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Dr.

Rafiq Zakaria Campus Maulana Azad Educational Trusts Millennium Institute of Management
Rauza Baugh, Aurangabad.

PROJECT REPORT ON
SALES & DISTRIBUTION NETWORK OF

ULTRA TECH CEMENT


Submitted By

Mohammed Ziauddin
(MBA 4th SEM) ROLL.NO. 20(Batch I)

Guided By
DR. SHAIKH SALEEM (Director) MR. SYED FARHANUDDIN (Lecturer)

Dr. Babasaheb Ambedkar Marathwada University, Aurangabad. For the academic year 2011-12
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Dr. Rafiq Zakaria Campus Maulana Azad Educational Trusts Millennium Institute of Management
Rauza Baugh, Aurangabad.

CERTIFICATE
This is certifying that MOHAMMED ZIAUDDIN student of M.B.A. (4th sem.) has completed his project on the topic

SALES & DISTRIBUTION NETWORK OF

ULTRA TECH CEMENT


and submitted satisfactory report as per the requirement of Dr. BABASAHEB AMBEDKAR MARATHWADA UNIVERSITY in the partial fulfillment of the Master of Business Administration (M.B.A) academic year 2011-12
MR. SYED FARHANUDDIN SIR.

Dr. Shaikh Saleem Director

Guide

Place: Aurangabad.
DATE ;

ACKNOWLEDGEMENT
It gives me an immense pleasure to acknowledge all the people who directly or indirectly helped me during the Project. My thanks go to Dr. Shaikh Saleem (Honorable Director MIM Aurangabad), MR SYED FARHANUDDIN SIR who guided me for project. My special thanks go to all colleagues, who guided and cooperated me to accomplish my project effectively.

MOHAMMED ZIAUDDIN
(MBA 4th sem )

DECLARATION
I the undersigned MOHAMMED ZIAUDDIN here by declare that all the information present in this report is based on my personal observation and any flaw thereby would be attributed solely to me. I also promise that the information collected from the sources would only be used for the completion of my MBA. I here by declare that this report is submitted by me in the partial fulfillment of Master of Business Administration is genuine work of me. It has not been submitted either fully or partially or any other institute prior in other connection.

MOHAMMED ZIAUDDIN

Index
S.NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Chapters Abstract Introduction Executive summary Indian cement industries an overview Company profile & other information Reviews of literature Objectives of study Research Methodology Data Analysis Conclusion Limitation of the study Recommendation Annexure Bibliography Page 1-5 6-9 10-13 14-45 46-59 60-68 69 70-73 74-78 79 80 81-82 83-84 85

1. INTRODUCTION

Indian economy is facing a boom in the real estate. This is directly related with the cement sector. Ultra Tech cement being one of the top three players in the Indian market and the most exported Indian cement is an important part of the sector. Ultra Tech Ltd is India's foremost manufacturer of cement and concrete. Their operations are spread throughout the country with 14 modern cement factories, 19 Ready mix concrete plants, 19 sales offices, and Several zonal offices. It has a workforce of about 9000 persons and a countrywide distribution network of over 9,000 dealers. Ultra Tech research and development facility has a unique track record of innovative research, product development and specialized consultancy services. Since its inception in 1936, the company has been a trendsetter and important benchmark for the cement industry in respect of its production, marketing and personnel Management processes. Its commitment to environment friendliness, its high ethical standards in business Dealings and its on-going efforts in community welfare Programs have won it acclaim as a responsible corporate citizen. Ultra Tech Co has made significant contributions to the nation building process by way of quality products, services and sharing its expertise. In the 70 years of its existence, UTC has been a pioneer In the manufacture of cement and concrete and a trendsetter in many areas of cement and concrete technology including improvements in raw material utilization, process improvement, energy conservation and development of high performance concretes. UTCS brand name is synonymous with cement and enjoys a high level of equity in the Indian market. It is the only cement company that figures in the list of Consumer Super Brands of India. The company's various businesses are supported by a
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Powerful, in house research and technology backup facility - the only one of its kind in the Indian cement industry. This ensures not just consistency in product quality but also continuous improvements in products, processes, and application areas. UTC has rich experience in mining, being the largest user of Limestone and it is also one of the principal users of coal. As the largest cement producer in India, it is one of the biggest customers of the Indian Railways, and the foremost user of the road transport network services for inward and outward movement of materials and products.

What is the Project


This projet about the sales & distribution network of Ultra tech cement. In this project a brief study has been done regarding their policies & strategies and how they distribute their product according to the fluctuating demand of the market. In this project we define what actually cement is? Its mixture, the government rules & regulation and policies regarding this segment. The details of Ultra Tech cement industry has been defined over here. Their export to various countries and the deep knowledge about the overall cement industry, the state wise capacity, production capacity, operations. Various research designs has been done over here & with the help of survey The Co has been awarded with various types of quality standards like ISO 9000-9001 Various graphical representations show the market share of the Co in Marathwada Region like Jalna & Aurangabad. Personal visit has been given to the dealers of the Co & many questions have been asked according to the question ere shown below. During my project, I carried out a research for Ultra Tech cement and tried to find out its current market position, reasons behind any

shortcomings and also found out some methods of increasing Ultra Tech cement sales.

The report also gives a detailed idea about the Indian cement industry and the key players.

WHAT IS CEMENT?
Cement is a mixture of limestone, Clay, Silica and Gypsum. It is a fine powder which when mixed with water sets to a hard mass as a result of hydration of the constituent compounds. It is the most commonly used construction material. Cement is manufactured by burning a mixture of limestone and Clay at high temperatures in a kiln, and then finely grinding the resulting clinker along with Gypsum. The end product thus obtained is called Ordinary Portland Cement (OPC). Different Types of Cement There are different varieties of cement based on different compositions according to specific end uses, namely Ordinary Portland Cement, Portland Pozolona Cement, Portland Blast Furnace Slag Cement, White Cement and Specialized Cement. The basic difference lies in the percentage of clinker used. 1. Ordinary Portland cement (OPC): OPC, popularly known as grey cement, has 95% clinker and 5% of Gypsum and other materials. It accounts for 70% of the total consumption. White cement is a variation of OPC and is used for decorative purposes like rendering of walls, flooring etc. It contains a very low proportion of iron oxide. Ordinary Portland cement is the most commonly used cement for a wide range of applications. These applications cover dry-lean mixes, general-purpose ready-mixes, and even high strength pre-cast and pre-stressed concrete.

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2. Portland Pozolona Cement (PPC): Portland pozzolana cement is Ordinary Portland Cement blended with pozzolanic materials (power-station fly ash, burnt clays, ash from burnt plant material or Siliceous earths), either together or separately. Portland clinker is ground with Gypsum and Pozzolanic materials which, though they do not have cementing properties in themselves, combine chemically with Portland cement in the presence of water to form extra strong cementing material which resists wet cracking, thermal cracking and has a high degree of cohesion and workability in concrete. PPC has 80% clinker, 15% pozolona and 5% gypsum and accounts for 18% of the total cement consumption. It is cheaply manufactured because it uses fly ash/burnt clay/coal waste as the main ingredient. It has a lower heat of hydration, which helps in preventing cracks where large volumes are being cast. 3. Portland Blast Furnace Slag Cement (PBFSC): PBFSC consists of 45% clinker, 50% blast furnace slag and 5% Gypsum and accounts for 10% of the total cement consumed. It has a heat of hydration even lower than PPC and is generally used in construction of dams and similar massive constructions. Portland blast-furnace slag cement contains up to 70 per cent of finely ground, granulated blastfurnace slag, a nonmetallic product consisting essentially of Silicates and Aluminum-silicates of Calcium. Slag brings with it the advantage of the energy invested in the slag making. Grinding slag for cement replacement takes only 25 per cent of the energy needed to manufacture Portland cement. Using slag cement to replace a portion of Portland
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cement in a concrete mixture is a useful method to make concrete better and more consistent. Portland blast-furnace slag cement has a lighter colour, better concrete workability, easier finish ability, higher compressive and flexural strength, lower permeability, improved resistance to aggressive chemicals and more consistent plastic and hardened consistency. 4. White Cement: White Portland cement has essentially the same properties as gray cement, except for color, which is a very important quality control issue in the industry. It is manufactured 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 aesthetic value, in tiles and for flooring. White cement is much more expensive than grey cement. 5. Specialized Cement: Oil Well Cement: is made from clinker with special additives to prevent any porosity. Rapid Hardening Portland cement: It is similar to OPC, except that it is ground much finer, so that on casting, the compressible strength increases rapidly. Water Proof Cement: OPC, with small portion of calcium stearate or non-saponifibale oil to impart waterproofing properties.

