Dissertation Report on

A study on Marketing strategies adopted by various players of

Indian cement Industry -
A case study on Ultratech Cement Ltd.

Submitted to
5 year Integrated MBA programme,
Department of Business Administration, Utkal University

Submitted by Internal Guide

Abhismith Pattanayak Dr. Manjusmita Dash

(53209V1701002)

Department of Business Administration

Utkal University
Bhubaneswar – 751004, Odisha, India

i
 Declaration

I do hereby declare that this report of Dissertation submitted to the Department of Business
Administration of Utkal University, Bhubaneswar for the partial fulfilment of the requirement
for the Master in Business Administration is of my own, which has been done under the
guidance of Dr. Manjusmita Dash and has not at any time been previously submitted to this
University or any other Universities/Institutions for award of any degree or diploma.

Place – Bhubaneswar Abhismith Pattanayak

(53209V1701002) Date – 22 / 06 / 2022

ii
 Acknowledgement

I take this opportunity to express my profound gratitude and deep regards to Department of
Business Administration, Utkal University & Dr. Manjusmita Dash (Marketing Faculty) for
providing me the opportunity to learn about various Marketing Frameworks through this
Report. However, it would not have been possible without the kind support and help of many
individuals and organizations. I would like to extend my sincere thanks to all of them.

Also thanks and appreciations to all my friends and family members too in developing the
project and people who have willingly helped me out with their abilities.

Abhismith Pattanayak
(53209V1701002)

iii
 Executive Summary

Cement is the single most important and profitable product in the building material sector and
with the consumption of cement in India to touch 600 MTPA by the year 2025. This is truly
the California Gold Rush of the new century. With an 8.2 % GDP growth rate in 2022,
governmental infrastructure augmentation and population expansion, the Indian cement
industry is a market of opportunities waiting to be tapped. A direct implication of this sectoral
growth is the influx of multinationals like Holcim and Lafarge (acquired by Adani), which will
drive Indian cement companies in the building industry to adapt new business strategies to
complement the higher demand and competition. A cogent analytical research on governmental
reports, industry data and cement company’s annual reports has been performed. On analysis
and scrutiny of the distinct variables involved in this market, this paper investigates the current
and future trends in the Indian cement industry and enumerates key business strategies that
cement companies will have to adapt to compete in the Indian building materials market.

The country has vast potential for development in the construction and infrastructure sector
due to support to weaker section of the Indian society, and the cement sector is expected to
largely benefit from it. Some of the recent major government initiatives such as development
of smart cities, reduction of rapo rate, new financial policy and loans, are expected to offer a
major make better to the sector. Expecting such developments in the country and aided by
suitable Govt. foreign policies, numbers of foreign investors: such as Heidelferg cement,
Lafarge Holeim, & vicat have invested their funds in the country recently. This is moreover
significant that raw material is required for cement production, like stone, Lime and coal is
willingly available in Indian earth.

iv
 List of Abbreviation

Sl No. Abbreviation Full form

1 OPC Ordinary Portland cement

2 PSC Portland Slag cement

3 PPC Portland Pozzolana cement

4 HPC Hydrophobic Portland cement

5 VAT Value Added Tax

6 EBITDA Earning before Interest Tax Depreciation & Amortization

7 MTPA Million Tonnes per annum

8 FY Financial year

9 CAGR Compounded Annual Growth Rate

10 GDP Gross Domestic Product

11 YOY Year on Year

12 ROE Return on Equity

13 ROCE Return on Capital Employed

v
 List of Figures

Sl. No. Description Page No.

1 Cement Manufacturing process 4

2 Manufacture of cement by Dry process 6

3 Manufacture of cement by Wet process 6

4 Showing a heap of Clinkers 16

5 Characteristics of Cement industry 25

6 Cement consumption & cement production in India 26

7 Market share of top cement producers in India of FY 2020 27

8 Percentage share of cement demand in India of FY 2021 31

9 Vision & Mission of UltraTech cement Pvt. Ltd. 36
10 Journey of UltraTech Cement 37

11 Business strategies for UltraTech 37

12 Product portfolio of UltraTech cement 38

13 Scale of production of UltraTech cement 38

14 Operational presence of UltraTech cement 39

15 Distribution network of UltraTech cement 39

16 Revenue & EBITDA of UltraTech cement 40

17 Balance sheet financials of UltraTech cement 40

18 Market Capitalization & operational financials of UltraTech cement 41

19 Awards received by UltraTech cement 41

20 Facebook Ads. By UltraTech cement 43

21 YouTube & Twitter campaigns by UltraTech cement 43

vi
 List of Tables

Sl. No. Description Page No.

1 Shows the Raw materials for manufacturing of Portland cement 5

2 Proportions of Various items in OPC, PPC & PSC cements 17

3 Cost structure of a cement bag 18

Decision points & optimization techniques for elements of
4 19
Financials
5 Details of Top cement producers in India 28

6 Prices of Ordinary Portland cement in India 29

7 Prices of Portland Pozzolana cement in India 30

vii
Sl. No. Contents Page no.

Front page i
Declaration ii
Acknowledgement iii
Executive Summary iv
List of Abbreviation v
List of Figures vi
List of Tables vii

1) Chapter I Introduction

1.1) Introduction & History of cement industry in India 2-3

1.2) Cement manufacturing process 4-7
1.3) Types of cement available in India 8 -11
1.4) Research Methodology 12

2) Chapter II Theoretical strands & Literature Review

2.1) Review of literature 14

3) Chapter III Understanding how the Indian cement

industry works

3.1) Cement industry in India 16 - 18

3.2) Cost structure of a cement company 18 - 19
3.3) Strategies to maximize sales 20 - 22
3.4) Parameters to analyze a cement company 22 – 23

viii
4) Chapter IV Indian cement market Analysis

4.1) Characteristics of cement industry in India 25

4.2) Indian cement market size 26
4.3) Indian cement market overview 27
4.4) Top cement producing companies in India 28
4.5) Cement price lists in India 29 - 30
4.6) Growth drivers & opportunities 31
4.7) Business strategies for Indian Cement Industry 32
4.8) Customer buying behavior process in cement industry 33
4.9) Key influencer in cement purchasing decision process 34

5) Chapter V About UltraTech cement pvt. Ltd.

5.1) About company 36

5.2) About the journey of UltraTech 37
5.3) Business strategies for UltraTech 37
5.4) Product portfolio & scale of production 38
5.5) Operational presence 39
5.6) Distribution network 39
5.7) Financials of UltraTech 40 – 41
5.8) Awards received by UltraTech 41 – 42
5.9) Social media Marketing strategies adopted by UltraTech 43

6) Chapter VI Observations & Conclusions

6.1) Observations 45

6.2) Conclusion 46

ix
7) Chapter VII Bibliography

7.1) Bibliography 48

x
 Chapter I
Introduction

1
 1.1 Introduction

Cement industry is the second most important primary and basic industry for the economic
development of India, second only after iron and steel industry. The cement industry is basic
industry and makes an important contribution to the development of the other industry, to the
construction and even to the development of agriculture. Cement is required by every industry
cement and is an important part of industrial infrastructure. It provides direct and indirect
employment to a large number of persons and contributes a major part to Gross Domestic
Product (GDP).

India is the second largest producer of cement in the world. It accounts for more than 7% of the
global installed capacity. India has a lot of potential for development in the infrastructure and
construction sector and the cement sector is expected to largely benefit from it. Some of the
recent initiatives, such as development of 98 smart cities, is expected to provide a major boost
to the sector.

Aided by suitable Government foreign policies, several foreign players such as Lafarge-Holcim
(Now acquired by Adani), Heidelberg Cement, and Vicat have invested in the country in the
recent past. A significant factor which aids the growth of this sector is the ready availability of
raw materials for making cement, such as limestone and coal.

