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A

PROJECT REPORT
ON
PERCEPTION OF DEALERS AND CONTRACTORS ABOUT
THE SHREE ULTRA CEMENT
IN

Submittedto R.T.U Kota in partial fulfillment for the


Award of degree of
Master of Business Administration

Submitted To:

Submitted By:-

Mr. Sumit Kumar

Virendra Singh
MBA 4TH SEM

MAHATMA GANDHI COLLEGE OF MANAGEMENT


15-A, RIICO IND. AREA, SITAPURA, JAIPUR
1

DECLARATION

Here by I declare that project report entitled PERCEPTION OF DEALERS AND


CONTRACTORS ABOUT THE SHREE ULTRA CEMENT submitted for the
degree of Master Of Business Administration, is my original work and the project report
has not formed the basis of the award of any diploma, degree, associate ship,
fellowship or any other titles. It has not been submitted to any other university or
institution for the award of any degree or diploma.

Date

VIRENDRA SINGH
MBA 4 th SEM

Place

CERTIFICATE

This is to certify that Mr. Virendra Singh student of MBA fourth semester of Mahatma
Gandhi College of Management, Jaipur, has completed his project report on the topic of
PERCEPTION OF DEALERS AND CONTRACTORS ABOUT THE

SHREE ULTRA CEMENT. under the supervision of Mr. Sumit Kumar


To As Far as my knowledge the report is original and has not been copied or submitted
anywhere else. It is an independent work done by him.

MR. SUMIT KUMAR

CONTENTS

Sr. No.

Particulars

Page No.

Preface

The industry profile

8-33

Cement-types
The Cement Industry Structure
Characteristic of Cement Industry
Major Demand Drivers
Major Players in Cement Industry
Cement Manufacturing
Business and Managerial Challenges
Risk and Return of Cement Companies

History of the company

34-36

Organization profile of Shree Cement Limited

37-45

The Companys Vision & Mission


Marketing
Product & Policies

Need of the study

46-47

Objective of study

48-49

Scope of study

50-51

Research Methodology & Data Sourcing

52-73

7
8
9

SWOT Analysis

74-75

10

Findings & Conclusion

76-77

11

Suggestion & Recommendations

78-79

12

Bibliography

13

Appendix

80-81
82-85

Prefece

Classroom teaching helps the student by making conceptual base clear, but on the
job training is a way, which helps the students to get the applied knowledge of the
concept. Normally the students are not aware of the actual requirement of practical
field, keeping in view this fact; project study has been established to make the
students acquainted of actual difficulties that are to be faced in the demanding
corporate sector.
Project Study at Shree Cement Ltd., has given me a great experience. I was
required to prepare a Project report on the topic PERCEPTION OF DEALERS
AND CONTRACTORS ABOUT SHREE ULTRA CEMENT. The managers
of marketing department helped me a lot to prepare this report.

( VIPIN GARG)

The
Cement
Industry
PROFILE

The Cement Industry PROFILE

The Indian Cement industry dates back to 1914, with first unit were set-up at Porbandar with a
capacity of 1000 tones. Currently The Indian cement industry with a total capacity of about 170
m tones (excluding mini plants) in FY07-08, has surpassed developed nations like USA and
Japan and has emerged as the second largest market after China. Although consolidation has
taken place in the Indian cement industry with the top five players controlling almost 50% of the
capacity, the remaining 50% of the capacity remains pretty fragmented.

Per capita consumption has increased from 28 kg in 1980-81 to 115 kg in 2005. In relative terms,
Indias average consumption is still low and the process of catching up with international
averages will drive future growth. Infrastructure spending (particularly on roads, ports and
airports), a spurt in housing construction and expansion in corporate production facilities is likely
to spur growth in this area.

South-East Asia and the Middle East are potential export markets. Low cost technology and
extensive restructuring have made some of the Indian cement companies the most efficient
across global majors. Despite some consolidation, the industry remains somewhat fragmented
and merger and acquisition possibilities are strong. Investment norms including guidelines for
foreign direct investment (FDI) are investor-friendly. All these factors present a strong case for
investing in the Indian market.

Types of Cement

Cements are of two basic types- gray cement and white cement. Grey cement is used only for
construction purposes while white cement can be put to a variety of uses. It is used for mosaic
and terrazzo flooring and certain cements paints. It is used as a primer for paints besides has a
variety of architectural uses. The cost of white cement is approximately three times that of gray
cement. White cement is more expensive because its production cost is more and excise duty on
white cement is also higher. Shree cement does not manufacture white cement at present.

GREY

Portland

WHITE

Ordinary Portland cement

Pozzolona

Cement (PPC)

Pozzolona used in the manufacture of Portland cement is burnt clay of flyash generated at
thermal power plants. PPC is hydraulic cement. PPC differs from OPC on a number of counts.
Pozzolona during manufacturing consumes lot of hydration heat and forms cementious gel.
Reduced heat of hydration leads to lesser shrinkage cracks. An additional gel formation leads to
lesser pores in concrete or mortar. It also minimizes problem of leaching and efflorescence.

10

The Cement Industry Structure

Presently the total installed capacity of Indian Cement Industry is more than 175 mn tones per
annum, with a production around 168 mn tones. The whole cement industry can be divided into
Major cement plants and Mini cement plants.

Major Cement Plants:

Plants : 140

Typical installed capacity

Per plant : Above 1.5 mntpa

Total installed capacity : 170 mntpa

Production 07-08: 161 mntpa

All India reach through multiple plants

Export to Bangladesh, Nepal, Sri Lanka, UAE and Mauritius

Strong marketing network, tie-ups with customers, contractors

Wide spread distribution network.

