Comperative Study of J.K.white Cement

8/10/2019 Comperative Study of J.K.white Cement

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Comprehensive Study of White Cement Among Retailers in Delhi

ACKNOWLEDGEEN!

I am sincerely grateful to Mr. Rahul Saxena (Sr. Manager, HRD), Mr.

Pankaj han!ra, "P (Mkt.), #e$ Delhi, Mr. R. %. &u'ta (Mkt. Manager)

an! Mr. %. P. &u'ta, Dy. Manager (Mkt.), #e$ Delhi. or allo$ing me to

e a 'art of this re'ute organi*ation as a summer trainee. I am heartly

thank full to Dee'ak hara an! all the other for their ne+er en!ing

su''ort an! encouragement exten!e! to me.

I am also thankfull to Mr. Saurah %han!el$al, Mr. Shari$asi, Mr.

-r+in! -rora, Mr. Paras %umar. Mr. S. #. Singh for their +aluale hel'

an! gui!ance !uring com'letion of our 'roject.

I am also thankfull to Mr. D. %. &arg (hairman IIM &. #oi!a) for this

'ain taking efforts to gui!ance.

/ast ut not the least. I $ish to thank all our res'on!ents an! those $ho

!irectly or in!irectly hel' as to com'lete our 'rojects $ork.

Agresh !i"ari

0th1uly 2334

#e$ Delhi

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ACKNOWLEDGEEN!

I am sincerely grateful to Mr. Rahul Saxena (Sr. Manager, HRD), Mr.

Pankaj han!ra, "P (Mkt.), #e$ Delhi, Mr. R. %. &u'ta (Mkt. Manager)

an! Mr. %. P. &u'ta, Dy. Manager (Mkt.), #e$ Delhi. or allo$ing me to

e a 'art of this re'ute organi*ation as a summer trainee. I am heartly

thank full to Dee'ak hara an! all the other for their ne+er en!ingsu''ort an! encouragement exten!e! to me.

I am also thankfull to Mr. Saurah %han!el$al, Mr. Shari$asi, Mr.

-r+in! -rora, Mr. Paras %umar. Mr. S. #. Singh for their +aluale hel'

an! gui!ance !uring com'letion of our 'roject.

I am also thankfull to Mr. D. %. &arg (hairman IIM &. #oi!a) for this

'ain taking efforts to gui!ance.

/ast ut not the least. I $ish to thank all our res'on!ents an! those $ho

!irectly or in!irectly hel' as to com'lete our 'rojects $ork.

Shi#aram $hatta%har&ee

0th1uly, 2334

#e$ Delhi

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!A$LE O' CON!EN!S

4 PR6-6

2 S7#8PSIS

9. S-6M6# 8 8:16I"6S

;. R6S6-RH M6H8D8/8&7

0. S 6"8/=I8#

?. I#D=SR7 8"6R"I6s goals to she! light on the

real nature of the 'rolem an! to suggest 'ossile selection.

Secon! ste' of our marketing research $as to !e+elo' a research 'lant.

It calls for !ecision on the !ata sources, research a''roaches, research

instruments, sam'ling 'lan an! contact metho!s. -s ojecti+e $as to

stu!y effecti+eness of sale 'romotion schemes an! a!+ertising regar!ing$hit cement. I sustantiate! my research y com'any literature an!

Internet.

I collect my 'rimary !ata through sur+ey an! use! uestionnaire as my

research instrument. 8ur uestionnaire is structure! non5!isguise! an!

contains close en!e! uestions. I ha+e chosen then ty'e of

uestionnaire to get more reliale result an! for ease of taulations an!

inter'retation of !ata gathere! as our uni+erse si*e is large.

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W+)!E CEEN! )ND-S!R, AND )!.S E*OL-!)ON


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W+)!E CEEN! )ND-S!R,

1.%.


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- minor share of sales (99) of $hite cement is !e+ote! to institutional

selling ('aint manufacturing, tiles manufacturing) an! aout ?@selling is

to the retailers.

he in!ustry sales figure for the 'ast 95year of Delhi in!icates an u'$ar!

tren! in sales.

In et$een, some other com'anies also entere! into the 'ro!uction of

$hite cement. #ihon #iman /t! $as one of them. hey installe! the unit

at &otan, ca'acity eing 4,33,333 MG7ear an! they ha+e collaorate!

$ith #ihon of 1a'an. hen at Poran!er in &ujarat, Himalayas ement

om'any $ith ran! name Hanse also entere! into 'ro!uction.

:ut -, #ihon, Hansa etc are no$ close! !ue to some or the other

reason. #o$ in In!ia there are three com'anies 'ro!ucing $hite cement

i.e. 1.%, :irla an! ../.

1.%. an! :irla are the market lea!ers an! / is confine! to southern

In!ia market only. hese com'anies are not only catering to In!ia>s

!eman! ut also ex'orting to countries like :angla!esh, #e'al, Srilanka,

Singa'ore an! Mi!!le 6ast

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CONS!R-C!)ON A!ER)AL AND E/-)0EN!

CEEN!

In!ian cement in!ustry, a lea!ing manufacturing su5sector in In!ia,

entere! ane$ era after the !econtrol in 4BA2 an! total free market in

4BAB, ahea! of the lierali*ation era in the country.

he in!ustry has 'ile! u' o+er the year a total ca'acity of 430 mn P-

$ith 43? large an! me!ian5si*e! 'lants an! a numer of mini an! small

units. In the 4BB3>s large 'lants ex'an!e! their ca'acities of the mini an!

small 'lants (inclu!ing the $hite cement 'lants) is of the or!er of Bmm

tones.

In!ia has the fourth largest cement cement in!ustry in the $orl!. Its

em'loy 4,93,333 $orkers an! contriute! Rs. 20 n annually in excise to

the go+ernment, let alone other le+ies inclu!ing cor'orate, income an!

sales taxes. he 'ro!uction reache! the le+el of @? mn tones an! is

antici'ate to a''roximate 4335mn5ta' mark y the turn of the century.

he 'ro!uction of larger 'lants increase! from ;? mn tones in 4BB35B4 to

@3 mn tones in 4BB?5B@, re'resenting an increase of o+er 03. he

'ro!uction of small an! mini 'lants touche! ? mn tones.

-t 'resent the !eman! seems to e lagge! ehin! su''lies $ith the

result that the 'rofitaility of the in!ustry has een im'acte!.

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he re!uction in the custom !uty on non5coking ole an! the excise on

HDP6 ags in the 4BB?5B@ union u!get 'ro+i!e! some relief to the

in!ustry. he hikes in rail fright an! the 'rice of !iesel cou'le! $ith theim'act of 'rice !e'ression in the latter half of 4BB?5B@ an! the im'osition

of minimum -lternate ax (M-) re!uce the le+el of 'rofitaility further.

he outlook for 4BB@5BA a''eare! a it more encouraging. he further

re!uction in the customs !uty on im'ort of non5coking ole to 43 ga+e

a glimmer of ho'e. Ho$e+er, the !e'ressi+e con!ition 'ersists in the

in!ustry. South $as not much affecte! earlier. De'resse! con!itions

ha+e !e+elo'e! in the south as $ell.

In!ia>s shares in international tra!e in cement remain small. he asolute

uantum has, ho$e+er, seen a rise from 9,?3,333 tones in 4BB45B2 to

2.@mn tones in [email protected] fact, the latter le+el $as a clim5!o$n from

9.2 mn tones achie+e! in the 'rece!ing year $hich is ex'laine! y

higher !omestic !eman!. -out @3 3f In!ian ex'orts are targete!

'rimarily at the neighoring countries, #e'al, :urma, Singa'ore an!

=-6. Some uantities are ex'orte! to the Mi!!le 6ast an! -frica.

he ex'orts are constraine! y uality, 'rice an! infrastructure facilities.

he asence of ulk han!ling for loa!ing an! unloa!ing at the 'orts!elay shi'ments. here are goo! 'ros'ects for ex'orts to the 6ast an!

-frica countries.

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:asic infrastructure facilities continue to 'lague the in!ustry.

rans'ortation an! its cost is a major 'rolem. Due to $agon shortages

the in!ustry>s !e'en!ence on rail$ay has come !o$n to 03. he o$n5your5$agon scheme, $hich ha! een intro!uce! y the rail$ays, has

faile! to attract the in!ustry. Haulage y roa! o+er long !istance,

ho$e+er, is not cost5effecti+e.

