign cement
companies are also picking up stakes in large Indian cement companies. Swiss cement major
Holcim has picked up 14.8 per cent of the promoters' stake in Gujarat Ambuja Cements (GACL).
Holcim's acquisition has led to the emergence of two major groups in the Indian cement
industry, the Holcim-ACC-Gujarat Ambuja Cements combine and the Aditya Birla group through
Grasim Industries and Ultratech Cement. Lafarge, the French cement major has acquired the
cement plants of Raymond and Tisco. Italy based Italcementi has acquired a stake in the K.K.
Birla promoted Zuari Industries' cement plant in Andhra Pradesh, and German cement company
Heidelberg Cement has entered into an equal joint-venture agreement with S P Lohia Group
controlled Indo-Rama Cement.
Issues concerning Cement Industry -
    High Transportation Cost is affecting the competitiveness of the cement industry.
       Freight accounts for 17% of the production cost. Road is the preferred mode for
       transportation for distances less than 250km. However, industry is heavily dependant on
       roads for longer distances too as the railway infrastructure is not adequate.
    Cement industry is highly capital intensive industry and nearly 55-60% of the inputs are
       controlled by the government.
    There is regional imbalance in the distribution of cement industry. Limestone availability
       in pockets has led to uneven capacity additions.
    Coal availability and quality is also affecting the production.




                                                                                             17
Government Policies
Government policies have affected the growth of cement plants in India in various stages. Their
control on cement for a long time and then partial decontrol and then total decontrol has
contributed to the gradual opening up of the market for cement producers. The stages of
growth of the cement industry can be best described in the following stages:
    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 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. In the next two years, the industry enjoyed a boom in sales and profits. 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 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.




                                                                                                  18
EXPORTS
The cement sector is relatively insulated from international markets. This is largely due to
inadequate infrastructure to carry on international trade. Being a very bulky item, international
trade is very limited and only between neighboring states. This is amply borne out by the fact
that cement accounts for not more than 0.20% of total world exports.
Having a long coastline, India is well positioned to export cement to the Middle East and Sri
Lanka. However, congestion at the Indian ports and lack of cement handling facilities restrict
the free movement of cement out of India. Hence, only those companies who have their own
jetties are able to export. Moreover, currently, prices in the international market too are at un-
remunerative levels. Nevertheless, companies like Gujarat Ambuja and L&T are major
exporters, who export mainly to get incentives like duty-free import of high grade coal and oil.
This apart, large scale cement exports are possible only when cement prices in the international
market look up.



REASONS FOR THE GROWTH OF CEMENT INDUSTRY
The domestic cement industry is highly insulated from global cement markets. Exports have
been constant at about 6% of total cement demand for past few years. With the Government of
India intervention, making cement duty free, cement is being imported from neighboring
countries. However, due to logistics issues and lack of port handling capabilities imports of
cement will remain negligible and do not pose a threat to domestic industry. Earlier
government sector used to consume over 50% of the total cement sold in India but in the last
decade, its share has come down to 35%.


Demand for cement is linked to the economic activity in any country. Broadly, it can be
categorized into demand for housing construction (homes, offices etc.) and infrastructure
creation (ports, roads, power plants etc). The real driver of cement demand is creation of
infrastructure; hence cement demand in emerging economies is much higher than developed




                                                                                               19
countries where the demand has reached a plateau. In India too, the demand for cement will
be affected by spending on infrastructure (including housing).



Indian Cement Industry Demand Drivers - 2009




(Source CMA)
Housing and infrastructure sectors constitute a major part of the total demand for cement in
India. These two sectors have been further analyzed.


HOUSING
Housing, besides being a very basic requirement for the urban settlers, also holds the key to
accelerate the pace of development. Investments in housing, like any other industry, have a
multiplier effect on income and employment. Construction sector employment is growing at
the rate of 7% per annum. Housing provides opportunities for home-based economic activities.
The Indian Housing sector has grown by leaps and bounds in the last few years. The total home
loan disbursements to this sector has risen from Rs 19,723 crore in the year ended 2000 to a
massive Rs 2,52,932 crore in the year 2008.This robust growth has been triggered by a number
of factors. Some of which are:
           Tax rebates on housing loans

                                                                                          20
           Continued growth in population
           Decrease in number of people per household (average size of household)
           Rise in disposable income levels
           Lower interest rates and easy availability of housing finance.


Also the Housing Finance Companies and banks have introduced various schemes to attract the
young generation borrower. Free home insurance, lower rates for purchase of consumer
durables, household goods, and refinance options are some of the noteworthy schemes that
the institutes have come up with to attract the borrowers.


The Indian housing industry is highly fragmented, with the unorganized sector, comprising small
builders and contractors, accounting for over 70% of the housing units constructed and the
organized sector accounting for the rest. The organized sector comprises large builders and
government or government affiliated entities. The housing market witnessed a frenzied boom
in the early nineties on the back of a booming stock market and a liberalization process that
was kicked off in 1991. The stock market and real estate markets crashed in quick succession –
1994 and 1995 respectively, followed by a prolonged period of about 8 years of little or no
appreciation in real estate. The crash, accentuated by high inflation and high interest rates, not
only kept speculative inflows out but also kept genuine home seekers at bay. However, reversal
in that trend is being witnessed in the past 3-4 years because of several reasons.


One of the most important reasons is that the rural people are moving from thatched mud
units to pucca (brick and mortar) structures. With increasing rural affluence, demand for
cement for construction of houses in villages has gone up significantly overt the last few years.
The cement industry is expecting around 50 per cent of the overall demand to come from the
rural housing sector during the current year and beyond. Rural people, especially in the most
underdeveloped states, are increasingly replacing thatched mud hutments and switching over
to pucca structures. While a marked increase in demand is being seen in the rural parts of




                                                                                               21
predominantly underdeveloped states such as Bihar, Chhattisgarh and Uttar Pradesh, the hill
states of Uttarakhand, Himachal Pradesh and the north-east are also seeing a spurt in demand.


The Centre's latest estimates peg the estimated shortage of houses in rural areas at around 15
million as against an overall shortage of 22 million dwelling units in the rural and urban areas
put together. The Centre, under its Bharat Nirman programme, expects over six million houses
to be built in rural areas over the next four years. Rural housing projects undertaken by about
15 states through their own capital subsidy or credit-cum-subsidy schemes have also resulted in
rural housing coverage going up during the last few years. These states, including Tamil Nadu,
Andhra Pradesh, Karnataka, Gujarat, Uttarakhand, Jharkhand, Sikkim, Meghalaya and Punjab,
have together constructed about 27 lakh houses from 2001 to 2005, according to Planning
Commission estimates. The cement industry recorded another year of double digit demand
growth (10 per cent for 2006-07). The demand buoyancy is witnessed across sectors with
increased focus on infrastructure development, rising industrial activity, and strong real estate
demand from commercial and residential sectors.
Home Loan Rates and disbursement of loans
           Year                  Interest Rate (in %)               Quantum of Loan
                                                                     lent in Rs Crore
            2000                             13.00                          19,723.38
            2001                             12.15                          22,425.09
            2002                             11.35                          29,359.29
            2003                             09.85                          51,672.70
            2004                             07.65                          89,449.00
            2005                             07.50                         1,34,276.00
            2006                             08.50                         1,79,060.00
            2007                             11.00                         2,24,481.00
            2008                              9.00                         2,52,932.00
Source: RBI Trend and Progress Reports



                                                                                              22
Another reason is the fall in interest rates, which have also greatly contributed to the growth of
the housing sector thus fuelling the demand for cement and in turn its production. The
following graph gives a clear indication of the rise in the quantum of loans lent as against the
rate of interest prevailing over a period of time.


INFRASTRUCTURE
Infrastructure projects along with commercial constructions accounts for about 35% of the total
cement consumption in India. With the government increasing its focus on infrastructure
spending, particularly on roads, ports and airports, the cement demand is likely to go up in the
near future.


Since India began opening up in 1991, until recently, the progress of infrastructure has been
very poor and has been a zigzag process. But if one considers the following developments, it
would be visible that India is turning the corner on the infrastructure question and in turn
spurring the demand for cement.


Firstly, there are over a hundred Special Economic Zones (SEZs) in India either in operation or
under construction. Many international companies, like Nokia and automotive makers like
Volvo, are actually producing in the SEZs. Construction has been taking place – land clearance
has been done to relocate squatters or farmers away from their land and this has already
happened in the last five years or so.


The other thing to look at is the organized retail sector in India. There are well over 500 retail
malls either already operating in India or in various stages of construction and this is also new in
the last three to five years.
The various road projects under the National Highway Development Program (NHDP Phase I
and II) initiated by the previous government are being successfully implemented by the present
government. Further, government has also announced new projects namely NHDP Phase, III, IV,




                                                                                                 23
V and VI, which include having four lanes on high density highways, upgradation of existing
highways, six-laning of roads under NHDP Phase I and also 1,000kms of new expressways. The
total cost of these new projects is about Rs. 1,075 billion and is expected to be completed by
FY2012. A total demand of close to 50 million tonnes of cement is expected from the above
projects.