Sales primarily through the dealer channel

Mini Cement Plants:

Nearly 300 plants & Located in Gujarat, Rajasthan, MP mainly

Typical capacity < 200 tpd

Installed capacity around 9 mn. Tones

Production around : 6.2 mn tones

Mini plants were meant to tap scattered limestone reserves. However most set up in AP
11

Most use vertical kiln technology

Production cost / tonne - Rs. 1,000 to 1,400

Presence of these plants limited to the state

Infrastructural facilities not the best

REGIONAL DIVISION

The Indian cement industry has to be reviewed 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, and

Central Uttar Pradesh and Madhya Pradesh

12

INDUSTRY CURRENT SCENARIO


SECTOR OUTLOOK

Indian Cement Industry is set to increase production capacity by 28.3 mt in FY09E, 41.4 mt in
FY10E and 18.9 mt in FY11E. This will take the aggregate installed capacity to ~288 mt. In
FY08, 21 mt of capacity was added. The Industry planned this massive capacity expansion of
108 mt because they had never seen such a good run till FY2006. During this period, the
capacity utilization rate of the Industry reached an all time high level of ~99% in FY08. In the
period FY05 to FY08, cement demand grew at a CAGR of 10.5% and average retail price
increased by a whopping 41% to Rs 230 per bag. Cement manufacturers made huge profits and
the Industry average per tonne of operating profits crossed Rs 1100. Driven by theses
profitability levels, average RoCE level of the Industry crossed the 25% mark.
13

Cement Industry is set to add ~89 mn tonnes of capacity between FY09-FY11E, which accounts
for ~48% of FY08 installed capacity. We expect ~21 mt of capacity addition in Q4FY09,
followed by 41 mt of additional capacity in FY10 and 18.9 mt in FY11. Of the new capacities, ~
41 mt (~50%) is expected to be commissioned in the South, followed by 13.3 mt (~16.4%) in the
North and 13 mt (16.1%) in the East.

14

SHARE OF CAPACITY ADDITION (REGION-WISE AND TOP 5


GROUPS)

15

ANTICIPATED GROWTH IN CEMENT


DEMAND
Housing construction accounts for around 60-65% of the total cement demand and the balance
comes from infrastructure sectors including roads, railways, ports and power, among others. The
demand for cement is directly linked to economic activity and has a high correlation with GDP
growth. Infrastructure investments and construction activities, which are the major drivers of
cement demand, are also key components of GDP. Further, rural housing, which is a determinant
of cement demand, depends on agricultural productivity, which again is a key component of
GDP.
Historical data of last 12 yrs shows that cement demand in India has increased at the rate of
1.27x the growth rate of GDP. It is expected that cement consumption growth would shrink
16

over the next two years due to uncertain economic conditions and slowdown in real estate
construction activities. Cement demand will consequently grow by 8.7%, 7.6% and 8.9% in
FY09, FY10 and FY11 respectively.

CAPACITY EXPANSION TO WEAKEN PRICING POWER

It is believed that the capacity expansion program will only weaken the pricing power and
profitability of the companies in the future. In a scenario where oversupply is inevitable,
companies could try to increase their market share by decreasing their prices, leading to a
possible price war.

Economic Analysis
-Key Economic Indicators

17

World GDP, also known as world gross domestic product or GWP - gross world product,
calculated on a nominal basis, was estimated at $65.61 trillion in 2007 by the CIA World Fact
book. While the US is the largest economy, growth in world GDP of 5.6% was led by China
(11.9%) and India (7.2%)

18

Inflation worldwide

The recessionary pressures felt across the globe resulted in a massive decline in the
supply of money. This, in turn, affected commodity prices, resulted in low inflation rates

Higher degrees of inflation, particularly in two digits, will defeat all business planning,
lead to cost escalations and squeeze on profit margins. These will adversely affect the
performance of industry and companies.

19

Unemployment Rates:

20

Interest rates: the rate offered on overnight deposits by the Central Bank or other
authority

21

If interest rates increase across the board, then investment decreases, causing a fall in
national income.

Characteristics of Cement Industry

This section describes the basic economic characteristics of the cement industry by following the
classical approach which consists of successively examining demand, supply and market
structure. On the basis of these characteristics are described the main economic stakes in the
sector.

Demand &Market
Demand in the cement industry is typically that of an activity which is mature, cyclical and with
low price elasticity. It is also characterized by a high degree of horizontal differentiation in terms
of location

and a low degree of vertical differentiation in terms of quality.

Cement is a homogeneous product. Most of its sales concern about half a dozen commercial
varieties, of which Portland cement is by far the leader. No brand name exists, so that one
suppliers products can easily be substituted for another. Cement is, however, an experience
good; its quality is guaranteed by standards with which the supplier has to comply. These
standards are often national but in most cases the products of one country can easily be approved
in neighboring countries. Standards therefore do not constitute trade barriers as such, even if they
may hinder trade.
The demand for cement is geographically widely dispersed and corresponds roughly to
population density. Although cement is an upstream industry, it differs from other basic
industries such as aluminum, steel or glass, for which demand id concentrated both
geographically and in terms of the number of customers. In the cement industry demand is by, by

22

contrast, dispersed in multiple zones of consumption, each of which comprises numerous


customers. Geographical factors thus determine the structure of the market.

Supply
Two economic considerations are important a priori in structuring supply in a market
characterized by strong horizontal differentiation:

The trade-off between fixed costs and transport costs which, depending on the economic
size of the factories, gives an initial idea of the density of the network of production units
covering the territory, in relation to the density of demand.

The level of investment costs and the life-span of facilities which determine the rigidity
and the duration of the network.