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INDIAN CEMENT INDUSTRY-AN OVERVIEW


Cement production commenced in India as early as 1914. The first cement unit was set up at Porbandar in 1914 with a capacity of 1,000 tones per annum.Cement is the preferred building material in India. It is used extensively in household and industrial construction. Earlier, government sector used to consume over 50% of the total cement sold in India, but in the last decade, its share has come down to 35%. Rural areas consume less than 23% of the total cement. Availability of cheaper building materials for nonpermanent structures affects the rural demand. Demand for cement is linked to the economic activity in any country. Broadly, it can be categorized into demand for housing construction (homes, offices etc.) and infrastructure creation (ports, roads, power plants etc). The real driver of cement demand is creation of infrastructure; hence cement demand in emerging economies is much higher than developed countries where the demand has reached a plateau. In India too, the demand for cement will be affected by spending on infrastructure (including housing). With the boost given by the government to various infrastructure projects, road network and housing facilities, growth in the cement consumption is anticipated in the coming year. The favorable housing finance environment is expected to fulfill the vast housing requirements, both in rural and urban areas. The increase in infrastructure projects by the government coupled with the construction of the Golden Quadrilateral and the North-South and East-West corridor projects have led to an increase in consumption of cement. This increase is expected to continue in the future. The reduction in
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import duties is not likely to affect the industry as the cement produced is at par with the international standards and the prices are lower than those prevailing in international markets. The graph below show the consumption of cement in different areas of housing, infrastructure and industries.

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Structure of the industry


Domestic players:

Associated Cement Companies Ltd (ACCL)


Associated Cement Companies Ltd manufactures ordinary Portland cement, composite cement and special cement and has begun offering its marketing expertise and distribution facilities to other producers in cement and related areas. It has twelve manufacturing plants located throughout the country with exports to SAARC nations. The company plans capital expenditure through expansion of existing units and/or through acquisitions. Non-core assets are to be divested to release locked up capital. It is also expected to actively pursue overseas project engineering and consultancy services.

Birla Corp
Birla Corp's product portfolio includes acetylene gas, auto trim parts, casting, cement, jute goods, yarn, calcium carbide etc. The cement division has an installed capacity of 4.78 million metric tones and produced 4.77 million metric tones of cement in 2003-04. The company has two plants in Madhya Pradesh and Rajasthan and one each in West Bengal and Uttar Pradesh and holds a market share of 4.1 per cent. It manufactures Ordinary Portland cement (OPC), Portland pozzolana cement, fly ash-based PPC, Low-alkali Portland cement, Portland slag cement, low heat cement and sulphate resistant cement. Large quantities of its cement are exported to Nepal and Bangladesh. Going forward, the company is setting up its captive power plant to remain cost competitive.

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Century Textiles and Industries Ltd (CTIL)


The product portfolio of CTIL includes textiles, rayon, cement, pulp & paper, shipping, property & land development, builders and floriculture. Cement is the largest division of CTIL and contributes to over 40 per cent of the company's revenues. The company has an installed capacity of 4.7 million tones with a total cement production of 5.43 million tones in 200304. CTIL has four plants that manufacture cement, one in Chattisgarh, two in Madhya Pradesh and one in Maharashtra. Going forward, the company has scripted a three-pronged strategy closing down its shipping business, continuing with its chemicals and adhesive division, and Focusing on cement, rayon and paper as its long-term business plan.

Grasim-UltraTech Cemco
Grasim's product profile includes viscose staple fiber (VSF), grey cement, white cement, sponge iron, chemicals and textiles. With the acquisition of UltraTech, L&T's cement division in early 2004, Grasim has now become the world's seventh largest cement producer with a combined capacity of 31 million tones. Grasim (with UltraTech) held a market share of around 21 per cent in 2005-06. It has plants in Madhya Pradesh, Chattisgarh, Punjab, Rajasthan, Tamil Nadu and Gujarat among others. The company plans to invest over US$ 9 million in the next two years to augment capacity of its cement and fiber business. Its also plans to focus on its international ventures, ramping up the capacity of Alexandra Carbon Black in Egypt to 1,70,000 tone per annum (from 1,20,000 tpa) and raising the capacity of the carbon black plant in China from 12,000 tpa to 60,000 tpa.

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Gujarat Ambuja Cements Ltd (GACL)


Gujarat Ambuja Cements Ltd was set up in 1986 with the commencement of commercial production at its 2 million tonne plant in Chandrapur, Maharashtra. The group has clinker manufacturing facilities at Himachal Pradesh, Gujarat, Maharashtra, Chattisgarh, Punjab and Rajasthan. The company has a market share of around 10 per cent, with a strong foothold in the northern and western markets. Its total sales aggregated US$ 526 million with a capacity of 12.6 million tonne in 2003-04. Gujarat Ambuja is one of India's largest cement exporter and one of the most cost efficient firms. GACL has a 14.45 per cent stake in ACC, making it the second largest cement group in the country, after Grasim-UltraTech Cemco. The company has free cash flows that it is likely to use to grow inorganically. The company is scouting for a capacity of around two million tonne in the northern and western markets. It has also earmarked around US$ 195-220 million for acquisitions

India Cements
India Cements is the largest cement producer in southern India with a total capacity of 8.81 million tonne and plants in Andhra Pradesh and Tamil Nadu. The company has a market share of 5.4 per cent with a total cement production of 6.36 million tonne in 2003-04. Its product portfolio includes ordinary portland cement and blended cement. The company has limited its business activity to cement, though it has a marginal exposure to the shipping business. The company plans to reduce its manpower significantly And exit non-core businesses to turnaround its fortune. It also expects the export market to open up, with the Gulf emerging as a major importer.

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Jaiprakash Associates Limited


Jaiprakash Industries, now known as Jaiprakash Associates Limited (JAL) is part of the Jaypee Group with businesses in civil engineering, hospitality, cement, hydropower, design consultancy and IT. It has an annual capacity of 4.6 million tonne with plants located in Rewa & Bela (Madhya Pradesh) and Sadva Khurd (Uttar Pradesh). The company has a market share of 3.8 per cent with the cement division contributing US$ 172 million to revenue in 2003-04. The company is upgrading its capacity to 6.5 million tonne through the modernizing of the existing units and the commissioning of a new grinding unit at Tanda (Uttar Pradesh) with an investment of US$ 163 million. Jaiprakash Associates has decided to concentrate on its core business of construction and engineering and leave its cement plant to its subsidiary Jaypee Rewa Cement Ltd. The company manufactures a wide range of world class cement of OPC grades 33, 43, 53, IRST-40 and special Blends of pozzolana cement.

JK Synthetics
JK Synthetics, a Singhania Group company, started manufacturing nylon at Kota in 1962. Subsequently, it diversified into PSY/PFY, nylon tyre-cord, cement (in 1975), acrylic and white cement (in 1984). The company has a market share of 2.7 per cent. JK Synthetics Limited is restructuring its business divisions into two separate entities- JK Cements and JK Synthetics. After the restructuring, it will be left with a cement plant at Nimbahera in Rajasthan, with a capacity of 3.26 million metric tonne and manufacturing white cement.

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Madras Cements
Madras Cements Ltd is one of the oldest cement companies in the southern region and is a part of the Armco group. The company is engaged in cement, clinker, dolomite, dry mortar mix, limestone; ready mix cements (RMC) and units generated from windmills. The company has three plants in Tamil Nadu, one in Andhra Pradesh and a mini cement plant in Karnataka. It has a total capacity of 5.47 million tonne annually and holds a market share of 3.1 per cent. Madras Cements plans to expand by putting up RMC plants. As Karnataka is a promising market, the company is further expanding its capacity from the present 1.5 million tonne to 3.4 million tonne through an investment of US$ 9 million.

Foreign players: Holcim


Holcim, earlier known as Holder bank, has a cement production capacity of 141.9 million tonne. It is a key player in aggregates, concrete and construction related services. It has a strong market presence in over 70 countries and is a market leader in South America and in a number of European and overseas markets. Holcim entered India by means of a longterm strategic alliance with Gujarat Ambuja Cements Ltd (GACL). The alliance aims to strengthen their clinker and cement trading activities in South Asia, the Middle East and the region adjoining the Indian Ocean. Holcim also intends to use India as an additional base for its IT operations, R&D projects as well as a procurement sourcing hub to generate additional synergies and value for the group.

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Italcementi Group
The Italecementi group is one of the largest producers and distributors of cement with 60 cement plants, 547 concrete batching units and 155 quarries spread across 19 countries in Europe, Asia, Africa and North America. Italcementi is present in the Indian markets through a 50:50 joint venture company with Zuari Cements. All initiatives in southern India are routed through the joint venture company, while Italcementi is free to buy deals In its individual capacity in northern India. The joint venture company has a capacity of 3.4 million tonne and a market share of 2.1 per cent.