Projects under the NHDP
      Project                   Details                    Date of         Cement Consumption
                                                         completion            (Mn tonnes)
  NHDP Phase I           GQ & Portconnectivity         90% complete                  -
  NHDP Phase II              NSEW Corridor               Dec, 2009                   8.8
  NHDP Phase III     Four laning of 10,000 kms of        Mar, 2010                  12.8
                          high density National
                                Highways
  NHDP Phase IV         Upgradation of existing          Mar, 2012                  18.0
                       20000 highways to 2 lane
  NHDP Phase V       Six laning of GQ & other high       Mar, 2012                  3.5
                            density highways
  NHDP Phase VI        1000 kms of expressways           Mar, 2012                 4.5
     Total                                                                         47.5
Source: NHAI, committee on infrastructure


Moreover, the government has set aside over USD 100 billion for infrastructure spending in
between 2007 and 2012. New airports have come up and the efforts are on to modernize the
existing ones. Thus, infrastructure is getting its share of attention and in turn spurring demand
for cement.


Global Players entering the Indian Market:
Rapid urbanization and the booming infrastructure have lead to an increase in construction and
development across India, attracting even the global players. The recent years have witnessed a
surge of foreign direct investment in the cement sector. International players like France's




                                                                                                 24
Lafarge, Holcim from Switzerland, Italy's Italcementi and Germany's Heidelberg Cements
together hold more than a quarter of the total capacity.
    Holcim, one of the world's leading suppliers of cement, has 24 plants in the country and
       enjoys a market share of about 23–25 per cent. It will further invest about US$ 2.49
       billion in the next five years to set up plants and raise capacity by 25 MT in the country.
       Holcim has a global sale worth about US$ 20 billion, where India contributes US$ 2
       billion–US$ 2.5 billion.
    Italcementi Group, which acquired full stake in the K K Birla promoted Zuari Industries'
       cement, for US$ 126.62 million in 2006 plans to invest US$ 174 million over the next two
       years in various Greenfield and acquisition projects.
    The French cement major, Lafarge which acquired the cement plants of Raymond and
       Tisco with an installed capacity of 6.5 MTPA a few years back plans to grow it to 15-30
       MTPA in the next 10 years. Till now its manufacturing capacity was concentrated in East
       India, but now the company is spreading its wings to the north and south. It is setting up
       four Greenfield projects in Rajasthan, Himachal Pradesh, north-east and south India,
       with a combined capacity of around 5 MT.
    German major, Heidelberg Cement has merged Mysore Cement, in which it owns
       around 54 per cent stake, Indorama, (where it acquired 100 per cent stake in 2008) and
       its 100 per cent Indian subsidiary, Heidelberg Cement India.




Current Scenario: Indian Cement Industry


The cement industry has continued its growth trajectory over the past seven years. Domestic
cement demand growth has surpassed the economic growth rate of the country for the past
couple of years. The growth rate of cement demand over the past five years at 8.37 % was
higher than the rate of growth of supply at 4.84% as also the rate of growth of capacity addition
during the same period. Demand for cement in the country is expected to continue its buoyant
ride on the back of robust economic growth and infrastructure development in the country.


                                                                                               25
                          DEMAND & SUPPLY SCENARIO
Date     Production (% change) Consumption (% change) Capacity utilization (%) Excess supply(%)

Jan-08                      5.2                     10.8                   102.4               1.0

Feb-08                     (0.9)                     5.4                   101.2               0.1

Mar-08                     11.2                     (0.3)                  104.1               1.8

Apr-08                     (8.3)                    10.7                    91.9              (1.1)

May-08                     (0.9)                    (9.8)                   89.1               0.4

Jun-08                     (1.5)                     2.0                    86.5              (0.2)

Jul-08                     (0.1)                    (1.3)                   86.4               0.0

Aug-08                   (10.2)                     (2.5)                   77.3              (1.1)

Sep-08                      5.6                     (9.5)                   81.6               1.0

Oct-08                      6.2                      4.9                    86.3               1.2

Nov-08                     (2.9)                     3.1                    83.3               0.4

Dec-08                     10.3                      0.9                    91.7               1.7

Jan-09                      2.0                     11.0                    93.4               0.5

Demand & Supply Scenario


The table above highlights the fact that consumption of cement has not taken back seat and
industry is growing and has been operating at the near equilibrium levels. Supply has fallen
short only for last monsoon which is usually a slack period for this industry. It is clearly can be
noted from the above data the production in Jan(08) 5.2% and in Dec(08) production increased
to 10.3% and consumption in Jan(08) 10.8% and in Dec(08) 0.9% and in Jan(09) increased to
11.0% and the supplies in Jan(09) become 0.5% in excess which is a indicator that cement
industry has a significant growth over the year.




                                                                                                 26
                                 SUPPLIE’S ESTIMATE’S

*in (m tonnes)                         FY04     FY05     FY06      FY07     FY08      FY09

Year-end installed capacity              144      152      158       166      199       222

Actual effective capacity                144      152      158       166      180       207

(-) Mothballed capacity                  8.5      8.2      8.5       8.3      5.7       4.9

Effective installed capacity             136      143      150       158      174       202

Domestic consumption                     114      121      136       149      164       178

Export (cement + clinker)                 9       10.1     9.2       8.9       6        6.1

Domestic consumption + export            123      131      145       158      170       184

Surplus / (deficit)                      13       12        5         0        4        18

% surplus (w.r.t effective capacity)     10%      9%       3%        0%       2%        9%

Actual utilization                       86%      88%      95%       99%      97%       91%

Average prices                           141      153      163       206      231       239

Change in average price                  3%       8%       6%        27%      12%       4%

Capacity growth                          5%       6%       4%        6%       10%       16%

Domestic demand growth                  5.80%    6.40%    12.00%    9.90%    10.10%     8%

Historical cement demand supply model


Historically, the sustainable capacity utilization in the cement industry has been 80-85%. This
implies FY09 and FY10 are unlikely to be years of overcapacity in the traditional sense. This
indicates the self efficiency of the Indian Cement Industry and also emphasizes that India
doesn’t require import of cement in future. Domestic Cement industry is highly insulated from
global cement markets. Exports have been constant at about 6% of total cement demand for
past few years.




                                                                                              27
                                    FORECAST MODEL
     *in (m tonnes)                                 FY09     FY10E     FY11E      FY12E

     Year-end installed capacity                      222       250        287       300

     Actual effective capacity                        207       231        257       283

     (-) Mothballed capacity                           4.9      4.9        4.9        4.9

     Effective installed capacity                     202       226        252       278

     Domestic consumption                             178       187        205       226

     Export (cement + clinker)                         6.1       5          8          9

     Domestic consumption + export                    184       192        213       235

     Surplus / (deficit)                               18        35        38         43

     % surplus (w.r.t effective capacity)              9%       15%       15%        15%

     Actual utilization                               91%       85%       85%        85%

     Average prices                                   239       240        240       240

     Change in average price                           4%       0%         0%         0%

     Capacity growth                                  16%       12%       11%        10%

     Domestic demand growth                            8%       5%        10%        10%

FORECAST MODEL :FY(09) TO FY(12)

The above model is a forecast model for the growing cement sector from FY09 to FY12 the
contributing factors taken to consideration are -

   o Export

   o Domestic Consumption

   o Average Prices

   o Capacity Growth and

   o Domestic Demand Growth

 The above factors are increasing in a considerable rate indicating a positive sign towards the
growth of this sector.


                                                                                                  28
COMPANY OVERVIEW




Introduction:
Maihar Cement is a division of Century Textiles and Industries Ltd, a flagship company of BK
Birla Group. The company is well diversified having interest in cement, textiles, rayon,
chemicals, pulp and paper.

Maihar Cement is situated at Sarlanagar (Maihar) Dist. Satna in the State of Madhya Pradesh
with an installed capacity of 3.80 Million TPA.     Maihar is 45 Kms South - East of Satna on
Howrah - Mumbai Central Railway Main Line. Maihar is well known for Sharda Devi Temple and
Maihar Gharana Music whose proponent was renowned Musician Padma Vibhushan Baba
Allaudin Khan.




                                       Devi Sharda (Maihar)

Apart from Maihar Cement, company has two more cement plants namely Century Cement at
Baikunth, Dist. Raipur in the State of Chhattisgarh with an installed capacity of 1.80 Million TPA
and Manikgarh Cement at Gadchandur, Dist. Chandrapur, Maharashtra with an installed
capacity of 1.50 Million TPA. The combined Capacity of all cement plants taken altogether is

                                                                                               29
7.80 Million TPA. More emphasis is given for production of blended cement which constitutes
about 95% of the total cement produced by the company.

