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CERTIFICATE
TO WHOMSOEVER IT MAY CONCERN
Signature
HR Department
Ultratech cement limited,
Aditya Birla White Cement Plant,
Kharia Khangar, Jodhpur, Rajasthan
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ACKNOWLEDGEMENT
Signature
Mr. Kripal Rathore
Mr.Patel Pariket
B.Tech Chemicals
6th Semester
Jaipur National University,
Jaipur.
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INDUSTRY DETAIL
The Indian cement industry has been on a high growth trajectory for more than a
decade, led by buoyancy in sectors such as real estate and construction. The industry has
witnessed continuous modernisation and adoption of new technologies in recent years.
India is the world's second largest producer of cement after China with industry
capacity of over 200 million tonnes (MT). With the boost given by the government to
various infrastructure projects, road networks and housing facilities, growth in the cement
consumption is anticipated in the coming years.
The modern Indian cement plants are state-of-the-art plants and amongst the best in
the world. The cement industry comprises of 134 large cement plants with an installed
capacity of 173.08 million tonnes and more than 350 operating mini-cement plants, with
an estimated capacity of 11.10 million tonnes per annum, making a total installed capacity
of 184.18 million tonnes in the last fiscal, as per the Department of Industrial Policy and
Promotion's latest data. In order to meet the expanding demand, cement companies are fast
developing new plants. The cement industry is poised to add 111 MT of annual capacity by
the end of 200910 (FY 2010), riding on the back of approximately 141 outstanding cement
projects.
According to a report by the ICRA Industry Monitor, the installed capacity is
expected to increase to 241 MTPA by FY 2010-end. India's cement industry is likely to
record an annual growth of 10 per cent in the coming years with higher domestic demand
resulting in increased capacity utilisation.
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Housing, Infrastructure and Real estate sectors, with major construction activity in
rural and semi-urban areas through large infrastructure and housing development projects, are
expected to augment the growth rise in cement sector. Demand in this region is being driven
by infrastructure, residential and commercial projects.
Domestic Players
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Global Players
Holcim, one of the world's leading suppliers of cement, has 24 plants in the country (India)
and enjoys a market share of about 2325 per cent
Italcementi Group, which acquired full stake in the K K Birla promoted Zuari Industries'
cement.
The French cement major, Lafarge which acquired the cement plants of Raymond and
Tisco with an installed capacity of 6.5 MTPA a few years back plans to grow it to 15-30
MTPA in the next 10 years. Till now its manufacturing capacity was concentrated in East
India, but now the company is spreading its wings to the north and south. It is setting up
four greenfield projects in Rajasthan, Himachal Pradesh, north-east and south India, with a
combined capacity of around 5 MT.
German major, Heidelberg Cement has merged Mysore Cement, in which it owns around
54 per cent stake, Indorama, (where it acquired 100 per cent stake in 2008) and its 100 per
cent Indian subsidiary, Heidelberg Cement India.
Installed capacity
The cement industry in India has added a whopping 46 MT capacity in just a little
over three years, taking the total installed capacity to 206.96 MT as on December 31, 2008.
This includes India Cements Ltd's new grinding unit at Vallur, Tamil Nadu with an installed
capacity of 1.10 MT, and UltraTech's plant at Ginigera, Karnataka with an installed capacity
of 1.30 MT.The industry added over 30 MT to its installed capacity in just one year (April
2007March 2008).
Almost all players of the industry, small to medium to large, have added capacity
ranging between a minimum of 200,000 tonnes and a maximum of 3 MT in the three years
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(April 2005 to March 2008), effecting a total addition of 45 MT to the installed capacity by
setting up greenfield projects, and expanding and upgrading the existing plant.
Technological change
JK Lakshmi Cements plans to add five more RMC units to its existing 10 units as part of
its expansion plans at a total cost of US$ 210.53 million.
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COMPANY SPECIFIC
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FACTFILE
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GROWTH STORY
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LEADERSHIP TEAM
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PROCESS TECHNOLOGY
While adding fresh capacities, the cement manufacturers are very conscious of the
technology used. In cement production, raw materials preparation involves primary and
secondary crushing of the quarried material, drying the material (for use in the dry process) or
undertaking a further raw grinding through either wet or dry processes, and blending the
materials. Clinker production is the most energy-intensive step, accounting for about 80% of
the energy used in cement Production.Produced by burning a mixture of materials, mainly
limestone, silicon oxides,aluminum, and iron oxides, clinker is made by one of two production
processes: wetor dry; these terms refer to the grinding processes although other configurations and mixed
forms (semi-wet, semi-dry) exist for both types. In the dry process, the raw materials are ground,
mixed, and fed into the kiln in their dry state. In the wet process, the crushed and proportioned
materials are ground with water, mixed, and fed into the kiln in the form of slurry.Different types of cement
that are produced in India are:
Ordinary Portland cement (OPC):OPC, popularly known as grey cement, has 95 per cent clinker and 5 per
cent gypsum and other materials. It accounts for 70 per cent of the total consumption.
Portland Pozzolana Cement (PPC):PPC has 80 per cent clinker, 15 per cent pozzolana and 5 per
cent gypsum and accounts for 18 per cent of the total cement consumption. It is manufactured
because it uses fly ash/burnt clay/coal waste as the main ingredient.
White Cement: White cement is basically OPC - clinker using fuel oil (instead of coal) with iron oxide
content below 0.4 per cent to ensure whiteness. A special cooling technique is used in its
production. It is used to enhance aesthetic value in tiles and flooring. White cement is much
more expensive than grey cement.