History of Cement Industry

It must be interesting to know how cement is made today Vis a Vis the historical background.
Ever since civilizations stepping in the earth, people sought a material that would bind stones
into a solid, formed mass. The Assyrians and Babylonians used clay for this purpose, and the
Egyptians advanced to the discovery of lime and gypsum mortar as a binding agent for building
such structures as the pyramids. The Greeks made further improvements and finally the
Romans developed cement that produced structures of remarkable durability. The secret of
Roman success in making cement was traced to the mixing of slaked lime with pozzolang, a
volcanic ash from Mount Vesuvius. This process produced cement capable of hardening under
water. During the middle ages this art was lost and it was not until the scientific spirit of inquiry
revived that we rediscovered the secret of hydraulic cement that will harden under water. Most
of the building foundations in the Roman forum were constructed of a form of concrete, placed
in some locations to a depth of 12 feet. The great Roman baths built about 27B.co, the coliseum,
and the huge Basilica of Constantine are examples of early Roman architecture in which cement
mortal was used.
Aspdin established a plant in Wakefield to manufacture
Portland cement, some of which was used in 1828 in construction of the Thames River Tunnel.
But it was almost 20 years later then J.D. White and sons set up a prosperous factory in Kent
that the portland cement industry saw its greatest period of early expansion not only in England,
but also in Belgium and Germany. Portland Cement was used to build the London sewer system
in 1859-1867. Thomas A Edison was a pioneer in the further development of the rotary kiln.

2
Origin and Development of Cement Industry In India

In India cement industry has a very late start. The first cement factory of India was established
in 1904 in Madras, the real beginning of the industry was in 1912-13, when three cement
factories were established at Porbandar (Gujarat) Katni (M.P.) and Bundi (Rajasthan). The first
world war gave the industry a great stimulus, since the demand for cement for was purposes
shot up. Accordingly, its production rose from 945 tonnes only in 1914 to 84,300 tonnes in
1918. In the inter war period several new cement companies were floated which resulted in
over production and price - war among them led to a large losses being incurred. Since
protection was denied to the industry, the cement companies formed themselves into a cartel
and established by agreement unified control over production and prices. The Indian cement
manufacturers' association was formed in 1926 with a view to restricting the output and
regulating the sale of cement. In 1936, Associated cement companies limited (ACC) was
formed by the merger of 10 principal cement companies. This combine was threatened in 1936-
37 when several Dalmia Group factories were established with an installed capacity of 5 to 7.5
lakh tonnes a year in 1937.

In 1947, when the country was partitioned, the number of cement manufacturing factories was
23 with a capacity of 2.2 million tonnes: Five of them fell in the jurisdiction of Pakistan, the
other 18 remaining with India aggregating with an annual capacity of 1.5 million tonnes. The
cement manufacturing capacity increased to 3.28 million tonnes by 1950-51, when the country
ushered in her planning era. During planning period, the cement industry has recorded
continuous growth. India not only became self- reliant at the end of seventh plan but also started
export of cement. At present cement is the most advanced industries in the country. After the
complete decontrol of price and distribution on March I, 1989, and introduction of other policy
reforms, the cement industry has made rapid strides both in capacity/production and production
process technology. As on April 30, 2003, these were 124 large cement plants with an installed
capacity of 140.02, million tonnes per annum. Besides there are more than 300 min cement
plants with an estimated capacity of 11.10 million tonnes per annum. The cement production
during 2002-03 was 116.35 million tonnes with a growth rate of 8.84%. All restrictions on
cement prices and distribution have been removed since March 1, 1989 under New Industrial
Policy Resolution 1991, cement Industry has been made license free.

Export of cement was 6.92 million tonnes in 2002-03. Improvement in the quality of Indian
cement has found its ready markets in Bangladesh, Indonesia, Malaysia, Nepal, Middle East
Countries Burma, Africa, and South East Asian countries.

3
 1.2 Cement Manufacturing Process

Figure 1

Manufacturing of cement involves various raw materials and processes. Each process is
explained chemical reactions for manufacture of Portland Cement. Cement is a greenish grey
coloured powder, made of calcined mixtures of clay and limestone. When mixed with water
becomes a hard and strong building material.
The history of cement goes back into Roman Empire. The
modern day cement. That is Portland cement was first produced by a British stone mason,
Joseph Aspdin in 1824, who cooked cement in his kitchen. He heated a mixture of limestone
and clay powder in his kitchen, and grind the mixture into powder creating cement, that hardens
when mixed with water. The name Portland was given by the inventor as it resembles a stone
quarried on the Isle of Portland. The first use of modern day Portland cement was in the tunnel
construction in the Thames River in 1828.

4
 Manufacture Process of Cement
The manufacture procedures of Portland cement is described below.

1. Mixing of raw material

2. Burning
3. Grinding
4. Storage and packaging

1. Mixing of raw material

The major raw materials used in the manufacture of cement are Calcium, Silicon, Iron and
Aluminum. These minerals are used in different form as per the availability of the minerals.

Table 1

a) Dry Process

The both calcareous and argillaceous raw materials are firstly crushed in the gyratory crushers
to get 2-5cm size pieces separately. The crushed materials are again grinded to get fine particles
into ball or tube mill. Each finely grinded material is stored in hopper after screening. Now
these powdered minerals are mixed in required proportion to get dry raw mix which is then
stored in silos and kept ready to be sent into rotary kiln. Now the raw materials are mixed in
specific proportions so that the average composition of the final product is maintained properly.

5
Fig 2. Manufacture of Cement by Dry Process

b) Wet Process

The raw materials are firstly crushed and made into powdered form and stored in silos. The
clay is then washed in washing mills to remove adhering organic matters found in clay. The
powdered limestone and water washed clay are sent to flow in the channels and transfer to
grinding mills where they are completely mixed and the paste is formed, i.e., known as slurry.
The grinding process can be done in ball or tube mill or even both. Then the slurry is led into
collecting basin where composition can be adjusted. The slurry contains around 38-40% water
that is stored in storage tanks and kept ready for the rotary kiln.

Fig. 3 Manufacture of Cement by Wet Process

2. Burning of Raw Materials

The burning process is carried out in the rotary kiln while the raw materials are rotated at 1-
2rpm at its longitudinal axis. The rotary kiln is made up of steel tubes having the diameter of
2.5-3.0 meter and the length differs from 90-120meter. The inner side of the kiln is lined with

6
refractory bricks. The kiln is supported on the columns of masonry or concrete and rested on
roller bearing in slightly inclined position at the gradient of 1 in 25 to 1 in 30. The raw mix of
dry process of corrected slurry of wet process is injected into the kiln from the upper end. The
kiln is heated with the help of powdered coal or oil or hot gases from the lower end of the kiln
so that the long hot flames is produced. As the kiln position is inclined and it rotates slowly,
the material charged from upper end moves towards lower end at the speed of 15m/hr. In the
upper part, water or moisture in the material is evaporated at 400 0C temp, so this process is
known as Drying Zone. The central part i.e. calcination zone, the temperature is around 1000 0C,
where decomposition of lime stone takes place. The remaining material is in the form of small
lumps known as nodules after the CO2 is released.

CaCO3 = CaO + CO2

The lower part (clinkering zone) have temperature in between 1500- 17000 C where lime and
clay are reacts to yielding calcium aluminates and calcium silicates. This aluminates and
silicates of calcium fuse to gather to form small and hard stones are known as clinkers. The size
of the clinker is varies from 5-10mm. The lower part i.e. clinkering zone has the temperature
around 1500-1700C. In the region lime and clay reacts to yield calcium aluminates and calcium
silicates. This products of aluminates and silicates of calcium fuses together to form hard and
small stones known as clinkers. The size of the small and hard clinkers varies from 5 to 10mm.

