PIONEER INSTITUTE OF PROFESSIONAL STUDIES

APRESENTATION ONSWOT ANALYSIS

OF“ULTRATECH CEMENT LIMITED.”

Presented ByTraun NayakMBA III SemSec R

Submitted ToProf.Nihit Jaiswal

Ultratech Cement Limited is among the world’s top 10 cement companies. The company has an annual capacity of 48.8 million tones, and manufactures and markets ordinary Portland cement, Portland blast furnace slag cement and Portland pozzalana cement. It also manufactures ready mix concrete.

The company has eleven integrated plants, one white cement plant, twelve grinding units and five terminals — four in India and one in Sri Lanka.

Ultratech Cement is the country’s largest exporter of cement clinker. The export markets span countries around the Indian Ocean, Africa, Europe and the Middle East.

The company's subsidiaries are Dakshin Cements Limited, Harish Cements Limited, Ultratech Ceylinco (P) Limited and UltraTech Cement Middle East Investments Limited

DEFINE THE BUSINESS AND COMPANY

VISION: - To be a premium global conglomerate, with a clear focus on each business.

MISSION: - To deliver superior value to our customers, shareholders, employees and employees and society at large

VALUES:- Integrity Commitment Passion Seamlessness Speed

VISION AND MISSION

Ordinary Portland cement Portland blast furnace slag cement Portland Pozzolana cement

PRODUCTS MIX

TOP MANAGEMENT TOP MANAGEMENT:-  Board of Directors Mr. Kumar Mangalam Birla, Chairman Mrs. Rajashree Birla Mr. R. C. Bhargava Mr. G. M. Dave Mr. N. J. Jhaveri Mr. S. B. Mathur Mr. V. T. Moorthy Mr. S. Rajgopal Mr. D. D. Rathi Mr. O. P. Puranmalka, (Whole time

Director)

Executive President & Chief Financial Officer

Mr. K. C. Birla Chief Manufacturing Officer

Mr. R.K. Shah Chief Marketing Officer

Mr. S.N.Jajoo Chief People Officer

Mr. C. B. Tiwari Company Secretary

Mr. S. K. Chatterjee

LOCATION AND MANUFACTURING UNIT:-• Awarpur Cement Works - Awarpur Maharashtra

• Hirmi Cement Works - Hirmi Chhatisgarh

• Gujarat Cement Works - Amreli

• A.P.Cement Works - ChukkalurAndhra Pradesh

• Jafrabad Works- Jafrabad

• West Bengal Cement Works- Durgapur

• Magdalla Works - Magdalla Gujarat

• Ratnagiri Works - Ratnagiri

• Arakkonam Cement Works - Vellore

• Jharsuguda Cement Works - Jharsuguda

  Our goal is to become a US$ 65 billion Group by 2015

from US$ 30 billion today. We expect your Company to contribute significantly to this growth and earnings.

Ultratech Cement is the country’s largest exporter of cement clinker. The export markets span countries around the Indian Ocean, Africa, Europe and the Middle East

CURRENT GOALS AND OBJECTIVES

S.NO. RATIOSMar '10 Mar '09 Mar '08 Mar '07 Mar '06

1 Operating margin (%)

70.09 72.30 68.66 71.15 83.20

2 Gross profit margin (%)

51.24 48.10 54.40 51.60 44.08

3 Net profit margin (%)

15.50 15.50 18.20 15.90 6.9

4 EPS (Rs) 87.82 78.48 80.94 62.84 18.46

5 Return on net worth

(%)23.72 27.10 37.40 44.40 22.12

6 Dividend payout

ratio (%)5.64 5 5.1 4 4.06

7 PBDIT 1706 1448 1589 1253 375

8 Depreciation388 323 237 226 216

9 PBIT 1706 1487 1589 1253 375

10 PBT1588 1361 1507 1166 286

11 PAT1093.24 977.02 1008.12 782.24 230.32

12 Net profit1093.24 977.02 1008.12 782.24 230.32

FINANCIAL ASPECT OF THE COMPANY

  PERFORMANCE BENCH MARKING

The last few years of this decade have been good for cement companies as prices have remained high, and hence profits have been good. In the same period, Gujarat Ambuja Cements and ACC have shown the same trends of increasing sales growth and capacity utilization of Gujarat Ambuja Cements and ACC both are growing continuously because of the increase in the demand of the cement in this scenario and they are very effective in meeting the demand of the consumers by doing their best performance.

BENCH MARKING

Due to similar raw material inputs and production processes, there is no significant differentiation in the cement produced across firms and thus they follow the standardized process of manufacturing. But it can follow the Manufacturing Process of its largest competitor ACC, though ACC enjoys lower fuel cost. However, this is not sustainable has already started switching to coal. Similarly it can have the advantage of coal fuel.