-nother ottleneck is coal. It is not only the uantum of su''ly, ut the

uality of coal is also a major constraint. It is un!erstoo! that the in!ustry

is getting only aout 43 mn P- against its reuirement of o+er 40 mn

tones annually. his has let to im'orts an! o'en market 'urchases.

here has een an attem't y the cement com'anies to acuire

coalmines, $hich along seems to e the ans$er. :ecause of the high

ash content, it>s im'erati+e that coal $asheries are set u'.

/ike coal an! trans'ortation, another ottleneck is 'o$er su''ly. he

in!ustry meets as much as 40 of its reuirement of 'o$er from ca'ti+e

'lants.


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to use jute ags for 'ackaging 03 of its out'ut. 1ute is technically

unsuitale for 'acking cement on account of its hygrosco'ic nature an!

; to 0 see'age, $hich results in a loss of a huge uantity of cement.

-nother 'rolem is arising out of the concern for ecological 'rotection.

Stringent measures are eing taken to 're+ent 'ollution. 6ui'ment likes

electrostatic 'reci'itators (6SP), the glass ag house (&:H) an! the

Re+erse51et :ag filters ha+e een installe! $hich ha+e enale the 'lant

to 're+ent 'ollution. he nee! for further technological im'ro+ement is

clearly in!icate!.

he cement 'lants ha+e come to e concentration in JclustersK in states

like Ma!hya Pra!esh, %arnataka an! amil5#a!u. hese clusters

account for aroun! ?3 of the total 'ro!uction.

onsum'tion in the $estern *one !ecline! y ? against the 'ro!uction

gro$th of 49. on+ersely, the southern *one recor!e! one 'ercent

!ro' in 'ro!uction $hile consum'tion increase! y @. In northern

region, against a consum'tion gro$th of 44, 'ro!uction rose y 49.

6astern region continue! to ha+e the !eficit. Ho$e+er the 'ro!uction

increase! y 0 against consum'tion gro$th of 44.

he 'ro!uction has een ex'an!ing at the rate of aout A to 43. =n

each of the year since 4BB35B4, the 'ro!uction ex'an!e! at the rate of

@ to 44 annually (exce't in 4BB25B9). he !eman! in the ninth 'lan

'erio! is ex'ecte! to gro$ at B 'er year. It is 'rojecte! that gro$th is

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/ikely to e sustaine! at A 5 if not B 5 o+er the tenth 'lan 'erio! an!

the !eman! is likely to reach 40A mn P- y 233? L 233@.

he country>s 'resent 'er ca'ita cement consum'tion is aroun! @4 kg

com'are! to the $orl! a+erage of 203 kg an! of the !e+elo'ing

countries, of 403 kg. hese enchmarks sho$ the 'otential for further

gro$th. he infrastructure sector in attracting huge 'ri+ate an! foreign

in+estment for mega 'roject such as irrigation, 'o$er, roa!s, 'orts,

rail$ays, ri!ges, housing (oth in rural an! uran area). hese $ill

reuire large uantities of cement.

-gainst the estimate! ca'acity a!!ition of 4;mn ta' !uring 4BB?5B@, the

$ork ha! starte! only on A mn P- in [email protected] tally of 'roject ex'ecte!

to e com'lete! y the year 2333 sho$s that 'rojects in+ol+ing

in+estments of the or!er of Rs AA3 n are in the 'i'eline. he


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$-S)NESS S!ANDARD

CEEN!)NG !+E '-!-RE

he In!ian cement in!ustry has ecome increasingly attracti+e to foreign

firms. he rench major, /afarge, set the all rolling $ith its acuisition of

IS8>S an! Raymon!>s cement 'lants. - :ritish com'any, :lue ircle,

is re'orte!ly acuiring century>s cement ca'acity. -n! an Italian firm,

Italcementi, is going in for a join +enture $ith *uari in!ustries to run its

existing cement 'lant. his interest from aroa! comes at a time of large5

scale restructuring of the in!ustry through a series of mergers an!

acuisition in recent months. he in!ustry is clearly mo+ing to$ar!s a

structure in $hich a han!ful of large !omestic 'layers $ill go hea! to

hea! against the intentional giants.

:oth !eman! an! su''ly factor are res'onsile for the restructuring. -t

the core of international interest in the In!ian cement market is the

enormous long term 'otential for gro$th in consum'tion. Data for the late

4BB3s sho$ that In!ia>s 'er ca'ita cement consum'tion $as less then

433 kg, com'are! $ith a $orl! a+erage of 'er ca'ita &DP. It 'lateaus off

in the !e+elo'e! countries. International 'ro!ucers are thus face! $ith

stagnant markets in their home countries, an! ha+e to look to the

!e+elo'ing $orl! for their gro$th. In!ia is clearly a long $ay off from the

'lateau, an! 'romises to make large in+estments in infrastructure, all of

$hich $ill reuire large uantities of cement. In a!!ition, as income

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le+els rise, a larger an! larger 'ercentage of the 'o'ulation $ill e ale

to affor! concrete housing. rom a cement 'ro!ucer>s 'ers'ecti+e, In!ia

'resents a +ery rosy future in!ee!.

-s attracti+e as the 'ros'ects are, the com'etiti+e 'ressure is going to

e intense. :eing a largely un!ifferentiate! commo!ity, 'remiums are

!ifficult to comman!. om'etiti+eness is almost entirely ase! on cost

control. he only source of market 'o$er is location, $ith res'ect to ra$

materials an! markets. ement is a trans'ort intensi+e commo!ity, so

the country>s inefficient trans'ort system allo$s 'ro!ucers to ex'loit

some limite! local mono'oly 'o$er. onsoli!ation through mergers is

!ri+en y oth these consi!erations. /arger scales of o'eration lea! to

lo$er a+erage cost, an! the ex'ansion strategy is ase! on entering

markets, $hich affor! some market 'o$er.

In fact, it is the im'ortant of location that makes takeo+ers the more

attracti+e +ehicle for entry into the In!ian market. - ne$ 'lant $ill cost in

the range of NA3 to NB3 'er tonne of ca'acity. his is not sustantially

more than $hat the international firms are $illing to 'ay for existing

ca'acity. t mo+e! +ery much for a $hile,

an! the ne$ 'lant $ill ine+italy ha+e to e u' in a less attracti+e locationthan existing ones. he higher costs of inferior are not com'ensate! for

y marginal technological a!+ancement. -lso, cement 'lants a''ear to

e easily a+ailale for sale, as many multi5'ro!uct firms $ho !i+ersifie!

into this in!ustry are themsel+es restructuring on the asis of core

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com'etence. -ll in all, the cement in!ustry is !emonstrating the +irtues of

com'etence rising +olumes, lo$er 'rices an! efficiency eing re$ar!e!.

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)ND-S!R, O*ER*)EW

CEEN!

he !omestic cement in!ustry $ith an installe! ca'acity of 44A.B@mn

tones consisting of 43B.B@ mn t'a in large 'lants an! Bmn t'a in $hite

an! mini cement 'lants 'ro!uce! A4.?0 mn tones of cement !uring

7BB. 8r!inary Portlan! cement 8P (@3.? of total 'ro!uction),

Po**olona Portlan! cement or PP (4B.9) an! cement slag (43) are

the major cement +arieties manufacture! y !omestic in!ustry In!ia 'er

ca'ita cement consum'tion is elo$ that in other !e+elo'ing countries.

:eing one of the core sector in!ustries, it has close linkages $ith the o'

gro$th rate.

his in!ustry $as one of the $orst affecte! y the economic slo$!o$n

!uring the last 259 year. Deman! gro$th slo$e! !uring 7B@, 7BA an!

7BB, after ('ericencing) a roust gro$th !uring 7B?. he In!ian

cement in!ustry is sensiti+e to !eman! fluctuations cause! y housing

sector, $hich account for nearly ?3 of !omestic cement consum'tion.

(Infrastructure (23) an! in!ustry account for the rest). onsum'tion of

cement y housing sector $as affecte! !ue to slo$!o$n !ue to the

slo$!o$n in+estment in this sector. he infrastructure sector also coul!

not 'ro+i!e the much5nee!e! im'etus for gro$th an! result the cement

in!ustry $itnesse! a a! 'atch !uring the last three year.

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he !eman! for cement has starte! looking u' in 72333, mainly on

account of economic reco+ery. :ut the cement market has starte! gettingcom'etiti+e. or exam'le, in Mumai, $hich is major cement aroun! 93

!ifferent ran!s of cement are a+ailale an! the com'etition is intense.