Expected Demand and


Supply

23

Major Demand Drivers

Present Demand drivers

Infrastructure & construction sector the major demand drivers. Some demand determinants

Economic growth

Industrial activity

Real estate business

Construction activity

Investments in the core sector

Growth in mortgage business in retail housing

Higher surplus income of household

Opportunities

growth in the housing sector

central road fund established for national highways and railway over bridges to provide
the necessary impetus

expansion plans, Greenfield projects on the anvil

Demand supply balance expected in the next 12 15 months

Encouraging trend in demand due to pick-up in rural housing demand and industrial revival

Industry likely to grow at 8-10% in the next few years


24

Newer capacities in future

MAJOR PLAYERS IN CEMENT INDUSTRY:


SHREE CEMENT LTD
Shree Cement Ltd is a Rajasthan based company, located at Beawar. The company has installed
capacity of 10.2 mn tonnes per annum in Rajasthan. It is a leading cement manufacture company
in North India and has been participating in the infrastructure transformation of India for over
two decades now. It started operations in the year 1985 and has been growing ever since. Its
manufacturing units are located at Beawar, district Ajmer, and Ras, district Pali, in Rajasthan. It
also has grinding units at Khushkhera, district Alwar in Rajasthan, near Gurgaon.. It has three
brands under its portfolio viz. Shree Ultra Jung Rodhak Cement, Bangur Cement and Rockstrong
Cement. The multi-brand strategy makes Shree the number one cement player in Rajasthan,
Haryana and Delhi. The company has also established two grinding units one at Suratgarh
(Rajasthan) and another at Roorke (Uttaranchal),.

GUJARAT AMBUJA CEMENT LIMITED


GACL was set up in 1986 with 0.7 million tonnes. The capacity has grown 25 times since then to
18.5 million tonnes. GACL exports as much as 15 percent of its production. 35% of the company
products transported are by sea which is the cheapest mode. It has earned the reputation of being
the lowest cost producer in the cement industry. Ambuja cement is one of GACLs well
established brands. The company plans to increase capacity by 3-4 million tonnes in the near
future.

25

ACC LIMITED
Being formed in 1936, ACC has a capacity of 22.40 million (0.53 million tonnes of Damodar
Cement and Slag and 0.96 million tonnes of Bargarh Cement). ACC Super is one of the
companys well established brands. It is planning to expand the capacity of its wholly-owned
subsidiary Damodar Cement and Slag at Purulia in West Bengal. This is aimed at increasing its
presence in the eastern region.

THE ADITYA BIRLA GROUP


The Aditya Birla Group is the worlds eight largest cement producer. The first cement plant of
Grasim, the flagship of the Aditya Birla Group, at Jawad in Madhya Pradesh went on stream in
1985. In total, Grasim has five integrated grey cement plants and six ready-mix concrete plants.
The company is Indias largest white cement producer with a capacity of 4 lakh tonnes. It has
one of the worlds largest white plants at Kharia Khangar (Rajasthan). Shree Digvijay Cement, a
subsidiary of Grasim, which was acquired in 1998, has its integrated grey cement plant at Sikka
(Gujarat). Finally Grasim acquired controlling stake in Ultra Tech Cement Limited (Ultra Tech),
the demerged cement business of L&T. Grasim has a total cement capacity of 31 million tonnes
and eyeing to increase it to 48 MT by FY 09. Grasim has a portfolio of national brands which
include Birla Super, Birla Plus, Birla White and Birla Ready mix and also regional brands like
Vikram Cement and Rajshree Cement.

26

BINANI CEMENT
A fierce competition with a 2.2 MTPA plant is located at Binanigram, Pindwara, a village in
Sirobi in the state of Rajasthan. Its a tough nut player which is outside CMA (Cement
Manufacturers Association) and is prime reason for driving prices low in markets. Offers a good
quality product at cheap rates and has very good brand image. Sales are focused in the North
India, Gujarat and Rajasthan. It holds around 14% of the Rajasthan market.

S
An entrenched competitor that has brands across the price spectrum with JK Nembahera leading
the pack. Also operates in the white cement market with Birla as its only competitor. It lost
significant market when Ambuja came to Rajasthan.

Others
Other players like Shriram have insignificant share and are highly localized. Shriram has a small
presence and that too largely in southern Rajasthan. There are various mini plants operating too
which supply cheap cement which has no ISI certification and does not confirm BIS standards.
Quite often they are supplied in other established brands cement bags. L&T is a strong player
nationally and regarded as quality product. It has a footprint but not a foothold in Rajasthan
market

Cement Manufacturing
27

Raw Material Preparation


Limestone of differing chemical composition is freely
available in the quarries. This limestone is carefully
blended before being crushed. Red mineral is added
the limestone at the crushing stage to provide
consistent chemical composition of the raw materials.
Once these materials have been crushed and subjected
online chemical analysis they are blended in a
homogenized stockpile. A bucket wheel reclaimer is
used to recover and further blend this raw material
mix before transfer to the raw material grinding mills.

to

to

Raw Mill

Transport belt conveyor transfers the blended raw


materials to ball mills where it is ground. The
chemical analysis is again checked to ensure excellent
quality control of the product. The resulting ground
dried raw meal is sent to a homogenizing and storage
for further blending before being burnt in the kilns.

and
silo

Fuels

The heat required to produce temperatures of 1,800C


flame is supplied by ground and dried petroleum coke
and/or fuel oil. The Petcock is imported via the
companies' internal wharf, stored and then ground in
dedicated mills. Careful control of the mills ensures
optimum fineness of the Petcock and excellent
combustion conditions within the kilns system.

28

at the

Burning

The raw meal is fed into the top of a pre-heater


tower equipped with four cyclone stages. As it
falls, the meal is heated up by the rising hot gases
reaches 800C. At this temperature, the meal
dehydrates and partially decarbonizes. The meal
enters a sloping rotary kiln, which is heated by a
1,800C flame, which completes the burning
process of the meal. The meal is heated to a
temperature of at least 1,450C. At this temperature
chemical changes required to produce cement
clinker are achieved. The dry process kiln is shorter than the wet process kiln and is the
fuel-efficient method of cement production available.

and
then

the
most

Cooler Units

The clinker discharging from the kiln is cooled by


a temperature of 70C above ambient temperature
heat is recovered for the process to improve fuel
efficiency. Some of the air from the cooler is dedusted and supplied to the coal grinding Plant.
remaining air is used as preheated secondary air
the main combustion burner in the kiln. Clinker is
analyzed to ensure consistent product quality as it
leaves the cooler. Metal conveyors transport the clinker to closed storage areas.

