Seminar Report
On
BY
Session 2008-10
CERTIFICATE
This report is the record of authentic work carried out by the student during the
academic year 2008-09.
City office: Disha Towers, New Shanti Nagar, Raipur (C.G.) 492007 PH.:+91-771-40353225-28, 33, 34 Fax: 0771-4035333
I Mr. Umeshanand Giri Goswami student of MBA 4th semester hereby declare that
this project report is the record of authentic work carried out by me during this
academic year to fulfil the universities criteria at per my level best. This is not similar
to any project prepared so and has not been submitted earlier to any institute but it is
Place: Name:
Date: Signature:
The completion of this project would have been extremely difficult without the never
ending and blooming inspiration from my teachers specially Dr Satish Benedict, Prof
J.K.Dewangan, Prof Anish Abraham, Prof Siddhath Bhattacharya. Further I wish to
thank my colleagues who have always boosted my morale and filled me with “can do
“attitude because of which I pursued my willingness in successive direction to
complete this report in the corridors of DIMAT. I would like to express my special
thanks to my friends helping me carry out the work with ease and comfort.
Above all I thank my family, for their constant motivation and support. It was just
because of their divine love and support that made me work properly and complete
my objectives in a splendid manner. Finally I thank the Almighty for creating an aura
of favourable situations for me and guiding me throughout the pathway.
17-22
Factors Affecting Cement Industry
03 Project Profile
22-23
Introduction Portland Cement
Cement Process
23-25
04
Production Process & Cement Production in India
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.
Cement is the element which brings the constructed structures and architectures
lively; it’s the essence of every kind of constructional bond it’s the thing which
furnishes the structures and adds value to their creation.
Further when we talk about cement and its contaminations and various types there is
lot of things to be considered in this prospective. As Portland cement was firstly used
in energy services industry in 1903 to isolate the oil-containing region of the earth
from down-hole water, a process in modern scenario referred to as zonal isolation.
The technique of oil well cementing was soon developed. After the primary hole is
drilled, a steel casing, through which the oil will later flow, is placed inside. Drilling
mud is used to assist in the actual drilling. The cement is pumped down the steel
casing to the bottom of the well and then back up through the free annular space
between the casing and the well, where it serves to bond the casing to the rock
formation and to prevent fluids from moving from one formation to another (hence
In 1929, Pacific Portland Cement Company developed the first retarded cement,
which allowed cement to be used in deeper oil wells than previously possible. The
construction of the first bulk cement production stations in the early 1940’s made the
use of cement additives more practical. The desire for deeper wells drove the
development of new retarders that could predictably delay cement setting for longer
periods of time than traditional retarders.
Today, oil wells are commonly 2 - 3 miles deep, at which depth temperatures of 180
°C are not uncommon. Cement pumped to the bottom of these wells is subject to
pressures approaching 150 MPa. Cement must remain as thin as possible under
these conditions, yet begin to set and develop strength soon after it is in place so
that oil drilling can continue. The demanding needs of the industry have sparked a
plethora of empirical investigations into the effect of different additives on cement
setting. More recently, investigations into the mechanisms of cement hydration and
hydration inhibition have begun in an attempt to develop a more rational
methodology for the design of cement additives.
Cement is a key infrastructure industry. It has been decontrolled from price and
distribution on 1st March, 1989 and delicensed on 25 th July, 1991. However, the
performance of the industry and prices of cement are monitored regularly. The
constraints faced by the industry are reviewed in the Infrastructure Coordination
Committee meetings held in the Cabinet Secretariat under the Chairmanship of
Secretary (Coordination). Its performance is also reviewed by the Cabinet
Committee on Infrastructure.
The cement industry comprises of 125 large cement plants with an installed capacity
of 148.28 million tones and more than 300 mini cement plants with an estimated
capacity of 11.10 million tones per annum. The Cement Corporation of India, which
is a Central Public Sector Undertaking, has 10 units. There are 10 large cement
plants owned by various State Governments. The total installed capacity in the
country as a whole is 159.38 million tones. Actual cement production in 2002-03
was 116.35 million tones as against a production of 106.90 million tones in 2001-02,
registering a growth rate of 8.84%.
Keeping in view the trend of growth of the industry in previous years, a production
target of 126 million tones has been fixed for the year 2003-04. During the period
April-June 2003, a production (provisional) was 31.30 million tones. The industry has
achieved a growth rate of 4.86 per cent during this period.