2CaO + SiO2 = Ca2SiO4 (declaim silicate (C2S))

3CaO + SiO2 = Ca3SiO5 (tricalcium silicate (C3S))
3CaO + Al2 O3 = Ca3Al2O6 (dicalcium aluminate (C2A))
4CaO + Al2 O3 + Fe2O3 = Ca4Al2 Fe2O10 (tetracalcium aluminoferrite(C4AF))

The clinker coming from the burning zone are very hot. To bring down the temperature of
clinkers, air is admitted in counter current direction at the base of the rotary kiln. The cooled
clinkers are collected in small trolleys.

3. Grinding of Clinkers

The cooled clinkers are received from the cooling pans and sent into mills. The clinkers are
grinded finely into powder in ball mill or tube mill. Powdered gypsum is added around 2-3%
as retarding agent during final grinding. The final obtained product is cement that does not
settle quickly when comes in contact with water. After the initial setting time of the cement,
the cement becomes stiff and the gypsum retards the dissolution of tri-calcium aluminates by
forming tricalcium sulfoaluminate which is insoluble and prevents too early further reactions
of setting and hardening.

3CaO.Al2O3 + xCaSO4.7H2O = 3CaO.Al2O3.xCaSO4.7H2O

7
4. Storage and packaging

The grinded cement is stored in silos, from which it is marketed either in container load or 50kg
bags.

1.3 Types of cement available in India

The cements coming under the category of Portland cements are also known as "Hydraulic
Cements", because they, when mixed with water have the property of setting and hardening
under water. Starting with hydraulic limes, which also when mixed with water, set and harden
under water, as apposed to fat limes which do not harden under water, there are various types
of Hydraulic Cements, a brief description of which is given below:

(i) Hydraulic Lime:- Early impure limestone when burnt in ordinary stack kilns and the
burnt lime cooled and hydrated or slaked, gives hydraulic lime. The clay matter impurites in
the limestone may be as high as 25%, but the clay matter should be very intimately
disseminated in the limestone. The silica, alumina and iron-oxide present in the clay combine
to some extent with the lime present in the limestone to form silicates and aluminates which
impart the hydraulic properties to the product.

(ii) Natural Cement :- Natural cement is also made by calcining impure, limestone, but the
burnt material is cooled, ground and packed. There composition is more stringent than
hydraulic limes and their manufacture entails better control during the process of manufacture.
However use of both hydraulic limes and natural cement is now going down.

(ii) Portland Cement :-

Beginning with the Ordinary Portland Cement, in comparison to the other cement available,
is THE most commonly used cement in the world. It is made with raw argillaceous, calcareous
materials and gypsum materials. According to Indian Standards, it is classified into three
grades, OPC 33 Grade, OPC 43 Grade, OPC 53 Grade cements.

Portland cement are made by grinding a mixture of

limestone and clay matter, burning the mixture at a very high temperature cooling the resultant
product, called "clinker", and grinding the same to an impalpable powder. Essential constituents
are lime, silica slumina and iron oxide. Some gypsum is added during the final grinding
operation. Portland cement types are divided into seven classes, as described later, but the
method of manufacture of all the type is practically the same, they very only in chemical
composition to impark the desired properties of a particular type.

Ordinary Portland Cement 33 Grade

As per Indian Standards, IS 269 – 2015, 33 Grade of cement means the Compressive Strength
of cement after 28 days is 33N/mm2. This grade of cement is outdated and no one is using in
recent times. 33 Grade of cement is not suitable for making more than M20 grade of concrete.
Typically implemented for the general civil construction purposes like plastering, flooring and
masonry and is used up to M20 grade concrete. This type of cement features low compressive

8
strength and low heat hydration which ensures lesser cracking. Yet, this type of cement is less
available in the markets. It is given the Indian Standard code of 269.

Ordinary Portland Cement 43 Grade

As you already know 43 grade of cement means the Compressive strength of cement when
tested under the CTM is 43N/mm2 as per Indian Standards, IS 8112 – 2013. Concrete of grade
upto M30 grade can be made using 43 grade of cement.
Similar to the OPC 33-grade cement they are also used for general civil purposes, like
plastering, flooring up to M 30 concrete grades. This type of cement attains the minimum
compression strengths at 43 Mega-Pascal at 28 days. Among the different types of
cement available, this is largely available in the market due to its immense application in the
construction industry even though it's gradually being replaced by the blended form cement.
The Ordinary Portland Cement is given the Indian Standard code of 8112.

Ordinary Portland Cement 53 Grade

This is the high grade of cement where anyone can easily buy from the market. The Strength
of cement having the Compressive strength of 53N/mm2 is called 53 grade of cement. The
setting time of cement is quicker when compared with the 33 and 43 grade of cement. Any
grade more than M25 is easily achievable by using 53 grade of cement.

This type of cement is used with a higher concrete grade than M30 for both general purposes
and for building bridges, roads, multi-storied building works, etc. They attain the minimum
compression strength of 53 Mega-Pascal at 28 days of curing. They are also widely used in the
reinforced cement concrete, is a complex material where the concrete with relatively low tensile
strength and ductility are included with reinforcement to have higher strength and ductility.
Application is also observed in cement grouts, instant plugging mortars which generally require
higher strength. It is given the Indian Standard code of 12269

Other types of Portland Cement

(b) Modern Heat Portland Cement (MHPC):- By changing the chemical composition of the
cement some what, the heat of hydration can be lowered, and this type of cement is called
Moderate Heat cement. This type of cement is also somewhat more Sulphate resistant than
OPC.

(c) Rapid Hardening Cement (RHC) or High Early Strength Cement (HESC):- As said in
above, ordinary Portland Cement develops the desired strength at 3 days, 7days and 28 days;
but sometimes a cement is required which should give as high a strength in 24 hours as is given
by ordinary Portland Cement at 3 days, this type of cement is called Rapid Hardening Cement
or High Early strength cement.

(d) Low Heat Portland Cement (LHPC):- All the above three types of cements have a fairly
high heat of hydration. For large mass concrete work in dams, piers, etc., it is necessary to have
a much lower heat of hydration, so chances of developing contraction cracks later are

9
minimised. This can be done by either adding some Pozzolonic material or granulated blast
furnace slag to the cement while grinding or by changing the chemical composition of the
cement in such a way that the heat of hydration is reduced. Thus the chemical composition of
LHC is so modified add to give a heat of hydration lower than the maximum specified.

(e) Sulphate Resisting Cement (SRC):- A Portland Cement with less than 5% C3 A is highly
resistant to sulphatic action and is known as sulphate resisting cement.
(f) Oil Well Cement (OWC):- It is made from clinker with special additives to prevent any
porosity. Oil wells are drilled to depths of 4000 metres or more, and, after the drilling operation
is completed, they have to be lined with an annulus made of cement concrete. The temperatures
at such depths are high - 1000C and higher.

(g) White Cement (WC):- Basically it is OPC clinker using fuel oil (instead of coal) and with
iron oxide content below 0.4% to ensure whiteness. Special cooling technique is used. It is used
to enhance aestheic value in tiles and for flooring white cement is much more expensive than
grey cement.

(iv) Blended Portland Cement:- There are certain natural or man-made inorganic complexes
which, when mixed with Portland cement clinker (or lime) and ground finely, gain
cementations properties and made the resultant cement more suitable for certain jobs. These
complexes are –

(a) Pozzolona (b) Slag, (c) Limestone, Sandstone, etc.

5. Portland Slag Cement (PSC)

The Portland Slag is the type of cement which when exposed to rough types of environments
like the wastewater treatment or marine applications it does not crack therefore preferred over,
Ordinary Portland Cements. With its high strength, it serves best for high rise structures or
long-lasting services such as roads or bridges. Its features perform perfectly along with Portland
cement in increasing strength, therefore reducing the permeability and improving resistance to
various chemical reactions such as chloride and sulphate attacks or even simple corrosions.
Unlike different types of cement, this is only available in certain markets. This cement is
given the Indian Standard code of 455.