29

air to
and

The
for

Filters

Dedicated electrostatic precipitators dedust the air and gases used in the Clinker Production Line
Process. In this way, 99.9% of the dust is collected before venting to the atmosphere. All dust
collected is returned to the process.

Constituents

Different types of cement are produced by mixing and weighing proportionally the following
constituents:

Clinker

Gypsum

Limestone addition

Blast Furnace Slag

30

Cement manufacturing from the quarrying of limestone to the bagging of cement.

Business & Managerial Challenges


31

Cement market is highly competitive with major players having advantage of brand equity,
capacity and early movers. The major players are Binaani, Birla (with products like Birla Super
and Birla Chetak), Grasim (with products like Vikram and Birla Plus), Gujarat Ambuja, JK (with
products like JK Nimbahera), Laxmi, Mangalam (with products like Mangalam and Birla
Uttam), ACC, DCM Shriram, L & T and Kamdhenu. Each of these players has their dominance
across whole Rajasthan in addition to their respective regional dominance.

Another issue is that the product (cement) cannot be differentiated clearly on the basis of quality
and hence, cost plays one of the most important role in this industry. If the company can control
cost of manufacturing & distribution, then not only would profitability of the company increase,
but this benefit would also trickle down to the customers.

Logistics is the most important cost associated with cement industry. This is the single most
important reason for strong dominance of all cement companies in the regions around their
factory. But if this system can be improved upon, and costs can be managed, then Shree Cements
Ltd. can strengthen their hold in present states of distribution as well as look forward to gaining
foothold in newer and farther regions.

Risk and Return of Cement Companies

32

General Risk Factors

Economic Conditions

- The performance of cement companies may be significantly

affected by changes in economic conditions, and particularly conditions which affect the cement
industry, its top consumers. These industries include the real estate sector and construction
companies. Profitability of the business may also be affected by factors such as market
conditions, interest rates, and inflation.

Geo-political Factors The companies may be affected by the impact that geo-political
factors have on the world economy or on financial markets and investments generally or
specifically. These include the demand for cement from China, and other export destinations.

Government policies and legislation The companies may be affected by changes to


government policies and legislation, including those relating to the real estate and construction
industry in addition to the cement sector. Taxation and the regulation of trade practices and
competition. In recent times there has been an attempt by the government to control the price of
cement by changing the tax structure. Such attempts could cause price instability and hit on
margins.

Currency Risk: The recent appreciation of the Indian rupee is going to be a major
hindrance to export to other countries especially china as well as other nations. Currency risk
represents a major issue facing exports however the risk is currently less due to the robust
demand for cement in the domestic economy. However with addition to plant capacity and
increase in volume of production, such a risk would prove to be a major challenge.

33

History
of
Company

History of Company
1979 - The Company was incorporated on 25th October, at Jaipur. The Company was promoted
by members of the Bangur family and others.Shree Digvijay Cement Co. Ltd., Graphite India,
Ltd. and Fort Gloster Industries, Ltd. took active part in the promotion of the Company. The
Company manufacture's cement & cement products. To reduce fuel and power consumption, the
Company adopted the latest dry process, four stage preheater precalcination technology of
clinkerisation and air swept roller mill grinding system for raw material and coal grinding. The
Company entered into agreement with F.L. Smidth & Co. A/s Copenhagen, a designer and
manufacture of cement plants, its associates F.L. Smidth & Cia. Espanola S.A., Madrid and with
Larsen & Toubro Ltd., Mumbai for the supply of plant equipment andservices for the proposed

34

project. 1984 - 70 No. of equity shares subscribed for by the signatories to the Memorandum of
Association. In Oct./Nov. 1,53,99,930 No. of equity shares issued of which
1,06,99,930 shares reserved for firm allotment as follows:
(i) 48,00,000 shares to Shree Digvijay Cement Co. Ltd.;
(ii) 11,00,000 shares each to Graphite India, Ltd. and Fort Gloster Industries, Ltd.
(iii) 36,99,930 shares to Directors, their friends etc. including upto 25,00,000 shares to NRIs
with repatriation rights. The balance 47,00,000 shares offered to the public of which 18,80,000
shares offered for allotment on preferential basis to Non-Residents. 1985 - Commercial
production commenced from 1st May. 1986 - A diesel generating set of 13.6 MW was installed
for captive power generation. 1987 - 46,00,000 shares issued to financial institutions in
conversion of loans. 1991 - Production of clinker and cement declined due to a major shut down
of the plant for implementation of modernisation/renovation/modification work. The Company
undertook to set up a new cement plant of 0.6 million TPA capacity in Rajasthan 7,96,000 No. of
Equity shares issued to financial institution in conversion of loan.
1992 - 36,00,000 shares allotted to FLT Ltd. a wholly owned subsidiary of P.L. Smith & Co.
Denmark under financial collaboration agreement.1993 The Company undertook a scheme of
implementing second stage of its licensed capacity to increase its capacity to 3300 tonnes per day
The Company issued 21975 - 16% each with equity warrants and these will be
converted as per institutional guidelines.2,40,021 shares issued in pursuance of scheme of
Amalgamation. 1994 - The Company issued 10,00,000-16% Secured Redeemable NCD of Rs
100 each on private placement basis.A scheme of amalgamation of an existing leasing and
finance Company with the Company was prepared for undertaking leasing activities and other
financial services on largescale.
M/s. Mannakrishna Investment, Ltd. is a subsidiary of the Company. 1995 - The Company
undertook the implementation of new unit of 124 MT capacity per annum named Raj Cement.
43,95,000 No. of Equity shares on surrender of detachable optional share warrants attached with
16% unsubscribed non-Convertible Debentures of 100 each.
1996 - The Company commissioned its second cement plant - Raj Cement with a capacity of
12.4 lakh tonnes per annum in Beawar. 58,06,204 rights shares issued (prem. Rs 10 per share) in
the prop. 1:5. 1998 - Shree Cement, the Calcutta-based PD-BG Bangur group company, has
decided to issue preference shares aggregating Rs 15 crore to mobilise long-term funds. Shree
Cement's expansion in capacity by 12.4 lakh tonnes at the new unit in Reawar, has made it a
leading cement manufacturer in North India.
- ICRA has downgraded the rating of the NCD programme of Shree Cement Ltd (SCL) from
LAA to LA. The Rs 372-crore 1.25 million tonne cement plant near Ajmer was commissioned
during the year after considerable delay due to an explosion in the electro-static precipitator.
Shree Cements has an installed capacity to produce up to two million tonnes of cement per
annum in Rajasthan and has an equity capital of about Rs. 34 crores. 1999 - The company has
been awarded the first prize for energy conservation in 1998 in the cement sector. SCL,
belonging to the house of Bangurs, is one of the largest cement manufacturers in North India,
35