The Indian cement industry is on a roll. Driven by a booming housing sector, global
demand and increased activity in infrastructure development such as state and
national highways, the cement industry has outpaced itself, ramping up production
capacity, attracting the top cement companies in the world, and sparking off a spate
of mergers and acquisitions to spur growth.
The recent boom in the housing and construction industry in India has worked
wonders for cement manufacturing companies with capacity utilization crossing the
100 per cent mark for the first time in January 2007.
Production
Globally, India is the second largest producer of cement. Cement production grew at
the rate of 9.1 per cent during 2006-07 over the previous fiscal's total production of
147.8 mt. Of this, 9.3 million tonne of cement was exported.
The Indian cement industry comprises 130 large cement plants and 365 mini-cement
plants, with installed capacities of 165 million tonnes per annum (mtpa). Large
cement plants accounted for over 94 per cent of the total installed capacity.
The cumulative FDI inflows into the cement and gypsum industry have been
US$ 989 million from August 1991 to March 2007 representing 2.26 per cent
of the total FDI inflows into the country.
Financial Performance
Ultra Tech Cement reported a 76 per cent rise in net profit at US$ 56.65
million in the last quarter of 2006-07.
Ambuja Cements grew by 43 per cent to US$ 144.23 million.
ACC net profit rose 54.5 per cent to US$ 88.82 million.
Sanghi Cement recorded a 75 per cent growth at US$ 34.89 million in net
profit in 2006-07.
the booming demand for cement, both in India and abroad, has attracted global
majors to India. In 2005-06, four of the top-5 cement companies in the world entered
India through mergers, acquisitions, joint ventures or Greenfield projects. These
include France's Lafarge, HOlCIM from Switzerland, Italy's Italcementi and
Germany's Heidelberg Cements. While Lafarge is investing over US$ 500 million in
India to expand capacities by six million tonne, Italcementi will invest US$ 174 million
over the next two years in various Greenfield and acquisition projects.
The Indian cement industry has also witnessed a flurry of mergers and acquisitions
within the domestic players, bringing smaller players under the umbrella of larger
companies, and larger companies coming under the umbrella of global players like
HOlCIM and Heidelberg. The top two groups in the industry, Aditya Birla Group and
HOlCIM Group, now control more than 40 per cent of total capacity in the country.
Further, more than a quarter pie of total capacity is now being controlled by global
majors.
HOlCIM
The HOlCIM Group entered India in January 2005 through a strategic alliance with
Gujarat Ambuja Cement Limited (GACL). It acquired a further 67 per cent stake in
the GACL group company Ambuja Cement India Limited (ACIL), the holding
company of the Ambuja Group. ACIL in turn holds around 35 per cent stake in ACC
and 97 per cent stake in Ambuja Cement Eastern Limited (ACEL). In January 2006,
HOlCIM acquired 14.8 per cent stake in GACL following it up with another 3.7 per
cent over the next few months. This took Holcim's total holding in the company to
18.5 per cent. Its holding further increased to 28 per cent when ACEL merged with
GACL. Recently, HOlCIM acquired additional 11 per cent stake in ACIL taking its
total shareholding in the company to 78 per cent.
HOlCIM now commands around 25 per cent of the total market share with 34.2 mt
capacities through ACC and Ambuja. India represents its single largest country
exposure at about 18 per cent of its total country exposure. The other large group,
Birla, controls another 31.2 mt of the country's cement capacity through group
companies Grasim Industries and Ultratech Cements.
Lafarge
The French cement major, Lafarge, has acquired the cement plants of Raymond and
Tisco in the recent past, and currently has an installed capacity of 6 mtpa. It plans to
double its capacity to 12 mt over the next five years by adopting the Greenfield
expansion route.
Italcementi
Italy based Italcementi has acquired a stake in the K.K. Birla promoted Zuari
Industries' cement plant in Andhra Pradesh, with a capacity of 3.4 mtpa.
Heidelberg
given the sustained growth in the housing sector, the Government's emphasis on
infrastructure (at both the national and the state level) and increased global demand,
the outlook for India's cement industry is exceedingly bright.
The demand growth for the current fiscal is expected to be in the region of 10 per
cent, which will translate into a demand of 175 mt.
To meet this rising demand, many Indian companies are going for capacity
expansion. Close to 54 mt of additional capacity is to come up in the next three
years, with an investment of around US$ 5.31 billion.