5. Portland Slag Cement (PSC)

The Portland Slag is the type of cement which when exposed to rough types of environments
like the wastewater treatment or marine applications it does not crack therefore preferred over,
Ordinary Portland Cements. With its high strength, it serves best for high rise structures or
long-lasting services such as roads or bridges. Its features perform perfectly along with Portland
cement in increasing strength, therefore reducing the permeability and improving resistance to
various chemical reactions such as chloride and sulphate attacks or even simple corrosions.

10
Unlike different types of cement, this is only available in certain markets. This cement is
given the Indian Standard code of 455.

5. Coloured Cement: White

Although the Coloured type of cement is more expensive in comparison to the Ordinary
Portland Cement, it has its benefits and implementations. Made from raw materials such as iron
oxide and manganese oxide Widely used for interior and exterior architectural beauty
enhancements such as the terrazzo tiles, ornamental concrete products like idols and non-
structural, flooring and special effects. As the name suggests it is white in colour and the
chemical composition and physical properties of this cement is also able to meet the
specifications of Ordinary Portland cement. The coloured cement is given the Indian Standard
code as 8042.

6. Portland Pozzolana Cement (PPC)

The Portland Pozzolana is known for its fineness, a high degree of impermeability and for being
a good corrosion resistor making the concrete dense therefore the structure becomes long-
lasting. Due to this high impermeable quality and long term strength of more than 90 days, in
adverse soil conditions, this type of cement is used in place of ordinary Portland cement.
Therefore used for the construction of marine structures, mass concrete structures like bridge
footings under aggressive conditions, hydraulic structures like dams and retaining walls or even
for basic masonry mortar and plastering works. The Portland Pozzolana Cement i also easily
available in markets. This cement is given the Indian Standard code as 1489 P-2.

7. Hydrophobic Portland Cement

The Hydrophobic Portland cement is not that easily available due to the abundance in the
availability of different types of cement in the market and is comparatively more expensive
than the Ordinary Portland Cement yet, they are best to be used in harsh cold weather conditions
as they are manufactured keeping in mind the requirements in the areas of high rainfall to
improve its lifeline. Giving it a chemical coating during manufacturing makes it’s a good water
repellent as the name suggests and therefore it isn’t affected due to high humidity making it
possible to be stored for long durations, hence this cement is used in the construction of
spillways, dams and other underwater constructions. This cement is given the Indian Standard
code as 8043.

11
 1.4 Research Methodology

Objectives of the Study

 To explore and measure the marketing environment of cement industry in India.

 To make a detailed study on the various marketing strategies adopted by the Cement
companies in India.
 To explore the impact of external influencer recommendation in purchase behaviour
process of selection of cement for construction.

Collection of Data
Secondary Sources
 Annual Reports of UltraTech cement for FY 2020 – 21
 Reports published on the cement industries, published by third party marketing research
firms like IBEF
 Industry journals and Magazines
 Various Websites
 Books

Tools Used
 Microsoft Word for making this report
 Various types of graphs for visualisation

Limitations of this Study

 Non availability of financial and marketing datas of every Cement companies.
 Data analysis done by 3rd party research firms may have some kind of deviations due to
any faulty research techniques.

12
 Chapter II
Theoretical strands & literature review

13
 2.1 Review of literature

Burange and Yamini (2008)1 found in their study that sales and marketing strategy is the
foremost important factor in the cement industry for many companies. They found that sales
and marketing strategy got more weightage than any other factor for the companies to become
more competitive in the industry. There is an extreme need to focus on sales and marketing
strategy for cement companies to take competitive advantage to grow in the dynamic business
environment of the cement industry.

Roshan Shankar, Udit Agarwal Pragya Goel and Wagisha Jha (2011)2 conducted a study on
“Business Strategies for the Indian Cement Industry. This article presents that the Cement is
the one of high demanded and single most important and profitable product in the building
material sector and with the consumption of cement in India, which had to touch six hundred
million tonnes by the year 2020. This study also concluded that considering the increasing of
cement demand in India and higher capacity utilization over the years, and key Indian players
have already begun to revisit their business strategies.

Kumar & Bansal (2013)3 also conducted a study and observed that stiff competition is one of
the major factors which are affecting the marketing strategies of Indian cement companies.
Lack of proper product mix offered to the customers is one of the lacunas in overall marketing
strategy. It discussed that differentiation among the products of different brands is not possible
due to availability of the same inputs of raw material. It further revealed the fact that pricing is
one of the factors plays a role of differentiator among the brands. Fewer margins are one of the
main concerns across the cement industry.

Kumar, John and Senith (2013)4 observed through his research that the growth of Indian cement
industry in recent several years in india. In this study designed to find out about the growth and
development of cement industry in India since 1991. The parameters had taken into this study
were production capacity, exports, production, and value addition in the cement products. This
research was entirely secondary data based and descriptive and applied statistics have been
used to evaluate the performance of the Indian cement industry.

Shaik, Balkrishn and Banana (2014)5 conducted a study on “A Study on Future Marketing
Trends Indian Cement Industry” and discussed about the future marketing trends in the cement
industry which will focus on the emerging economies markets, improving and enhancing
production technology or production portfolio to minimize the cost to achieve cost leadership,
branding and innovation to provide better cement products to the targeted customers. The future
lies with those companies which provide the best quality cement product at affordable prices
and most of the companies in the cement industry is focusing on producing the best quality
cement by introducing upgraded technology.

14
 Chapter III
Understanding
How the Indian cement industry works

15
 3.1 Cement Industry in India

Basics of Cement Industry

Cement can be sold to two sets of customers

 Retail Customer – Trade Segment – Has Higher Margins

 Infra Customer – Non Trade Segment – Has Lower Margins

 As far as the retail customer is concerned – cement is a push market industry – so

whoever is able to push its product first to the customer, will be able to successfully sell
it.

The reason being – at the end Cement is a commodity. A layman doesn’t differentiate between
different brands. The lead sales influencer is the mason and the shopkeeper.
He goes to buy Cement only when he immediately needs it, and will buy whichever is
immediately available. So it is important for a manufacturer that he is able to successfully push
his product on the shelf of shopkeeper (ship it on time) and incentivise the shopkeeper enough
(discount and commission) so that he sells your product.
 Sales Price is determined based on demand and supply. It’s a dynamic pricing market.
 Cement is a bulky material – hence handling this bulky material takes a lot of effort. It
occupies a lot of space and carries a lot of weight. Hence higher the distance a cement
bag travels, higher is the freight and handling cost involved and lower is the profit a
manufacturer makes.

Therefore it is important that the manufacturer keeps his production unit as close as close
as possible to the end customer.

 Cement is basically is made by heating limestone (calcium carbonate) with small

quantities of other materials to 1450°C in a kiln. The resultant hard material which is
recovered after heating limestone and chemicals is called ‘Clinker’.

Figure 4

16
  Clinker looks like small lumps. These lumps are crushed with a small amount of
gypsum into a powdery form – which gives the final product – ‘OPC Cement’.

So in essence following components are compulsory for making OPC cement

 Limestone – Natural Reserve, extracted or mined from Mines
 Heat – requires heat of 1450°C , ideally obtained from Coal or its variants.
 Gypsum –a mineral compulsory for providing the binding nature to cement
However with time, people figured out that limestone can be substituted with other materials
namely Flyash or Slag, which will still provide the strength but to a lesser extent. The threshold
limit of mixing Flyash is maximum 33%
For big infra projects, limestone component of upto 95% is required, but for the daily
homebuilding use, the lower component limestone works fine enough.
 Thus, there are various varieties of Cement depending on the composition of materials,
namely OPC (Ordinary Portland Cement), PPC (Portland Pozzolana Cement) and PSC
(Portland Slag Cement (PSC).

Items OPC PPC PSC

95% 45%
Clinker 65%

5% 5%
Gypsum 5%

– –
Flyash 30%

– 50%
Slag –

Total 100%
100% 100%

Lowest Highest
Margin profile for Higher
Margin Margin
manufacturer Margin

Table 2

17
  Flyash is a by-product of Thermal Power Production. Most power producers want to
dispose of fly-ash and one of the ways is by selling it to cement manufacturers who can
substitute it for lime-stone in the cement making process. Similarly slag is a by-product
of Steel making process and is often sold to cement makers as a substitute for lime-
stone in the cement making process.