Lafarge India
Lafarge India Pvt Ltd, a subsidiary of the Lafarge Group, has a total cement capacity of 5 million tonne and a clinker capacity of 3 million tonne in the country. Lafarge commenced operations in 1999 and currently has a market share of 3.4 per cent. It exports clinker and cement to Bangladesh and Nepal. It produces Portland slag cement, ordinary portland cement and portland pozzolana cement. The Indian cement plants are located in Chhattisgarh and Rajasthan. Lafarge Cement has become the largest cement selling firm in the Indian markets of West Bengal, Bihar, Jharkhand and Chhattisgarh.

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Two players call all the shots;


For the first time in India, two companies - Grasim and Gujarat Ambuja, along with their associate companies, control almost 50% of Indias cement capacity and supply. In a commodity business, where profits move disproportionately with even small changes in cement prices, this is a significant development The emphasis laid by the government on the development of physical infrastructure mainly roads, airports, seaports and railroads and the boom in housing driven by easy availability of cheap housing credit have been the key growth drivers for the sector. Government is the single largest buyer of cement. Historically, in the last year, drive to complete pending infrastructure project has driven demand growth. One of the major cement consuming projects is the Golden Quadrilateral Project-Besides construction and modernization of four airports and two seaports. Gujarat Ambuja has always traded at a premium to its peers due to its higher operational efficiency, presence in high growth markets and fiscal benefits. This edge got further sharpened post ACC acquisition that added to scale as well as geographical diversity. Grasim and ultra tech on the other hand are doing so well to capture the more and more market share.

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Major Consolidations
With an installed capacity of around 157 million tonne per annum (mtpa) at end-March 2007, large cement plants accounted for 93% of the total installed capacity in India. The installed capacity is distributed over across approximately 129 large cement plants owned by around 54 companies. The structure of the industry is fragmented, although, the concentration at the top is increasing. The fragmented structure is a result of the low entry barriers in the post decontrol period and the ready availability of technology. However, cement plants are capital intensive and require a capital investment of over Rs. 3,500 per tonne of cement, which translates into an investment of Rs. 3,500 million for a 1 mtpa plant. The cement industry has witnessed substantial reorganization of capacities during the last couple of years. Some examples of the consolidation witnessed during the recent past include: Gujarat Ambuja taking a stake of 14% in ACC; Gujarat Ambuja taking over DLF Cements and Modi Cement; India Cement taking over Raasi Cement and Sri Vishnu Cement; Grasim's acquisition of the cement business of L&T; Indian Rayon's cement division merging with Grasim; Grasim taking over Sri Dig Vijay Cements; L&T taking over Narmada Cements; ACC taking over IDCOL. Multinational cement companies have also initiated the acquisition process in the Indian cement market. Swiss cement major Holcim has picked up 14.8% of the promoters stake in Gujarat Ambuja Cements (GACL). In January 2006, Holderind Investments (Holcim Mauritius), an indirect, wholly-owned subsidiary of Holcim, acquired 200 million equity shares of GACL at a price of Rs.105 per share from the promoters. Post-sale, the share of promoters in the company is 9%. Holcim also made an open offer to acquire an additional 20% stake in GACL at Rs.
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90.64 per share. Earlier, Holcim had entered into a strategic alliance with GACL, and acquired a 67% controlling stake in Ambuja Cement India. Through this holding company, Holcim acquired a majority in Ambuja Cement Eastern and a substantial stake in ACC. Ambuja Cement India holds a 34% share in ACC and a 97% share in Ambuja Cement Eastern. Holcim's acquisition has led to the emergence of two major groups in the Indian cement industry, the Holcim-ACC-Gujarat Ambuja Cements combine (capacity of 33.5 mt) and the Aditya Birla group through Grasim Industries and Ultratech Cement (combined capacity of 31.1 mt). Lafarge, the French cement major, had acquired the cement plants of Raymond and Tisco in the recent past, and has an installed capacity of 5 mtpa. Italy based Italcementi has acquired a stake in the K.K. Birla promoted Zuari Industries' cement plant in AP, with a capacity of 3.4 mtpa. Recently, 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% controlling stake in Indo-Rama's grinding plant of 0.75 mtpa at Raigad in Maharashtra. As on March 2006, ACC was the largest player with a capacity of 18.64 mtpa. UltraTech CemCo Ltd.1 now occupies the second slot with a capacity of 17 mtpa (which includes 1.5 mtpa of subsidiary Narmada Cement). The Gujarat Ambuja group has emerged as the third largest player with a capacity of 14.86 mtpa. Grasim ranks fourth with a capacity of 14.12 mtpa. Other leading players include India Cements, Jaypee group, Century Textiles, Madras Cements, Lafarge, and Birla Corp.

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Reasons behind these consolidations; As discussed above, the cement industry is witnessing a number of Mergers & Acquisitions (M&As). The extent of concentration in the industry has increased over the years. This concentration is mainly because of the focus of the larger and the more efficient units to consolidate their operations by restructuring their business and taking over relatively weaker units. The relatively smaller and weaker units are finding it difficult to withstand the cyclical pressure of the cement industry. Some of the key benefits accruing to the acquiring companies from these acquisition deals include: Economies of scale resulting from the larger size of operations Savings in the time and cost required to set up a new unit Access to new markets Access to special facilities / features of the acquired company And, benefits of tax shelter.

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State wise Capacity

As cement is a low value commodity, freight costs assume a significant proportion of the final cost. Transporting costs render the prices of cement in distant destinations uncompetitive. For instance, it is financially infeasible to transport cement by road over 250 kms. Railways are mostly used to transport cement over longer distances. However, its bulky nature and infrastructure bottlenecks render even rail transport unviable over very long distances (that is why Madras Cements or India Cements, located in the south, can hardly make a difference to the fortunes of west-based companies like Gujarat Ambuja). Therefore, manufacturers tend to sell cement at the nearest market first and sell in distant markets only if additional realization is greater than freight costs incurred. This is the reason for showing regional demand rather than state demand in case of cement.

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Region wise Capacity


The Indian cement industry has to be viewed in terms of five regions: North (Punjab, Delhi, Karanataka, Himachal Pradesh, Rajasthan, Chandigarh, J&K and Uttranchal); West (Maharashtra and Gujarat); South (Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Pondicherry, Andaman & Nicobar and Goa); East (Bihar, Orissa, West Bengal, Assam, Meghalaya, Jharkhand and Chhattisgarh); and Central (Uttar Pradesh and Madhya Pradesh). Northern Region Punjab Delhi Karanataka Himachal Pradesh Rajasthan J&K TOTAL West Maharashtra Gujarat TOTAL South 8950.00 12937.00 21887.00 2173.34 500.00 172.00 4060.00 16299.34 200.00 23404.68

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Tamil Nadu Andra Pradesh Karnataka Kerala TOTAL East Bihar Orissa West Bengal Assam Meghalaya Jharkhand Chattisgarh TOTAL Central U.P. M.P. TOTAL

12913.18 19831.02 9744.00 420.00 42908.20

1000.00 2761.00 2291.66 400.00 3475.01 11287.33 21215.00

6297.00 16185.00 20482.00

South accounts for 33.03% of cement production capacity of the country, with Andra Pradesh accounting for 15.27% of the total production capacity of India. It has an installed capacity of around 20mn tons of cement and ranks first in the country, followed by Tamil Nadu with 9.94% of the total production capacity. North accounts for 18.02% of the total production capacity, with Rajasthan at 12.55% of the total production capacity of the country. West accounts for 16.85% of the total production capacity.
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Maharashtra and Gujarat have production capacity of 6.89% and 9.96% respectively. East and Central Regions account for 16.33% and 15.77% of the total production capacity of the country respectively. Trade between these regions is on a very low scale mainly because of the transportation bottlenecks and uncompetitive cost of transportation. The Southern region dominated the cement consumption at 44.5 mn tonnes in FY 07, accounting for about 30% of total domestic cement consumption. During FY 03-07, Southern region has witnessed highest CAGR of cement demand growth at 10.4% followed by Northern and Eastern regions at 8.9% and 9%, respectively

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Mechanics of Distribution Channels of Sector


Companies invariably hire agents or transport cements to own or government warehouses either via roadway or railways. Incase of exports, cement reaches the nearest port via roadways or railways and is then transferred to the importing country. Domestically, from agents or warehouses the cement is transported to the dealers/distributors and in turn to sub dealers who finally sell it to the end users. There may or may not be physical ownership of goods. In the second case, dealers and sub dealers take order from buyers and place it to the companies, co ordinate and monitor the timely dispatch of said orders,

ENERGY AND TRANSPORT REQUIREMENTS The cement industry is dependent on three major infrastructural sectors of the economy: coal, power and transport. The inputs from these three sectors account for roughly 50% of the cost of cement. Both the availability and the cost of these inputs have a vital bearing on the fortunes of the cement players. All these sectors are largely in the State sector, and, historically cement companies have had virtually no control on the cost or availability of these inputs. Hence, the industry response has largely been in the form of achieving efficiency gains and finding alternatives (captive power, use of waterways). One additional external influencer of the cement industry performance is the taxes and levies imposed by the Central and State Governments. These together account for around 30% of the selling price of cement in the Indian context.