In such a com'etiti+e market, only inno+ati+e selling i!eas $oul! ensure

higher +olumes an! high 'remiums. -s a result, niche market 'ro!uct

(cement ma!e a+ailale in !ifferent +arieties of colours), 'ackaging

inno+ation (em'hasis on ulk cement terminals) an! +alue a!!ition

(forays into rea!y mix concrete y major 'layers) are increasingly

ecoming the marketing tools of cement com'anies.

/ike 7BA, 7BB $as also a a! year for year for the cement in!ustry as

'rices starte! !eclining after reaching a rief 'eak aroun! 8ctoer.

Sustantial ca'acity uil! u' cou'le! $ith a !ecline in flo$ of fun!s in

infrastructure relate! 'rojects acte! as s'oils'orts. De'resse! !eman!

acte! as a !eterrent to emarking on significant ca'acity ex'ansions y

@ cement majors !uring the year. It is only !uring C27BB that major

'layers starte! announcing ex'ansion 'lans, efforts aime! at

consoli!ation of existing ca'acities are ex'ecte! to hel' the in!ustry

further reco+er from the crisis in the me!ium term.

)ND-S!R, S!R-C!-RE

he cement in!ustry can e classifie! ase! on technology, 'ro!uction

ca'acity an! geogra'hical !is'ersion.

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!e%hnology1 2 cement is manufacture! y suing the, semi!ry, or !ry'rocesses. he $et 'rocess $as 'o'ular in the 'ast as it 'ro+i!e! etter

control o+er the ra$ materials mixing 'rocess. Ho$e+er, the !ry 'rocess

has no$ gaine! 'o'ularity gloally ecause it is s'ace sa+ing, energy5

efficient an! an! economical.

Geographi%al1 2 clusters of cement 'lants are locate! in region, $hich

are rich in limestone !e'osits.

0rodu%tion %apa%ity1 5 cement 'lants $ith a ca'acity of unto 3.9 mn

tones 'er annum are classifie! as mini cement 'lants an! $ill e eligile

for concessional excise !uty. hought the minimum economic si*e of a

cement 'lant is 4mn P-, there are o+er 433 mini cement 'lants in In!ia

$ith a collecti+e ca'acity of only 0mn P- (only @ of the total !omestic

installe! ca'acity). Most of the ne$ cement 'lants eing set u' ha+e a

ca'acity of 4 mn P- or more.

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)ND-S!R, D,NA)CS

he in!ustry is characteri*e! y mature! an! stale technology $ith only

minor im'ro+ements taking 'lace o+er the year. -lthough, there is some

amount of ran!ing $hich fetches a small 'remium, it is more of a

commo!ity 'ro!uct an! corres'on!ingly the financial +iaility 'rofitaility

of a unit !e'en!s on o'erational efficiency (oth manufacturing an!

marketing) a'art from the general !eman!5su''ly euation in the region.

&i+en the ulky nature of the 'ro!uct an! resultant high freight cost, it is

economical to sell in a small ra!ius of the 'lant location. Regional su''ly

imalances affect the reali*ations an! margins of the 'lant. =ne+en

ca'acity ex'ansions ha+e intensifie! these imalances in the in!ustry.

Significant ca'acity a!!ition in northernGcentral an! $estern In!ia

resulte! in an o+er su''ly 'rolem !uring 'ast cou'le of year, south,

$hich $as hitherto a fairly insulate! region, has starte! facing the'rolem of o+ersu''ly ecause of ne$ ca'acities installe! in the region

o+er the t$o year.

&i+en the ulky nature of the 'ro!uct an! resultant high freight cost, it is

economical to sell in a small ra!ius of the 'lant location. Regional su''ly

imalances affect the reali*ations an! margins of in!i+i!ual 'lant.

=ne+en ca'acity ex'ansions ha+e intensifie! these imalances in the

in!ustry. Significant ca'acity a!!ition in northernG central an! $estern

In!ia resulte! in an o+er su''ly 'rolem !uring 'ast cou'le of years,

$hich $as hitherto a fairly insulate! region, has starte! facing the

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'rolem of o+ersu''ly ecause of ne$ ca'acities installe! in the region

o+er the last t$o years.

Im'orte! cement !oes not form a threat to the In!ian 'layers, mainly on

account of the freight rate in+ol+e! in trans'orting cement. he country

$here In!ian com'anies like &ujarat -muja cements limite! ex'ort their

'ro!uct are locate! near In!ian shores an! these inclu!e :angla!esh,

#e'al, Srilanka, =-6 an! Mauritius. Similarly, the countries that can

ex'ort their 'ro!uct to In!ia are almost the cement sur'lus countries

ha+ing an access to the seas. hese inclu!e mainly the 6ast -sian

countries ha+ing an access to the seas. hese inclu!e mainly the 6ast

-sian countries ha+ing an access to the seas. hese inclu!e mainly the

6ast -sia countries. he cou'le of years $itnesse! some of the lo$est

cement 'rice, $hich actually acte! as a ca' eyon! $hich im'orte!

cement coul! not e sol!, thus making sales in In!ian markets

un'rofitale to o+erseas ex'orters an! sa+ing the !omestic in!ustry from

im'orts.

COS! AND 0RO')!A$)L)!,

ement is a 'o$er intensi+e in!ustry. #early 423k$h of 'o$er isreuire! to 'ro!uce one tonne of cement. =nits em'loying mo!en

technology an! etter5cost management strategies like &-/ ha+e

re'orte! a 'o$er consum'tion of B? %


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the energy efficiency an! enjoy a com'leti+e e!ge o+er $etGsemi!ry

'rocess ase! 'lant. Moreo+er, cost ase! 'lants are ale to im'ort lo$

ash content coal, therey resulting in lo$er 'ro!uction cost. -lthough,the lan!e! cost of im'orte! coal is generally higher than !omestic 'rice,

the 'er coal cost $orks out much chea'er. Po$er accounts for nearly

4? of total o'erating costs of cement in!ustry. Hence, a+ailaility of

stale an! continuous 'o$er su''ly is of critical im'ortance to the

'rofitaility of in!ustry.

he reliaility of 'o$er from that su''lie! y state electricity oar! is

'oor in major cement 'ro!ucing states an! this ha''ens to e a major

cause of concern for most of the cement manufacturing. or exam'le,

state like MP, -P, Rajasthan an! %arnataka ha+e 'o$er cut of 905;3

for more than ?5A month of the year. hus, com'anies ha+ing lo$

!e'en!ence on 'o$er su''lies y S6:s ha+e a com'etiti+e a!+antage.

-s a result, the cement in!ustry has starte! trying to insulate itself from

+agaries of 'o$er su''ly y setting u' ca'ti+e thermal 'o$er 'lants

accounte! for o+er 99 of total cement 'ro!uction in financial year 4BBB.

reight at 42540 of sale, accounts for a significant 'art of total

ex'enses. -ility to control this y selling a larger 'art of the 'ro!uctionin a small ra!ius ensures higher net reali*ation. =nreliale rail trans'ort

has resulte! in the increasing 'ro'ortion of cement eing trans'orte! y

roa! (;3) as on 7BB. the share of rail !is'atches in cement trans'ort

has !ecline! from 09 in 7B9 to ;3in 7BB. he ;3 !iesel 'rice

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hike announce! in 8ctoer BB $ill further increase the fright cost for

cement com'anies can ho'e to 'ass on the increase in in'ut costs to

customers. ost of trans'ortation coal from mines to the 'lant is anothermajor cost com'onent. o o+ercome increasing freight cost, some of the

cost5ase! com'anies ha+e starte! using $ater trans'ort. Prominent

among these are &ujarat -muja cement an! In!ia cements. hough

this in+ol+es initial ca'ital ex'en!iture on acuiring shi' an! installing

jetties, the o'erating cost are almost half of roa! trans'ort.

'-!-RE O-!LOOK

In!ian cement in!ustry is at 'resent 'assing through a major structural

change an! consoli!ation through mergers acuisitions has ecome

the or!er of the !ay. -s a result, the cement in!ustry has seen some

serious restructuring efforts in the recent 'ast. or exam'le, $hile the

$hole of -sia sa$ aout 40 merger acuisition !eals in cement

in!ustry !uring Decemer 4BBA to 1une 4BBB, (exclu!ing In!ia), In!ia

alone $itnesse! aout B !eals.


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he minimum economic si*e of a cement 'lant is going u' in In!ia an!

increasingly, the a!!ition in cement ca'acity is likely to come from

ex'ansion of existing ca'acities an! ne$ 'lants from $ell estalishe!existing 'layers. &loal cement majors ha+e ma!e as In!ia $ith rench

cement /afarge taking o+er the cement units of isco. 8ther cement

com'anies that are seeme! to e intereste! in In!ian market are :lue

circle of =.% an! Hol!er ank. Major cement manufacturers across the

gloe an! their relati+e 'ositions are as follo$s.