having the installed capacity of 2 million tonnes. Its plants are located in Rajasthan. The new
plant was set up at Beawar with the capacity of 1.24 million tpa in Rajasthan.

-Unit I and Unit II of the company receives National Award for 'Best Electrical Energy
Performance' and 'Best Thermal Energy Performance' in the Cement Industry for the year

Decides to change the Accounting year to April - March each year and accordingly the
current year is only for nine months. Appoints Mr M K Singhi as the Executive Director of Shree
Cements. In pursuance to the IDBI, company approve for early redemption of privately placed
under noted cummulative redeemable preference shares.Change in Management Structure: Mr B
G Bangur re-appointed as executive chairman and Shri H M Bangur re-appointed as the
Managing Director for a period of five years.

Members approve for the delisting of its shares from 4 stock exchanges of Jaipur,
Kolkota, Delhi and Chennai exchanges. Confers the Runner up National Safety Award by the
Ministry of Labour,GOI, in recognition of outstanding performance in Industrial Safety
achieving longest accident free period. Receives permission for delisting of shares from Delhi
Stock Exchange. The company has been conferred National Award for Excellence in Energy
Managemen instituted by the Confederation of Indian Industry (CII) and Sohrabji Godrej Green
Business Centre Delisting of equity shares from Madras Stock Exchange Association Ltd

Company conferred 'BEST PRODUCITY AWARD-2003' by the Rajasthan state


Productivity Council in recognition of productivity measures and productivity improvements
achieved Rajasthan Chamber of Commerce & Industries, Jaipur presents 'RCCI Excellence
Award' to Shree Cement Ltd in recognition of Overall Best Corporate Governance Practices and
Disclosures in Annual Report among all companies having registered office in Rajasthan. Delist
from The Calcutta Stock Exchange Association Ltd (CSE).

Shree Cement Ltd has appointed Shri. Amitabha Ghosh as Director of the Company

36

THE
ORGANIZATION
PROFILE

ORGANIZATION PROFILE
COMPANY

PROFILE

37

COMPANY

Shree Cement Ltd.

INCORPORATION YEAR

1979

REGISTERED OFFICE

Bangur Nagar, Beawar, Ajmer (Rajasthan)

CORPORATE OFFICE

21, Strand Road, Kolkata

INDUSTRY

Cement Manufacturing

CHAIRMAN

B.G. Bangur

MANAGING DIRECTOR

H.M. Bangur

EXECUTIVE DIRECTOR

M.K. Singhi

INTRODUCTION Shree Cements Ltd.


Shree Cements Ltd. is a Rajasthan based company, located at Beawer. The company has installed
capacity of 10.2 mtpa tones per annum in Rajasthan.. For the last 18 years, it has been
consistently producing many notches above the nameplate capacity. The company retains its
position as north Indias largest single-location manufacturer. Shrees principal cement
consuming markets comprise Rajasthan, Delhi, Haryana, Punjab, Uttar Pradesh and Uttranchal.
Shree manufactures Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC). Its
output is marketed under the Shree Ultra Ordinary Portland Cement and Shree Ultra Red Oxide
jung rodhak Cement brand names.

38

THE SHREE VISION


Vision
To drive and sustain industry leadership Within a global context - by developing
individual Competencies at every level, through a robust Trust, support, innovation and
reward

Guiding Principles

Enforce good corporate governance practices


Encourage integrity of conduct
Ensure clarity and un-ambiguity in communication
Remain accountable to all stakeholders
Encourage socially responsible behavior

Mission

To harness sustainability through low carbon philosophy


To sustain its reputation as one of the most efficient manufacturers globally.
To continually have most engaged team
To drive down cost through innovative practices
To continually add value to its products and operations meeting expectations of all its
stakeholders

Marketing
Shree caters to cement demand arising in Rajasthan, Delhi, Haryana, UP and Punjab. What is
strategic for SCL is that it is located in central Rajasthan so it can cater to the entire Rajasthan
market with the most economic logistics cost. Also, Shree Cement is the closest plant to Delhi
and Haryana among all cement manufacturers in its state and proximity to these profitable
cement markets renders the company an edge over other cement companies of the company in
terms of lower freight costs. SCL has a 160 MW captive thermal power plant, which has
achieved over 90 per cent load factor. In 2000-01, the company has succeeded in substituting
conventional coke with 100 per cent pet coke, a waste from refineries, as primary fuel resulting
39

in lower inventory and input costs. In the past two years the price of coal has gone up. Earlier
dependent on good quality imported coal, the company's switch to pet coke could not have come
at a better time. The company also replaced indigenous refractory bricks with imported
substitutes, reducing its consumption per tonne of clinker. The company has one of the most
energy efficient plants in the world. The captive plant generates power at a much lower cost of
Rs 2.5 per unit (excluding interest and depreciation) as compared to over Rs 5 per unit from the
grid. In appreciation of its achievements in Energy sector, the Company has been awarded the
prestigious 'National Energy Conservation Award" various times. Shree is rated best by
Whitehopleman, an international agency specializing in the rating of cement plants.