Plants of Century Textiles & Industries Limited:




Century Cement - Chhattisgarh

Maihar Cement – Madhya Pradesh

Manikgarh Cement – Maharashtra



                                                   Figures in Million TPA

                                 Units                    2008-09

                      Century Cement                        2.1

                      Maihar Cement                         4.2

                      Manikgarh Cement                      1.9

                      Total                                 8.2


The capacity enhancement to 8.20 Million TPA is under implementation by carrying out
modification, up gradation and debottlenecking of existing plant & machinery and equipments,


                                                                                         30
which is likely to be completed by Oct-Dec 2009 Quarter. All cement plants are equipped with
captive power plants, which not only ensure an uninterrupted power supply, but also help
company substantially on power cost, as the own generated power is quite economical as
compared to grid power.

The company sells its cement under its premium brand name - BIRLA GOLD.




Shri B.K. Birla group has three more plants :

    1) M/S Kesoram cement for southern region

    2)   M/S Vasavdutta ceent for southern region

    3)   M/S Manglam cement for western region

Captive Mines:
Maihar Cement has its own Captive Mines with rich limestone reserves at Bhadanpur just 7 Kms
from the plant. Mines' working is fully mechanized and an overland belt conveyor of 7 kms
passing through hilly terrain transports limestone from mines to plant. The aesthetic view of
the surrounding area has been maintained by afforestation of the mining area and also by
creating water reservoir in the excavated area.




                                          A Panoramic view of Mines


                                                                                          31
Captive Power Plant:
To meet the need of the hour and in order to reduce the cost of production, so as to be
competitive, Maihar Cement has installed its own Captive Thermal Power Plant and the
total installed capacity is 35 MW which is helpful in uninterrupted running of the plants on
sustainable basis.




                                          Power Plant View

Logistics:
Strategic location of the plant, connected with NH-7 puts Maihar Cement in a very
advantageous position so far as logistics is concerned. The Plant is well connected by Road with
all the major marketing centers. Being situated on Mumbai - Howrah (via Allahabad) main
Railway Line, it is also well connected with all the States in East & North East.




                                              Rail Lines



                                                                                             32
Maihar Cement is pioneer in producing Blended Cement i.e. Portland Pozzolana Cement. The
motivation for the production of blended cement has been primarily with the aim of preserving
limestone reserves and environment.

Advantages:
        Low Heat of hydration resulting in resistance to cracking.
        Resistance to corrosive water and chemical attacks and thereby longer life to steel/iron
        structure underneath.
        High degree of impermeability and workability for the concrete mix.
        Higher ultimate strength at longer duration
        Higher degree of fineness, resulting in -
           -   Complete chemical reaction
           -   Easy workability
           -   Increased plasticity
        Reduced Alkali aggregate reaction as also free lime expansion and thereby resistance to
        cracking.
        Lower drying shrinkage and low leaching value.



PPC can be used for any type of construction which earlier had been the forte of OPC. However due
to it's special attributes, its use is rather imperative for the following construction works.

Uses:
        Hydraulic Structures
        Mass Concreting Works
        Marine Structures
        Masonry Mortars and Plastering
        Under aggressive Conditions



The basic raw material in the production of cement is Limestone. The Limestone ore as
obtained from the Mines is fed to the Raw Mills after first crushing it to acceptable size. Certain


                                                                                                33
additives such as Laterite, Bauxite, High Grade Limestone (Sweetener) etc. are also introduced
along with Limestone into the Raw Mills as applicable. In the Raw Mills, the above inputs are
reduced to a particular fineness. The output of the Raw Mills, called 'Raw Meal' is then burnt
in the Kiln and then cooled to produce Clinker.

The fuel used for burning of limestone is powdered coal produced from the coal Mill. The
Clinker is thereupon fed into Cement Mill & pulverized along with Gypsum to yield the basic
cement. A certain proportion of Clinker in the production of cement is replaced by Fly ash to
produce PPC.


Process in Nutshell

Scenic View of Our Uniqueness:
   1. Limestone excavated from Mines is transported through Dumpers and fed to crushers

       wherein it is reduced from above 850 mm to 80 mm size.




   2. Environmental friendly Conveyor belts transport the limestone from the Crusher to the
       Plant Site over a distance of 7 kms.




                                                                                           34
3. Scientifically designed Stackers provide for stacking of the limestones received from the
   mines in circular / longitudinal stock piles. Use of Reclaimers ensures consistency in
   quality.




4. State of the Art Vertical Roller Mill grinds Limestone feed to powdered form called Raw
   Meal.




5. Most advanced Coal Mill pulverizes the coal to be injected into Kiln for burning of Raw
   Meal.




6. Rotary Kiln provides for Clinkerisation where in Raw Meal fed from VRM is first burnt to
   melting (1400 C) & then cooled to 100 - 120 C by means of coolers immediately outside
   the Kiln to produce Clinker.




                                                                                         35
   7. Close Circuit Cement Mill ensures high quality grinding of clinker, gypsum and Pozzolana
       to yield best possible uniformity of the cement particles.




   8. Centralized Control Room monitoring the manufacturing process through computers.




Consistency and accuracy in the packing of bags by electronic packing machines:

Packing Plant is equipped with computer controlled electronic packers, which ensure that
cement bags are packed and sealed to 50 kg of cement each accurately. Manual check is also
carried out at random to monitor computer accuracy and introduce correction as applicable.

Packing & Dispatch:




                                                                                             36
Loading of bags in the wagon/trucks is carried out automatically by means of wagon / truck
loading machines, equipped with Electronic Loading Counters which accurately keep count of
the Number of bags being loaded.




Efficient logistic & transportation network ensures prompt delivery of materials to the
customers.


Environmental Management System:
Right from inception, great emphasis has been laid at Maihar Cement on maintaining ecological
balance and environmental preservation so as to provide green, healthy and pollution free
environment. Continuous monitoring of various Pollution Control equipments are done round
the clock to maintain emission levels much below the norms specified by State Pollution
Control Board.

Measures Taken Towards a Cleaner Environment
    Installation of highly efficient Pollution Control Equipments viz., ESPs, Bag Houses and
       Pulse Jet Dust Collectors at every dust generating point in the Plant.

    Regular monitoring of all stacks and ambient air quality.




                                                                                          37
    Proper treatment of domestic affluent generated from residential colony in Oxidation
       Ponds and use of treated water for plantation purposes.

    Massive efforts for plantation of various species of trees for ecological up-gradation.




                                  View of Greenaries in Plant Area




To control fugitive emission, following additional steps have been taken:

       Covering of Conveyor belts transporting various process materials

       All raw materials are stored in covered gantry.

       Water sprinklers have been provided on the roads to check fugitive emission generated
       due to movement of vehicles

       Concretization of roads and floors inside the Plant

       The Fly Ash generated from Thermal Power Plant is used as an additive for manufacture
       of PPC.




                                                                                               38
The Plant maintains perfect harmony with environment through effective pollution control
measures in respect of air, water, land and noise level. All efforts are made to curb pollution at
grass root level.




Environment Policy
Maihar Cement is fully conscious of the environmental impacts of its activities. It also realizes
the need for minimizing the impacts, towards preservation of environment in keeping with the
image of BK Birla Group of companies as a socially responsible organization.




Therefore, Maihar Cement commits to:

       Prevention of pollution incidental to Plant operations
       Adopting clean technology and eco-friendly processes in the Plant
       Compliance with all applicable legal and statutory requirements
       Conservation of natural resources
       Reduction in waste generation.
       Awareness amongst employees and business associates.
       Continual improvement in environmental performance by effective implementation


    The plant has been accredited with IS / ISO 14001 Environmental Management System Certification.




TREES ARE TREATED OUR BEST FRIEND
Every year tree plantation is undertaken in a planned manner on a massive scale. As a result the
barren land acquired by the Company looks like green land today with different varieties of
trees, gardens, lawns, fountains, flora and fauna. The plant presents a wonderful balance
between concrete and ecology with smokeless chimneys and lush greenery all around. Number
of Trees surviving as on date is 1058840.



                                                                                                       39
Clean Development Mechanism:
Cement Industry is highly energy intensive and leads to generation of CO2 during clinkerisation
process due to calcinations of limestone and combustion of fossil fuel inside the Kiln. CO2 is a
Green House Gas (GHG) which leads to depletion of ozone layer above earth's atmosphere
causing health hazard for all living beings. Maihar Cement is actively engaged in reduction of
GHG emissions and has undertaken CDM projects. The project activities consist of an increase
in % addition of fly ash in Portland Pozzolana Cement (PPC) as well as an increase in the
proportion of PPC in the over all product mix. This leads to reduction in usage of clinker in
cement production which in turn contributes to reduction in GHG emissions.