- focus on more +alue5a!!e! 'ro!uct like Rea!y Mix cement (RM) is

also emerging. RM is a com'oun! in $hich san!, gra+el, a!!iti+es an!

$ater are a!!e! to cement an! sol! as rea!yma!e concrete. ement

'ro!ucers an! enefit from RM 'ro!uction as it in+ol+es lo$ ca'ital

ex'en!iture. he cost of setting u' a 433 metric cue 'er hour 'lant in

the range of Rs @3 to B3 mn.


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an increase! stan!ar!i*ation an! s'ee! $hich is almost 43 times faster

as com'are! to site mixe! concrete.

#ext cost cutting measure a''ears to trans'orting ulk cement. his

metho! of cement trans'ortation is 'referre! y cement manufacturers

as it results in lo$er 'ackaging costs, hence lo$er !emurrage costs. -t

'resent cement is 're!ominantly sol! in 03 kg ags. :ut the 'attern

a''ears to e changing as cement manufacturers ha+e increasingly

starte! selling cement in ulk, es'ecially in cities $here the construction

acti+ity is at its 'eak. he rea!y mix concrete 'lants currently use most

the cement sol! in the ulk. ement consume! in ulk coul! hel' sa+e

aout Rs. 443 'er tonne (Rs. 0.03 'er 03 kg ag) com'are! to the use of

con+entional ags. -roun! the $orl!, almost A3 of the cement

trans'ortation is carrie! out in the ulk from. his is ecause of the

atten!ant 'rolems like ina!euate infrastructure in the form of 'lot

facilities an! lake of timely a+ailaility of $agons from the rail$ays.

ement 'ackaging costs account for nearly ; of total costs for a

cement manufacturer.

In!ustry 'layers ex'ect the !eman! to gro$ at aroun! 42 in financial

year 2333. he task force for the cement in!ustry set u' y the go+t of

In!ia. It has also in!icate! that the !eman! in the #inth Plan Perio! islikely to gro$ at ? to A annually till financial year 2332. &o+ernment

uying, $hich use! to account for almost 20 of total consum'tion, is

!o$n to an estimate! 40. urther, no major in+estment for ca'acity

a!!ition $as announce! !uring financial year 4BBB an! ex'ansion 'lans

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announce! y major 'layers recently $ill take some time to materiali*e.

Hence on an a+erage, the current fiscal is ex'ecte! to see a suitale

!eman! su''ly situation. In the union u!get 2333, go+t announce!major 'olicy !ecisions to 'romote housing sector, $hich is likely to oost

!eman! !uring the next fiscal.

CEEN! -N)!S !OLD !O 'OC-S ON 0ACKAG)NG3

$-LK !RANS0O!A!)ON

he !irector general (Roa!s), Minister of surface trans'ort, Mr. Prafulla

%umar has aske! the cement in!ustry to focus its attention to$ar!s

'ackaging an! a!o't ulk trans'ortation in +ie$ of the economy in+ol+e!

in the 'ro'osition.

Mr. %umar sai! this $hile inaugurating the seminar on Jcement concert

roa! -rteries of the 24st centuryK organi*e! y the cement

manufacturers association here on


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sustantial uality of cement if concrete 'a+ement is constructe!. He

further a!!e! that concrete 'a+ements ase! on life cycle costing. He

cite! exam'les of the =S, &ermany an! S$it*erlan! $here the concreteroa! forme! a sustantial 'ercentage of the total roa! net$ork.

He further informe! the gathering that rea! thought has alrea!y een

consi!ere! for Delhi5 Mathura an! Mumai5 Pune ex'ress$ay.

J


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Mr. #arian 'ointe! out that a'art from high$ays an! ex'ress$ay, +illage

roa! $oul! also e i!eally suite! for concreting.

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DEPRESSED CEMENT PRICES EAT AWAY

PRODUCTON GAINS

After a much published hue and cry over the up trend in the fortunes of the

cement industry, latest reports filtering in suggest that even though the situation

is better than the previous year, it will take some more time to pop the

champagne as cement prices continue to remain depressed.

According to the latest data released by the Cement Manufactures Association

(CMA), the total cumulative production between April ecember !""" has

increased by !#.$ per cent %#.&! million tonnes (mt) from '#.&% mt during the

same period last year. owever, the dispatches have not kept pace with the

growth as seem from the rise of only !%. per cent from %#.% mt for the first

nine months of the current fiscal to '#. mt during the same period in the

previous year.

owever, cement prices remain subdued with average prices being the same as

that * years ago, with some places in eastern +ndia seeing prices being the

same as that almost # years ago, says -arthasarathy, ecretary general, CMA.

/his is also seen from the fact that one of the largest players in the industry

ACC ltd. turned up losses for the first nine months of the current fiscal even

though production went up.

owever, the good news is that with an installed capacity of !!0.# mt as on

ecember !""", the industry has thus managed to notch up a capacity utilisation

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of "!.0" per cent for the first nine months of the current fiscal as compared to

1ust #0.!' per cent for the period fast year.

/he is striking improvement over the near #' per cent capacity utilisation that

the industry had for si2 straight years in running with the year !""% "# even

witnessing capacity utilisation levels as low as #$.# per cent.

/he downtrend in prices can be traced to the economic depression and also the

capacity e2pansion done by the industry, which led to supply outstripping

demand since the past few years. +n fact while the industry saw an average

growth of &.' per cent between !""! "$ and !""#3"&, capacities rose from %!

mtpa to the !!0.'! mtpa during the same period. 4n the other hand, dispatches

grew at a low rate of #.$ per cent during the period, which resulted in stagnation

in poor capacity utilisation.

+n fact, domestic consumption saw a rise of 1ust %.# per cent from !""! "$ to

!""# "& as a result of the slow demand, even as companies tried to make up

for this dismal performance by increasing e2ports which grew by almost *0 per

cent during the same period.

/he ma1or factor that could be traced directly responsible for the slow growth

was the regional imbalances present in the industry. 5hile south and 6orth +ndia

account for over three fourth of the total capacity, the latter leads in terms of

consumption with a share of over % per cent. /his is followed by outh +ndia

with $& per cent. 5estern +ndia with $ per cent and 7ast +ndia with ! per cent.

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5hile the year !""& "" saw a growth of ! per cent in terms of production in

6orthern +ndia, the south and west saw a growth of only seven and five per cent

respectively. 4n the other hand, the eastern region saw production levels go

down by as much as eight per cent.

5hile nearness to the raw material sources determines profitability, the nearness

to the market and also to the available rail road facility determines transport

cost which in many cases becomes one of the ma1or cost factors.

+n fact, due to this anamoly, inter regional movement of cement at a low cost

determines profitability of the company. /his movement by the companies to the

markets has in turn led to the emergence of two corridors, namely the north east

corridor and the south west corridor.

5hile post !""* saw a huge surge in capacities in 6orthern +ndia, including

states of 8u1arat, Maharashtra with plants of 9: Cement, -rism Cement, 9 ;

/ Cement and 8u1arat Ambu1 being set up, the outhern region remained

neglected due to the absence of large deposits of limestone. /his is turn led to

prices remaining high over there while in 6orth and 5estern +ndia, prices

remaining high over there while in 6orth and 5estern +ndia, prices actually

dropped.

/his is turn attracted fresh capacity in outhern +ndia after !""% !""#, which

in turn led to down trend in prices in the entire country. 5ith cement industries

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using continous process, economies of scale mean plants of smaller capacities

became unviable, thus sparking off a spate of mergers and ac


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generated. owever, with be recement increase in diesel prices, manufactures

have been hit further.

?-resently there is too much capacity chasing too little demand. owever, the

thrust of the government towards housing, infrastructure, roadways is going to

have a good effect on the industry once the process starts rolling,@ he said.

eeping these developments in mind and the streamlining done by the industry

in this sector, a growth of " !*0 per cent is possible for this industry, summed

up Mr. -arthasarthy.

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CEMENT SHARES IN LIMELIGHT

C7M76/ shares stole the limelight on the bourses riding piggyback on

sustained buying in the cement sector and the set of a good monsoon in many

parts of the country.

+ndustry analysts said that mirroring an over all industrial revival, cement

production in the country has postered a handsome #.' per cent increase to &.&million tonnes in Bune $000 as against &.$! million tonnes produced during the

same period last year.

ispatches, including e2ports, surged &. per cent to &."% million tonnes as

compared to &.$ million tonnes in the corresponding period of the previous

year.