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The shortage in domestic coal production coupled with the poor quality has resulted in cement companies resorting to importing coal, or going in for open market purchase of coal, or using alternative fuel such as lignite or pet coke. Use of imported coal has become an essential feature of the Indian cement industry and has shown a rising trend during the last few years.

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Power and Fuel cost form the largest proportion of the cost structure. This reflects the effects of the trend in rising global oil and fuel prices. On the other hand Employee costs form the smallest proportion of over all cost. This is essentially because cement industry is a very capital intensive industry. This also accounts for the huge depreciation and interest costs which accrue on the plant and machinery. Moreover, the labour employed is essentially semi-skilled excluding the top management which bring down labour costs.

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GOVERNMENT POLICIES
Government policies have affected the growth of cement plants in India in various stages. The control on cement for a long time and then partial decontrol and then total decontrol has contributed to the gradual opening up of the market for cement producers. The stages of growth of the cement industry can be best described in the following stages:

Price and Distribution Controls (1940-1981): During the Second World War, cement was declared as an essential commodity under the Defense of India Rules and was brought under price and distribution controls which resulted in sluggish growth. The installed capacity reached only 27.9 MT by the year 1980-81.

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Partial Decontrol (1982-1988): In February 1982, partial decontrol was announced. Under this scheme, levy cement quota was fixed for the units and the balance could be sold in the open market. This resulted in extensive modernization and expansion drive, which can be seen from the increase in the installed capacity to 59MT in 1988-89 in comparison with the figure of a mere 27.9MT in 1980-81, an increase of almost 111%. Total Decontrol (1989): In the year 1989, total decontrol of the cement industry was announced. By decontrolling the cement industry, the government relaxed the forces of demand and supply. In the next two years, the industry enjoyed a boom in sales and profits. By 1992, the pace of overall economic liberalization had peaked; ironically, however, the economy slipped into recession taking the cement industry down with it. For 1992-93, the industry remained stagnant with no addition to existing capacity The things that primarily control the price of cement are coal, power tariffs, railway, freight, royalty and cess on limestone. Interestingly, all of these prices are controlled by government. Coal: The consumption of coal in a typically dry process system ranges from 2025% of clinker production. This means for per ton clinker produced 0.200.25 ton of coal is consumed. This contributes 35-40% of the production cost. The cement industry consumes about 10mn tons of coal annually. Since coalfields like BCCL supply a poor quality of coal, NCL and CCL the industry has to blend high-grade coal with it. The Indian coal has a low calorific value (3,500-4,000 kcal/kg) with ash content as high as 25-30%
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compared to imported coal of high calorific value (7,000-8,000 kcal/kg) with low ash content 6-7%. Lignite is also used as a fuel by blending it with coal. However this process is not very common. Electricity: Cement industry consumes about 5.5bn units of electricity annually while one ton of cement approximately requires 120-130 units of electricity. Power tariffs vary according to the location of the plant and on the production process. The state governments supply this input and hence plants in different states shall have different power tariffs. Another major hindrance to the industry is severe power cuts. Most of the cement producing states like AP, MP, experience power cuts to the tune of 25-30% every year causing substantial production loss. Limestone: This constitutes the largest bulk in terms of input to cement. For producing one ton of cement, approximately 1.6 ton of limestone is required. Therefore, the cement plant location is determined by the location of limestone mines. The major cash outflow takes place in way of royalty payment to the central government and cess on royalties levied by the state government. The total limestone deposit in the country is estimated to be 90 billion tons. AP has the largest share -- 34%, Karnataka 13%, Gujarat 13%, M.P 8%, and Rajasthan 6.5%. The plants near the limestone deposit pay less transportation cost than others. Transportation: Cement is mostly packed in paper bags now. It is then transported either by rail or road. Road transportation beyond 200 kms is not economical therefore about 55% cement is being moved by the railways. There is also the problem of inadequate availability of wagons especially on western
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railways and southeastern railways. Under this scenario, manufacturers are looking for sea routes, this being not only cheap but also reducing the losses in transit. Today, 70% of the cement movement worldwide is by sea compared to 1% in India. However, the scenario is changing with most of the big players like L&T, ACC and Grasim having set up their bulk terminals.

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Incentives in States: Most state governments, in order to attract investments in their respective states, offer fiscal incentives in the form of sales tax exemptions/deferrals. In some states, this applies only to intrastate sales, like Madhya Pradesh and Rajasthan. States like Karanataka offer a freeze on power tariff for 5 years, while Gujarat offers exemption from electric duty. Opening up the FDI channel: The impact of government policies on cement demand has been steadily decreasing with the sector being gradually deregulated. At present, 100 per cent foreign direct investment (FDI) is permitted in the cement industry. Lafarge was the first foreign company to enter the Indian market in 1999. The French Declining Role of Public Sector: Historically, cement has been one of the most important areas of operations for the Indian private sector. Unlike much of heavy industry and utilities, cement was not deemed to be the exclusive preserve of the State sector in the post-independence development strategy. Cement was also the industry of choice of many corporate diversifying away from the troubled traditional areas of jute and textiles. Over the years, the share of the public sector in cement production has declined. While the private sector (large companies) accounts for around 95% of the total installed capacity, the share of public sector companies has declined from a level of 11% in FY1996 to around 4.4% in FY2006. The share in production of the public sector companies is even lower at 1.2% in FY2006 as compared to 6.5% in FY1996.

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Export of cement from India


The Indian cement industry exported around 6 mt of cement during FY2006, accounting for around 4% of the total production. There has been a significant year on year variation in the export trend, implying that Companies rely on cement exports to balance out the domestic demand supply situation. As seen from above there is excess production, so the difference in supply and demand is met by exporting. The export of Indian cement has increased over the years, giving a boost to the Indian cement industry. The demand for cement in the foreign countries is a derived demand, for it depends on industrial activity, real estate, and construction activity. Since growth is taking place all over the world in these sectors, Indian export of cement is also increasing. The cement industry in India has around 300 mini cement plants and 130 large cement plants. The total production capacity of these plants is around 167.36 million tons. The India cement industry is technologically very advanced, as a result of which the quality of Indian cement is now considered the second best in the world. This has given a major boost to the Indian export of cement. The production of cement in India is not only able to meet the domestic demand, but large amounts are also exported. A fair amount of clinker and cement by-products are also exported by India. As the quality of Indian cement is very good, its demand in the international market is always high.

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The graph shows that the production of cement in India is at 2nd place after China, this higher production is a good reason for exporting cement . In 2001-2002, 3.38 million tons of cement was exported from India. That figure stood at 3.47 million tons in 2002-03, and 3.36 million tons in 200304. In 2001-2002, 1.76 million tons of clinker was exported from India. In 2002- 2003 clinker exports amounted to 3.45 million tons, and in 20032004 the figure stood at 5.64 million tons. This shows that the export of Indian cement has been increasing at a steady pace over the years. The major companies exporting Indian cement are:

Gujarat Ambuja Ultra Tech Cement L&T Limited


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Export of Indian cement has registered growth a fair amount of growth, giving a boost to the Indian economy. India has an immense potential to tap cement markets of countries in the Middle East and South East Asia due to its strengths of locational advantage, large-scale limestone and coal deposits, Adequate cement capacity and world-class cement production with the latest technology. India has an estimated total of 90 billion tonnes of limestone deposit in the country.

40

Indian technology advantage


The manufacturing process of cement consists of the mixing, drying and grinding of limestone, clay and silica into a composite mass. The mixture is then heated and burnt in a pre-heater and kiln to be cooled in an air cooling system to form clinker, which is the Semi-finished form. This clinker is cooled by air and subsequently ground with gypsum to form cement. The dry and semi-dry processes are more fuel-efficient. The wet process requires 0.28 tonne of coal and 110 kWh of power to manufacture one tonne of cement, whereas the dry process requires only 0.18 tonnes of coal and 100 kWh of power. Coal and power costs account for 35 per cent of the total cement production costs. With 95 per cent of the total capacity based on the modern dry process technology, the Indian cement industry has become more cost efficient.