At Maihar Cement, proportion of Blended Cement has been gradually enhanced over the last
few years and today total cement production comprises of Blended Cement only. The project
activity contributes to sustainable development at Regional, National and Global levels in the
following ways-

   o Reduction of GHG emissions - by way of reduction in clinker usage in cement
       production as explained above;
   o Industrial Waste Utilization - Fly Ash Handling and disposal not only involves extra cost
       for Thermal Power Plant (TPP) but also leads to land and air pollution as well as water
       contamination at fly ash ponds / land fills. Hence the project indirectly helps TPP in cost
       reduction and pollution abatement. It also leads to reduction in specific energy
       consumption for cement manufacture and positively contributes to conservation of coal
       which is a valuable renewable natural resource.
Reduced usage of clinker in cement manufacture also means reduction in mining / extraction of
limestone and its associated fugitive dust emission, loss of bio-diversity etc. Therefore the CDM
project related activity has excellent environmental benefits in terms of reduction of carbon
emissions, conservation of natural resources like limestone and coal, decreased environmental
degradation and enhanced waste utilization.




                                                                                               40
Energy Conservation:
All out efforts are made at every level to achieve the highest level of efficiency in managing and
conserving energy resources. This includes involvement of both financial and human resources
coupled with technological upgradation. Following measures have been taken at Maihar
Cement for conservation of electrical and thermal energy:

       Upgradation of Kilns by installation of LP cyclones and upgradation of pre-heater section
       and CIS MFR system on Clinker Grate Cooler;
       Close circuiting of Raw Mills and Cement Mills by installation of High efficiency
       Classifiers;
       Installation of pre-grinder in conjunction with close circuit Cement Mills for capacity
       upgradation and reduction of specific power consumption;
       Replacement of pneumatic conveying system of Raw meal and cement by Mechanical
       handling system
       Incorporation of VVVF drives;
       Replacement of low efficiency fan impellers by high efficiency Impellers;
       Optimization of Raw Mills and Cement Mills by upgradation of internals and grinding
       media charge;
       Dry Fly Ash storage and handling system has been installed at Cement Mill.
       Installation of high efficiency dynamic separators for Coal Mills in place of static Grit
       separators for power saving and better residue control
       Process automation with DCS and Fuzzy logic control


Customer service:
       “Customer delight” remains focus of company’s marketing mix. For that company
       provides best quality cement to the customers followed by prompt and perfect “After
       Sales Services”. Later, independent customer feedback assessment is done to evaluate
       the degree of satisfaction, which is key to Century’s marketing strategy.




                                                                                               41
       “Technical Service Cell” has been setup to provide technical assistance to institutions
       and people engaged in construction work. Besides on site assistance brochures and
       useful guidelines for cement usages provided regularly. Masons, contractors, Architects
       and Engineers are also trained on regular basis and so far 53715 such persons have been
       trained.


       “Advertisements and Promotional” campaigns are created and executed in-house by
       innovative marketing professional involving whole gamut of activities right from
       conceptualization to execution stage.


Market Regions of Birla Gold:
Maihar Cement sales are mainly spread in Madhya Pradesh, Uttaranchal, West Bengal, Bihar,
Uttar Pradesh, Assam and Orissa. The increasing congestion of plants in the Satna belt has led
to intense competition in M.P. market.


Market Segment (State wise):
                     Sl No.                State                Share
                        1        Bihar                         25.91%
                        2        Uttar Pradesh                 46.83%
                        3        Madhya Pradesh                17.86%
                        4        Uttaranchal                   2.47%
                        5        West Bengal                   1.15%
                        6        Assam                         3.48%
                        7        Export                        2.29%


Cross Branding:
Introduction of cross branding concept is the major achievement as packaging of different
brands of Century, Maihar and Manikgarh cement from different manufacturing facilities
started selling as a single brand ‘Birla Gold’; which in turn has given freight benefits and


                                                                                           42
advantage of brand powers of established brands like Birla Faulad, Century Gold, Century
Classic etc. This has significantly improved brands base and realization to cement division.


SELLING CHANNELS:
(1) Stock Transfer:
In Bihar and Uttar Pradesh sales are through stock transfer to company dumps. Handling Agents
manage company’s godown / dumps and cement marketing under instruction of the company’s
local office. Cement is sold through dealers.


(2) Consignment Sale:
Earlier sales in Bihar, Orissa, Assam, A.P. and N.E. States, were made through Consignment
Agents. The Consignment Agents used to develop market and sale cement through dealers.
Storage / Warehousing, sales, collection of payment, tax payment and advertising in the area
were under their responsibilities. But now due to issues in Branding and due to customer
dissatisfaction consignment sale has been stopped.


(3) Dealer Sale:
In Chhattisgarh, the company directly supplies material to dealers against their orders and
collects payment from them. These dealers either retail the cement or sale in wholesale to sub
dealers appointed by them.


(4) Direct Sale:
Government Departments or private companies float tenders/ enquires from time to time for
bulk supply of cement. The company actively participates in these tenders. Marketing agents
assist in getting orders/payments and get small commission for the same.


Maihar Cement is selling through dealers, stock transfer and also selling directly to government
department/institutional buyers.




                                                                                               43
Sl No.   Channel          State                        Sales By               Sales in %

  1      Stock Transfer   Bihar, Uttar Pradesh, N.E.   Handling Agents              27%
  2      Dealer Sale      Chhattisgarh, M.P., Orissa   Dealers                      34%
  3      Direct Sale      All States                   Government,                  39%
                                                       Institutional Buyers

TOTAL                                                                               100%




As on 31st March 2009, Maihar Cement has more than 4000 stockist/agents.




                                                                                           44
CEMENT- Major Players

ACC LIMITED



Established in 1936, ACC has been a pioneer and trend-setter in cement and concrete
technology. A prominent overseas presence and figuring on the elite list of consumer super
brands of India but most importantly ACC has been amongst the first Indian companies to make
environmental protection, it is a cornerstone of its corporate objectives.

The historic merger of ten existing cement companies led to the establishment of ACC –
melding into a cohesive organization in the year 1936 at Maharashtra. It’s a big company in
cement manufacturing and offers the services of Ready mixed concrete and Consultancy
service. This company is listed by Bombay Stock Exchange, National Stock Exchange and in
London.

The company received an award as 'Good Corporate Citizen' for the year 2005-2006. During the
year 2007 company acquired 100 % of the equity stake of Lucky Minmat Private Limited for Rs
35 crores and also acquired 14.3 % equity stake in Shiva Cement Limited. Meanwhile the
company divested its entire equity shares in Almatis ACC Ltd to the Almatis group. The overseas
contract with YANBU Cement Company in the kingdom of Saudi Arabia is successfully ongoing
relationship from last 28 years and has been renewed up to February 28, 2011.

The company has developed comprehensive expansion plans to meet the requirements of its
agenda for growth with a view to attain leadership position in the cement industry, for that
company made a project for augmentation of clinkering and cement grinding. As a result with
this the capacity of Gogal works stands increased to 4.4 Metric Tonnes Per Annum. ACC planed
to expand the unit of Bargarh works capacity to 2.14 MTPA together with 30MW captive power
plant is underway.

Ready mix concrete business has been identified as an area of strategic priority. ACC
commissioned a Wind Energy Farm in Tamil Nadu to promote clean and green technology. The


                                                                                              45
company foresees substantial scope for growth of this business in India and has accordingly
finalized plans to expand Ready Mix business in major cities including Tier1 and Tier 2 cities.
ACC realizes the growth potential of Ready Mix, the company has 26 plants for the same and
enhance to 46 in 2008. The company has major capital expenditure projects in hand, as a result
of these projects the total cement capacity of the company will increase to about 30.4 MTPA by
end of 2010 with total outlay of Rs 4,000 crores.




ULTRATECH CEMENT LTD.

UltraTech Cement Limited was incorporated as a public limited company on 24th August 2000,
as “L&T Cement Limited” a 100% Subsidiary of Larsen & Toubro Limited. The name of the
Company was changed to UltraTech CemCo Limited with effect from 19th November 2003. The
name of the company was again changed to UltraTech Cement Limited with effect from 11th
October 2004.

UltraTech Cement Limited has an annual capacity of 18.2 million tonnes. It manufactures and
markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzalana
Cement. It also manufactures ready mix concrete (RMC). UltraTech Cement Limited has five
integrated plants, six grinding units and three terminals — two in India and one in Sri Lanka.

UltraTech Cement is the country’s largest exporter of cement clinker. The export markets span
countries around the Indian Ocean, Africa, Europe and the Middle East.




