Build with CONFIDENCE

Company Name: ACC Ltd Address: Cement House, 121, Maharshi Karve Road, Mumbai - 400020 Phone No: (22) 66654321 Website: http://www.acclimited.com // Rank: 58 Industry: Cement/Marble/ Ceramics/Stones Company Type: India's Top 500 Total Turnover: 5000 +Crs(approx.) No. of Employees: 5001& above(approx.).
Group: ACC Sector: Private Sector

Vision & Values of the company

Strength Building strong and lasting relationships. Conducting everyday operations internally in true team spirit. Acting responsibly with integrity and demonstrating strength of character. Performance Delivering on our promises to each other and to our stakeholders. Always ensuring excellence. Working together and striving to delight customers with best solutions. Passion Caring, being dedicated, committed and passionate about everything we do, demonstrating excellence in everything we do. We have learnt to take our core values seriously. Living our values means displaying them in everything we do. Creating assurance in the brand ACC by consistently delivering on our promises through services and behavior towards all stakeholders. Giving our people pride, helping them see the bigger picture and understanding their impact on the Companys success. Being accountable. By utilizing financial resources in the most efficient way we can. Being customer oriented which means winning in the market place through customer insight. Demonstrating respect for the environment and for society and by displaying responsibility and interdependence with the community we live in.

YEAR 2009
Profit Before Tax and exceptional items 2292 Crore Raw Material Rs. 892 Crore Power and Fuel Rs. 1540 Crore. Interest and Finace Rs. 84 Crores Depreciation Rs. 342 Crore. Manufacturing & Other costs Rs. 3116 Crore

YEAR 2008
Profit Before Tax and exceptional items 1688 Crore Raw Material Rs. 799 Crore Power and Fuel Rs. 1599 Crore. Interest and Finace Rs. 40 Crores Depreciation Rs. 294 Crore. Manufacturing & Other costs Rs. 3152 Crore

28% 37% 41%

22%

11%
11% 4% 21% 19% 4% 1%

1%

MANUFACTURING EXCELLENCE
ACC strive to retain its position as India's foremost manufacturer of cement and concrete with a countrywide bouquet of 16 modern cement factories that have a capacity of 26 million tones per annum, to be increased to 30 million tones by the end of this year. Captive power plants play a vital role in providing cost-efficient and effective supply of quality power to our plants. Our cement plants now meet 70% of their total power requirements through captive generation.

Three pricing tasks for ACC to secure profitability

Oversupply threat in a growing market
Market share Market volume Price
1

Threat of margin squeeze

Cost =

Profit

Securing overall profitability:

Balancing margin and share: Optimizin g volume contributi on

Share above target market share

Protect

Driving up market price level

2

2007

08

09

10

11

2012

Skim share HPM target market share

Share below target market share Optimize low

Defend share Grow share

Optimizing profitability:
LFG

ACC

Margin

high

Managing ACC price premium

UT

Value

-:Challenge: Volume pressure is nationally increasing yet differentiated. Northern Central and Southern will face significant overcapacity while Western, still undersupplied, cannot absorb all oversupply.
66 71 98 104 86 93
27
North Central East

81 89 60 61 66 73
2007 08 09 10 '11 '12

28 28

50 35 42 31 34 37

52 41

26

2007 08 09 10

'11 '12

Domestic import and oversupply threat in East

46 51 35 39 31 31 56 31 36 40 44 49
200708 09 10 '11 '12 Available supply Demand

West

100 107 108

South

59 48

61 52

78 58 66 74
'11

85
'12

2007 08 09 10

Source: Holcim India strategy Final Progress Review, Demand Supply Estimation - FINAL 23.05.2008, Cluster Wise Demand DN scenario 2008

-:Challenge: The variable cost of ACC East are expected to increase with an average of 10% p.a. over the next years. Cost increases haven been high in 2008 and are expected to accelerate in 2009.
ACC East's variable cost development [Rs/bag] MS&A Distribution Production 139 111* 100 7% 30% 67%

Cost development Total variable cost are assumed to grow by 10% p.a. between 2008 and 2012

+10% 138 151

160 5% 28%

Coal subsidization is assumed to be gradually withdrawn until 2010

ACC currently relies heavier on coal subsidies than its
competitors

63%

2007
(

2008

2009

2010

2011

2012

Updated according to latest net price and EBITDA [%]. Source: ACC FinPlan 2008 as of 05.09.2008; Written update for '08

Strategic: Valued Customer

Who to serve?

