A Seminar Report On Study of Positioning of PPC (Portland Pozzolana Cement) &PSC (Portland Slag Cement) Cements BY UMESHANAND GIRI GOSWAMI Session 2008-10 IN PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION DEGREE DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY, RAIPUR Study on Positioning of PPC And PSC Cement 1
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Seminar Report on study of positioning of portland pozzolana and portland slag cement
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A
Seminar Report
On
Study of Positioning of PPC (Portland Pozzolana Cement) &PSC (Portland Slag Cement) Cements
BY
UMESHANAND GIRI GOSWAMI
Session 2008-10
IN PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION DEGREE
DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY, RAIPUR
Study on Positioning of PPC And PSC Cement 1
DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGYSatya Vihar, Vidhansabha-Chandrakhuri Marg (Baloda Bazaar Road), Mandir Hasaud, Dist-Raipur (C.G.) Pin-492101Tel No. : 0771-4200100-09, Fax No. : 0771-4200110, 2472010Website: www.dimatindia.com, Email: [email protected]
CERTIFICATE
This is to certify that
Mr./Ms…………………………………………………………………… of DIMAT, MBA
Semester –IV has successfully completed his Seminar Report in partial fulfillment of
requirement for the award of MBA Degree prescribed by the Chattisgarh Swami
Vivekanand Technical University, Bhilai.
This report is the record of authentic work carried out by the student during the
academic year 2008-09.
Internal Guide Academic In charge
Prof Sanjay Mishra Dr R A S Benedict (Faculty of Management)
Please do all the correspondence at:
City office: Disha Towers, New Shanti Nagar, Raipur (C.G.) 492007 PH.:+91-771-40353225-28, 33, 34 Fax: 0771-4035333
Study on Positioning of PPC And PSC Cement 2
DECLARATION
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
for the award of my MBA degree.
Place: Name:
Date: Signature:
Study on Positioning of PPC And PSC Cement 3
ACKNOWLEDGEMENT
I express my deepest gratitude to management of our institution, for giving us such
an opportunity in our curriculum to carry out independent research and understand
the market to the fullest extent. My special thanks to Prof Sanjay Mishra for providing
extremely valuable inputs in the very early stage of my project and helping me
understand the objectives of the study.
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.
04 Production Process & Cement Production in India
Manufacturing Process
Cement Production in India
36-38
38-39
05 Research Methodology 40-4206 Objective of the Study 43-4407 Observation and Analysis 45-4808 Bibliography 48-4909 Questionnaire 49-51
Study on Positioning of PPC And PSC Cement 5
Executive Summary
It is a general phenomenon that buyers in same market seek products for broadly
the same function, but different buyers have different evaluative criteria about what
constitute the right choice of performing the function. As a consequence different
offering will attract different buyers. A market segment is explained to mean
homogeneous group consisting of buyers who seek the same offering. In other
words Market Segmentation may be defined, as the division of the market in to
groups of segments having similar wants. But wants must be interpreted very
broadly, broader than products characteristics only. Segment may differ also in their
needs for information, reassurance, technical support, service, promotion,
distribution and host of other non-products benefits that are part of their purchases;
they may also differ in their capacity for these differences.
Regions, known to be unpredictable like Bihar, Madhya Pradesh, Uttar Pradesh,
Orissa and other parts of the Country. One of the major section, which requires or
purchases cement in bulk quantity are engineers, architect, builders and contractors.
This section or segment is known as the non-trader segment. And the retailers,
stockists, whole-sellers and dealers are known as trader segment.
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
Study on Positioning of PPC And PSC Cement 6
the term zonal isolation). Displacement fluids, such as fresh water, sea water, and
weak acid solutions, are used to push the cement out of the casing. To avoid
damage to the pumping equipment used to place the cement slurry, the cement must
remain a fluid state for several hours while it is pumped into place; to avoid wasting
valuable rig time, the cement should set shortly after being placed.
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.
Study on Positioning of PPC And PSC Cement 7
Basic objective to prepare this report is to critically evaluate the role of Portland cement in construction works and its respective position in among its rivals and other variants with refers to cement industry.