PRODUCTS

Following are the various products of Shree Cements Ltd.


1

Shree Ultra Red Oxide Jung Rodhak Cement (ROC)

Shree OPC

Bangur Cement
40

Rockstrong Cemento

POLICIES:
Quality Policy:

To provide products conforming to national standards and meeting customers requirements to

their total satisfaction.


To continually improve performance and effectiveness of quality management system by setting
and reviewing quality objectives for

a) Customer satisfaction
b) Cost effectiveness

Energy Policy:

To reduce to the maximum extent possible the consumption of energy without impairing

productivity which should help in:


Increase in the profitability of the company
Conservation of Energy

Reduction in Environmental pollution at Energy producing areas.

Environment Policy:
To ensure:

Clean, green and healthy environment


Efficient use of natural resources, energy, plant and equipment
Reduction in emissions, noise, waste and greenhouse gases
Continual improvement in environment management
41

Compliance of relevant environment legislation

Water Policy:

To provide sufficient and safe water to people and plant as well as to conserve water, we are

committed to efficient water management practices viz.


Develop means and methods for water harvesting
Treatment of waste discharge water for reuse
Educate people for effective utilization and conservation of water
Water audit and regular monitoring of water consumption

Health and Safety Policy:

To ensure good health and safe environment for all concerned by:
Promoting awareness on sound health and safe working practices
Continually improving health and safety performance by regularly setting and reviewing

objectives and targets


Identifying and minimizing injury and health hazards by effective risk control measures
Complying with all applicable legislations and regulations

Human Resource Policy:


Shree Cement is committed to:

Empower people
Honor individuality of every employee
Non discrimination in recruitment process
Develop Competency
Employees shall be given enough opportunity for betterment
None of the person below the age of 18 shall be engaged to work
Incidence of Sexual harassment shall be viewed seriously
To follow Safety & Health, Quality, Environment, Energy policy

ADVERTISING
42

Need for Advertising:

Cement has evolved into a highly commoditized product category. Due to competitive pricing

within the industry, there was not much differentiation among the various brands on offer.
People too did not pay much attention to this product unless there was a need felt. Hence people
who were currently making their houses or were soon to embark on such a project became the
target market.

Because of the product being commoditized, there was a need for differentiation for which there
were some changes made to the product.

Shree Cement Ltd was not advertising its products for


the past few years but looking at the competitive
market and opportunities ahead it introduced a new ad
campaign which was targeted to differentiate its
products from other cement brands. It introduced an ad
campaign showing the anti rusting capability of the Red
Oxide Cement of the company. But still the presence of the company has not been as intense as
other brands have like Ambuja and Grasim etc.

43

AWARDS OF THE COMPANY

4 star rating from Whitehopleman UK, an International Cement Consultants, since 2000 (No one
in world has been rated 5 star!!

Reckoned as 2nd fastest growing mid sized Company in 2006 by Business Today a national
level magazine (6 May 07 edition

Golden Peacock Award - 2007 for Excellence in Corporate Governance

Golden Peacock Award - 2007 in recognition of excellent Environment Management practices

National Awards for Energy Conservation from Ministry of Power, Govt of India

CII National Award for Excellence in Energy Management 2006

National Safety Award awarded by the Honorable President of India, Smt. Pratibha Patil

Best Annual Report Award by Rajasthan

Amity Corporate Excellence Award by Amity International Business School, Noida.

Chamber of Commerce and Industry in 2007

44

ICWAI National Award 2005 for excellence in cost management

Green-Tech Environment Excellence Award

Golden Peacock Award for Combating Climate Change

Corporate Excellence Award by Rajasthan Chamber of Commerce & Industry (RCCI) in all four
categories namely Corporate Governance & Capital Market, Financial Performance & Analysis,
Business & Qualitative Aspects and Annual Report Presentation as well as Management

SILVER CIO Award by the CIOL Dataquest


Enterprise Connect Awards 2008.
Note: Recently their name is registered for Limca book of Records (National Records 2010), for
the completion of 1 new mtpa plant in a record 12 months from march 23, 2008 to march 24,
2009.

NEED
FOR
STUDY

45

NEED FOR STUDY

The project is structured for the purpose of getting good insight of, MARKETING STRATEGY
of the organization as the 90% market covered by the competitors. After applying all the
facilities to the employee then also no increment in the sales volume of the product i.e. SHREE
ULTRA CEMENT.

The project is being made as a part of summer training and gives good insight of the topic
covered under it.

The basic need behind the project is to increase the sales volume of the product and also increase
the satisfaction level of the customers and make the presence in the market and give tough
competition to the competitors. .

46

OBJECTIVES
OF
THE STUDY:

47

OBJECTIVES OF THE STUDY:


Following are the objectives of the study

To know the strategy of the competitors.

To know the Key Players in the Industry

To know the Business Level Functions & Process of the Organization

To know the Company Profile

To do SWOT Analysis, etc. of the Company

To learn about the Organizational Culture, Values, Benefits in a Practical way

To get an exposure to the different functions of the Organization and understand


how they are performed and coordinated.

To relate various concepts studied in the first term to a real Organizational


Environment

48

SCOPE
OF
THE
OBJECTIVES:
49

SCOPE OF THE OBJECTIVES:

Organizational Functioning is an important factor for any Organization to achieve the


desired

goals and Objectives. This requires Co-ordination at all levels to smooth functioning. This
study is to know the overall efficiency and performance cement Industries and a general
study on Shree Cement Ltd at (RAJA PARK AND TRANSPORT)JAIPUR, Rajasthan.