PROCESS BENCH MARKING 

Can adopt the strategies of ACC cement i.e.,

Cost leadership: Striving to become a cost leader by means of setting up captive power plants, and/or up-gradation of technology to enhance productivity, is increasingly becoming critical for large cement players in this sector.

Rising Exports: Due to the increasing construction activity in the Middle-East, exports will constitute a major sales driver. Hence, the coming years would see companies scrambling for bases on the Western coast to minimize their export transportation costs.

Retail Stores: A unique concept, which ACC is experimenting with in recent times, and one that is important for the future, is to continue setting up retail stores. Other companies like Asian paints, and most recently Tata Steel have tried a similar concept.

Relationship Management: ACC focus on managing its relationships with importers, exporters, distributors, warehouse providers, wholesalers, retailers and dealers for their long-term profitability.

STRATEGIC BENCHMARKING

PRODUCT LIFE CYCLE

COMPANY LIFE CYCLE

• Porter’s Five force Model

STRATEGIC MODELS

STRENGHTS 

Production The company's production facilities are spread across 11 integrated plants,

one white cement plant, 12 grinding units, and 5 terminals — 4 in India and one in Sri Lanka.

High quality 17.64Mn.Ton cement production in 2009-10.production is increasing annually.

Annual production capacity of 23.10 million tones. Use of high-end equipment such as the Gamma Metrics Machine and the X-

ray Analyzer ensures that each product passing out of Ultraech manufacturing facility adheres to global standards of quality and performance.

 Logistics Can directly deals with the limestone tenders and thus the middle man do not

affect its cost. Use the local transporters which provide the efficient transportation cost

SWOT ANALYSIS

Plant

Ultratech manufacturing plant uses ultra-modern technology and imported machinery.

Company’s Unit at Kovaya is the only Unit in this sector in India to have a desalination plant. It is used for meeting the water needs of the plant and the colony. The waste gases from the cooler are used in the desalination plant.

The Ultratech cement manufacturing The greenbelt at our Units is simply awesome and is surrounded by trees all around. At some points, you cannot even see the skyline. Only the leaves and the flowers and hear the cacophony of the birds.

Company’s CSR (corporate social responsibility) activities extend to 127 villages, in proximity to its plants, across the country.

Brand Positioning

The Aditya Birla Group the eighth largest cement player in the world. UltraTech's products include Ordinary Portland cement, Portland

Pozzolana cement and Portland blast furnace slag cement. The company exports over 2.5 million tons per annum, which is about 30

per cent of the country's total exports. 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.

OPC is used for applications, such as commercial buildings, industrial constructions,

multi storied complexes, cement concrete roads and heavy duty floors. PPC cement is used for big construction like dam and thermal power plant,

Distribution Channels The Company has a network of cement Ultratech distribution network is very widely spread out in the country

with over 5,500 dealers and 30,000 retailers

Finance Production for the Aditya Birla Group company – UltraTech Cement, for

the period April-September 2010, has moved up by 3.99% at 186.30 lakh mt as against 179.16 lakh mt during April-September 2009.

Consistent revenue growth. Gross sales increase from 7160 cr. to 7729 cr.(from year 2009 to 2010) EBIT increase from 1487 cr. to 1706 cr.(from year 2009 to 2010) PAT increase from 977 cr. to 1093 cr.(from year 2009 to 2010) EPS (Rs.) increase from 118.94 to 127.65 Rs/share (from year 2009 to

2010)

Human resource

Total number of employees in Company as on 31st March, 2010 was 4,481 employees.

Ultratech has won the best employer award in 2007. Company continuously strives to foster a culture of high performance.

Management has infused a lot of rigor and intensity in its people development processes and in honing skill sets.

The Performance Management System at Ultratech Cement ensures that performance and achievement do not go unnoticed.

Ongoing learning, refreshing HR systems in line with global benchmarks, aligning rewards an recognition with performance, have enabled Company sustain its reputation of a meritocratic organization.

Its HR processes are absolutely aligned to organizational goals

It provides an opportunity to the employees to monitor their progress and develop into complete professionals.

The Group’s Corporate Human Resources function has played and continues to play an integral role in Company’s Talent Management Processes.

The cornerstone of our Performance Management System is the Appraisal System. Individual performance targets in the form of Key Result Areas (KRAs) are set at the beginning of the year through consultation with the reporting managers.

At the end of the year, each employee’s performance is assessed against the set KRAs. Performance Management provides the employee an opportunity to discuss his/her achievements during the given period and to focus on improvement areas.

Training & development-We lay a lot of emphasis on developing our employees beyond their present boundaries, broadening their horizon, enabling them to think the unthinkable and rise above the benchmarks they set for themselves.

Conti…

Quality All the plants of UltraTech are ISO 14001 Environment Management Systems

certified and adhere to OHSAS 18001 standards. 