Cement manufacturers often try to keep their plant near to a power plant, because neither
slag nor flyash can be transported across long distance. You have to be near to a steel or
power plant to use Flyash or Slag in the production process.

3.2 Cost Structure of a Cement company

Table 3
*Please note that the above rates are indicative and can change if the Market or the product is
different.

So If A Cement Bag of Rs. 350 Rs is sold

 Indirect Taxes levied by the government form almost Rs. 75/ bag – Not to mention there
are other taxes which are levied during the manufacturing stage such as Entry Tax,
Cement Cess, Royalty etc
 Dealer Margins typically are around Rs. 40/Bag (Rs. 25 as discounts and and Rs 15 as
markup to customer)
 Handling of Finished Goods costs almost Rs. 50/Bag
 Manufacturing Cost is almost Rs. 155/Bag
 In the end, a manufacturer earns Rs. 30/Bag on a Cement Bag which has MRP of 350

18
How Does A Cement Manufacturer Optimize His Profits
 Given the fact that it is a commodity industry, with little or no differentiation in the end
product – how does one manufacturer make a higher profit than his peers? Well let’s
look at the formula

Sales – Govt Taxes – Discount – Freight – Manufacturing Cost = Profit

Table 4

19
 3.3 Strategies to maximize sales

 So basically a manufacturer has to ensure that he realises maximum sales price. This he
can do by :
 Selling in markets with Best Prices – Demand Supply Mismatch creates better. If
competition sets up a new plant in your market, the mismatch reduces and price
falls.
 Trying to sell high margin products such as PPC and PSC – You have to be near the
source of Flyash or Slag to be able to do this
 Higher Volumes – Better the demand in the market , higher the volumes
 Better branding – Since it is a commodity – You need to ensure that brand recall is
high when customer goes for buying the product.
 Set up additional capacity
 Maintain the quality of the Product, Home building services
 Incentives schemes for Clearing and Forwarding Agents and Dealers

Manufacturing Costs
Limestone

 To make cement you have to first make clinker.

 So a plant has to first make Clinker
 Then Grind the Clinker with Gypsum to make Cement
 Limestone is the pre-requisite to make Clinker. Limestone is extracted from Mines. A
company that has its own mines is at an advantageous position than the one which
doesn’t have mines. Limestone cannot be traded, so a company which has no mines
cannot make clinker.
 However limestone is a natural resource and more than 65% of India’s limestone comes
from five states of Madhya Pradesh, Rajasthan, Andhra Pradesh, Gujarat and
Chhattisgarh.
 So companies have two options
 Make cement in the areas where limestone is available and the ship the finished
good to those parts of country that want cement, or
 Make only Clinker in the state where limestone is available, and then do the grinding
of clinker in the region which requires cement.

A unit which does both grinding and clinker manufacturing is called an Integrated Unit. A
unit that does only grinding work is called Grinding Unit.

 It may so happen that a company makes Clinker and directly sells it to another player
who dies, but these situations are rare.

20
  Mines are normally allotted through government auction and are leased to a company
for time periods extending upto 99 years. After expiry of the lease term, the mines are
again re-auctioned. Some companies like ACC have old legacy mines, allotted in 1960s
with lease period of 99 years.

It also depends what amount of limestone reserves you have in the mines. Higher the
reserves in your mines, better the prospects of your plant. Typically 1.5 Tones of Limestone,
gives 1 ton of Clinker. Output from Clinker to Cement, depends on the blend of cement being
manufactured (OPC, PPC or PSC)

 If the quality of limestone procured from mines is not of correct quality, then a company
has to add chemicals (Correctives) to make Clinker of desired quality.

Note:
– Since mines are allotted by Government, they typically give a right of mining (by
charging a hefty sum). Companies capitalise this amount as an Intangible Asset. Hence an
analyst can quickly check the Intangible Assets Section in Balance Sheet to know if a
company has a limestone mine.
– This Intangible is depreciated on the basis of Quantity of Limestone extracted as a
proportion of Actual Quantity of Reserves existing. So an analyst can actually do a reverse
calculation to judge the life and quantity of reserves a company has in their mines.

Heat

 High Temperature heat is the next biggest requirement in the manufacturing process
 This high temperature can ordinarily be obtained only from Coal or Petcoke.

 Coal can be procured from open market – generally costly, or
 Cheaper coal can be obtained through Government tendering – government rations
a quota of cheap coal to each industry, or
 Petcoke can be substituted for coal – which is less costly than Coal – but reduces
the life of plant – and increases maintenance costs
 Use of Alternate Fuel and new trend in the industry, like Rick Husk, Liquid Solvent,
TDI Tar, Etc.
 Waste Heat Recovery is a mechanism which can lead to huge cost savings in Fuel
cost.

21
 3.4 Parameters to analyse a cement company

Housing forms 65% of the cement demand in India and hence this is the biggest demand driver.
Housing has been growing at a steady modest pace even during lean period. The infrastructure
sector adds or restricts the much needed growth.So one needs to judge uptick in demand and
more specifically, the demand supply mismatch in the Micro Market where the Cement player
is located.

Demand Scenario

 As a metric, analysts should check the expected demand growth in the micro market
and if anything is being done on housing or infra sector in the micro market, which can
provide boost to volumes.
 Whether competition is setting up new capacity in the company’s region of operation?
It is normally observed that whenever a new player enters the micro market, they
capture market share (through better incentives) thus restricting volume growth of
existing players.

22
  Whether the company has maintained or increase its market share, with respect to
overall demand
Prices
 Are the overall prices in the company’s micro market, headed up or down?
 Whether the company has a brand good enough to charge premium pricing.
 Utilisation levels drive the price hikes – Sustainable price hikes hinges on high
utilization level. Once the utilisation level starts touching 80%+, the cement
manufacturers start getting a lot of pricing power. Optimal Capacity utilisation can only
be driven by high infrastructure demand.

EBITDA/Ton

The best metric to measure the profitability of a cement company is EBITDA/Ton. Most
corporate deals also use this as a measure of payment, and management too uses this metric to
judge performance. EBITDA/Ton is a result of lot of small things done right. It starts from
better pricing power and ends at better raw material costs and better overhead absorption. The
following factors generally drive EBITDA/Ton
 Whether company has better access to key raw materials viz Limestone, Coal, Petcoke,
Flyash, and Power. If a company has captive access to any or all of these factors, its
cost of production is reduced and realisations improve.
 Whether company is enjoying and Government incentive schemes and for what tenure
 Cost effectiveness in Power and Supply Chain Management.
 Larger the player, higher is his bargaining power with suppliers. So one should judge
whether the company is big enough to negotiate better with vendors.
An analyst should basically check, how much EBITDA growth does he expect and what is the
market building in?

Why Balance Sheet Of A Cement Company Is Important

 Cement is a capex Heavy Business. The ROAs of a cement plant is close to 1. So a
Cement plant with 5000 Crores of Capex can typically do a turnover of 5000 Crores
only.
 Hence it is important, that not only does the company set up a plant in the best market
(which offers best prices), it should also ensure that cost of setting up the plant is
cheapest.
 Further since the Cost of Setting up a plant is high; it can either be done by
 Taking debt or
 Through Internal Accruals
In both the cases, it is important that company should generate enough Free Cash Flows else
they will not be able to service the debt or set up additional new capacities in future.
 Size and spread of a company also matters because
 It allows a company to negotiate better with suppliers,
 More a company is spread across India, more can it minimise the freight costs and
serve a higher market – thus creating a even bigger brand.