INDIA CEMENTS

India Cements was set up in 1946 and the company's first plant was established in 1949 at
Sankarnagar, Tamil Nadu. Since the India Cements Ltd. has been established, it has risen in
stature to become the biggest cement producer in south India. India Cements has 7 plants


                                                                                                 46
spread across Andhra Pradesh and Tamil Nadu. The total production capacity of the plants is
around 9 million tons per year. In south India, India Cements Company has a 28% market share
and it plans to achieve a market share of around 35% in the near future.

Around 90% of India Cements Company's produce is sold in the Tamil Nadu and Kerala markets.
India Cements Company has a distribution network which is very strong - it has over 10,000
stockists out of which around 25% is devoted to the company. The India Cements Ltd owns
famous brands such as Rassi Super Power, Sankar Super Power, and Coromondal Super Power.
In the year of 1990, ICL acquired Coromandel Cement plant at Cuddapah, consequently
installed capacity rose to 2.6 million tonnes per annum). The India Cements Company has
subsidiary companies which include ICL Financial Services, Industrial Chemicals & Monomers,
ICL International, and ICL Securities. In 1997 India cements acquired Aruna Sugars Finance Ltd
which was later renamed as India Cements Capital & Finance Ltd. It also acquired Cement Plant
of Visaka Cement Industry, at Tandur, Ranga Reddy district of Andhra Pradesh with Installed
capacity 9,00,000 Tonnes.The cement division of Raasi Cement (RCL) was vested with the
company from April.1998 under a scheme of arrangement

India Cements has established itself as a leading cement manufacturing company and as it plans
to expand its production capacity, the company's position in the market is sure to rise in the
near future.




AMBUJA CEMENT

The company's cement plant was commissioned in 1985. It was set up in technical collaboration
with Krupp Polysius, Germany, Bakau Wolf and Fuller KCP. The company got necessary
approvals for setting up another cement plant with 1 million tonne capacity per annum at
Himachal Pradesh in the year 1991. The Company undertook bulk cement transportation, by
sea, to the major markets of Mumbai, Surat and other deficit zones on the West Coast.
Transportation was to be carried out by three specially designed ships during the year 1992.
During the year 1994, the company's Muller location 1.5 million tonne cement project with


                                                                                           47
clinkerization facility at site in H.P and grinding facility both at Suli & Ropar in Punjab was
bespoken. In 1997, Kodinar plant of the company was originated its commercial production
with an enhanced capacity.

In the last decade the company has grown tenfold. It was the first company in India to
introduce the concept of bulk cement movement by the sea transport. The company's most
distinctive attribute, however, is its approach to the business. Ambuja follows a unique
homegrown philosophy for successful survival. Ambuja is the most profitable cement company
in India, and one of the lowest cost producers of cement in the world.

The company was awarded for its credit, the National Award for commitment to quality by the
Prime Minister of India, National Award for outstanding pollution control by the Prime Minister
of India, Best Award for highest exports by CAPEXIL and Economic Times - Harvard Business
School Association Award for corporate excellence in different years. The company was
adjudged as the top Indian company in the cement sector for the Dun and Bradstreet -
American Express Corporate Awards 2007. The company developed a unique homespun
channel management model called Channel Excellence Programme (CEP) for marketing their
product. Over 7000 dealerships and 20,000 retailers across India are covered under this model.
The company name was changed from Gujarat Ambuja Cements Limited to Ambuja Cements
Limited on April, 2007, the word Gujarat was dropped to reflect the true geographical presence
of the company.




JAYPEE CEMENT

Jaypee group is the 3rd largest cement producer in the country. The groups cement facilities
are located in the Satna Cluster (U.P), which has one of the highest cement production growth
rates in India.

The group produces special blend of Portland Pozzolana Cement under the brand name ‘Jaypee
Cement’ (PPC). Its Cement Division currently operates modern, computerized process control
cement plants with an aggregate capacity of 13.5 MTPA. The company is in the midst of

                                                                                            48
capacity expansion of its cement business in Northern, Southern, Central, Eastern and Western
parts of the country and is slated to be a 24.30 MTPA cement producer by the year 2010 and
26.80 MTPA by 2011 with Captive Thermal Power Plants totaling 327MW.

Keeping pace with the advancements in the IT industry, all the 140 cement dumps are
networked using TDM/TDMA VSATs along with a dedicated hub to provide 24/7 connectivity
between the plants and all the 120 points of cement distribution in order to ensure “track – the
– truck” initiative and provide seamless integration. This initiative is the first of its kind in the
cement industry in India.

In the near future, the group plans to expand its cement capacities via acquisition and
greenfield additions to maximize economies of scale and build on vision to focus on large size
plants from inception.




LAFARGE INDIA

Lafarge India is a subsidiary of the French Building Materials major Lafarge. Lafarge is the world
leader in building materials, with top-ranking positions in all of its businesses: Cement,
Aggregates & Concrete and Gypsum. Lafarge entered the Indian market in 1999, with the
acquisition of the cement business of Tata Steel. This acquisition was followed by the purchase
of the Raymond Cement facility in 2001.

Lafarge currently has three cement plants in India: two integrated plants in the state of
Chhattisgarh and a grinding station in Jharkhand. Total cement production capacity of Lafarge
in the Indian market currently stands at around 5.5 million tons. Lafarge India produces
different types of cements like Portland Slag Cement, Portland Pozzolana Cement. Lafarge
Cement is famous all over the world for its premium quality and has been used to build many
landmark buildings globally. The company is a leading cement player in Eastern India. It’s
brands Lafarge Cement and Lafarge Concreto Cement enjoy high brand equity here and are
amongst the highest priced brands. Lafarge is committed to the Indian market and has firm
plans to expand its capacity in India.

                                                                                                  49
Lafarge cement is available through a large dealer network, throughout eastern India- in the
states of West Bengal, Jharkhand, Bihar, Chhattisgarh, Orissa and North-East States. Lafarge
Cement is also available in parts of Madhya Pradesh and Maharashtra (Vidarbha region), parts
of Uttar Pradesh, Andhra Pradesh & National Capital Region.




                                                                                         50
PROJECT PROFILE
              51
PROJECT PROFILE
The project entitled "Perception of Trade and Non-trade Segments of BIRLA GOLD Cement"
revolves around the customer, who is the optimal decision maker of a firm's future. Since the
cement is a core product and used by all consumers; it is very necessary firm to now about their
brand's position and customer expectations.

Earlier Marketers aimed at satisfying the customer's need but the present day of Marketing
requires something more that is customers delight.

In this era of globalization Company can survive only when he knows the fast of consumer,
which is changing day by day. A company can get an edge other its competitors in these
cutthroat competitions through superior quality, innovations and better customer
responsiveness.

In order to get competitive advantage in core Industries, A firm will have to not only take care
of consumers taste but also delight its channel partners, which is its external resource.
Normally it takes years to build, and it not easily changed. It ranks in importance with key
internal resources such as manufacturing, research, engineering and field sales processional
etc. It represents a significant corporal commitment to a large number of intelligent companies
whose business is distribution and to the particular market they serve. It represents to a
commitment to a set of policies and practices that constitute the basic fabric on which is woven
an extensive of long-term relationship intermediaries smooth the flow of goods and services.
This procedure is necessary in order to bridge the discrepancy between the assortments of
goods and services generated by the producer and the assortment demanded by the consumer.
The discrepancy results from the fact that manufacturers typically produce a large quality of
limited variety of goods, where as consumers usually desire only a limited quantity of a wide
variety of goods. In order to attain the market share it is necessary to satisfy the channel
members. Channel members are having better knowledge of consumers buying behavior hence
their suggestions regarding the product distributors are of high values.




                                                                                             52
Research Methodology:
DATA COLLECTION METHODOLOGY

Universe

Since the cement is a core product and being used by all types of consumers, so our focus for
collection data was each and every man who are directly or indirectly involved with the sale or
use of cement such as stockists, dealers, civil engineers, contractors, individual customers,
masons, etc.

Sample Plan

To know the position of Maihar Cement in the trade and non-trade segment regarding sale in
comparison with the other brands on the basis of attributes of cement has been done. For this
purpose, opinion of stockists, dealers, engineers, contractors, architects and builders (who
posses knowledge regarding different brands available in the market) has been taken. This
might be helpful to draw the right picture about the market scenario.

This was convenient in nature because I would have to account only those people who actually
require or purchase cement in bulk quantity. The survey is conducted with the help of
questionnaire method and survey is conducted in the Satna region. Survey of 50 traders and 50
non-traders has been done for the analysis.

Data Collection

Every type of research requires two types of data to be collected to reach up to any conclusion.

Primary Data are those data, which are directly obtained from people by approaching them
individually, primary data are generated when the researcher employing mail questionnaire,
telephone surveys, personal interviews, observations and investigates a particular problem at
hand.