Clean technologies and processes that combine economic progress and sustainable environment have been adopted at Ultratech plants at Awarpur and Ratnagiri in Maharashtra; Kovaya, Jafrabad and Magdalla in Gujarat; Hirmi in Chhattisgarh; Arakkonam in Tamil Nadu; Tadipatri in Andhra Pradesh; Jharsuguda in Orissa and Durgapur in West Bengal.

Ultratech won the Capexil Certificate of Export Recognition - Top Exporter - Cement, Clinker, Asbestos and Cement Products for the years 2000, 2002 and 2003

Uniform cement quality to customer.

Bhartiya Udyog Ratan Award presented to Sh.KYP Kulkarni By Indian Economic Development & Research Association (IEDRA), New Delhi in 2004.

Projects

 Ultratech Cement, we see it in the Bandra-Worli Sea Link – an eight lane bridge that is going to make a difference to millions of commuters.

Officially named as the Rajiv Gandhi Setu the bridge will provide an alternative route to south Mumbai from the western suburbs.

Raw materials Not available in all the places. Losses of raw material. High cost of branded products.

Operations. High Power/ Fuel costs. Required efficient maintenance for the wastes. Raw material inventory required due to perishable of raw material. High inventory handling cost

Human Resource Due to openness in the organization work culture is very informal that will

not suit for better management in corporate. Insufficient man power

WEAKNESSESS

Conti..

Marketing Lack of awareness program for consumers due to low promotion mix. Lack of marketing mix. Delay in supply.

Health Highly dusty environment at the time of dumping the cement is hazardous for health. It affects human’s respiratory system adversely.

Others Cement industry is highly fragmented Industry is also highly regionalized Low value commodity makes transportation over long distances uneconomical The cost of transporting cement is high and this keeps cement from being profitable over

long distances. In other words, shipping cement costs more than the profit from selling it. The cement industry has recently streamlined its production efforts, using dry

manufacturing instead of wet, which is heavier and more time-consuming.

With the low per capita consumption of cement in India — 102 kg compared to the global average of 260 kg (China: 429 kg, Malaysia: 529 kg and South Korea: 951 kg) —- and the emphasis on infrastructure development, Ultratech has ample opportunity to ride the growth curve.

It can develop new marketing area.

It can sign MOUs with government regarding supply of cement for government work.

Maintain the position of competition in the market.

Institutional market like corporate and offices, school society complexes are growing in large scale, which will increase the requirement.

OPPURTUNITIES

Conti…

People are opting for more stable structures and intensive use of cement is taking place, even government is spending heavily on infrastructure project Thus, this is the right time to fully tap these markets.

As Indian core industry is also growing at rate of nearly 10% per annum it is having a good future.

Foreign direct investment in infrastructure sector going to increase in coming years, which will increase the demand of cement.

Roads are undergoing through the transformation process through which the traditional method of road building will be replaced by modern concrete roads.

Large number of players in cement industry makes it more competitive for ACC to carefully price its product and at the same time satisfy its dealers and customers.

Cheep priced brand are grabbing rapidly a large chunk of lower income customer base.

Players such as Jaypee Cement, Prism Cement, and Birla cement.ACC cement are eating up considerable market share.

Due to India’s exponential growth many new international cement companies are expected in coming years which will bring a tide of change and can start price war.

Government intervention to adjust cement prices

THREATS

Conti…

Transportation cost is scaling high; bottleneck due to loading restriction.

Coal prices climbing up industry players say current shortage of coal in the country is estimated to be over 10 million tons.

The emergence of small players in this market may increase the competition and start the malpractices, and heavy discounts to retailers. They can also influence many retailers by giving better profit margin, and other Benefits.

Now-a-days Timber is also being considered as one of the substitutes of cement. In many countries like Japan, Indonesia, Singapore etc are now using timber in construction since those areas are high earthquake affected. They now prefer timber which is cheap and long lasting for years

Adopt new technology for the production like wet process of cement manufacturing. it will reduce the cost of product that will increase the profit margin and good for human health also.

Proper use of waste material. They can increase the production plant because of high growth

rate of infrastructure. They can increase the production for global market.

SUGGESTION

As India is the second largest producer of cement in the worlds many big player presents in the market after that Ultratech cement increases his market share due to the high growth rate of real estate.

Because of continuously growth of ultra tech cement after few year company may occur top cement manufacturer in India.

After swot analysis of Ultratech I found that company has many strength, but few weakness also present,

There are various opportunities for company in India and other Asian countries because the infrastructure is continuously developing.

Company has won the best Employer award in 2007,so young generation have various career opportunities in it.

Overall performance of company is increasing continuously in each sector like as Production, HR , Marketing it is good for company.

CONCLUSION

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