As a part of two year MBA program at the end of 1st trimester, we had to carry
on a project in an organization in order to understand the organization structure and their
functions. This was a great opportunity to get the first hand information and understand the
functioning of the various departments

50

Research
Methodology

51

Research Methodology
Definitions: Research is the systematic investigation to establish facts or collect information on
a pre-decided subject. Methodology is the specification of the system of principles and
techniques used in a particular discipline.
Define the problem and research objective

Develop the research plan

Collect the information

Analyze the information

Finding & Recommendations

RESEARCH DESIGN: Research design involves a general plan of how to go about answering
the research questions set keeping in mind the research objective.

52

SECONDARY SOURCES: - For the completion of the report it was important that the
secondary data should be supplemented by primary data originated specifically for the research
in hand. The primary data was gathered through questionnaires. My research findings are based
on information collected from filled questionnaires. The main sources of secondary data were: Internal Data:

a) Some previous market studies.


b) From news paper, business world and internet.

PRIMARY DATA COLLECTION METHOD


Questionnaire Method: For the purpose of the study survey was conducted across different areas
of raja park and transport nagar (Jaipur) . The Questionnaire (a sample copy is attached) was
prepared according to the objectives of the project and was administered accordingly. The data
gathered through this exercise became the primary data.
SAMPLING ERRORS : While interpreting the results I kept in mind the potential errors. Two
sources of errors are random sampling error, which arises due to the fact that the sample may not
be a true representative of the population, and non-sampling error which comes up because of
faulty coding, untruthful responses, respondent fatigue etc.
LIMITATIONS IN RESEARCH : All research papers have its own limitations in terms of
methodology and the resources available for its conduct. This study is no exception to it and has
been carried under following limitation:

Some of the respondents were not forthcoming with information as they thought it to be a
waste of time.
A number of respondents were biased towards a particular brand, which was giving them
better returns.
Some of the respondents were not available so, contacted person was not able to present a
fair view.
Respondents lack of time to give information and their casual attitude was a big
hindrance in the study.

53

WHICH COMPANY DELEARSHIP DID YOU HAS?

54

WHICH CEMENT IS HAVING MAXIMUM SALES


VOLUME?

55

THE SALES DEPENDS ON WHICH FACTOR?

56

WHICH COMPANY GIVES SATISFACTORY


SERVICE FOR THE DELEARS?
57

ARE YOU GET ANY EXTRA AWARDS OR


REWARDS
FROM THE ANY CEMENT COMPANY?
58

WHICH COMPANIES MARKETING STRTAGY IS


BETTER?
59

WHICH CEMENT IS GOOD AS RESPECT TO


THE RAJASTHAN ENVIORNMENT CONDITION?
60

WHICH COMPANY GIVES QICK RESULT IN


RESPECT TO THE SETTING PERIOD?
61

WHY SHREE CEMENT IS NOT EFFECTIVE IN


THIS SPECIFIC MARKET.
62

SINCE HOW MUCH TIME YOU ARE IN


CONSTROCTING LINE?
63

WHICH CEMENT DO YOU NORMALLY


PREFFER?

64

65

WHICH CEMENT GIVES GOOD RESULTS


ACCORDING TO RAJASTHAN ENVIORNMENT?

66

WHICH CEMENT COMPANY GINVES BEST


SERVISE?

67

WHICH IS THE IMPORTANT FACTORS WHICH


AFFECTS THE SALES VOLUME OF THE
PRODUCTS?

68

QUS.6 ARE YOU USING SHREE ULTRA CEMENT


FOR CONSTRUCTION?

69

IF NOT THEN WHICH FACTOR EFFECTS THE


SHREE ULTRA?

70

IS THE SARVICE OF SHREE ULTRA CEMENT


IS

71

WHICH CEMENT IS PREFFERED BY THE


COSTOMERS?

72

ON WHICH FACTOR CUSTOMER CHOOSES


ANY BRAND OF CEMENT?

73

swot
Analysis

74

75

FINDINGS
&
CONCLUSIONS

76

FINDINGS & CONCLUSIONS


Learning is a never ending process which continues from birth of human being to his/her death.
It can also be done by reading book and through training and work. Spending 45 days in SHRRE
CEMENT LTD. was good learning experience for me. After completing the organization study I
come to know that academic learning is different and working in organization and learning is
different. After spending such precious time in an organization my major finding in that
particular organization are as follows:
Firstly, organization culture of Shree Cement is formal, where every person cannot
directly meet to High authority without any systematic way which I considered was good
because it encourages employees at work.
Secondly, organization structure of Shree Cement is well formatted in which each and
every department plays important role.
Thirdly, in the organization structure is divided into to 4 part one is in Finance,
Marketing, Operation & Quality, Human and Resources These all departments are

Quality matters a lot while consumer buying cement.


Consumer mostly uses 53-Grade of cement.
Some people say that quality of 53-Grade is not so very well.
Shree Ultra has good brand image in the market and most of the dealers and retailers are
satisfied with it.
Contractors give emphasis on commission and gifts. So, commission should increase and
gift items like company diaries, company pens, company bags, lunch boxes and
walkmans etc. given to contractors on regular time gaps for increase sale.
Lack of advertising of Shree Cement in comparison of Ultratech, Ambuja and Birla
Chetak Samrat in this area..

77

There is not much dissatisfaction regarding market rates but the dealers and retailers
demands for more margins

SUGGESTION
&
RECOMMENDATI
ONS

78

SUGGESTION & RECOMMENDATIONS


Advertising strategies should be revised. More focus should be given on publicity and
awareness among customer should be there.
A price of shree Cement is much higher than other competitors brands and this
lead to very less margin of profit for retailers. To prevent this type of problem
company should provide more margins of profit & incentives to defer it.
The main & lucrative factor may for shree cement is contracted , relation will create
a smooth flow of sales for Bangur cement. So they should make more frequent in
contractors meeting.
We often see that retailers would like to sale only that product in which he gains more
profit, so we should give a good margin of profit to retailer.
In sales promotion activity, we should focus on counter meeting, contractors meeting
& retailer meeting, in which we can give some gifts and refreshments to contractor,
Dealer and retailers.
They should offer POP material and other incentives to push the confidence in shree
Cement dealers and contractor.
Literature can be provided to stockiest and retailers. This written material will also
help them to advertise and promote the product.
The major problem faced by the retailers is great transparency in prices so company
Should make a policy for stability in prices at every stockiest in jaipur city.
Company should also provide more technical services, so they can visit every site &
solve the customers problem.