According to cement manufacturers association (CMA), cement production

during the first


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5hile dispatches increased .#% per cent to &."% million tonnes, up from &.%*

million tonnes in May $000.

+n the !""" $000 budger certain measures were announced to boost

construction activity in the housing sector. /hese were initiatives announced,

like repealing the rban 9and Ceiling ; egulation Act, ta2 holidays for

housing pro1ects with built up area below !,000 sanks were also permitted to invest per

cent of incremental deposits into housing finance against !.' per cent earlier.

he cement in!ustry has se+eral features, $hich make it a 'rime target

for merger an! acuisitions acti+ity. 8n is the regional nature of the

market, $hich means that com'anies alrea!y estalishe! in one region

ha+e to acuire or set u' ases in other regions if they are to gro$.

-nother is the fact the nature of the commo!ity makes the !omestic

market a 'rotecte! one. oreign majors $anting a share in the country>s

cement cake ha+e therefore other to set u' &reenfiel! ca'acity or to

acuire other 'lants.

rance>s /afarge S- has alrea!y acuire! t$o cement com'anies from

ata Iron an! Steel om'any /t!. an! Raymon! /t!. in the 'ast se+en

months. Italy>s italcementi is 'lanning a joint +enture $ith Ouari In!ustries

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an! is examining other alliances or acuisition an! Mexico>s emex is

also in talks $ith In!ian firms.

ollo$ing the u'turn in the cement in!ustry !uring 4BBB L 2333, major

cement com'anies announce! their intention to in+est in ne$ 'rojects.

-s of May 2333, there $ere 0? cement 'rojects entailing an aggregate

in+estment of Rs. 49,2@3 crore. -n a!!itional cement ca'acity of 9;

million tonnes is en+isage! o+er the next fi+e L six years of these, 23

'rojects $ith an in+estment of Rs. ;,A32 crore $ere currently un!er

im'lementation. hese 'rojects aim to install 4; million tonnes of

ca'acity o+er the next t$o years. he alance 9? 'rojects, $ith an

aggregate in+estment of Rs. A,9?A crore, $ere in the !ra$ing oar!

stage.

- Share 'rice of -, the largest cement 'ro!ucer has starte! its

u'$ar! March an! close! at Rs. 42B.;0 on the :omay Stock 6xchange

(:S6) on ri!ay. he share 'rice mo+ing u' from a lo$ of Rs. B?. he

marker men are ho'eful of etter $orking in the first uarter of 2333 L

34.

- sli''e! !ee' into re! $ith a loss of Rs. 0A.00 crore for the year

en!e! March 2333, against a 'rofit of Rs. 0?.A; crore in the 're+iousyear. #et sales increase! to Rs. 2,@?3.33 crore u' from Rs. 2,?3B.3?

crore, $hile total income rose form Rs. 2,@;@.;; crore to Rs. 2,A4A.??

crore !uring 4BBB.33. 8ther income !ro''e! shar'ly from Rs. 424.B;

crore to Rs. 09.4B crore. he com'any>s o'erating 'rofit efore interest,

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!e'reciation an! non L recurring items fell y 4B 'er cent to Rs. 242.A?

crore !ue to the shar' !ro' in 'rice realisation.

Ho$e+er, !es'ite a se+ere 'rice !e'ression $hich a!+ersely affecte! its

'erformance. - is ho'eful that the 'rices $ill take an u'turn soon.

- has a comine! manufacturing ca'acity of 44.;4 million tonnes.

he com'any currently has one cement 'roject an! three cement clinker

'rojects un!er im'lementation $ith a total in+estment of Rs. ?;3.03

crore. he com'any is setting u' a t$o million tonne cement 'lant at


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GACLis no$ in the 'rocess of setting u' a t$o million tonne &reenfiel!

cement unit in Maharashtra $ith an in+estment of aroun! Rs. 033 crore.

:esi!es, these &reenfiel! units, $hich $ill increase o+erall ca'acity y

four million tonnes, the com'any is also ex'an!ing its existing ca'acity in

&ujarat from three million tonnes to four million tonnes at an estimate!

cost of Rs. 433 crore.

:uoye! y the 40 'er cent gro$th in cement !is'atches in BB L 33, the

com'any is 'rojecting a !oule L !igit gro$th in the cement in!ustry in

the coming years.

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CEEN! 1 ON WEAK 'O-NDA!)ON SE! 'OR

CONSOL)DA!)ON

his time last year stocks of the cement in!ustry $ere on a roll. he

numers for -'ril 4BBB sho$e! +olume year on year gro$th of o+er 23

'ercent. Such gro$th, it $as ex'ecte!, $oul! im'ro+e the !eman!

su''ly alance as also the 'ro!ucer 'ricing 'o$er o+er a 'erio!.


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-s a gloal 'layer $ith !ee' 'ockets, higher entry costs seem to no

'rolem for /afarge. here is the 'ossiility of its uying u' a fe$ more'lants to match the ca'acities of the extant majors L In!ia ements,

/arsen an! ouro, &ujarat -muj ements an! &rasim in!ustries.

'rices for the acuisitions. 6ually, the lea!ing 'layers,

es'ecially &ujarat -muj ement, are keen on 'reser+ing their turf.

Since it has consistently ha! etter cash flo$s an! o'erating efficiencies,

in a attle among In!ian 'layers, there is little !out that &ujarat -muj

$oul! ha+e emerge! #o. 4 on all key areas, inclu!ing ca'acities o+er a

three fi+e L year 'erio!.

:ut $ith the coming in of /afarge an! the 'ossile entry of ement.

ements rancais, the ltaclementi grou' an! :lue ircle "ictor, $hich

ha+e etter access to resources an! the staying 'o$er, the in!ustry

scene has change!. he mo+es of Ouari In!ustries shoul! gi+e some of

the ne$er entrants a si*eale ca'acity an! estalishe! market 'resence.

o ensure that it retains its !ominant 'osition, an! also as a strategicmo+e to stall the M#s $alking a$ay $ith -, &ujarat -muj 'ai! a

hefty 'rice of Rs. 9@3 'er share to acuire the 'romoters stake (that of

the atas) of aroun! 4;.2 'er cent. hough the issue of o$nershi'

control of - is y no means settle!, if &ujarat -muj can hol! on to its

Page #o. 5


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most recent uy, it may as a grou' ($ith o'erations in the in!ustry

share! $ith -muj ement In!ia) control aroun! 20 'er cent of the

market in a cou'le of years time. his $oul! ensure that it coul! take onthe likes of /afarge an! other ig 'layers $ithout eing han!ica''e! on

the ca'acity front.

MORE CONSOLIDATION AHEAD

he consoli!ation 'hase is y no means o+er as yet. If this fiscal turns

out to e !ifficult for the in!ustry, es'ecially on 'rofitaility front, uite a

fe$ cement units, $ith ca'acities of one L t$o million tonnes, are sure to

go on the cho''ing lock.

his ha''ene! in 4BB@ L BA $hen major cement stocks languishe! on

floun!ering fun!amentals an! small cement com'any stocks ha! a goo!

time on the 'ros'ect of takeo+ers.

- similar 'rice 'attern for the rest of 2333 L2334 can e ex'ecte! $ith

select small cement com'any stocks mo+ing out of line $ith

fun!amentals in antici'ation of a takeo+er.

In the earlier 'hase, uite a fe$, such as #arma!a ement, Shree Dig"ijay ements, Dharani ements, Mo!i ements, Sri "ishnu ements

an! Rassi ements, $ere acuire! y igger 'layers. More recently,

Ouari In!ustries an! Raymon! ha+e also !i+este! the $hole or 'art of

their usinesses.

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CHANGES AT TOP

learly, the ca'acities that are changing han!s are gra!ually increasing.:arring a fe$ select 'layers, it is !ifficult to see units less than three

million tonnes sur+i+ing an! making goo! 'rofits o+er a 'erio!.


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If these four $ith /afarge an! Ma!ras ement gain a igger share, the

'ressure coul! uil! on the smaller units e+en $ithout any in!ustry Lle+el negati+es. In this ack!ro', it is clear that o+er a t$o L three year

'erio!, the in!ustry may $ell e !ominate! y ten 'layers L one or t$o

M#s an! some !omestic 'layers.

he may e no room for the smaller 'layers, y $ay of catering to

niches, gi+en the in!ustry>s characteristics. Some niche segments trie!

out y com'anies such as #ion #irman an! In!ian Rayon ($hite

cement) ha+e en!e! in the re!, an! usinesses of the kin! are either

!o$n an! out or 'art of other cement majors. his high le+el of

consoli!ation has serious im'lications for in+estments, oth long an!

short term (see story on in+estment outlook), in the in!ustry>s stocks.