Top companies in the cement industry match quite well with world standards in terms of energy (thermal energy Kcal/kg of clinker - India 665 against 690 of Japan) and pollution norms (SPM of 40 in India against 20 in Japan).
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PORTERS 5-FORCE MODEL FOR CEMENT INDUSTRY

42

Threat of New Entrants: The high capital costs acts as a major entry barrier for the entry
of new players. The high freight costs make it difficult to import cement. Cement being a high volume low value commodity results in high freight costs, which makes cement imports economically unfeasible. Domestic Cement industry is highly insulated from global cement markets. With GoI intervention, making cement duty free, cement is being imported from neighboring countries. However, due to logistics issues and lack of port handling capabilities, imports of cement will remain negligible and do not pose a threat to domestic industry.

Bargaining power of Suppliers: The major inputs are coal and power. The Prices of both coal
and power are determined by the government. To mitigate the high costs of power the cement players have set up captive power plants.

Competitive rivalry between existing players: Previously the rivalry was strong among the
players, as the industry was not consolidated. During the last few years the industry has become more consolidated with the Top 3 players having a combined market share of 49 percent in 2005-06 as percent in 1999-2000. compared to 32

43

Bargaining power of Buyers: Retail sales constitute about 80 percent of the total sales and the
rest is institutional sales. The retail buyers dont have any bargaining power while the institutional buyers get a discount of 5 to 10 percent as they buy cement in bulk.

Threat of Substitutes: There are no good substitutes for cement.

44

ULTRA TECH CEMENT


UltraTech is the second largest cement manufacturer in India. It is the part of Aditya Birla group and is subsidiary of Grasim. It has a capacity of 17 million tonnes. The company is the largest exporter of cement and clinker from India. UltraTech has a presence in the west, south, north and east. The western and southern regions are its major markets. The company exports both clinker and cement. The company exports are moving towards cement from clinker owing to the higher realization in the cement. In 2005-06 the company exported 1.52 million tonnes of cement. With UltraTech Cement, the Aditya Birla Group has established itself as not only the most respected domestic player but also among the global leaders in cement. Now a look at Aditya Birla groups cement capacity: Currently, the Aditya Birla Group is the 11th largest cement producer in the world and the seventh largest in Asia and Ultra Tech and Grasim together, make it the largest cement producer in India. The group mainly has two cement units Grasim and Ultra tech.
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UltraTech Cement Limited, a Grasim subsidiary has an annual capacity of 17 million tonnes. It manufactures and markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzolana Cement. It has five integrated plants. This also includes the integrated plant and two grinding units of the erstwhile Narmada Cement Company Limited, a subsidiary, which has been amalgamated with the company in May 2006. Grasim, on the other hand, manufactures grey and white cement. In grey cement, the company has the capacity to manufacture 14.20 mtpa. This includes Grasims capacity of 2.06 mtpa, Vikram Cement 4.2 mtpa, Aditya Cement 1.5 mtpa, Rajashree Cement 4.2 mtpa, the acquired and merged Dharni Cement 1.16 mtpa and the acquired Digvijay Cement 1.08 mtpa. Grasim and Ultra Tech together have a cement capacity of 31.20 mtpa. And when the B K Birla cement companies also come into the fold, the Aditya Birla group would have a cement capacity of 37.86 mtpa, making it clearly the largest cement maker of India. The Aditya Birla Group bought over the cement business of L&T for around Rs. 2,200 crore. L&T allowed its name to be used for about a year. Then from 19th November 2003,the name was changed to ultra tech cemco.This name also didnt last for long and finally the ultra tech cemco was changed to Ultra Tech cement. These stages of evolution of ultra tech cement are listed below:

2001 :: Grasim acquires 10 per cent stake in L&T. Subsequently increases stake to 15.3 per cent by October 2002 :: Durgapur grinding unit
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2002 The Grasim Board approves an open offer for purchase of up to 20 per :: cent of the equity shares of Larsen & Toubro Ltd (L&T), in accordance with the provisions and guidelines issued by the Securities & Exchange Board of India (SEBI) Regulations, 1997. :: Grasim increases its stake in L&T to 14.15 per cent :: Arakkonam grinding unit 2003 :: The board of Larsen & Toubro Ltd (L&T) decides to demerge its cement business into a separate cement company (CemCo). Grasim decides to acquire an 8.5 per cent equity stake from L&T and then make an open offer for 30 per cent of the equity of CemCo, to acquire management control of the company. 2004 :: Completion of the implementation process to demerge the cement business of L&T and completion of open offer by Grasim, with the latter acquiring controlling stake in the newly formed company UltraTech 2006 Narmada Cement Company Limited amalgamated with UltraTech pursuant to a Scheme of Amalgamation being approved by the Board for Industrial & Financial Reconstruction (BIFR) in terms of the provision of Sick Industrial Companies Act (Special Provisions)

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ULTRA TECH PRODUCTION UNITS:


Ultra Techs subsidiaries are Dakshin Cement Limited and UltraTech Ceylinco (P) Ltd.UltraTech has five integrated plants, five grinding units and three terminals two in India and one in Sri Lanka. These include an integrated plant and two grinding units of the erstwhile Narmada Cement Company Limited, a subsidiary, which has been amalgamated with the company in May 2006.The details of its different production units is shown on the next page.

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Details of units:
PLANT/UNIT KILN CAPACITY(tpd) CAPACITIES(million tpa)

A. Composite integrated
Plants. 1. AndraPradesh Cement Works. 2. Awarpur Cement works 3. Gujrat cement works 4. Hirmi cement works 5. Narmada cement works 8000 2.3

9500 15000 8050 4350

3.3 5.3 1.6 0.4

B.Grinding Units
6. Arakkonam cements works 7. Jharsuguda cements works 8. Narmada cement (Ratnagri) Works 9. Narmada cement(Magdala) Works 10.West-Bengal cement works TOTAL 1.2 0.8 0.4

0.7

1.0

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THE ULTRA TECH ADVANTAGE


UltraTech Cement Ltd is one of the largest premium quality cement producer in India. UltraTech Cement is manufactured in the state of the art dry process plant at Tadipatri (Andhra Pradesh) and grinding unit at Arakkonam (Tamil Nadu). Advanced instrumentation systems, computerized process control and online quality control through X-ray ensure consistently high quality product at UltraTech Cement plant. The quality of UltraTech Cement has been globally accepted and is India's largest exporter of clinker and cement. UltraTech Cement due to its consistently superior quality has become the first choice amongst discerning users and construction professionals.

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Raw Material : Careful selection and scientific proportioning of raw material with the use of latest technology enables manufacturing of high quality cement. Rigorous hourly tests are conducted on raw material. Laboratories at all plants are equipped with sophisticated facilities. World Class process Technology ensures Quality and Consistency : Quality Assurance is an integral part of Ultra Techs manufacturing philosophy. The quality attributes are consistently ensured through rigorous application of advanced technology. Key features include:

Use of good quality limestone and careful selection of other raw material

Computerized mining operation and homogenization of crushed limestone

Perfect proportioning of raw materials by QCX ( Quality Control through X-ray )

Online process control through CCR ( Computerized Control Room ) High-quality clinkerisation and close-circuit grinding for optimum particle size distribution

UltraTech Cement plants have been accredited with ISO 9001, 14001, 18001 Certifications by DNV of Netherlands Distinct Features:

Higher Compressive strength Optimal fineness Balanced physical and chemical properties Optimal setting time Consistency in quality Low-level of Chloride
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High-soundness

Advantages:

Higher workability Lower consumption Enhanced durability Quicker construction Overall economy

Customer Care and Guidance: UltraTech Cement offers customers a range of "product plus" services. A full- fledged Technical Services Network has been set up exclusively for technical advice and guidance in usage of cement UltraTech Cement is marketed nationwide through large network of stockist's, sales officers and representatives. Cement dumps have also been established at strategic locations to facilitate faster delivery of cement. Value Added Services :

Mobile concrete lab services ( Concrete cube testing facilities ) Training Programmes for masons, site supervisors on good construction practices

Field visits by qualified civil engineers Educating individual house builders on various aspects of building material and construction

Non-destructive testing of concrete Any other customer specific services

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Applications :
1.

All Kinds of constructions including precast and prestressed concrete, masonry works

2. 3. 4. 5. 6.