23
 Chapter IV
Indian Cement Industry Market Analysis

24
 4.1 Characteristics of Cement Industry in India

 Of the total capacity,

98% lies with private
 India is the world’s second largest sector and the rest
cement producer. with public sector.
 India’s domestic cement production  The top 20 companies
was nearly 294.4 million tonnes account for around
(MT) in FY21* and accounted for 70% of the total
over 7% of the global installed production.
capacity in FY21*. India’s cement
production capacity stands at 545
Dominated
MT. by Private
 In FY 2027, cement demand is Players
expected to reach 419.92 MT.

Second Indian Higher

Largest
Cement Cement shares of
Large plants
Market
Industry
Large  210 large cement plants
concentration account for a
in South &
cumulative installed
West
capacity of over 410
MT, while over 350
mini cement plants have
 Of the total 210 large an estimated production
cement plants in capacity of nearly 11.10
India, 77 are situated MT.
in the states of Andhra
Pradesh, Rajasthan &
Tamil Nadu.
Figure 5

25
 4.2 Indian Cement Market Size

Figure 6

 Cement production reached 329 million tonnes (MT) in FY20 and is projected to reach
381 MT by FY22. However, the consumption stood at 327 MT in FY20 and will reach
379 MT by FY22. The cement demand is estimated to touch 419.92 MT by FY 2027.
As India has a high quantity and quality of limestone deposits through-out the country,
the cement industry promises huge potential for growth.

 As per ICRA, in FY22, the cement production in India is expected to increase by ~12%
YoY, driven by rural housing demand and government’s strong focus on infrastructure
development.

 As per Crisil Ratings, the Indian cement industry is likely to add ~80 million tonnes
(MT) capacity by FY24, the highest since the last 10 years, driven by increasing
spending on housing and infrastructure activities.

 Sale of cement in India stood at Rs.63,771 crore (US$9.05billion) in FY20.

 Higher allocation for infrastructure – US$ 26.74 billion in roads and US$ 18.84 billion
in railways in union budget of FY23, is likely to boost demand for cement.

 According to CLSA (institutional brokerage and investment group), the Indian cement
sector is witnessing improved demand. Key players reported by the company are ACC,
Dalmia and Ultratech Cement. In the second quarter of FY21, Indian cement companies
reported a sharp rebound in earnings and demand for the industry increased, driven by
rural recovery. With the rural markets normalising, the demand outlook remained
strong. For FY21, CLSA expects a 14% YoY increase in EBITDA in the cement market
for its coverage stocks.

26
 4.3 Market overview

MARKET SHARE OF TOP CEMENT PRODUCERS IN

INDIA (2020)
The Ramco CementOthers, 4%
India Cement Ltd., Ltd., 4%
5%
Birla Corporation Ultratech Cement,
Ltd., 5% 31%
Dalmia Bharat, 8%

Shree Cement Ltd.,

10%

ACC Ltd., 12% Ambuja Cement,

21%

Figure 7

 As of 2020, India is the world’s second-largest cement market, both in production and
consumption.

 India’s cement market accounts for ~7% of the global installed capacity.

 It is supported by high level of activity going on in real estate and high Government
spending on smart cities and urban infrastructure.

 In the third quarter of FY21, Indian cement companies reported a healthy growth in
earnings and demand for the industry increased on the back of resuming construction
activities post COVID-19 lockdown imposed by the government.

 Growth in Infrastructure and real estate sector, post-COVID-19 pandemic, is likely to

augment the demand for cement in 2021.The industry is likely to add an~ 8MTPA
capacity in cement production.

 Cement production is expected to increase by 10-12% and utilisation is expected around

65% in FY22.

 Private equity investments in real estate surged 24%YoY to US$477 million between
July 2021 to September 2021.

27
 4.4 Top Cement producing Companies in India

Revenue Profit
Market Prod.
Name of Parent (Rs. in (Rs. in
Share Capacity No. of Plants
Company Company Crores) Crore)
(2020) per Year
FY 21 FY 21

22 Integrated
Manufacturing Units, 27
UltraTech Aditya Birla 117.95 Grinding Units, 1
31% 44,726 5,463
Cement Group MTPA Clinkerisation Unit, 7 Bulk
packaging terminals and
150 RMC plants
6 integrated cement
Ambuja Adani manufacturing plants and 8
21% 28,965.46 3,711 31 MTPA
Cement Group cement grinding units
across the country.

ACC Adani 16,356.11 33.05 17 cement plants and 9

12% 1,820.27
Cement Group MTPA captive power plants.

Shree 4 integrated plants in India,

Shree 47.4
Cement 10% 14,843.22 2376.62 1 in UAE and 9 Grinding
Cement MTPA
Ltd. Units

Dalmia 35.9
Dalmia
Bharat 8% 6,606.10 709.72 MTPA 14 Manufacturing plants
Cement
Group

Birla Corp. M.P. Birla 15.5

5% 6,785.45 630.14 11 plants
Ltd. Group MTPA

10 Plants includes
Ramco Ramco 16.45
4% 5405.64 593.28 Integrated Cement plants
Cement group MTPA
and Grinding Units

JSW Over 500

JSW Group NA 3,600 17 MTPA 6 Manufacturing Units
Cement crore

11 Cement
Nuvoco Plants comprising five
Double Bull
Vistas NA 9,318 NA 22.32 integrated units, five
cement
Corp. Ltd. grinding units and one
blending unit.

Table 5

28
 4.5 Cement Price list per 50kg in India (2022)

Ordinary Portland Cement

Grade of
Cement Brand Price (Rs.) Grade of Cement Price (Rs.)
Cement

Ultratect Cement 43 Grade OPC Rs. 307 53 Grade OPC Rs. 410

Ambuja Cement 43 Grade OPC Rs. 330 53 Grade OPC Rs. 369

ACC Cement 43 Grade OPC Rs. 385 53 Grade OPC Rs. 435

Birla Cement 43 Grade OPC Rs. 375 53 Grade OPC Rs. 365

JK Lakshmi
43 Grade OPC Rs. 390 53 Grade OPC Rs. 340
Cement

Dalmia Cement 43 Grade OPC Rs. 450 53 Grade OPC Rs. 415

Jaypee Cement 43 Grade OPC Rs. 360 53 Grade OPC Rs. 340

Shree Cement 43 Grade OPC Rs. 365 53 Grade OPC Rs. 335

Banger Cement 43 Grade OPC Rs. 365 53 Grade OPC Rs. 360

Coromandel
43 Grade OPC Rs. 415 53 Grade OPC Rs. 415
Cement

Priya Cement 43 Grade OPC Rs. 350 53 Grade OPC Rs. 395

Ramco Cement 43 Grade OPC Rs. 395 53 Grade OPC Rs. 410

Sanghi Cement 43 Grade OPC Rs. 365 53 Grade OPC Rs. 400

Hathi Cement 43 Grade OPC Rs. 385 53 Grade OPC Rs. 392

Table 6

29
 Portland Pozzolana Cement

Cement Grade of
Price (Rs.) Grade of Cement Price (Rs.)
Brand Cement

Ultratect
43 Grade PPC Rs. 350 53 Grade PPC Rs. 365
Cement

Ambuja
43 Grade PPC Rs. 310 53 Grade PPC Rs. 368
Cement

ACC Cement 43 Grade PPC Rs. 325 53 Grade PPC Rs. 400

Birla Cement 43 Grade PPC Rs. 310 53 Grade PPC Rs. 340

JK Lakshmi
43 Grade PPC Rs. 296 53 Grade PPC Rs. 375
Cement

Dalmia
43 Grade PPC Rs. 327 53 Grade PPC Rs. 325
Cement

Jaypee
43 Grade PPC Rs. 320 53 Grade PPC Rs. 370
Cement

Shree Cement 43 Grade PPC Rs. 260 53 Grade PPC Rs. 310

Banger
43 Grade PPC Rs. 305 53 Grade PPC Rs. 350
Cement

Coromandel
43 Grade PPC Rs. 350 53 Grade PPC Rs. 342
Cement

Priya Cement 43 Grade PPC Rs. 365 53 Grade PPC Rs. 335

Ramco
43 Grade PPC Rs. 322 53 Grade PPC Rs. 270
Cement

Sanghi
43 Grade PPC Rs. 370 53 Grade PPC Rs. 320
Cement

Hathi Cement 43 Grade PPC Rs. 296 53 Grade PPC Rs. 355

Table 7

30
 4.6 Growth drivers and opportunities

PERCENTAGE SHARE OF CEMENT DEMAND

IN INDIA (FY21)
Low cost
housing, 13%
Industrial
Development,
10%
Housing & Real
Estate, 55%
Infrastructure,
22%

Figure 8

The demand of Cement industry is expected to achieve 550-600 million tonnes per annum
constantly by 2025 because of the expanding requests of different divisions i.e., housing,
commercial construction and industrial construction.