For this project primary data was collected from stockists, dealers, engineers, contractors,
architects and builders by using survey method. Data collection from respondents was carried

                                                                                              53
out with the help of a structured interview schedule. In this method data was collected from
respondents through questionnaires. I made a survey based on the questionnaire, which consist
of 21 questions. The mode of survey was directly contacting the people and recording their
response based on well-defined questions and also through telephone.

Secondary Data, on the other hand, includes those data, which are collected in the past for
other research work and are being used in current project work.

Secondary Data, such as procedures of marketing for cement, marketing conditions, brief
details of M/s Maihar Cement and other competitors, price, quality, and other strategy and
planning, specification in relation to other cement companies, all other information which can
be useful to complete this project, was collected for Sales and Marketing Department of Maihar
Cement. Published Documents of Maihar Cement and other competitors’ cement plants have
also been used for collection of secondary data.




NATURE OF SURVEY:

Objective of my study in this project is the discovery of ideas and thoughts from trade and non-
trade segment and is exploratory in nature. Hence instead of probability sampling, a non-
probability sampling procedure has been adopted. Survey was subjective as well as convenient
in nature because I have taken into account those people who are directly related to non-trade
segment.

Accordingly I made a survey based on the questionnaire, which consists of 21 questions. The
mode of survey was direct contacting the people and also on telephone by recording their
response about the questions asked.




                                                                                             54
ASSUMPTIONS MADE:

1. During the project the data regarding the comparison in among different brands on the basis
of market share were required. For collecting those following assumptions are made-

2. Survey of only non-trade segment included engineers, contractors, architects and builders
have been done because it is assumed that only these parties have adequate knowledge and
information regarding cement market situation and they are able to compare different brands
on the basis of attributes of cement.

3. The comparison of different brands was based on retailers’ and dealers perception about
these brands because it has been assumed that they are directly in contact with customers and
they can influence the buying decision of end consumer or buyer

4. The term quality was assumed to be sum total of setting time strength, treatment color etc.
and the opinion was taken in total terms.

5. Delivery promptness, delivery quality and percentage of defective bags of cement reaches to
retailer are taken into account while we were trying to know their perception about any
particular brand on the basis of delivery.

6. Not only the promotional tools uses by company out also advertisement along with other
support provided by marketing team such as payment terms, credit terms, attention on the
feed back on remarks given by retailers are considered while trying to know about marketing
support.

7. In this survey it is assumed that the response provided by respondents is true, genuine and
free from any bias. Results obtained are based only on the opinion of the respondents.



LIMITATION OF THE STUDY
   1. Lack of cooperation from the retailers in regard to giving interview
   2. It was found in some cases dealers showed inclination towards certain brands which
       gave them more margins when compared to others

                                                                                           55
3. It was experienced during the survey that it was difficult to convince or make the
   retailers and dealers understand the important of the project
4. As the retailers and dealers thought that it was unwise for them to give their details of
   business as they feared competitors would take advantage
5. Some time the emotional attachment and brand loyalty of respondents prohibited to
   give correct information
6. The time constraint faced in the project might have affected the comprehensiveness of
   its findings




                                                                                         56
OBSERVATION &
  ANALYSIS
                57
OBSERVATION & ANALYSIS
1. Market Position in terms of Sales:


                Brand                                                %
                JAYPEE-BULAND                                       35.31
                PRISM-CHAMPION                                      34.11
                ACC                                                 13.12
                BIRLA-GOLD (MAIHAR)                                 10.40
                BIRLA-SAMRAT (SATNA)                                07.06

                Total                                            100%


Jaypee and Prism Cements have a good market share in Satna region. Here people are price
conscious and even aggressive marketing by Jaypee has allowed it to capture a large market
here. Birla Gold should respond by launching innovative marketing campaigns so that it can
increase its market share.




In the Satna market some area like MAIHAR, Naguad, Singhpur JAYPEE has sales of around 95-
99%. But some area of SATNA Zone like SATNA City market is captured by the PRISM & ACC
Comparitively Birla Gold stands 4th in ranking. It has considerable market share in places such
as Kotar, Birsinghpur, DevendraNagar, Panna.



                                                                                            58
2. Customer Preference of the Brand:



               Brand                                          %
               JAYPEE-BULAND                                 29.2
               PRISM-CHAMPION                                25.3
               ACC                                           18.0
               BIRLA-GOLD (MAIHAR)                           18.4
               BIRLA-SAMRAT (SATNA)                          09.1

               Total                                      100%




Birla Gold has a decent image in consumers mind. It can increase its market if it increases its
availability by enhancing its dealer network and increasing the number of counters where it
could sell its product. Thus compared to market share Birla Gold has a better Brand Image,
hence by strengthening its marketing and sales efforts it can leverage in this region.



                                                                                            59
3. Purchasing frequency and reasons
According to this survey:

a) In summer i.e. March, April, May about 35% of the cement purchase increases. It is due to
good climatic conditions for starting new construction work.

b) In monsoon i.e. from June to August about 30% of the construction work is decreased due to
rains.

c) 35% purchasing of cement is done according to the availability of work and the purchasing
does not depend upon seasons.




Hence attempts need to be done to maximize their sales efforts in summer and launch heavy
marketing during rainy seasons to increase sales. As we know that sales in cement is seasonal,
there is a need to launch different marketing campaigns according to season to target its
customers more accurately.




                                                                                             60
4. Decision for selection of brand:


Advertisements- 35%

Contractors, Masons, Engineers advice- 50%

Personal Decision- 5%

Family Referrals, Word of Mouth- 10%




It can be seen that customers give the maximum weightage to the advice of masons, engineers
and contractors. Even Advertisements play a major role in their buying decisions. Very few
people take personal decision while buying cement and family referrals also effects their
selection of a brand.

Thus company should make maximum efforts to attract masons, contractors and also launch
innovative advertising campaigns to attract more customers.




                                                                                        61
5. Availability of Promotional Schemes


             No. of persons    Schemes

                   58          Availing Promotional Schemes

                   32          Not Availing any Promotional Schemes

                   10          Don’t want to disclose their schemes




From the above data I can say that there are abut 32% of respondent who are not availing any
promotional schemes and they are most important for any company to make them their
customer by offering them schemes.

Some companies such as ULTRATECH, ACC send their sales representatives to the construction
of the site. This place a very good impression on customers but this is only a marketing gimmick
of cement companies.




                                                                                             62
6. Ranking of Technical Promotion activity of Birla Gold


        Technical promotion                      % of customer       Rank
        Engineer meet                                   10             3
        Architect Meet / builders meet                  30             2
        Mason meet                                     55.7            1
        T.S.E. visit                                    4.3            4
        Total                                           100




Most of the respondents gave high ranking to mason meet conducted by Birla Gold, but
complained that company did not conduct ample builders/engineers meet and also complained
that the Technical Sales Executive visits are less by the company.




                                                                                      63
7. Under the brand promotion re-arrange the importance of the following attempts
done on dealer side.


                    Dealer Level                       %of customer    Rank
                    Dealer Meet                             40           1
                    Sub- Dealer                             20           3
                    Gift Item                               25           2
                    Foreign journey                         2            5
                    Van program                             5            6
                    New year calendar& Dairy                8            4
                    Total                                  100




Most of the counters are said that all type of programs provided by the company is utilized by
dealers and sub-dealers are using most of the facility what is given by the company. In many
counters I found that company gives gift items to the Dealers to distribute it to customer and
mason like dairy, calendar, pen, stickers, bags etc.


                                                                                           64
8. Place these mass publicity media on the basis of its importance under brand
promotion.



            Advertisement Media                      % of customer      Rank
            Hoarding                                          10          4

            Wall painting                                     30          1

            T.V. advertisement                                8           5

            Advertising in Newspaper                          25          2

            Radio advertisement                               5           6

            Banners                                           22          3




Wall painting is playing important role in mass publicity; this observation is done by large
amount of customers and is thus given higher priority. News paper advertisement is in second
position and Banner is in third rank in for mass publicity.




                                                                                         65
9. Factors affecting selection of a Brand:

In the questionnaire respondents were asked to rate the reasons that why a particular brand is
preferred by them. Ranking to different reasons was given and a chart was prepared.

Points      A        B        C        D        E        F        G        H         I        J
         (Price)   (S.P.S) (Pers.)   (C.P.)   (Advt)   (Qlty)   (Ava.)   (Ass.)   (G.I.C)   (S.R.)