Segmentation

Targeting

Positioning

Market Understanding

S T R A T E G y

Tactical:

Value Proposition
What to offer?

Products & Services

Pricing

Channels

Communication

Market Development

Commercial Planning (Marketing/Sales/Logistic)

Operational: Value Network

How to deliver?
ENABLERS Human Resources

Order Acquisition

Order Fulfilment/
Logistics

Sales Services

Marketing & Commercial Controlling

Policies & Procedures Admin & Finance

IT Tools

Organization

Segmentation
Identifying the kind of customers and construction trends in different kind of market clusters (rural and urban) and demography, in the vastly stretched SU. (geographical diversity)

Targeting
Analyzing key market sensitivity through implementing pilot branding activities and gathering feedbacks by evaluating mass participation index and assess- ment done for the viability of a regional or universal campaigning in Our Sales Unit Initiating Rural Marketing Pilot Project to tap the BIG market of rural India

Positioning
On the basis of market behaviour, the acceptability criteria of the branding activities are analyzed and the target markets for specified activities are shot listed. Majority are attracted with media campaign and price sensitive especially on commercial construction Identifying the kind of customers and construction trends

S T R A T E G

IHB Segment is brand sensitive and consumes lions share of consumption

New Infrastructure Projects in Large Buyer segment are also coming in NE/Power Projects

Multi Storied/Mass Housing in Silguri, Durgapur & Guwahati

Low cost Housing in back districts like Purulia, Birbhum.

Focus is now on rural market because there are limited Urban centres.

Value Proposition
Product & Services

Pricing
Pricing & Branding are inversely proportionate in Sales Unit Asansol market cluster. Branding activities are directed exclusively towards product promotion. With SMX initiatives, attempt is to keep a minimum of Re 1/- to Rs 2/- per bag premium at retail and wholesale level.

Channel
Arresting the existing network with SMX benefits and efforts are on to grow in the potential markets with MAPEC and MAPRA. Attempt to make the existing dealer network loyal with SMX benefits and efforts are on to increase the network especially vast geographical region of AO Asansol

Communication
IHB Segment is brand sensitive and consumers lions share of consumption Communication objective is to transfer better knowledge, clarity of message and translate into sales. ACC Pamphlet, ApnaAshiana, Construction related books, handbill in Bengali ACC Help Van for site service Mass Awareness Program for End Consumer Marketing Action Program for Rural Awareness. ACC Video on Wheel Van (new initiative) Widespread communication of SMX initiatives through Channel Partners which includes customer service, education of Mason/Consumers

Market Development

Sales Unit Asansol Area is focusing on Portland Slag Cement promotion with ACC Help. North East market is predominantly a PPC & OPC market. Even the colour preference is black. We are completely doing away with OPC except to some sites where a combination is required

Penetration in the existing markets and expansion in unrepresented area. Also Channel Partners are being projected as Brand Ambassador in market clusters.

Strategy

Value Network
Order Acquisition
Following SMX Process Knowledge of the market & its demand Status of the Dealer & his inventory Following JCP regularly & constant communication Order Fulfillment/ Logistics Orders are collected from markets by Dist Officers and given to SAP Operator.

Sales Services
Visit of Customer Service Officer at the newly constructed site for rendering presales and post sales services. Dealers also give the name of customers planning for construction & the Dist Officers/CS Officers to meet the customer for offering both the services i.e. pre and post. Dist Officers assure for timely delivery and good & consistent quality ACC Help Van is pressed into service for building confidence in customers mind

Marketing & Commercial Controlling Key Performance Indicators are decided after discussions and mutual agreement. Define reporting system based on the organizational hierarchy Budget is made based on the agreed KPI Weekly review is done by the AO Incharge followed by monthly review with SU Head Through Market visit by AO and subsequent review for improvement. Role Play on critical issues

Prospecting for new orders as per newer opportunities and from newly identified sites. Getting information of IHB from Bank, Municipality etc.
Statements and status of the dealers are carried by DO

Order is processed on SAP within the credit limit. If any payment is due for more than 1 month, order is blocked. DO carries age wise outstanding and conveys to dealers before collecting the order.
Sales Order is either on Factory or on warehouse. Check & Control is through AO with SU and Plant Logistics Delivery confirmation from SAP as well as SU Logistics Invoicing is made in SAP every 3rd day and outstanding is generated at warehouse point. Dist Officer starts following up with dealers for payment within the stipulated time frame