Housing and Real Estate

 Government initiatives like Housing for All will push demand in the sector.

 Real estate market in India is expected to reach US$ 1 trillion by 2023. Strong growth
in rural housing and low-cost housing to amplify demand.

Public Infrastructure

 As per Budget 2022-23 a spending of over Rs10 lakh crore (US$ 134.34 billion) on
infrastructure is proposed.

 As per the Union Budget 2022-23, the government approved an outlay of 1,99,107 crore
(US$ 26.74 billion) for the Ministry of Road Transport and Highways.

 In October 2021, Prime Minister, Mr. Narendra Modi, launched‘ PM Gati Shakti-
National Master Plan (NMP)’ for multimodal connectivity. Gati Shakti will bring
synergy to create a world-class, seamless multimodal transport network in India. This
will boost the demand for cement in the future.

 As per the Invest India, National Infrastructure Pipeline(NIP) expanded to 9,305

projects from 7,400 projects.

 Government of India’s push with Smart Cities Mission and AMRUT.

31
 4.7 Business strategies for the Indian cement industry

 Consolidation and Globalization: Large cement players in India will use the acquisition
route to enhance capacity and market share. It is clear that smaller plants will not survive
in the long term. The top five players will hold 70-80 % of capacities and market in the
next decade. There is an expectation that more global players would come into India as
they would like to get a foothold in the market as the demand will propel in the emerging
economies.

 Process Automation: The significant nature of changes to the Information technology

area and the manner in which information will be processed will be drastic over the next
10-15 years. This will have some impact on the cement industry. Higher levels of
technology, its seamlessness and functionalities that have wider acceptance and usage will
also bring down operating costs considerably.

 Technology: Use of technology in marketing will assume more changes with increase in
both communication and information technological changes. Concepts will emerge such
as phone-a–cement, or portraying a 3-D animation of the house prior to its construction in
a library, providing responses to customers through mobile technology.

 Cement Economics: Costs have a significant bearing on the performance of an industry

and cement is no exception. The uptrend in costs is likely to continue, although the increase
in input costs is expected to be neutralized by rise in prices owing to higher demand.

 Corporate Governance and Branding: Corporate governance is as a set of systems,

processes and principles, which ensure that a company is governed in the best interest of
all stakeholders. The business environment has been changing over the years with
increasing expectations from key stakeholders including regulatory bodies. Recent stock
exchange regulations also require listed companies to enhance corporate governance and
business practices and improved disclosure norms.

 R&D and Innovation: Companies do not have much of application-oriented research and
development efforts but this will become critical for future success. To a large extent, this
is related to creating the application and customer of the future and understanding customer
needs based on the emerging environment. Companies will need to create niche products
and develop the market for such products by providing solution-based offerings to the
customer.

32
 4.8 Customer buying behaviour process in cement industry
According to the first objective of this research, is to explore the structural framework of
cement purchase behaviour process to know the distribution channel. Cement is mainly used in
Independent houses, housing complexes, commercial complexes and infrastructure. The
demand drivers for the cement sector continue to be housing, infrastructure and commercial
construction, etc. Housing sector acts as the principal growth driver for cement. However, in
recent times, industrial and infrastructure sector have also emerged as demand drivers for
cement. Individual housing sector is the major consumer of cement (50% of cement demand)
followed by the government infrastructure sector.

Market segmentation
Segmentation is categorization of buyers into suitable classes so that the strategic options are
customized and made appropriate to each specific class of buyers. From exploratory survey, on
basis of cement distribution, the customers are categorized as Trade customers and Non-Trade
customers.

Trade customer: Dealer/retailer/sub dealer/whole seller who sell cement to the retail customer
and they are the direct customer of cement company as they lift cement though authorized CFA
of company. Trade customer include retail customer can buy cement from a retail outlet
(Hardware shop) from his area. People who build their own houses or mason/
contractors/Engineer/Architect who build housing infrastructure and opt to buy cement through
distribution channel are the retail customers.

Individual home builders: These are the trade customer or retail customer who purchases
cement from cement retail store and build private house for own accommodation.

Non trade (Industrial) customers: A customer who has a registered company and buys large
quantities of cement can buy cement directly from sales points. Government is an industrial
customer. Big builders and promoters fall into this segment. Generally 5 types of non trade
customer segmentation:

[1] Builders and promoters: Are private companies specialized in developing housing or
commercial complexes to sell them on the market. E.g. PS Group, Fort group, Merlin Group,
Riddhi Siddhi Group…

[2] Big infrastructure contractors: are corporate companies that handle main civil construction
projects for the government or private customers: poIr plants, water waste, airports, major
bridges. E.g. Jusco, L&T ECC, Simplex Infrastructure, Ramky Infrastructure …

[3] Small projects contractors: are small public or private contractors which work essentially
for government infrastructure projects at smaller scale: roads, schools, irrigation etc. E.g. Block
Government Office.

[4] Manufacturers: are industrial manufacturers which use cement as a raw material for their
production: ready-mix, AC sheets, or concrete blocks manufacturers. E.g. Ramco, RDC
Concrete, Rigid bricks, RMC Ready-mix…

33
[5] Expanding companies: Are private companies which are building new industrial units to
increase their production. The consume cement for their own purpose. E.g. Tata metaliks,
Ramsarup, Utkarsh Galva…

4.9 Key influencers in cement purchasing decision process

From exploratory survey it is found that the key influencers in purchase decision-making of
IHB and Non trade customers are:

Mason/Labor: they can give feedback on the process qualities of the building materials, but
sometimes are not considered as direct influencers. Engineers/ Architect: experts who make the
technical tests and give followed recommendations on the cement to use. They have the power
to short-list the brands, and are totally trusted.

Friend/ relatives: with good experience are also influencers to certain extent.
Contractor: with good experience in construction are also influencers to certain extent.
Word of mouth: advertisement by Cement Company also influence to a certain extent.

Local Dealer/ Retailer: who deal with cement business with good experience and locally
available are also influencers to certain extent by playing with price sensitivity customer.

Self decision/ end user: the people who will eventually judge the construction. They are
generally customers (individual home builder, households, government board, corporate
companies…). For Non Trade Customers buy directly cement in bags from Company or
through CFAs. Some institutional buyers happen to buy bags on the distribution channel when
they have no time to wait for a delivery which is not coming here. The decision makers can
have very different responsibilities in their organization, which condition their approach to the
purchase of materials.

Different profiles are:

[1] Purchase managers (in corporate companies)

[2] Project managers (in smaller projects)
[3] Owners of the company
[4] Head of plant (mainly with Ready-mix and AC Sheets)
[5] Engineers (in infrastructure, small units)

The involvement in the field is therefore very variable, and so the major influences. The choice
of the cement used also depends on the results of a test done with different samples by
engineers. But the purchase manager is often more involved in this step, and has more
knowledge about the specificities of the products. After approval from the test, they make their
choice mainly on price and consistency in delivery. Workers play a significant role as
influencers because the profit of those companies is related to the ease of using the materials.
Since they are regular buyers, customers in this segment expect smoother relations with their
supplier, and base it on cooperation. The confidence that cement is good and the high impact
on their final product are arguments to keep on working with the same suppliers. This however
does not imply a single behaviour in this segment: some are exclusive, some have a reduced
number of regular suppliers to ensure supply, and others keep an eye on the market to deal with
the more competitive suppliers for each order. Some customers consider competition boosts
suppliers, and have helped to improve the service offered in the past years.