1           -        -        -        -       44        -       12        -        40        -
2           -       12        -        -       12        4        8       34        16        -
3           4       12        -       14       20        -        2       26        16        -
4           -       16        9       10       16        2       18       16         -        -
5           -       38        6       20        2        -       20        6        6         -
6           -       18       30       28        -        -        -        -        4        10
7           6        -       30       18        2        8        8        6        4        16
8          14        -        -       10        -       12        8        8        10       34
9          16        -        4        4        -       28        -        -         -       30
10         40        -        2        2        -       42        -        1         -        6



A (Price) = 00+00+12+00+00+00+42+112+288+400 =854

B (Sales Promotion Schemes) = 00+24+36+64+190+108+00+00+00+00 =422

C (Personal Contact) = 00+00+00+36030+180+210+00+72+40 =568

D (Credit Period) = 00+00+42+40+100+168+126+80+36+20 =216

E (Advertisement) = 44+24+60+64+10+00+14+00+00+00 =840

F (Quality) = 00+08+00+08+00+00+56+96+252+420 =840

G (Availability) = 12+16+6+72+100+00+56+64+00+00 =326

H (After Sales Service) = 00+68+78+64+30+00+42+64+00+00 =346

I (Goodwill & Image) = 80+32+48+00+30+24+28+48+00+00 =282

J (Structural Requirement) = 00+00+00+00+00+60+112+272+270+60 =714

                                                                                                  66
Calculation Procedure is given in appendix

From the above results I prepare a list of rankings of factors that affect the decision of
customers to select a particular brand. The list is as follows:


              Ranking      Reason                                             Points
                 1         Price                                               854
                 2         Quality                                             840
                 3         Advertisement                                       840
                 4         Structural Requirement                              714
                 5         Personal Contact                                    568
                 6         Sales Promotion Schemes                             422
                 7         After Sales Service                                 346
                 8         Availability                                        326
                 9         Goodwill & Image                                    282
                10         Credit Period                                       216




1. Price:

Birla Gold’s price is economic as compared to all the established brands i.e. ACC, ULTRATECH,
etc. But competitors such as Jaypee and Prism provide cement at lower prices. Respondents in
Satna area rated the price factor as 1st preference. This shows the importance of price factor in
the selection of brand. Most of the respondents suggested that the company must reduce the
price of the product and control over price hike. So the company has to adopt a suitable price
policy to increase its sale.

2. Quality:

In this region Birla Gold is an established name. But people perceive Birla Gold to contain more
Fly-Ash which reduces quality. Respondents’ ranked quality as 2nd. Birla Gold should try to
project that it provides one of the best quality cement.


                                                                                              67
3.Advertisement:

In my survey this attribute is rated 3rd. So according to the survey most respondents gave this
attribute not much importance for selecting the brand of cement. So the company should try to
improve services rather than spending more on advertisement.

4. Structural Requirement:

This factor is rated 4th. People perceive ACC to be the best while giving foundations/roofing to
any structure. Similarly they consider Birla Gold to be optimal while building walls, light
construction, etc. Company should strive hard to educate people to use its cement in different
structural requirements.

5. Personal Contact:

In this survey personnel contact is rated as 5th position. Personnel Contact has an everlasting
effect on the relationship among individuals, so the company should try to maintain healthy
personnel relationship with stockists, dealers, engineers and contractors.

6. Sales Promotion Schemes:

In the non-trade segment Sales Promotion Schemes are effective tools to increase the sales. In
my survey sales promotion schemes are rated at 6th position. This aspect should be given more
consideration and should provide more sales promotion schemes for those who are not availing
it and also for potential buyers.

7. After Sales Services:

According to the survey After Sale Service factor is rated at 7th position. To increase the sale
company should have to try to handle the complaints of customers immediately and try its level
best to satisfy the customers.

Service Engineers should be deployed for this and routine checkup of construction site of
customers should be made.



                                                                                             68
8. Availability:

Availability is rated 8th as per the survey. The company must improve its distribution channels
and dumps should be formed in Satna region in order to meet the demands of customers as
soon as possible. In this world where the time is very precious, the delivery of cement must be
immediate. It is an important key for every business to succeed.

9. Goodwill and Image of the Company

Goodwill is an important asset for every company and it requires years to form it. The goodwill
and image factor is ranked 9th according to the survey.

Birla Gold has its biggest attribute in the form of ownership owned by prestigious Birla Group,
so it has earned good image in the market but further brand upliftment exercise is also
required. By giving the technical assistance in the form of making necessary information
available regarding their product and its proper usage can increase the goodwill in the non-
trade segment. Company also can conduct seminars and Masons’ meeting to improve the
goodwill of the company.

10. Credit Period:

In this survey the factor, the respondents rate credit period as 10th preference. The customers
demanded the duration of the credit period should be of minimum 90 days, but it is not
advisable; keeping in view the risk involved and is not feasible from the industry’s aspect.
However by seeing the competition with other brands and the market trend of other building
materials as well as goodwill of customers, credit facility can be extended for a reasonable
period.




                                                                                            69
10. In the questionnaire respondents are asked to give suggestions to the company
so that it can improve its sales in the non-trade segment.

Out of 50 respondents:

20 [40%] Are suggested that the company is to interact [improve the personal relations] with
engineers, contractors, builders, and architects.

17 [34%] Are suggested that the company have to reduce the price and minimize the price
variations and also improve and maintain the quality of the cement.

13 [26%] Are suggested that the company have to promote the non-traders by introducing
promotional schemes and the company must give more and more technical assistance to them.

11. Level of satisfaction

The respondents have made various suggestions that how a company can improve level of
satisfaction in a customer-

a) Giving more emphasis on better quality.

b) More personal relationship between company and customer.

c) Giving promotional schemes to their customers in the form of technical assistance.

d) The recent changes in manufacturing technology should be known to customer through
representatives of the company.




                                                                                         70
FINDINGS
           71
FINDINGS
SWOT ANALYSIS
STRENGTH:
  1) Marketing team of Maihar Cement is having good relations with its channel partners
     hence they are able to understand their problem and provide best possible support.
  2) People ask for bleakness in cement and Maihar Cement has this.
  3) Maihar Cement is having best packaging in comparison to other brands.
  4) Due to its delivery promptness and effective delivery system Birla Gold scores over
     other brands of cement.


WEAKNESS:
  1) The competitors are doing much promotional activity rather than Birla Gold that’s why it
     facing more problems in selling of product in the market. Players such as Jaypee, Prism,
     Ultratech and Lafarge are spending heavily in advertising compared to Maihar Cement.
  2) Company is not having the best demand, as it is not perceived as of better quality than
     ACC, Ultratech.
  3) Company is not having good image in comparison to few leading brands, as company is
     not projecting its image through advertisement.
  4) Lack of awareness program for consumers. They think Birla Gold contains more FLYASH.


OPPORTUNITY:
  1) Rapid growth is taking place in Bihar and Madhya Pradesh. People are opting for more
     stable structures and intensive use of cement is taking place, even government is
     spending heavily on infrastructure projects. Thus, this is the right time to fully tap these
     markets.
  2) As Indian core industry is also growing at rate of nearly 10% per annum, Birla Gold is
     having a good future.
  3) Foreign direct investment in infrastructure sector going to increase in coming years,
     which will increase the demand of cement.

                                                                                              72
   4) Road's are undergoing through the transformation process through which the
      traditional method of road building will be replaced by modern concrete roads.


THREATS:
   1) Large number of players in cement industry makes it more competitive for Maihar
      Cement to carefully price its product and at the same time satisfy its dealers and
      customers.
   2) Due to India’s exponential growth many new international cement companies are
      expected in coming years which will bring a tide of change and can start price war.
   3) The emergence of small players in this market may increase the competition and start
      the malpractices, and heavy discounts to retailers. They can also influence many
      retailers by giving better profit margin, and other benefit.


REASONS STATED BY RETAILER FOR BRAND PREFERENCE:-

MAIHAR CEMENT (Birla Gold)
    Good relationship with the company people
    Price is low and affordable for people
    Low price helps to sell easily
    Quality is good
    More profit selling the brand


LAFARGE (Concreto)
    Better quality
    Good name in the market
    Timely available
    Immediately respond on the competitors’ strategy
    Relatively less price
    Better packaging




                                                                                            73
ACC (Suraksha)
    People ask for ACC, it is having a good image and brand loyalty among consumers
    Service is good
    “Dhalai karne ke liye” people ask for ACC
    Perceived to be of very superior quality cement when compared to others
    Selling form the very first day the shop came in to being & sells easily
    They have same price prevailing for wholesale at dealers/stockiest retailers end.