Slip form constructions Rehabilitation and retrofitting works Cement based products such as pipes, tiles, blocks, poles,etc. Roads, runways, bridges and flyovers Water retaining structures

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AWARDS FOR ULTRA TECH

Export awards Worldwide, clients have consistently endorsed Ultra Techs highest quality standards. The list of export awards it has won is testimony to Ultra Techs uncompromising standards on product quality. Ultra Tech has been on the roll call of top exporters of the Chemicals & Allied Products Export Promotion Council (Capexil), year after year. Ultratech won the Capexil Certificate of Export Recognition - Top Exporter - Cement, Clinker, Asbestos and Cement Products for the years 2000, 2002 and 2003. Other awards that have come its way have included:
Year 2001 and 1999 1999 1998 1998 1997 Award Capexil Certificate of Export Recognition - Highest Export in Non-mineral Sector Capexil Certificate of Outstanding Export Performance - Chemicals & Allied Products (for Portland cement) Capexil Certificate of Export Recognition - Top Exporter- Cement, Asbestos, Cement Products Certificate of Outstanding Export Performance, Gujarat state Capexil Certificate of Export Recognition - Certificate of Merit for Export Achievement in Cement and Clinker

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National awards won by Awarpur Cement Works Year 2000-2001 1999-2000 1999 1996 1995-96 1995 1994-95 1994

Award

Indo-German Greentech Environment Excellence Awards by the Greentech Foundation, New Delhi Business / Trade Award Jamanalal Bajaj Uchit Vyavahar Purashkar ISO 14001 Certification By M/S Det Norske Veritas in November ISO 9001 Certification By M/S Der Norske Veritas FIMI National Social Awareness Awards FIMI National Social Awareness Awards Indira Priyadarshini Vrikshmitra (IPVM) National Award By Ministry of Environment & Forests, Goverment of India Special Gold Award By The Council of Industry & Trade Development for Quality Delhi Commendation Certificate - Rajiv Gandhi National Quality Award By Bureau of Indian Standards

Awards won by Gujarat Cement Works: Year 2004 2002-2003 2002 2001-2002 2001 Award Bhartiya Udyog Ratan Award presented to Sh. KYP Kulkarni By Indian Economic Development & Research Association (IEDRA), New Delhi Greentech Gold Safety Award By Greentech Foundation, New Delhi Gujarat State Safety Award By Gujarat Safety Council (GSC), Vadodara Greentech Environment Excellence Award By Greentech Foundation, New Delhi Awards for Excellence in "Industrial Relations" By Federation of Gujarat Industries (FGI), Vadodara

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Awards won by Andhra Pradesh Cement Works: Year 2004-2005 2003-2004 Energy efficient unit award from CII Energy Conservation Award from PCRA Excellence Award in Water Conservation & Pollution Control by APPCB 2002-2003 Gold medal for Six Sigma Project on Optimisation of Compressed air energy at HIMER National Conference FIMI environment award for mines Award for six sigma project on reduction in specific fuel consumption at NIQR 2001-2002 Energy efficient unit award from CII Best rural development effort award from FAPCCI Appreciation award from NSC for achieving OHSAS-18001 Award State and Zonal level I prize for overall performance in Mines safety

Awards won by Hirmi Cement Works: Year 2001-2002 2001-2002 Award Environment Energy Foundation award for water conservation. Fuller Energy award for reduction in specific power consumption (KWH/T) per tonne of cement

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ULTRA TECH CEMENT EXPORTS


UltraTech Cement recently bagged an award for being the highest exporter of the year from CAPEXIL for the eighth time in a row for its sterling performance. A leading cement exporter, its plants have also received various awards for environment protection, social awareness, safety and management of better industrial relations. The company has been credited with boosting its exports of cement and clinker last year by 25 per cent to 4 million tonnes from 2.8 million tonnes in 2005-2006. stringent quality control and testing in the best laboratories ensure that cement and clinker produced from its plants conform to and surpass international standards. The laboratory is equipped to test cement as per ASTM, British and Euro standards. All the plants are ISO 9001 certified for the latest production process and 14001 certified for environmental management. The cement plant in Gujarat has an additional OHSAS 18001 certification as well for occupation hazards and safety parameters. The company has a captive jetty at the Gujarat plant. The jetty length of 337 meters and width of 23 meters is capable of handling ships of 45,000 DWT with 11 meters draft. Loading of cement and clinker onto the ship is carried out by a ship loader, which is fed by a four km long conveyor belt that connects the plant to the jetty. UltraTech Cement is the first and only Indian cement company to obtain an EC certification for this plant. The accreditation, given by Bureau Veritas, is a pre-requisite to supply cement to EC member countries. UltraTech is one of the few Asian cement companies to receive this recognition. The export markets span countries around the Indian Ocean, Africa, Europe and the Middle East.

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The Hirmi Cement Works in Chattisgarh and the Jharsuguda Cement Works in Orissa make them ideal locations for export of cement and clinker to Nepal and Bangladesh. With captive railway sidings to facilitate loading of railway rakes and a high-tech production facility for cement and clinker, UltraTech Cement has found wide acceptance in these neighboring countries

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REVIEW OF LITERATURE
Ultratech Cement Results Review October 16, 2009 Author: Komal Meswani Category: business Ultratech Cement Ltd (UTCL) Q2FY10 net profit at Rs2.51 bn (up 53% yoy) is below our expectation (Rs2.75 bn), primarily on account of higher than freight & fuel cost. Revenues for the quarter increased by 8.7% yoy to Rs15.41 bn on the back of volumes (+by 3.9%) increase to 4.16 mt and realizations (+4.7% yoy) to Rs3704/ton. Though on sequential basis, domestic cement realization per tonne seems to have increased by Rs 70 per tonne, the net plant realization (excluding freight) seems to have declined by Rs 45/tonne, in lne with expectations. EBITDA for the quarter at Rs 4.7bn grew by 48.1% on y-o-y was below our expectation (Rs 4.9 bn), mainly on account of higher than expected power and coal cost as well as higher freight cost due to increased lead distance. EBIDTA margins stood at 30.5% registering a massive 810 bps improvement on a yoy basis. UTCL, which imports 40-45% of its coal requirements, had bought 10 handymax cargoes of South African coal at USD 52-53 FOB South Africa for delivery in July- September. Therefore going forward, we expect power and fuel cost per tonne to decline. We maintain our estimates for the FY2010 of EPS at Rs 94.3. We believe that the Grasim-Ultratech restructuring would be positive for Ultratech as it provides significant re-rating triggers for the stock.
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LITERATURE REVIEW ON CEMENT KILN DUST USAGE IN SOIL AND WASTE STABILIZATION AND EXPERIMENTAL INVESTIGATION M. K. Rahman, S. Rehman & O. S. B. Al-Amoudi Center for Engineering Research, Research Institute, King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia ABSTRACT The globally growing demand of cement results in towering collection of kiln dust from cement plants. The disposal of this fine dust is very difficult and poses an environmental threat. To overcome this problem, research is being carried out in different parts of the world to find out economical and efficient ways and means of using cement kiln dust (CKD) in various applications like soil stabilization, cement production, pavements, waste product stabilization, agriculture and cement products, etc. This study presents a research review on CKD usage in soil and waste utilization and the results of experimental investigation on its usage in building block manufacturing and soil stabilization. The experimental results clearly showed that the use of 34% CKD may bring the pH of sludge above 10, which is enough to stabilize the sludge. Furthermore, the final concentrations of heavy metals were found to be within acceptable international limits. Tests conducted on blocks made using aggregates in the Eastern Province (Type-N) and light-weight
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pozzollanic aggregates (Type-P) indicated that addition of CKD to cement results in significant gain in strength of the blocks. Keywords: Cement kiln dust, soil stabilization, sewage treatment, pH, cement blocks. 1. INTRODUCTION Cement kiln dust (CKD) is a fine powdery material similar in appearance to Portland cement. Fresh cement kiln dusts can be classified as belonging to one of four categories, depending on the kiln process employed and the degree of separation in the dust collection system [Collins and Emery 1983]. There are two types of cement kiln processes: wet-process kilns, which accept feed materials in a slurry form; and dryprocess kilns, which accept feed materials in a dry, ground form. In each type of process, the dust can be collected in two ways: (1) a portion of the dust can be separated and returned to the kiln from the dust collection system (e.g., cyclone) closest to the kiln, or (2) the total quantity of dust produced can be recycled or discarded. Large quantities of cement kiln dust are produced during the manufacture of cement clinker by the dry process. CKD contains a mixture of raw feed as well as calcined materials with some volatile salts. It is derived from the same raw materials as Portland cement but, as the CKD fraction has not been fully burnt, it differs chemically from the former. With modern manufacturing techniques, it is technically possible to introduce most CKD back into the clinker-making cycle. However, it is
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not done due to the restrictions on the alkali and chloride contents in the cement. The UK cement industry has estimated that over 200,000 tons a year of landfill space could be saved if the surplus CKD could be recycled into the clinker-making process or if alternative uses could be found [Aidan and Trevor 1995]. Approximately 15 million tons of CKD are produced annually by the American cement industry [Portland Cement Association 1992]. A medium size cement plant may produce up to 30,000 tons of CKD annually. Based on an analysis of existing data, including data collected by the Portland Cement Association (PCA) from operators of cement manufacturing facilities, the Agency estimates that in 1995, the cement industry had a clinker capacity of 77 million metric tons and a net CKD generation of 4.08 million metric tons which were disposed in land fills. The 1995 data indicate that 24 of the 110 cement plants (22 percent) recycle all collected dust back to the kiln, and an additional 12 plants (11%) ship all generated CKD off site for beneficial use. PCA estimates that the remaining two-thirds of cement plants (74 facilities) had a combined annual CKD land-disposal requirement of 3.3 million metric tons in 1995. The obvious and best use of CKD is its re-incorporation in the clinker production cycle. However, this can only be done when the existing restrictions on the alkalis and chloride concentrations
62