34
 Chapter V

About Ultratech Cement Pvt. Ltd.

35
5.1 About Company

UltraTech Cement Limited is the cement flagship company of the Aditya Birla Group. A $ 5.9
billion building solutions powerhouse, UltraTech is the largest manufacturer of grey cement
and ready mix concrete (RMC) and one of the largest manufacturers of white cement in India.
It is the third largest cement producer in the world, excluding China. UltraTech is the only
cement company globally (outside of China) to have 100+ MTPA of cement manufacturing
capacity in a single country. The Company’s business operations span UAE, Bahrain, Sri Lanka
and India.

UltraTech has a consolidated capacity of 119.95 Million Tonnes Per Annum (MTPA) of grey
cement. UltraTech has 22 integrated manufacturing units, 27 grinding units, one Clinkerisation
unit and 8 Bulk Packaging Terminals. UltraTech has a network of over one lakh channel
partners across the country and has a market reach of more than 80% across India. In the white
cement segment, UltraTech goes to market under the brand name of Birla White. It has one
White Cement unit and two Wall Care putty unit, with a current capacity of 1.5 MTPA. With
150 Ready Mix Concrete (RMC) plants in 50 cities, UltraTech is the largest manufacturer of
concrete in India. It also has a slew of speciality concretes that meet specific needs of discerning
customers. Our Building Products business is an innovation hub that offers an array of
scientifically engineered products to cater to new-age constructions.

Figure 9

36
5.2 About the journey of Ultratech

Figure 10

5.3 Business Strategies for Ultratech

Figure 11

37
 5.4 Product Portfolio

Figure 12 & 13

Scale of
production

38
5.5 Operational Presence

Figure 14

5.6 Distribution Network

Figure 15

39
 5.7 Financials of Ultratech

Figure 16

Figure 17

40
 Figure 18

5.8 Awards received by Ultratech

Figure 19

UltraTech Cement has recently won four awards at the Indian Content Marketing Awards
(ICMA) 2020, for its '#BaatGharKi' media campaign. UltraTech was conferred with a 'Silver'
under 'Best Content Marketing - Multi Year Program' category and a 'Bronze' under three
categories - 'Best Branded Content Marketing On TV', 'Best Integrated Branded Content', and
'Best Marketed Branded Content'.

UltraTech received the award for making the brand name synonymous to home building by
crafting platform specific versions of the category insight based campaign Baat Ghar Ki.

41
By making short and helpful content, UltraTech has started a new means of engaging directly
with the end consumers with the concept of Baat Ghar Ki. UltraTech as a brand understands
the Individual Home Builders’ (IHB) real motivation behind building a home. For the home
builder, home is not just a structure but an important milestone of his life. When most of the
IHBs are embarking on the journey of building their first home, which is a long and complex
process that comes with very high stakes. There is usually a requirement of an ‘expert’ who
can ‘empower’ them in the process. To address this need of IHBs, UltraTech Cement
conceptualized this digital campaign, Baat Ghar Ki (BGK) which has evolved over a period of
time to take shape across various medium. This campaign engaged with IHBs through a series
of videos, social media posts and impressive content on TV that simplified the process of home
building.

#BaatGharKi, has won various awards in the past like 'Gold' at the Foxglove Awards 2019
under the 'Best Branded Content Campaign' category; Silver at SAMMIE Awards 2019 under
the category, ‘Best use of Social Media Platform – Facebook; and ‘Silver’ at EMVIEs Awards
2019 under the 'Best Media Research and Analytics Using Data and Technology' category.

42
5.9 Social media marketing strategies adopted by Ultratech

Figure 20 - Facebook Ads

Figure 21- YouTube & Twitter

Campaigns

43
 Chapter VI
Suggestions & Conclusion

44
 6.1 Observations

The cement industry requires to operate in a social and environment needs to handle market of
continuous changing customers‟ product preferences. The production and marketing
development becomes a major activity for cement industry of these companies. Basically
Cement companies are functioning and operating their business in a high competitive
environment due to presence of the cutthroat competition among the national & international
and existing cement investors and players in the cement market. This article shows that
marketing environment in cement industry is very competitive and dynamic and companies
need to adopt new age, digital based and unique marketing strategies to be in competition at
Indian cement market not only survival but also for growth and development in cement
industry.

Cement companies are well aware of importance of focusing customers. Cement companies
are willing to cater new customer segments. It shows the level of competition among the
existing cement companies in the market. Any company offers a product or service in the
market immediately introduced by its competitors in the market. This concludes that cement
industry is highly competitive.

The results show that technology plays an important role in the growth of cement industry
Companies have to ready for the change in the technology to utilize the opportunity present in
the cement market. The results show that companies contributed in the technology
developments in the cement industry. It is required for company to keep the same pace in the
change in the technology within the company to contribute to the industry as a whole. Company
also needs to check about the benefits it is getting from this contribution and act accordingly.
This will help us in further establishing success rules for cement industry in Indian market.

45
 6.2 Conclusion
We expect that in the presence of global competitors and a global market, Indian companies
would be able to acquire most of the share of this market following sound business strata-
gems as summarized below: -

 The problem of up scaling and surviving competition with multinational companies

calls for Consolidation
and Globalization amongst all Indian cement players. Indian companies would have to
identify the threat from global cement players entering the market and find demand for the
product in neighbouring countries and continents. Smaller companies should consolidate their
businesses to survive in the market, which will be dominated by larger players.

 The companies have to get a higher share of sales in the market. This would require
multi-product entities. Indian Companies need to focus on products other than just
cement like RMC (Ready Mix Concrete), and research new building materials that
will create a niche for them in the market.

 To serve as a truly global company, the operations of a company can’t just be

restricted to India. Indian companies should look at entering foreign countries in other
continents to have a far larger customer base, thus enhancing production and creating
demand leading to stronger businesses.

 To produce high quality cement and in the cheapest and most efficient manner
possible, new technologies have to be adapted. New technologies have to be
introduced and implemented across various plants and factories for enhanced control
and efficient production of the product. Process Automation has to be employed to
create high quality products.

 To gain a high visibility in the market and pose stiff competition to most multinational
brands, Research is going to be the key. Research to develop newer, cheaper and more
efficient technologies for creating cement and other products. Niche products like
cement with Fragrance, pre-coloured plasters can also be developed for increased
consumption.
Considering the growing demand for cement in India and higher capacity utilization over the
years, key Indian players have already begun to revisit their business strategies. Further, as
cement is a commodity and the process is well known, there is no USP as far as this product is
concerned. Therefore, the differentiation would largely relate to operating efficiencies, cost
optimizations and reduction, and providing superior product and service and marketing
strategies such as the presence of a stable and proactive marketing leadership, targeting
specifically various customer and market segments, an expansion in product profile
complemented with aggressive sales promotion and advertising will be the key to unlocking
the puzzle of profit and expansion in the Indian cement industry in the 21 st Century.

46
Chapter VII

Bibliography

47
 Bibliography

 https://www.alphainvesco.com/blog/understanding-indian-cement-industry/

 Journal on 2010 International Conference on Economics, Business

and Management

 International journal on Impact of External Influencer Recommendation in Purchase

Behaviour Process of Selection of Cement for Construction

 Equity research report on Indian Cement Industry by Systematix Institutional Equities

 https://www.ibef.org/industry/cement-india

 https://www.mbaskool.com/marketing-mix/products/17058-ultratech-cement.html

 https://www.ultratechcement.com/about-us/media/features/ultratech-s-baatgharki-
media-campaign-wins-four-awards-at-icma-2020

 Annual report of Ultratech Cement Pvt. Ltd. For FY 2020 - 21

48