According to a Deutche Bank report, close to 5.1 mt will be added by second half of
2007-08, while 11.46 mt will be added in 2008-09. Around 28.90 mt is likely to be
added in 2009-10 and 2.87 mt in 2010-11.
Apart from meeting the entire domestic demand, the industry is also exporting
cement and clinker. The export of cement during 2001-02 and 2003-04 was 5.14
million tones and 6.92 million tones respectively. Export during April-May, 2003 was
1.35 million tones. Major exporters were Gujarat Ambuja Cements Ltd. and L&T Ltd.
For the development of the cement industry ‘Working Group on Cement Industry’
was constituted by the Planning Commission for the formulation of X Five Year Plan.
The Working Group has projected a growth rate of 10% for the cement industry
during the plan period and has projected creation of additional capacity of 40-62
million tones mainly through expansion of existing plants. The Working Group has
identified following thrust areas for improving demand for cement;
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
Study on Positioning of PPC And PSC Cement 17
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 14 (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 75-85 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 HDPE (High Density Poly Ethylene) bags. It is then
transported either by rail or road. Road transportation beyond 200 kms is not
economical therefore about 55% of cement is being moved by the railways. There is
also the problem of inadequate availability of wagons especially on western railways
and south-eastern 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 10% in India. However,
the scenario is changing with most of the big players like ACC and Ultratech having
set up their bulk terminals.
Ordinary Portland cement is the most commonly used cement for a wide range of
Applications. These applications cover dry-lean mixes, general-purpose ready-
mixes, and even high strength pre-cast and pre-stressed concrete.
Satna Cement Works PPC & OPC (43 Gr.) Birla Cement Samrat
Birla Vikas Cement Birla Cement Khajuraho
Most cement produced is Portland cement: other cement types include white,
masonry, slag, aluminous, and regulated-set cement. Cement production involves
quarrying and preparing the raw materials, producing clinker through pyro
processing the materials in huge rotary kilns at high temperatures, and grinding the
resulting product into fine powder. The following detailed description is borrowed
from the World Energy Council (1995).
Raw materials preparation involves primary and secondary crushing of the quarried
Material, drying the material (for use in the dry process) or undertaking a further raw
Grinding through either wet or dry processes, and blending the materials. The
energy consumption in raw materials preparation accounts for a small fraction of
overall primary energy consumption (less than 5%) although it represents a large
part of the electricity consumption.
Clinker Production
Clinker production is the most energy-intensive step, accounting for about 80% of
the energy used in cement production in the United States. Produced by burning a
mixture of materials, mainly limestone (CaCO3), silicon oxides (SiO2), aluminium,
and iron oxides, clinker is made by one of two production processes: wet or dry;
Once the materials are ground, they are fed into a kiln for burning. In modern kilns,
the raw material is preheated (in four to five stages) using the waste heat of the kiln,
or it is pre-calcined. During the burning or Pyroprocessing, the water is first
evaporated after which the chemical composition is changed, and a partial melt is
produced. The solid material and the partial melt combine into small marble-sized
pellets called clinker.
Finish Grinding
Cooled clinker is ground in tube or roller mills and blended by simultaneous grinding
and mixing with additives (e.g., gypsum, anhydrite, Pozzolana, fly-ash or blast
furnace slag’s) to produce the cement. Drying of the additives may be needed at this
stage.
Positioning )
PPC is a kind of cement which is produced either by integrating the OPC clinker
along with gypsum and pozzolanic materials and in the certain proportions.
Volcanic Ash
Calcined Clay
Fly Ash
Lica Fumes
Hydraulic Structures
Mass Concreting Works
Marine Structure
Aggressive Conditions
Where OPC is used
Masonry Mortars and Plastering
Concrete Creation
Cannel Plantation
Bridge Construction
Oil Rick Construction
Machinery Installation
Engineering Instruments Installation
According to the American Association of Plant Food Control Officials, basic slag
must contain at least 12% total phosphoric acid (P2O5) or be labelled "low
phosphate".
What was once an unwanted by-product of the steel making process can now be
recycled and used in the manufacture of high performance concretes?
As the slag is channelled out of the furnace, thousands of gallons of water are
poured over it. This rapid cooling, often from a temperature of around 2,600°C, is the
start of the granulating process. This process causes several chemical reactions to
take place within the material, and gives the slag its cementations properties.