in cement are revised. From alkalis point of view, it is estimated that most of the CKD could be utilized in the clinker-making process if the cement alkali levels could be raised by around 0.1%. Similarly, the limits on the required chloride concentration on the performance of cement in reinforced concrete construction need to be evaluated. According to Bhatty [1995], alternative applications of CKD include agriculture - potash/lime source and animal feed; Civil engineering - fill, soil stabilization, fly ash stabilization, and blacktop filler; building materials - lightweight aggregates, blocks, low strength concrete, and masonry cement; sewage and water treatment; coagulation aid and sludge stabilization and pollution control as sulfur absorbent, waste treatment, and solidification. The present study provides a literature review on the usage of CKD for soil and waste stabilization. The paper also includes the results of preliminary experimental investigations on CKD usage in soil and waste stabilization and building block manufacturing. Research Review on CKD Usage for Soil Stabilization In the field of geotechnical engineering in general and soil stabilization in particular, the parent soils are practically categorized under either cohesionless soils (i.e., sandy and larger particle-sized soils) or cohesive soils (i.e., primarily clay and silt). Since the soil stabilization mechanism of
63

fine-grained soils requires calcium (in the form of lime) as the major stabilizing agent, it is possible that some CKDs, especially those high in free lime, would similarly be useful in stabilizing clay soils. In the case of sandy soils, which are commonly selected in the pavement layers, the usage of CKD may provide cementitious materials when it is mixed with water in a way similar to the mechanism by which Portland cements provide their binding characteristics. Any potential application of CKD, including sand and clay stabilization, is governed by the physical and chemical composition of the dust. In practical terms, the dusts vary markedly from plant to plant in chemical, mineralogical, and physical composition, depending upon the feed raw materials, type of kiln operation, dust collection facility, and the fuel used [Klemm, 1980]. Nicholson presented a number of patents [1977, 1982] for a series of investigations on CKD and fly ash mixtures for producing subbase materials with different aggregates. CKD was used up to 16% by weight of the mixture, producing a durable mass by reacting with water at ambient temperatures. Collins and Emery [1983] demonstrated the effectiveness of substituting CKD for lime in a number of lime-fly ash-sandy aggregate systems for subbase construction. The results indicated that the majority of
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the CKD-treated fly ash and aggregate mixtures resulted in materials which were comparable in strength, durability, dimensional stability, and other engineering properties, to those of the conventional lime-fly ash-aggregate mixtures. Miller, et al. [1980] have also reported the use of CKD and fly ash as the cementitious ingredients in developing pozzolanic bases that demonstrated comparable properties to those of a stabilized base. It was pointed out, however, that the use of any particular CKD-fly ash combination would require an appraisal of the chemical and strength test data to establish optimum properties for a suitable mix design. Napeierala [1983] examined the possibility of using CKD in stabilizing sandy soils for pavement subgrade applications. It was reported that an addition of 15% CKD having 5.9% free CaO and MgO, and 0.97% total alkalies (K2O + Na2O) ensured a compressive strength of 360 psi (2.5 MPa), which is a standard practice in Poland for the subgrade within 14 days of the treatment. Baghdadi and Rahman [1990] studied the effects of CKD on stabilizing siliceous dune sand in highway construction. It was deduced that a mix proportion of 30% CKD and 70% sand gave peak performance for application as base materials. In a somewhat similar study conducted later, Baghdadi et al. [1995] reported that the use of CKD between 12 and 50% was satisfactory to stabilize dune sand. For light applications, 12 to 30%
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CKD was found sufficient, and for heavily-loaded applications, about 50% CKD gave satisfactory stabilization. A number of CKDs and clay-type soils were used by McCoy and Kriner [1971] to study the soil stabilization. Soil-CKD mixes containing 3, 8, and 10% of CKD were tested for various engineering properties, such as the unconfined compressive strength, moisture-density relationship, liquid limits (LL), plastic limit (PL), plasticity index (PI), and shrinkage limit. The study found that the use of CKD was potentially promising in stabilizing soils for subbase applications. Bhatty et al. [1996] reported that CKD with high free 2O equivalent) produced mixtures with compressive strengths comparable to those obtained with cement and lime. CKDs having low free lime (0.5%) and low alkalies (2.2% Na2O equivalent) gave lower strengths. In general, CKDs with high free lime and moderate alkalies gave enhanced stabilization in terms of improved compressive strengths and reduced plasticity. It might also be pointed out that higher alkalies in CKDs can counter the stabilization reactions because of the ionic interference. Baghdadi [1990] reported the usage of CKD for stabilizing pure kaolinite and a 50:50 kaolinite-bentonite clay mixtures. Pure bentonite clay was

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The 50:50 kaolinite-bentonite clay mixtures gave a PI of 150. A study on the use of CKD in clay stabilization was also reported by Zaman et al. [1992] and Sayah [1993]. They established potentially useful correlations among the engineering properties of the clays and their stabilized counterparts. However, their investigations were based on only one CKD and primarily one clay soil, a dark grey "fat" clay, although, at times, some selected tests were also carried out on other potentially expansive clays. The primary clay used in the investigations belonged to the CH group [Spangler and Handy, 1992]. The clay-CKD mixtures containing 5% to 40% CKD by weight were cured for up to 56 days. The results showed that, with the exception of the dry densities, the engineering properties of the CKD-clay mixtures were comparable to those of fly ashsoil and cement-soil mixtures. According to Southgate and Mahboub [1994], the CBR test also positively correlates with the modulus of elasticity and strength of the stabilized soils.

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OBJECTIVE OF THE STUDY


Primary objective: To study the distribution channel of Ultra Tech cement along with other brands, in Aurangabad and Jalna distt. Of Maharashtra .

Secondary objectives:
1. 2.

To find out the market share of Ultra Tech cement. To find out the major competitors of Ultra Tech cement in a particular area.

3.

To find out the problems faced by the Ultra Tech dealers/retailers and try to minimize these problems.

4. 5.

To help the ultra tech dealers/retailers to increase their sales. To find out the possible newer methods for advertisement and methods for increasing sales of Ultra Tech cement.

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RESEARCH METHODLOGY

(a) General Methodology: The methodology adopted for this project was completely base on primary information. The locale of the study was distt. Thirthahalli and shimoga of Karanataka.The first stage included gathering information about the general cement market of the two cities. That was, to find out which are major players, what is general distribution pattern, what type of incentive schemes the different brands are using. The second stage comprised determining the objective of the study and drafting the questionnaire. The questionnaire was designed keeping in mind the objective of the study. It was designed with due guidance of the company guide. It was assured that the questionnaire didnt exceed more than 10 questions. Keeping in mind the education level of the respondents who were mainly dealers/retailers, the questionnaire was kept simple and precise.

b) Research Tools: The research called for gathering primary data only. Hence, primary sources were considered for the collection of data. *Primary tool The primary data is gathered for specific purpose and is collected by the researcher himself. It includes direct communication and feedback from the customers. For the purpose of collecting information from customers a structured questionnaire was formulated and is contacted directly.
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c) Research Approach: The research conducted was exploratory in nature and the goal was to gather preliminary data to shed light on the real nature of problems and to suggest possible solutions. For the purpose of this project, we went for a questionnaire- based survey of customers. A pilot test of this questionnaire was done for the preparation of final questionnaire. It involved, applying the draft questionnaire to a sample of 5 people. This was done to ascertain which questions are ambiguous, wrongly worded or in any way objectionable.