Study on Positioning of PPC And PSC Cement 8
Corporate Profile Indian Cement Industry
CEMENT INDUSTRY
Study on Positioning of PPC And PSC Cement 9
Cement is a key infrastructure industry. It has been decontrolled from price and
distribution on 1st March, 1989 and delicensed on 25th 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.
Capacity and Production
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.
Growth Trend in Cement Industry
Study on Positioning of PPC And PSC Cement 10
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.
According to Cement Manufacturers Association (CMA), the average monthly
capacity utilization during fiscal 2006-07 was 94 per cent. Also, cement dispatches
for the recently concluded fiscal was at an all-time high of 155 million tones (mt), up
from 142 mt in the previous fiscal, thereby recording a growth of 10 per cent. More
particularly, the dispatches for March 2007 stood at 15.08 mt as against an installed
capacity of 14.95 mt.
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.
Despite the growth of the Indian cement industry, India's per capita production
Study on Positioning of PPC And PSC Cement 11
of 115 kilograms per year lags the world average of over 250 kilograms and
China's production of more than 450 kilograms per person. Clearly there
remains room for growth in the industry in India.
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
Majority of the cement companies witnessed a surge in their sales volume,
which was led by rising demand. The impact of high demand growth was
evident in the continuous northward movement of prices. Concurrently,
companies reported higher production, higher sales and higher profits. The
net profit growth rate of cement firms was 85 per cent in the fourth quarter
ended March 2007:
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.
Mergers and Acquisitions
the booming demand for cement, both in India and abroad, has attracted global
Study on Positioning of PPC And PSC Cement 12
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 has further increased its stake in Indian cement company ACC taking its
total holdings in the company to 41.6 per cent. HOlCIM is now the largest
shareholder in the company. Also, presently it holds 78 per cent of total share
holdings in ACIL.
Study on Positioning of PPC And PSC Cement 13
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
Heidelberg Cement has entered into an equal joint-venture agreement with S P
Lohia Group controlled Indo-Rama Cement. Heidelberg Cement is expected to take
a 50 per cent controlling stake in Indo-Rama's grinding plant of 0.75 mtpa at Raigad
in Maharashtra. Heidelberg is also taking over Mysore Cement of S K Birla group at
a consideration of US$ 93 million.
Demand Projection
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,
Study on Positioning of PPC And PSC Cement 14
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.
A similar projection by National Council of Applied Economic Research (NCAER) for
cement consumption, on a conservative basis, has placed cement demand at 225 mt
by the fiscal year 2011. If the Government goes ahead with infrastructure projects as
planned, consumption is likely to be much higher at 291 mt.
Exports
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
Study on Positioning of PPC And PSC Cement 15
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.
Recommendations on Cement Industry
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;
(i) Further push to housing development programmes.
(ii) Promotion of concrete Highways and roads; and
(iii) Use of ready-mix concrete in large infrastructure projects.
Further, in order to improve global competitiveness of the Indian Cement Industry,
the Department of Industrial Policy & Promotion commissioned a study on the global
competitiveness of the Indian Industry through an organization of international
repute, viz. KPMG Consultancy Pvt. Ltd. The report submitted by the organization
has made several recommendations for making the Indian Cement Industry more
competitive in the international market. The recommendations are under
consideration.
Technological change
Cement industry has made tremendous strides in technological up gradation and
assimilation of latest technology. At present ninety three per cent of the total
Study on Positioning of PPC And PSC Cement 16
capacity in the industry is based on modern and environment-friendly dry process
technology and only seven per cent of the capacity is based on old wet and semi-dry
process technology. There is tremendous scope for waste heat recovery in cement
plants and thereby reduction in emission level. One project for co-generation of
power utilizing waste heat in an Indian cement plant is being implemented with
Japanese assistance under Green Aid Plan.
The induction of advanced technology has helped the industry immensely to
conserve energy and fuel and to save materials substantially. India is also
producing different varieties of cement like Ordinary Portland Cement (OPC),
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