PRISM CEMENT (Champion)
    Customers preference
    Good cement, plastering work is good
    Price is suitable as per customers pocket
    Rate & profit


JAYPEE CEMENT (Buland)
    Rate & profit
    Price is suitable as per customers pocket
    Service is good
    Good relationship with the people Jaypee


ULTRATECH
    Good name in the market as it carries the goodwill of L&T
    High Brand awareness among customers
    Good Advertisements
    Famous Brand




                                                                                         74
PROBLEM FACED BY-
  1. STOCKISTS
           None of the stockiest had any complains about any brands, in regards to the
            price, transport, service etc
           Dispatch being closed at the start of the month is a ”trump card“ for them to
            play in the market to push the sale
           Stockiest are satisfied with the companies service


  2. RETAILERS
           The stockiest occasionally inform about the price change in the market
           They do not make personal visits to the counters frequently
           Price should be stabilized in the market
           Price stability in regard to the price set by the company as well as wholesalers
            (i.e. all the wholesalers should have the same price offered in the market)
           Dispatch being closed every start of the month is a problem is a problem for
            them to stick to the commitments made by them to the customers
           Small quantity ordered is not furnished on time
           Pressurize them for taking more quantity for more quantity for transportation
            facility
           Maihar Cement now does not give any gifts at the counters


  3. CUSTOMERS
           Large quantity of cement is not readily available
           Cracks in structures
           Low Brand Awareness
           Less number of people advise to use Birla Gold




                                                                                          75
Based on these the major findings are stated as below:
   1. ACC was perceived as the brand with best quality followed by Ultratech and then
       Maihar Cement.
   2. Maihar Cement is having best packaging perceived by the respondents.
   3. Maihar Cement is having best delivery system and terms among all cement brands in
       respondents perception followed by ACC and Lafarge.
   4. Marketing team of Maihar Cement is providing best support to its channel partners.
   5. Jaypee Cement is investing a huge amount on advertisement in order to address
       consumers. And also its supply is very fast, that's why it’s becoming extremely popular.
   6. Maihar Cement is in more demand due to the reputation of its dealers & credit facilities
       given to the customers.
   7. Word of Mouth publicity and Reference publicity are very important media that affects
       the sales in cement industry.
   8. Buying decision of the end customer is heavily dependant on recommendation from the
       mason, engineers and contractors. Hence there is a need to maintain good relationship
       with them.
   9. At present cement consumer is flooded with choices due to the existence of numerous
       brands in the market. Hence the cement companies need to carefully monitor their
       prices and execute dynamic advertising campaigns to attract the customer.
   10. Maihar Cement is very popular in price-sensitive segment of customers.




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RECOMMENDATIONS
  & CONCLUSION
                 77
RECOMMENDATIONS AND CONCLUSION
In this modern era when globalization and liberalization has brought a tide of change and only
those companies can survive, which will ride on it or which will keep them isolated and let the
tide go. No company can be untouched from the storm of change and the pace of adaptive-ness
will decide its success. The market share of company will be decided from the value it gives to
the customer, the relations it has with its channel partners and end consumers, the number of
innovative products it has in its basket and its position in consumers mind.

1. The company is having quality products but it is unable to harvest it because they haven't
projected their advertisement on quality hence company should project its image through
advertisement. Quality accreditation and awards got by the company can be projected.

2. Company is having one of the best marketing supports, delivery term and packaging with
which can tap the new opportunity thrown in market buy loss of market share of ACC, as well
as Jaypee.

3. Company should increase its reach hence it should increase its numbers of dealer and
emphasis on retailing has to be done. But company should be careful in doing so because it may
bring dissatisfaction among existing dealers.

4. Company should increase the meets for reference groups like Engineers, Architects, and
Builders & Constructions companies as they play major role in influencing buyers purchasing
decision.

5. Company should give stress on the quality of cement.

6. The reach to the rural market need to be strengthened and transportation to rural areas
need to be strengthened, a significant amount of business is lost because of this.

7. Effective Branding needs to be done. Cement is merely the means to an end—a dream home.
The challenge, therefore, is to develop an identity or personality for the product that
consumers can relate to. Hence innovative advertisements should be used to stand out in the
crowd.

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Based on my research I would like to suggest 2 lateral strategies for the company to adopt-

1) “Micro-lending” in Rural areas:

People in the rural regions of Bihar and MP were less affluent. Their inability to secure credit
emerged as a primary obstacle to financing construction projects. I discovered that in these
regions communities would conduct lotteries in which a group of families contribute a specific
sum each month to a pool and one lucky family would win the entire amount at the end of the
month. The winnings are then diverted to purposes such as Weddings and celebration of
festivals.

I will recommend that working with the local leaders, Maihar Cement should help community
organizers establish similar financing pools in which, instead of cash, the winners can receive
building materials, including cement. In addition, Maihar Cement can provide construction
advice and blueprints to the winners.

Hence this program can be aimed to these potential customers by appealing to their aspirations
and thus provide them psychological satisfaction through financial benefits. This program can
create loyal customers and will enhance the image of the company.

2) “Retailing” in Urban Areas:

Maihar Cement can strengthen its hold over distribution, by its foray into retailing. It can
increase cement usage in these areas by providing building solutions to retail consumers. It can
thus open company- owned retail outlets.

The company can tap the segment where customers are keener to build their homes rather
than buy a pre-built flat. This is evident in Tier II cities and smaller towns. As Bihar and M.P.
have no major metropolitan cities, this concept can work well here. Here flat culture isn’t
popular and individuals still build their homes through local contractors and laborers. Each
retail outlet can have a qualified civil engineer who will assist customers.




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ANNEXURE

           80
ANNEXURE
CALCULATION PROCEDURE



    1. All the reasons are given points according to their ranking.
         For example: The reason which is ranked 1st by the non-traders is given 10 points and
         the reason ranked 2 is given 9 points like this allotment of points is made to all the
         reasons.
    2. Division of all the reasons is made separately according to their ranking.
    3. To calculate the total points of each reason, all the ranking is multiplied with its points
         and then their addition is made.

Total points for each factor is calculated as:

A = ak + al + am + an + ao + ap + aq + ar + as + at

B = bk + bl + bm + bn + bo + bp + bq + br + bs + bt

C = ck + cl + cm + cn + co + cp + cp + cr + cs + ct

D = dk + dl + dm + dn + do + dp + dp + dr + ds + dt

E = ek + el + em + en + eo + ep + ep + er + es + et

F = fk + fl + fm + fn + fo + fp + fp + fr + fs + ft

G = gk + gl + gm + gn + go + gp + gp + gr + gs + gt

H = hk + hl + hm + hn + ho + hp + hp + hr + hs + ht

I = ik + il + im + in + io + ip + ip + ir + is + it

J = jk + jl + jm + jn + jo + jp + jp + jr + js + jt



Abbreviations:

a = Price

b (S.P.S) = Sales Promotion Schemes

c (Porc.) =Personal Contact


                                                                                                     81
d (C.P.) =Credit Period

e (Advt.) = Advertisement

f (Qu.) = Quality

g (Aval) =Availability

h (A.S.S.) = After Sales Service

i (G.I.C.) = Goodwill and Image of the Company

j (S. Req.) = Structural Requirement



The survey was conducted in Satna City (Prem Nagar, Pateri Road), Kothi Road,
Dhawari, Unchehra, Maihar, Devendra Nagar, Panna, Nagaud, Singhpur, Kotar,
Birsinghpur, MadhavGarh, Sajjanpur and Rampur regions of Satna area.




QUESTIONNAIRE:

Name:

Name of the Business (in case of stockist/dealer):………………………………………….

Address: ………………………………………………………………………………….…………………..

Contact Details: Ph. …..………………… Mob: …….………………… Fax: ……………...……...

E - mail: ……………………………………………………………………………………………………….

Category : Contractors/Engineers/Builders/Institutions (non-trader)

1. Name the Brand of Cement you sell:

    a. Jaypee Buland
    b. Birla Gold


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   c. ACC
   d. Prism Champion
   e. Birla Samrat
   f. Ultratech

2. Which Brand do you Prefer?

   a. Jaypee Buland
   b. Birla Gold
   c. ACC
   d. Prism Champion
   e. Birla Samrat
   f. Ultratech



3. Is your decision influence by anyone?

   o Yes
   o No



4. If yes then by whom?

    Engineers or Architects
    Masons
    Advertisements
    Personal Discussion
    Contractors
    Brand Image of the company

                                           83
5. Name the different promotion schemes offered by different companies
known to you

6. Under the brand promotion Re-arrange the importance of the following
attempts done on dealer side?

  a. Dealer meet
  b. Sub-Dealer meet
  c. Gift item
  d. Foreign tour
  e. Van program
  f. New year Calendar and Dairy



7. Rate the following attempts done for mass publicity on the basis of its
importance under the brand promotions.

  a. Hording
  b. Wall panting
  c. TV advertisement
  d. News paper Advertisement
  e. Radio advertisement
  f. Hoarding and Banner



8. Do you get any technical assistance from any company? If Yes, How?



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9. What according to you the company does to increase its sales in this
segment?

10. During which month/period your purchasing is

    Maximum, Reason?
    Minimum, Reason?



11. Do you have any complaint with any company?

      o Yes
      o No



12.    Are you satisfied with the service given by the company regarding
complaint resolution?

   o Yes
   o No



13. How a cement company can improve the level of satisfaction of you?
Please explain.



Thank you for your support…….!




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