Gujarat Ambuja- Redefining Operational
Efficiency
-Swapnil Zeple (14344)
• GACL was established as ACPL in 1981 by Narotam Satyanarayan Sekhsaria
• Advantages of cement businessi. Stable demand, ii. Lack of substitutes iii. limited competition
• Started at a 0.7 million tonnes per annum (mtpa) in Ambuja Nagar, Gujarat
Introduction
Introduction
• In 1997, GACL became fourth largest cement manufacturer in India.
• By the late 1990s, GACL had emerged as one of the most energy efficient and technologically advanced cement manufacturer in India.
• GACL had large distribution network of 11,500 outlets.
• GACL was not only the market leader; it also ranked very high on the profitability criteria.
• Competitive advantages of GACLI. Use of better quality limestoneII. Innovative energy management effortsIII. Strong retail presence in Mumbai, Gujarat and Punjab
Introduction
Indian Cement Industry-Companies and their Market share (%) in 2001
Introduction
22%
24%
5%5%
5%
3%
36%
Market share (in %)
Grasim-L&T combine
GACL-ACC
JK Group
India Cements
Madras Cements
Lafarge
Others
Location of a Plant Take advantages of substantial sales tax and income tax
incentives
Gujarat, HP, Punjab plants get sales tax benefit of about 90% of its fixed assets for a period of 14 years
Chandrapur plant got sales tax benefit for 18 months
HP plant- a. prioritized power supply at a guaranteed cost for five years
from the date of commissioningb. This region was cement deficit at that point of timec. Plant was closer to the mines and the Punjab grinding unit.d. Area had substantial limestone deposits
Operational efficiency
Infrastructure development GACL built a conveyor across three valleys on its own within 18
months Cut down the distance from 17 km to just 2.8 km. The belt moved 800 tonne of limestone per hour.
Reduction in set up time Empowerment of engineers They define their own job Authority to take on-time decisions Allow to set daily, weekly and monthly targets
First plant was commissioned within 22 months instead of 3 yearsAnd second plant was commissioned within in a record time of 13
months
Operational efficiency
Major cost components
Fuel- 20%
Freight- 17%
Raw material- 17%
Power- 16%
Adopted a two-pronged strategy
Enhancing plant productivity
Reducing cost of each cost component
Total Cost Management
Mining Process
• GACL worked hard to reduce mining expenses• The company introduced an Australian device
Surface Miner• Surface miner is energy efficient and it also
recovered more material from a given area.
Kiln Operations•Required high power and directly related to the cement quality.•GACL arranged training in Japan cement plant for engineers.•Brought down power cost from 120 units/ton to 90 units/ton.
Kiln Productivity •Implementation of larger pre-heater•Productivity increases by 12.5%
Enhancing Productivity
Quality •GACL installed a centrally operated computerized process control system •Useful to evaluate optimum mix of raw material and redesign accordingly
Capacity Utilization•GACL installed 24-hour monitoring system and introduced weekly checks•Run its plants for 40 days continuously•GACL achieved more than100% capacity utilization during 1999
Quality Control •The practice of reporting quality related data 48 times per day
Enhancing Productivity
POWER Setup of fuel based captive power plants in
Gujarat and Himachal Pradesh in 1998
Selling extra power generated
Small measures reduced GACL’s power consumption from 120 units/tonne of cement to 88-90 units/tonne of cement
Cutting Costs
FUEL Import cheaper higher quality coal from South
Africa
Import of better quality furnace oil for its diesel generator
Use of groundnut husk instead of coal .Overall coal consumption reduced by 3%
Replacement of v belt drives by flat belt drives
Cutting costs
FREIGHT Use of sea route
Set up of modern ports & freight handling terminals at Muldwarka,Surat and Panvel
Cost of transporting cement to Mumbai by road worked out to be 1800 per tonne and 400 per tone by sea.
GACL saved roughly 160 million annually.
Cutting costs
Cement production in the World
Types of modern Cement Portland Cement - Portland cement is by far
the most common type of cement in general use around the world
Masonry cements are used for preparing bricklaying mortars and stuccos, and must not be used in concrete.
Expansive cements are designed to offset the effects of drying shrinkage that is normally encountered with hydraulic cements.
• White blended cements may be made using white clinker
• Colored cements are used for decorative purposes.
• Very finely ground cements are made from mixtures of cement with sand or with slag or other pozzolan type minerals that are extremely finely ground together.
Types of modern Cement
"Natural" cements correspond to certain cements of the pre-Portland era, produced by burning argillaceous limestones at moderate temperatures
Geopolymer cements are made from mixtures of water-soluble alkali metal silicates and aluminosilicate mineral powders such as fly ash and metakaolin.
Types of modern Cement
Cement Industry in India
Current production capacity – Around 366 MT
India is the second largest producer of cement in the world
In India, the housing sector is the biggest demand driver of cement, accounting for about 67 per cent of the total consumption. The other major consumers of cement include infrastructure at 13 per cent, commercial construction at 11 per cent and industrial construction at nine per cent.
67%
13%
11%9%
Cement consumption
Housing sector
Infrastucture
Commercial construction
Industrial construction
Top 10 Cement companies in India
ACC Ltd. Gujarat Ambuja Cements Indian Cement UltraTech Cement Jaypee Cement JK Cement Ramco Cement Prism Cement Shree Cement Rain Cement
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