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)N*ES!EN! O-!LOOK 4 A )5ED $AG

onsoli!ation $ith igger 'layers accounting for a larger of the market

an! its im'lications slo$er !eman! gro$th than last year continuation

of the sluggish 'rice tren!s of the last three L four years continue!

stress on 'rofitaility an! earnings gro$th 'ossiility of units $ith

smaller ca'acities going into the re! an! some of them ecoming

takeo+er targets the entry of M#s $ith !ee' 'ockets ut not

necessarily assure! of making money L all these factors $ill im'inge

u'on the +aluation of stocks in the cement in!ustry in the next cou'le of

years.

In this context, ho$ !oes the sector look from an in+estment

'ers'ecti+eF ill last s ex'erience sho$e!.

&i+en that the !eman! L su''ly situation is still title! in fa+our of the

latter an! the consoli!ation that is un!er$ay, the stocks on offer can

e!e+ile! into t$o roa! categories.

Page #o. 5


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8ne, com'anies $ith a strong outlook in the in!ustry an!, t$o, the

takeo+er 'layers. In the secon! category, the in+estment $oul! largely

ha+e to e of a s'eculati+e nature. his necessarily means a higher le+elof risk. :ut the short5term 'ay offs can e attracti+e as sharehol!ers of

com'anies such as Rassi ement, Shree Dig+ijay ement an! #arma!a

ement foun! out in the last t$o years.


48/119


mo+e u' if there is a $hiff of a !eal e+en if sharehol!ers get to 'artici'ate

!irectly in the cash flo$s.

he cement usinesses of all these com'anies are likely to get in+ol+e!

in the consoli!ation 'rocess sooner or later. :ut $hether the enefits

$oul! flo$ the $ay of sharehol!ers is !outful. So, if at all, any segment

of stocks $ill offer takeo+er L !ri+en enefits to in+estors, it $ill e the

'ure cement com'anies $ith ca'acities of one to t$o million tonnes. he

risk not $ithstan!ing, sharehol!ers of com'anies such as Prism

ements, Shree ement, Priya!arshini ements, Mangalam ement

an! 1ai'rakash In!ustries can stay in+este!.

)ndustry 4 Spe%ifi% Options1Ho$e+er, from a me!ium to long L term

'er L s'ecti+e, the numer of stocks $hich can e consi!ere! from an

in+estment 'ers'ecti+e is extremely small. In!ia ements, &ujarat -muj

ements, Ma!ras ements an! t$o !i+ersifie! com'anies L /arsen

ouro an! &rasim In!ustries L are the only ones on offer. - common

factor is that all these com'anies, $ith the exce'tion of Ma!ras

ements, ha+e ca'acities of close to 43 million tonnes.

hese are the stocks that one has to look at in terms of fun!amentals for

cement sector ex'osures. - is a glaring omission, ut any +alue in thestock may lie only ecause of the likely changes in o$nershi' an!

control, the stakes of &ujarat -muja ement not$ithstan!ing.

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the other usinesses may not e the est of o'tions as the fortunes of

the other usinesses may at any 'oint in time act counter to that of the

cement usiness. :ut existing sharehol!ers can stay in+este! sincethese stocks ha+e suffere! shar' !eclines an! $ait for 'rices to reco+er

an! restructuring 'lans to emerge efore taking a +ie$ on ex'osures in

these t$o com'anies.

he thrust of any cement sector L oriente! in+estment $oul!, therefore,

ha+e to eE Hol! an! uy &ujarat -muja an! Ma!ras ements on

!eclines, hol! - for any 'ossile control> +alue to emerge, a+oi! fresh

ex'osures in In!ia ements an! a$ait restructuring 'lans in &rasim

In!ustries an! /arsen ouro an! stay in+este! for the 'resent.

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W+EN W)LL CEEN! +ARDEN6

In!ia is the fourth largest 'ro!ucer of cement after hina, 1a'an an!

=S-. he installe! ca'acity of cement in the year 4BBB increase! to

more than 442 million tones, out$itting the 'resent !eman!. Housing an!

infrastructure are the only t$o sectors that 'ro+i!e a oost to the cement

in!ustry to!ay.

ement is a ca'ital L intensi+e in!ustry, o!ay, it has more su''ly as

com'are! to !eman!, thus resulting in lo$er 'rices. ement 'rices are

so unattracti+e that o+en reak e+en of the ne$ &reenfiel! 'roject to

manufacture cement $ith these 'rices is not +iale. here are lesser

chances of im'ro+ement in cement 'rices in the near future. -lthough

the go+ernment !oes not ha+e any !irect control on cement 'rices,

almost t$o thir! of the cost of cement Lnamely coal, 'o$er an! freight L

is controlle! y the go+ernment use! to uy o+er half of the total cement

sol! in In!ia. Ho$e+er, in the last fe$ years, its consum'tion has

re!uce! su5stantially.

o!ay, In!ia is the fourth largest 'ro!ucer of cement after hina, 1a'an

an! =S-. he installe! ca'acity of cement in the financial year 4BBB has

increase to more than 442 million tones, $hich is more than the !eman!

at 'resent.

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Housing an! infrastructure are the only t$o sectors, $hich can 'ro+i!e a

oost to the cement in!ustry to!ay. om'anies that can sa+e on freightcost, either y ha+ing 'lants near their markets or ha+ing facilities to

trans'ort y sea $ill e $inners. Similarly, cement com'anies ha+ing

their o$n 'o$er generation facilities $ill e ale to sa+e only time an!

money, ut $ill also e ale to 'ro+i!e uality.

Right no$ there is o+er L ca'acity in the cement in!ustry. he entry of

/afarge has ma!e things !ifficult for major In!ian com'anies, $hich

earlier forme! a cartel an! !ictate! the 'rice of cement to their

customers. hus, the o'tions for cement manufacturers are fe$.


53/119


In!ia ement>s Srini+asan has consoli!ation his 'osition in the south an!

is enefiting from higher cement rates. Similarly, consoli!ation through

takeo+ers an! mergers is going on at &ujarat -muja an! 'roaly inthe %umarmangalam :irla grou' as $ell.

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CEEN! )ND-S!R)ES 7ROAD. !O 0RO')!S

6M6# 'rices a''ear to ha+e lost their strength, going y their tren!s

in recent months. In the Mumai market, 'rices in #o+emer an!

Decemer last year $ere static at Rs. 4?4. 'er 03 kg ag, shar'ly !o$n

from Rs. 4@4 'er ag in 8ctoer 4BBB. #ot only this, 'rices $ere also

!o$n from the year ago le+el of Rs. 4?; 'er ag.

here are +arious reasons for the sluggish 'rices, ut t$o are mot

im'ortant. irst, there is too much cement floating aroun! $hich the

're+ailing !eman! is not ale to a!sor an! small cement 'lants are

un!ercutting ig rothers.

Secon!, the ex'ecte! rise in !eman! has not materiali*e!, thanks to the

slo$ 'ick L u' in infrastructural sector. 8ff take y the tra!itional market

uil!ing construction in!ustry is also static.

-ccor!ing to - %. #aik, chief executi+e officer an! managing !irector,

/arsen ouro /t!., the cement in!ustry has een 'assing through a

+ery !ifficult 'erio! since the last t$o years !ue to !eman! L su''ly

mismatch.

In the com'any>s annual re'ort for 4BBA L BB, #aik state!E :ecause of

ra'i! uil! u' of the ca'acity in the last 0G? years, su''lies ha+e een

more than the !eman! an!, therefore, 'rices all o+er the country ha+e

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een un!er 'ressure. -t the same time, the in!ustry $as ur!ene! $ith

increases in in'ut costs. he situation $as further aggra+ate! y thecrisis in South L 6ast -sia.

Ho$e+er, #aik has +isuali*e! the future $ith o'timism. He felt the !ifficult

situation $oul! im'ro+e soon since no ne$ cement 'lant ha+e een

or!ere! in the last t$o years an! also the !eman! is ex'ecte! to get a

oost !ue to +arious 'ro+isions in the 4BBB 5 2333 u!get $hich

encourages housing an! infrastructure !e+elo'ment.

Signs of this ha+e een +isile, ut not to the extent !esirale. :ut the

in!ustry is still gearing u' to raise 'ro!uction. -ccor!ing to !ata

'ulishe! y the enter for Monitoring In!ian 6conomy (MI6), cement

'ro!uction !uring the nine months (-'ril L Decemer) 'erio! of 4BBB L

2333 totale! @2;.?3 lakh tones, sho$ing a 40.A? 'er cent in crease o+er

the out'ut of ?20.;3 lakh tones in the same 'erio! of 4BAB L BB.