79

Bibliography

80

Bibliography
1)

Shree Cements annual reports 2006-07, 07-08,08-09,09-2010,

2)

www.shreecementltd.com

3)

ASSOCHAM Report on Cement Industry 2007

4)

www.cseindia.org/programme/industry/cement_rating.htm

5)

www.worldcement.com

6)

international_cement_industry.htm

7)

Fundament of Financial management by Brigham & Huston.

8)

Analysis Financial Management by Robert C. Higgins

9)

Financial Reports of ACC ltd, Grasim Industries Ltd., Gujarat Ambuja Cement Ltd. and
India Cement Ltd.

10)

Quarterly Performance Analysis of Companies, India Cement Industry: Cygnus,


Business Consulting and Research.

11)

Prowess Online Database

12)

www.cmaindia.org

13)

http://www.wikipedia.com

14)

http://www.investopedia.com

15)

http://www.moneypore.com

16)

http://www.moneycontrol.com

17)

www.indiancementindustry.com

18)

Times of India (News Paper)

19)

Economic times (News paper)

20)

Financial management by Ravi M Kishor (Book)

21)

Financial management by M. Pandey (Book)


81

APPENDIX

82

QUESTIONIERS FOR THE DELEARS


QUS.1 WHICH COMPANY DELEARSHIP DID YOU HAS?
A) AMBUJA
CEMENT

B) ULTRA TECH
D) OTHERS

C) SHREE

QUS.2 WHICH CEMENT IS HAVING MAXIMUM SALES VOLUME?


A) AMBUJA
CEMENT

B) ULTRA TECH
D) OTHERS

C) SHREE

QUS.3 THE SALES DEPENDS ON WHICH FACTOR?


A) PRICE

B) QUALITY

C) SERVICES

D) OTHERS

QUS.4 WHICH COMPANY GIVES SATISFACTORY SERVICE FOR THE


DELEARS?
A) AMBUJA
SHREE CEMENT

B) ULTRA TECH
D) OTHERS

QUS.5 WHICH COMPANY DILIVER THE PRODUCT ON TIME?


A) AMBUJA
C) SHREE CEMENT

B) ULTRA TECH
D) OTHERS

QUS.6 ARE YOU GET ANY EXTRA AWARDS OR REWARDS


FROM THE ANY CEMENT COMPANY?
A) YES

B) NO
83

C)

QUS.7 WHICH COMPANIES MARKETING STRTAGY IS BETTER?


A) AMBUJA
C) SHREE CEMENT

B) ULTRA TECH
D) OTHERS

QUS.8 WHICH CEMENT IS GOOD AS RESPECT TO THE RAJASTHAN


ENVIORNMENT CONDITION?
A) AMBUJA
CEMENT

B) ULTRA TECH
D) OTHERS

C) SHREE

QUS.9 WHICH COMPANY GIVES QICK RESULT IN RESPECT TO THE


SETTING PERIOD?
A) AMBUJA
CEMENT

B) ULTRA TECH
D) OTHERS

C) SHREE

QUS.10 WHY SHREE CEMENT IS NOT GETTING PICKUP IN THE MARKET


DUE TO..
A) PRICE FACTOR

B) QUALITY FACTORS

C) SERVICE FACTORS

D) ANY OTHER.

84

QUESTIONER FOR THE CONTRECTORS

QUS.1 SINCE HOW MUCH TIME YOU ARE IN CONSTROCTING LINE?


A) 1 TO 5 YRS

B) 6 TO 10 YRS

C) 11 TO 15 YRS

D) MORE THEN 15 YRS

QUS.2 WHICH CEMENT DO YOU NORMALLY PREFFER?


A) AMBUJA
CEMENT

B) ULTRA TECH
D) OTHERS

C) SHREE

QUS.3 WHICH CEMENT GIVES GOOD RESULTS ACCORDING TO


RAJASTHAN ENVIORNMENT?
A) AMBUJA
CEMENT

B) ULTRA TECH
D) OTHERS

C) SHREE

QUS.4 WHICH CEMENT COMPANY GINVES BEST SERVISE?


A) AMBUJA
CEMENT

B) ULTRA TECH
D) OTHERS

C) SHREE

QUS.5 WHICH IS THE IMPORTANT FACTORS WHICH AFFECTS THE


SALES VOLUME OF THE PRODUCTS?
A) PRICE FACTOR

B) QUALITY FACTORS

C) SERVICE FACTORS

D) ANY OTHER.

QUS.6 ARE YOU USING SHREE ULTRA CEMENT FOR CONSTRUCTION?


A) YES

B) NO

QUS.7 IF NOT THEN WHICH FACTOR EFFECTS THE SHREE ULTRA?


85

A) HIGH PRICE FACTOR

B) LOW QUALITY

C) LACK OF ADVERTISING

D) ANY OTHER

QUS.8 IS THE SARVICE OF SHREE ULTRA CEMENT IS


A) SATISFACTORY

B) UNSATISFACTORY.

QUS.9 WHICH CEMENT IS PREFFERED BY THE COSTOMERS?


A) AMBUJA
CEMENT

B) ULTRA TECH
D) OTHERS

C) SHREE

QUS.10 ON WHICH FACTOR CUSTOMER CHOOSES ANY BRAND OF


CEMENT?
A) PRICE FACTOR
C) ENVIORMENTALS FACTORS

B) QUALITY FACTOR
C) ANY OTHERS.

86

87

Minat Terkait