When the filtering process is complete, the remaining slag granules, which now give
the appearance of coarse beach sand, can be scooped out of the filter bed and
transferred to the grinding facility where they are ground into particles that are finer
than Portland cement
Pricing
Whenever it comes to pricing and value determination it severally differs for one to
another, but in case of Portland cements very less differentiation is there in pricing
like price of PPC and PSC for Birla cements is same, it’s similar in context of
Ambuja, Maiher and others only in case of JP cements ACC’s rate differs for both
PPC and PSC products.
Reason what really differentiates the pricing of the two for manufacturers is
availability of raw materials like clinker iron extracts and limestone as we have seen
in manufacturing process that every cement is the combination of above mentioned
materials.
Other reason for price differentiation could be logistic and transportation cost to
transfer materials from one place to another, like presently JP Cements is tied up
with Bhilai Steel Plant and brings its clinker from Reenva and limestone from Satna
which increases the cost of manufacturing and Company has to also look after its
profitability so the price differentiation arises there. Meanwhile few companies are
there whose products are really transformed form better quality process or some
Above given reasons are related to manufacturing but apart from this other reasons
are there which leads to price differentiation like marketing strategies and product
differentiation that can be bring in the form of companies trying in the market to show
and position their product as premium product and so to make it somehow unique or
different from other products. That obvious also because there is immense pressure
of targets on divisions and one has to come up with some different products or
different marketing strategy in order to survive for longer span of time.
PLACE
Two type of distribution network mainly followed by the company are followings
2. Non Trade- It is basically contract basis, it include contractors and government. It is for a
fix period at fix rate. There are two methods which followed by company regarding
transportation cost
2. To Pay- In this category supply cost is given by the stockiest or dealer. Application
In direct sale means from industry to Dealer. 75% transportation is through railway and rest
through from road.
Place plays very important role in the value chain to site the product and let it derive
its value and estimated position and it depends upon the companies strategy how
they are using it.
PROMOTION
Positioning
This is about the trend and scenario of mass market which lies in the rural market,
but Portland Pozzolana also has its premium position in the metro and majority of
towns just because of its whitened colour and ingredients. There people thinks that
white is the colour of prosperity and it truly appears on every other construction and
suits the process.
Positioning of Birla and Ultratech is excellent both belong to Aditya Vikram Birla
Group in context of Portland Pozzolana cement. Ultratech enjoys dominant 20
percent market share with wide coverage in the market.
Some of the renowned brands from Birla Cements are Birla Gold and Birla A1 type
of Portland Pozzolana Cements and have their influence in every corner of market.
But when we talk about Portland slag cement ACC enjoys the maximum market
share leaded by its organized sales force, wide distribution channel and quality
which comes from its branding.
Reason behind the success of Ambuja and ACC in the PAN India market Madhya
Pradesh, Chhattisgarh is because of HOlCIM that manages both companies it is
worlds second largest cement manufacturer and now AV Birla Group is eyeing for its
acquisition which will form them worlds second largest cement maker behind
LAFARGE which is worlds largest cement manufacturer.
Market Share of key Cement Manufacturer Birla Gold (PPC 53 Grade Cement):-
4 Uttaranchal 2.47%
6 Assam 3.48%
7 Export 2.29%
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
(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.
MANUFACTURING PROCESS
Mining
The process of making cement clinker requires heat. Coal is used as the fuel for
Providing heat. Raw Coal received from the collieries is stored in a coal yard. Raw
Coal is dropped on a belt conveyor from a hopper and is taken to and crushed in a
Crusher. Crushed coal discharged from the Coal Crusher is stored in a longitudinal
Stockpile from where it is reclaimed by a reclaimer and taken to the coal mill hoppers
For grinding of fine coal.
Reclaimed limestone along with some late rite stored in their respective hoppers is
fed to the Raw Mill for fine grinding. The hot gasses coming from the Clinkerisation
Section are used in the raw mill for drying and transport of the ground raw meal to
the electrostatic Precipitator / Bag House, where it is collected and then stored and
Homogenised in the concrete silo. Raw Meal extracted from the silo (now called Kiln
Feed) is fed to the top of the Preheated for Pyroprocessing.
Cement Clinker is made by Pyroprocessing of Kiln feed in the preheated and the
rotary kiln. Fine coal is fired as fuel to provide the necessary heat in the kiln and the
Precalciner located at the bottom of the 5/6 stage preheated. Hot clinker discharged
From the Kiln drops on the grate cooler and gets cooled. The cooler discharges the
Clinker onto the pan / bucket conveyor and it is transported to the clinker stockpiles /
Silos. The clinker is taken from the stockpile / silo to the ball mill hoppers for cement
Grinding.