If the 'ro!uction tren! is maintaine!, aggregate cement 'ro!uction

!uring the current fiscal year coul! easily out'ace that recor!e! !uring

4BBA L BB $hich itself $as 0.@3 'er cent u' at [email protected] lakh tones.

ortunately the cement in!ustry has succee!e! in maintaining high le+el

of !is'atches, $hich ha+e registere! a risker gro$th rate than the

'ro!uction. -t ?@?.?3 lakh tones !is'atches !uring the ten5month 'erio!

sho$e! almost 4@ 'er cent increase from 0@A.@4 lakh tones !is'atche!

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a year ago. During the 're+ious fiscal year (4BAB L BB) !is'atches $ere

?.A0 'er cent higher at A4A.44 lakh tones.

Part of the reason the cement 'lants are maintaining higher rate of

!is'atch is that this $ay they are ale to sa+e on in+entory maintenance

costs $hich ha+e een 'asse! on to the stockiest. :ut this situation

cannot last for long an! a+enues ha+e to e foun! for increasing cement

consum'tion in ne$ areas.

8ne exciting o''ortunity in the concreti*e! roa!s segment $hich the

a'ex o!y of the cement com'anies, ement Manufacturers -ssociation

(M-), is stri+ing har! to 'enetrate.

oncreti*e! roa!s an! concreti*e! 'a+ements in+ol+e use of massi+e

amounts of cement $hich ha+e to the trans'orte! in ulk a that rings

out the nee! for fin!ing suitale ulk trans'ortation system o+er a longer

!istance. - lot $oul! !e'en! on ho$ uickly the entral go+ernment an!

state go+ernments release fun!s for conretisation of national high$ays.

oncretisation of high$ays, 'a+ements are consi!eraly chea'er than

the ituminous counter 'arts ase! on life L cycle costing, accor!ing to

Prafull %umar, !irector general (roa!s) in the ministry of surfacetrans'ort.

He 'ointe! out at a recent seminar on ement oncrete Roa!s L

-rteries of 24stentury> that a reakthrough ha! een ma!e in national

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high$ays as conretise! 'a+ements $ere eing consi!ere! for Delhi L

Mathura an! Mumai L Pune ex'ress$ays.


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CO0AN, 0RO')LE

1.%. s hea! office

is at %amla o$er, %an'ur an! the 'ro!uction unit of $hite cement is at

otan. Distt. #agaur in Rajasthan.

1.%. s

technology. he 'ro!uction unit is at &otan in Rajasthan. or $hite

cement the main ra$ material is limestone, $hich shoul! e a su'erior

uality in In!ia 'urest limestone is a+ailale from &otan lime stone

mines. his is 'erha's the main reason for setting u' of 'ro!uction unit

in &otan.

1.%. market share stan!s at more then 030, $hich means e+ery secon!

ag sol! in In!ia is of 1.%.

o maintain $hite 'erfection, 1.%.


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1.%. s Register uality assurance.

B?.B@ 2;@@B M

[email protected] 2@;03 M

BA.BB 2B4;0 M

he entire manufacturing acti+ity right from the grin!ing of the grin!ing of

the limestone to 'acking the cement is controlle! y the most

so'histicate! com'uteri*e! technology calle! Ju**y /ogicE

1.%. s a!+ance! technology an! high gra!e an!

chemically 'ure ra$ materials, free from colouring im'urities make it

strikingly $hite. - stringent Cuality control measure gi+es an u''er han!

to 1.%.


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he 'erfect $hite cement $ith no colouring im'urities.

Stronger $ith exclusi+e features of ra'i! har!ening.

o!ay the $hite cement in!ustry in In!ia faces t$o major com'etitors L

1. %.


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CM 0102 i. White Cement

Deman! Pa"t # $%t%&eYea& M

!""03"! !"0,000 Ma&'et G&()th Rate"

!""!3"$

!""$3"

!""3"*

!""*3"'

!""'3"%

!""%3"#

$0",000

$0,000

$','00

$#",000

0#,000

&,000

1**0+*1 + 1**,+*-

10.1

1**,+*- + 2001+02

1/.0

2001+02 + 200,+0-

1.*

!""#3"&

!""&3""

!"""300

$00030!

$00!30$

&&,#00

**#,000

'!*,000

'"0,000

%&0,000

ensitivity Coefficient '.;

$00%3%# !,%#,*00

Market Structure

Market segmentation

Segment Share 9;: Lead 0layers

6orth

7ast

5est

outh

'

!0

$$

Company hare (D)

B 5hite Cement

+ndian ayon

/ravancore 5hite

0

%!

0"

Leading $rands

B 5hite, >irla 5hite

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CM0101ii. White Cement

Deman ! Pa"t # $%t%&eYea& Mm M

!""03"! *'.& Ma&'et G&()th Rate"

!""!3"$

!""$3"!""3"*

!""*3"'

!""'3"%!""%3"#

'0.'

'0.#'*.$

'&.

%*.*#0.0

!""03"! 3 !""%3"#

#.D!""%3"# 3 $00!30$

&.*D

$00!30$ 3 $00%30#&.'D

!""#3"&

!""&3""!"""300$00030!

$00!30$

#%.0

&$.0&".0"#.0

!0'.0

ensitivity Coefficient '.;

ara8ia3

Tata Stee8.

Lead 0layers

Company Share 9;:

-:irla1%/ &ujarat

-muja

4;2A9A?;

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0ROD-C! DE!A)L AND A00L)CA!)ONS

It is a kin! of Portlan! cement conforming to ISE A3;2 L 4BAB an! all

eui+alent $or! stan!ar!s, o+iously it is $hite is colour. Its $hiteness is

!ue to use of highly 'ure ra$ materials.


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'OR WALLS1 2

DECORA!)*E WA!ER 0ROO' CEEN! 0A)N!

ement 'aint is a !ecorati+e $ater'roof cement coating in 'o$!er

form a+ailale in !ifferent colours an! sha!es. It can e a''lie! y

rush or s'ray after mixing $ater an! is use! for 'rotection an!

!ecoration of exteriors of uil!ings.

0O)N!)NG ON $R)CKS @ S!ONE WORKS

he filling of joints et$een the ricks y $hite or coloure! cement

is kno$n as 'ointing $ork.

0LA)N 0LAS!ER

Plain 'laster of $hite or coloure! cement is like that of or!inary

Portlan! cement. Marle 'o$!er is use! as fine aggregate along

$ith fine marle chi's as course aggregate an! colour if reuire!.

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2. Innovative Application:

'OR 'LOORS1 2

SOL)D )N!ERLOCK)NG $LOCKS W)!+ !O0 LA,ER O' W+)!E

AND @ OR COLO-RED CEEN! 90AR)NG $LOCKS:

Paring locks are ma!e in factories un!er controlle! con!itions an!

are a+ailale in +arious si*es, colours, an! !esigns to suit +arie!

a''lication.

E5!RA +EA*, D-!, CEEN! !)LES

hese tiles are use! for exterior as $ell as interior finishes of $alls

an! floors.

LAND G-ARD EROS)ON CON!ROL 0A*ERS

hese 'a+ers are eing use! in an increasing +ariety

en+ironmental engineering a''lication such as 'arking areas

run$ay 'erimeters, +erge 'rotection on roa!$ays etc.

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'OR WALLS1 2

E50OSED AGGREGA!E 9GR)! WAS+ ')N)S+:

In this finish the aggregate 'articles are eme!!e! in the 'laster

an! ex'ose! to gi+en a 'ermanent natural an! eautiful look.

E50OSED AGGREGA!E 9C+)SELED ')N)S+:

In this 'laster the aggregate 'articles are igger in si*e an!

ex'ose! y chiseling using chisel an! hammer.

SAND'ACE S0RA, 0LAS!ER COA!)NG

his is texture! coating $hich can e a''lie! manfully or y

machine.

CAS! S!ONE ')N)S+

his is an imitation stone finish.

0RECAS! CLADD)NG 0ANELS

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Precast 'anels are joine! together at the construction site to s'ee!

u' construction 'anels are fixe! y $el!ing.

AGGLOERA!ED AR$LE ')N)S+

oncrete locks are cast un!er high +iration an! com'ression

cure! for 40 !ays an! cut into slices groun! an! 'olishe!.

0RO')LED ')N)S+

In 'rofile! concrete the texture is im'arte! to concrete y form$ork

y $hich it is 'lace!.