(d) Research Tool: 1. Personally administered questionnaire 2. Structured interview 3. Unstructured interview

For the purpose of this project, a questionnaire was designed to collect data that consisted of close ended questions & open ended questions. A survey technique is being used to collect the data. During the project a survey of customers using personal interview was done at random locations in aurangabad and jalna and a predetermined structured questionnaire was administered to them. The areas covered were as following: 1.Auranagabad (a Phulambri (b) Sillod (c) Waluj (d) Laad Saungi (e) Gangapur
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Sampling Plan

* Sampling Unit

The study was restricted to Aurangabad

and jalna

only.

Keeping in mind the objective of the study we sampled dealers and retailers of each and every brand. We try to explore out as many shops as could be possible.
*Sample Size

The sample size taken for the purpose of study was around 150 respondents from the two distt.All the respondents were chosen randomly.
*Sampling Procedure

We try to find out almost all of the cement dealers and retailers in the market.

*Contact Method

I personally visited most of the customers after seeking prior appointment. Few shopkeepers due to their busy schedule or loyalty for their brand refused to respond at all.

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f) Analytical tools: The data, which was collected, was summarized and

tabulated on MS-excel for further analysis. The analysis performed was mainly comparative analysis using statistical analytical tools. The tools that have been used are as follows: Bar Chart Pie Chart Line Graph

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Data Analysis
Market share graph for district Aurangabad

ultra tech

6% 9% 27% 8% 9% 12% 10% 15%

Acc J.k. J.P. BINANI

4%

Ambuja Shree Ultra Tuff Cemento Bangur

The graph clearly shows that the Ultra Tech Cement has largest market share in aurangabad, followed by J.K. cement and J.P. Cement.The main reason behind this excess market share goes to the higher number of dealers of Ultra Tech cement than other brands.J.K. Cement on the other hand is having a good market share due to a nicely balanced supply chain of dealers along with many retailers. All the other brands like Sri Ram and Bangur are struggling to find market in aurangabad

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The graph shows that the Ultra Tech is lagging behind ACC cement in jalna.although it has a good 20% share. The credit for ACC success goes to the no. of dealers it has in jalna.Its no. of dealers is almost double than the Ultra Tech dealers plus retailers. The possibility behind Ultra Tech success lies at the chances of getting some more retailers. Market Share Graph for Jalna

1% 3% 12% 9% 6% 21%

3%

ultra tech Acc

20%

J.k. J.P. BINANI

25%

Ambuja Shree Ultra Tuff Cemento Bangur

Satisfaction level of Dealers/Retailers:

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70 60 50 40 30 20

highly satisfied

satisfied average

10 0 highly satisfied satisfied average

not satisfied not satisfied

highly dissatisfied highly dissatisfied

the graph clearly shows that most of the dealers are well satisfied with the services provided to them by the brand they deal in. The services include timely supply of cement, regular visits by the company officials, different type of incentive schemes meant for the dealers etc.The other side of the fact can be that-being loyal to their respective cement brands, the dealers didnt want to give a poor image of the company.i.e.they were not satisfied with the company but responded positively.

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Want to Shift to Other Brand?

90 80 70 60 50 40 30 20 10 0

NO

MAY BE YES NO YES MAY BE

The graph shows that about 84% of the dealers and retailers dont want to shift to any cement brand other than the one in which they are currently dealing. But the last portion of the graph i.e. MAY BE part is of crucial importance for Ultra Tech.This portion shows the dealers who may shift to a new brand if it proves beneficial for them. So if Ultra Tech assures them some better services and mainly the better incentives then these can be the new suppliers for it

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INTERPRETATION
The major competitor for Ultra Tech in Aurangabad is J.K. Cement.The reason behind this is the presence of more no. of retailers for J.K. Cement.The two brands under J.K. i.e. J.K. SUPER & J.K. LUXMI are both well established here.J.K. Provides the benefit of low cost and quality to the customers as compared to higher price of Ultra Tech cement. The competitor for Ultra Tech in jalna is ACC cement. It seems that ACC has given more importance to jalna.It has just 4 dealers in aurangabad but in jalna it has about 12 dealers. The total cement consumption in aurangabad is much higher than that in jalna .The reasons behind this are construction of a no. of malls, presence of major real estate players like ANSAL, DLF etc and other Govt.projects in Aurangabad So Ultra Tech need to concentrate more in Aurangabad Ultra Tech cement lags behind other brands only at the price point. It costs nearly 4-5 rupees higher than the other cements. This is the main reason for some lower sales. On the other hand, customers are very sure about the thing that Ultra Tech cement provides much better quality. Ultra Tech should try to increase the number of MOBILE CONCRETE HELP vans. These vans are the feature that no other brand is offering. These are very popular among the local customers. So Ultra Tech should introduce some more of these vans.

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CONCLUSION

Ultra Tech has two major competitors- J.K. CEMENT and ACC CEMENT.

Ultra Tech is well established in the markets as far as quality is concerned.

Introduction of new attractive incentive schemes can bring new dealers & retailers for Ultra Tech cement.

Price is the major factor that matters for a customer while purchasing cement.

Market share increases with the increase in no. of dealers.

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LIMITATIONS OF THE STUDY


1. The major problem of the survey was that most of the respondents

being very loyal to their brands didnt give exact answers .like they didnt talk much about what problems they are facing, what are the different marketing schemes of the brand in which they deal etc.
2. Once we got the questionnaire filled, we need to restart the

conversation in a very generalized way and talk about the local market conditions. Like who is the main dealer, which cement is mostly sold in that area etc.so this survey demands a good piece of time while talking to the respondent. Also Aurangabad & jalna are both big Distts. With a number of small towns and villages. So to complete the survey within 2 months time seems to be a bit difficult.
3. Some of the respondents may have told their average monthly sale

more than the actual. Because all of them think that the monthly sale attached with the market image of their shop.
4. Many of the dealers/retailers refused to answer any question at all. So

the actual figures can be somewhat different from the one that we have found out
5. Being new to the Distts of Aurangabad & jalna , it is quite possible

that I was unable to explore some of the dealers/retailers.

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RECOMMENDATIONS
1) The Co has only a single C&F agent for a single state. They should appoint more then one C&F agent for a single state. If they do this their sales will increase spontaneously Co should have their own transport facility so as to reduce their transportation expenses.

2) The Co should organize a small event in every 6 months for the dealers so as to increase their morality and attachment towards the CO.

3) They should held a training & development programs for their dealers to increase the sales.

4) They should tie up them with various selling schemes so as to increase the sales force and potential.

5) I think the Co has poor advertisements.UTC should think much about the advertisements.

6) Customer satisfaction plays a vital role in every business. They should think about customer retentions so as for a smooth relation.
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7) UTC should pay much more attention on their competitors. They should not lack behind in the competitive business.

8) Secrecy of their policies & strategies should be kept vey confidential.

9) Gunny bags in which they pack their cement should be of good quality.

10) Considering the environment security they should use paper bags instead of their regular bags. It should be recyclable.

11) Export should be majorly done so as to increase Gross domestic progress of the country.

12) Government norms & regulations should be strictly followed.

13) As India is the land of the villages, so the development is getting day by day in these areas. The distribution network to these areas should be very strong.

14) UTC should give more attention on their consumption of Raw material so as to reduce the cost of the product.
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ANNEXURE 1
QUESTIONNAIRE
SOLICITATION Dear Sir/Madam, We are conducting a survey on behalf of ultra tech cement as a part of my summer training project. I would be extremely benefited if you answer the following questions.I assure you that the information provided by you will be used for my project work only. NAME: ELLORA STEEL ADDRESS & CONTACT NO. : Plot No 5 Maulana Azad Chowk TV center road Aurangabad

WHICH CEMENT YOU DEAL IN: ultratech cement orient cement and all kinds of cement YOU ARE A: >DEALER >RETAILER YOUR AVERAGE MONTHLY SALE (IN BAGS): 50000 to 80000 bags

HOW MUCH ARE YOU SATISFIED WITH THE SERVICES PROVIDED TO YOU BY THE BRAND YOU DEAL IN: >HIGHLY SATISFIED >SATISFIED >AVERAGE >DISSATISFIED >HIGHLY DISSATISFIED

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WHAT TYPE OF PROBLEMS ARE YOU FACING WITH YOUR CURRENT BRAND(IF ANY): Late delivery of product and service provided by the CNF agent to the retailer and customer. WHAT ARE THE REASONS FOR SELLING THIS PARTICULAR BRAND: Because of best quality and customer response.

DO YOU WANT TO SHIFT TO ANY OTHER BRAND: >YES >NO USEFUL COMMENTS: Hope this cement industry which has ever green market not only in urban areas as well as rural areas. THANKS A LOT

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BIBLIOGRAPHY www.cemnet.com www.pca.com www.ceicdata.com WWW.ULTRATECH.COM

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