Clinker and Gypsum (for OPC) and also Pozzolana (for PPC) are extracted from
their respective hoppers and fed to the Cement Mills. These Ball Mills grind the feed
to a fine powder and the Mill discharge is fed to an elevator, which takes the material
to a separator, which separates fine product and the coarse. The latter is sent to the
mill inlet for regrinding and the fine product is stored in concrete silos.
Packing Cement extracted from silos is conveyed to the automatic electronic packers
where it is packed in 50 Kgs. Polythene bags and dispatched in trucks.
About 94% of the thermal energy requirement in the Indian cement manufacturing is
met by coal. The remaining part is met by fuel oil and high speed diesel oil. So far,
no real substitute for coal exists. Increasing the oil share would imply significant
Outflows of foreign exchange and impose a burden on the economy. Natural gas is
mainly used as feedstock in newly-built large fertilizer plants and is thus not
sufficiently available for the cement industry.
Actual coal consumption varies with qualitative factors. Over the years there has
been a steady decline in the quality of coal. In particular, the ash content of coal has
increased implying lower calorific values of coal, and improper and inefficient
It’s imperative that any type of organisation in the present environment needs
Systematic supply of information coupled with tool of analysis of for making sound
Decision which involves minimum risk.
A research design is purely and simply the framework or plan for a study that guides
SAMPLE DESIGN
Considering the constraints, it was decided to conduct the study based on sample
size of 100 respondents.
The selection was made through combined approach of random sampling and
Convenient sampling. Scientific method was not adopted in this study because of
Financial constraints and also because of lack of time, also the basic aim of doing
the research was academic, hence most convenient way was selected.
TOOLS USED
There are several methods of collecting primary data, particularly in surveys and
Descriptive research. Important are:-
Observation method.
Through questionnaires.
Interview method.
1. To know the position of Portland Pozzolana and Portland Slag Cement in the
trade and non-trade segment regarding sale in comparison with the other brands.
To attain the above objectives various other sub objectives were needed to be
achieved. These are listed below:
To analyze the transportation facilities for Birla Gold and other cement companies.
Thus my study attempts to find ways to increase market share, to increase customer
satisfaction and thus increase the business prospects.
Apart from it’s also focus upon the growing business opportunities and widening
scope of cement industry and relevant industries like power plants and
manufacturing units to supply and give manufacturing support to cement industry.
Results
The survey is conducted in RAIPUR and its nearby locations. Total number of respondent
covered under this survey is 50 which are either customers or retailers.
In RAIPUR mainly companies playing in the market are BIRLA, ACC, AMBUJA,
LAFARGE, JP Cements. Lafarge is toughest competitor of Birla cement.
In the above given estimated table we can see that Birla is market leader and
Lafarge is the closest competitor and every company has got good customer base
and are trying to increase their net customer base so it helps us to say that Birla,
Lafarege, ACC and Ultratech are delivering superior quality product and others still
going through transformation process.
ACC 25
BIRLA 20
LAFAREGE 09
AMBUJA 28
Bibliography
To make a study or to prepare a research report we have to have take the help of
knowledgeable stuffs and that here we can say intellectual and quicker sites are
fulfilling our requirements and information required to prepare the seminar report.
Major Contributors for my report are several websites and web links mentioned
below:-
www.google/search/portland
Study on Positioning of PPC And PSC Cement 48
www.wikipedia.org
www.cement.org
www.business.mapsofindia.com
www.acclimited.com
www.ibef.org/industry/cement
www.birlacement.com
www.slagcement.org
www.lafarge-india.com
www.answers.com
Dear Sir/Madam
I most humbly request you to please respond to my certain questions which will help me to depict
conclusion for study conducted by me on topic entitled...
I sincerely assure you about keeping your valuable opinions and relevant information provided by
you will be kept confidential and safe.
Further I will appreciate your cooperation and help to let me complete my respective report.
Occupation ………………………………………………………………………………………………………………………………..
Address ……………………………………………………………………………………………………………………………………..
White Black
Que3. What you keep in your mind before purchasing the cement?
Pricing Ad Influences
Que4. Which Brand of cement you would like to purchase if you get the privilege to do so?
Que6. Which brands product is more solid and durable according to you?
Que7. If you know about the classification of cements then which one Porland Pozzolana or Portland
Slag Cement is better?