0RO')LED ? E50OSED AGGREGA!E ')N)S+

he 'rofile! finish is further treate! in $hole or in art to ex'ose the

aggregate.

3. Miscellaneous Application

GARDEN '-RN)!-RE

0LAN!ERS

'LOWER 0O!S ? O!+ER ORNAEN!AL O$(EC!S

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D-- -#-/7SIS -#D I#6RPR6-I8#

=8 Whi%h #rand of "hite %ement do you


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rom the ao+e gra'h it can e seen that most of the retailers kee's

oth the ran!s, (i.e. ;?), aout 2B retailer kee's only 1.%.


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B8 Whi%h #rand %ustomer as+9A 5+/7 '#

A6F !$*

/4/A9 $00


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rom the ao+e 'ie chat it is +ery clear that the !eman! for any

'articular ran! is not much. Mostly customers ask for $hite cement an!

it is the retailers $ho influence them. (i.e. ?2 customers uy 'articularran! eing in 'rescrie! y the retailers. -gain :irla $hite cement>s

!eman! in the market is much higher then 1.%.


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9. What ma


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he ao+e 'ie5gra'h sho$ing the cause $hy the customer uy any

'articular ran!. his is the a+ailaility in the market $hy customer uy

'articular ran! accor!ing to this gra'h their 'ercentage is highest i.e.9? in the $hole market.

2B retailers think uality is the main cause. 2? retailer think uy any

'articular ran! for com'any goo!$ill. B retailer thinks is 'rice is the

cause. here is no 'lace ha+ing attracti+e 'ackaging their 'ercentage is

3.

Sho$ the main thing $hat the com'any has to !o isE

(I) Strengthen the su''ly chain

(II) Cuality shoul! e maintain strictly

(III) -n! for ran! 'ositioning much a!+ertisement is necessary

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8 'or "hat purpose %ustomer #uy "hite %ement

/88RI#& 996M6#


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rom the ao+e 'ie L gra'h it can een seen that mostly 'eo'le (aout

0A) use $hite cement for marle G tile fixing, 24 to 4@ for joints an!

flooring res'ecti+ely an! aout ; 'eo'le $hite cement for cement$ash.

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8 What


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he ao+e 'ie L gra'h is sho$ing that mostly the retailers $ho are the

influencer of selling any 'articular ran! are not ha''y, as they !o not

get any ty'e of scheme cash or gift.

-out @3 retailers say that they ha+e ne+er get any ty'e of gifts or

cash !iscount. hey sai! mostly the !ealer !on>t gi+e these things to

retailers. -out 4@ retailers sai! they get oth ty'e of schemes. 44

gets some gifts an! only 2 gets cash !iscount.

o make the retailers 'lease at least they shoul! e gi+en :oar!s,

Stickers for a!+ertisement, small gifts, etc.

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8 Whi%h #rand is providing you #est s%heme6

1. %. 4@:.


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he ao+e gra'h is sho$ing that accor!ing to most of the retailers. #one

1. %.


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F8 Whi%h #rand fet%hes you the good margin6

1. % ?2:. < 9?S-M6 432otal 233

:.


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rom the ao+e 'ie L gra'h it can e seen that 04 retailers sai! that

oth the o.>s are 'ro+i!ing same margin $hich is +ery lo$ for them.

-out 94 retailers sai! 1. %.


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8 Do advertisement Effe%t !he Sale of White

Cement6

7es 233#o 38-/ 233

76S

433

#8

3

NO!E1 Ea%h per%entage has #een sho"n in round figure8

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rom the ao+e 'ie chart its clear that a!+ertisement is +ery much

effecti+e for increasing sale.


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H8 0ie Charts sho"ing the popularity of different

#rand of %ement6

A8 North Delhi

1. %. 4A:. < 9;:8H ;A8-/ 433

$O!+

CG;

$8 W8

IC;

(8 K8

=G;


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his 'ie chart is sho$ing that in #orth Delhi, Mostly the retailers kee'

oth the ran!s i.e. 1. %.


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$8 South Delhi

1. %. 03:. < 4?:8H 9;8-/ 433

$O!+

IC;

$8 W8

=E;

(8 K8

DJ;


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In south Delhi region. 1. %.


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C8 East Delhi

1. %. 02:. < 23:8H 2A8-/ 433

$O!+

BG;

$8 W8

BJ;

(8 K8DB;


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In 6ast Delhi region also 1. %. is !oing $ell aout 02 retailers kee's

only 1. %.


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D. West Delhi

1. %. 43:. < 2A:8H ?28-/ 433

$O!+

EB;

$8 W8

BG;

(8 K8

=J;


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=nlike South 6ast Delhi in the


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43. Preference of


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In #orth Delhi region 4; 'eo'le ask for 1. %.


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$8 SO-!+

1. %. 9:. < @

-#7 B38-/ 433

AN,

HJ;

$8 W8

F;

(8 K8

I;


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In South Delhi region customer has +ery lo$ 'reference of any 'articular

ran! aout B3 'eo'le ask for just $hite cement. herefore, in that

region the retailers are the 'ersons, $ho influence the customers.herefore, in that region !istriution of gifts to retailers may e effecti+e.

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C8 EAS! DEL+)

1. %. 4?:. < A

-#7 @?8-/ 433

AN,

FE;

$8 W8

G;

(8 K8

=E;


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In 6ast Delhi region most of the customers has no s'ecial 'reference of

any ran!. -out @? 'eo'le generally ask for just $hite cement. 4?

ask for 1. %.


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D8 WES! DEL+)

1. %. ;:. < ;4:8H 008-/ 433

$O!+

DD;

$8 W8

C=;

C;


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In


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DEAND O' SALL 0ACKS

-mong the !ifferent ty'e of ags mostly the small 'ackets has etter

!eman! in the market mainly the 4%g 'acket an! 0%g 'ackets !eman!

stays. Deman! for 43 %g 'ackets is +ery lo$ in the market.

&enerally the small'acksare use for marles or tiles.

INTRODUCTION O$ NEW SCHEME $OR CUSTOMER

Most of the res'on!ents says that intro!uction of ne$ scheme for

customers may increase sale ecause just ask, for $hite cement so they

may e attracte! easily to$ar!s gifts. -n! si!e y si!e some schemes or

!iscount shoul! e gi+en to the retailer>s asis of their 'erformance.

After Sale Servi%e

Most of the retailers res'on!e! that they ne+er fin! any 'rolem $hich

nee! after sale ser+ice.

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O$SER*A!)ON

4. Poor co+erage y the stockiest of 1.%.


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43. e$ retailers in that area sai! that some time they are getting

'acks, $hich are un!er $eight.

44. Some retailers say that there are fe$ retailers $ho sells

1.%.s 'acket less then recommen!e! 'rice, $hich meant

they are selling something !u'licate.

42. It is oser+e! that 1.%.s a!+ertisement in the market is

+ery less then :irla $hite.

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RECOENDA!)ON

4. Distriution channels shoul! e ma!e more effecti+e.

2. om'any shoul! !o freuent +isit to retailers in or!er uil! goo!

relationshi'.

9. luctuation in 'rice shoul! e minimi*e!.

;. Durale an! strong 'acking is reuire!.

0. &ift scheme shoul! e !istriute! eually to ig as $ell as small

retailers.

?. &rie+ance han!ing shoul! e gi+en 'riority.

@. -ttracti+e scheme shoul! e intro!uce to in!uce retailers to sale

more 1.%.


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L))!A!)ON

his re'ort is not the reflection of entire nation$i!e retailers.

ontacting the retailers at !ifferent location of Delhi !eman!e! a lot

of 'hysical $ork an! tra+eling.

-ll the result an! conclusion ha+e een !ra$n on the asis ofinformation 'ro+i!e! y the retailer>s .It cannot e !enie! that there

$as a 'ossiility a res'onse error.

Some retailers $ere reluctant an! ten! to fitter the necessary

information.

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$)$L)OGRA0+,

1. %.


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NOR!+ DEL+)

Sl8No8

Name Address 0honeNo8

4. /o+e %ush Sanitary Marels

: L 294, Sector L I, Rohni @4?;A@4

2. %amalia Sales : L 33G292, Sector 5 I, Rohni @4@03409. 8m Prakash AB, 6o$ar!line 5;. #arula Paints : L ?, Mo!el o$n. @44424B0. Mittal Paints G H< : L 9A3, -ja!'ur @490220?. Payal Paints Shastri #agar 5@. Sin!hani Paints G

H

Comperative Study of J.K.white Cement

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