Portland Blast Furnace Slag Cement (PBFSC): PBFSC consists of 45 per cent clinker, 50 per cent
blast furnace slag and 5 per cent gypsum and accounts for 10 per cent of the total cement
consumed. It has a heat of hydration even lower than PPC and is generally used in the
construction of dams and similar massive constructions.
Specialized Cement: Oil Well Cement is made from clinker with special additives to prevent any
porosity.
Rapid Hardening Portland cement: Rapid Hardening Portland Cement is similar to OPC, except that it is
ground much finer, so that on casting, the compressible strength increases rapidly.
Water Proof Cement: Water Proof Cement is similar to OPC, with a small portion of calcium stearate or
non- saponifibale oil to impart waterproofing properties.
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PROCEDURE
The main raw materials used in the cement manufacturing process are limestone,sand, shale, clay, and iron
ore. The main material, limestone, is usually mined onsite while the other minor materials may be
mined either on site or in near by quarries. Another source of raw materials is industrial by-products.
The use of by-product materials to replace natural raw materials is a key element in achieving
sustainable development.
Raw Grinding
In the wet process, each raw material is proportioned to meet a desired chemical composition and fed to a
rotating ball mill with water. The raw materials are ground to a size where the majority of the materials are
less than 75 microns. Materials exiting the mill are called "slurry" and have flowability characteristics. This
slurry is pumped to blending tanks and homogenized to insure the chemical composition of the
slurry is correct. Following the homogenization process, the slurry is stored in tanks until required. In the dry
process, each raw material is proportioned to meet a desired chemical composition and fed to either a
rotating ball mill or vertical roller mill. The raw materials are dried with waste process gases and
ground to a size where the majority of the materials are less than 75 microns. The dry materials exiting
either type of mill are called "kiln feed". The kiln feed is pneumatically blended to insure the
chemical composition of the kiln feed is well homogenized and then stored in silos until
required.
Pyroprocessing
Whether the process is wet or dry, the same chemical reactions take place. Basic chemical reactions are:
evaporating all moisture, calcining the limestone to produce free calcium oxide, and reacting the calcium
oxide with the minor materials (sand, shale, clay, and iron). This results in a final black, nodular product
known as"clinker" which has the desired hydraulic properties. In the wet process, the slurry is fed to a rotary
kiln, which can be from 3.0 m to 5.0m in diameter and from 120.0 m to 165.0 m in length. The rotary kiln is
made of steel and lined with special refractory materials to protect it from the high process temperatures.
Process temperatures can reach as high as 1450 oC during the clinker making process. In the dry
process, kiln feed is fed to a pre heater tower, which can be as high as150.0 meters. Material
from the pre heater tower is discharged to a rotary kiln with can have the same diameter as a wet
process kiln but the length is much shorter atapproximately 45.0 m. The preheater tower and rotary
kiln are made of steel and lined with special refractory materials to protect it from the high
process temperatures. Regardless of the process, the rotary kiln is fired with an intense flame, produced by
burning coal, coke, oil, gas or waste fuels. Preheater towers can be equipped with firing as well. The
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rotary kiln discharges the red-hot clinker under the intense flame into a clinker cooler. The clinker cooler
recovers heat from the clinker and returns the heat to the pyro-processing system thus reducing fuel
consumption and improving energy efficiency. Clinker leaving the clinker cooler is at a temperature
conducive to being handled on standard conveying equipment.
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DEMAND DRIVERS
Indian cement demand skewed towards housing
The demand from the housing sector is ~53% of the total Indian cement demand
There are fears of a slowdown in the demand from the housing sector due to a drop in real estate prices in
the country. The worry is that builders may postpone construction of new buildings if the property prices
were to correct.
Infrastructure to give demand a big boost
Our analysis shows that Infrastructure should be the biggest growth driver forcement demand in the
country. If we were to look only at order books of the topeight construction and manufacturing
equipment companies in India, we find thattheir combined order book has virtually doubled
over the last two years fromINR1,000bn (USD25bn) to INR1,950bn (USD48.75bn) for
completion over the next 24-30 months.
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COST
Over the past five years, cost of cement production has grown at a CAGR of 8.4%.Also, the producers have
been able to pass on the hike in cost to consumers on the back of increased demand. Average realizations
have increased from Rs. 1,880 per tonne in FY 03 to Rs. 3,133 per tons in FY 07, at a CAGR of
13.6%, which has beenreflected in higher profit margins of the industry. To reduce the cost of
production, the industry has focused on captive power generation. Proportion of cement production through
captive power route has increased over the years. Also, cement movement by rail has increased over the
years. Freight and energy costs are also increasing; however, in the current market scenario, manufacturers
have the flexibility to pass on the increase in costs to end-consumers. Let us have a look at the
cost factors affecting the cement industry
Capacity Utilization:
Since the industry operates on fixed cost, higher the capacity sold, the wider the cost
distributed on the same base. But one should also keep in mind, that there have been
instances wherein despite a healthy capacity utilization, margins have fallen due to lower realizations.
Power:
The cement industry is energy intensive in nature and thus power costs form the most critical cost
component in cement manufacturing (about 30% to total expenses). Most of the companies resort
to captive power plants in order to reduce power costs, as this source is cheaper and results in uninterrupted
supply of power. Therefore, higher the captive power consumption of the company, the better
it is for thecompany.
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REQUIREMENTS
Coal
The consumption of coal in a typically dry process system ranges from 20-25% of clinker production. This
means for per ton clinker produced 0.20-0.25 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% compared to imported coal of high calorific value (7,000-8,000kcal/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.
Infrastructure
To reduce uncertainty relating to power, most of the leading companies like ACC, Indian Rayon, and
Grasim rely on captive power plants. A few companies are also considering power-generating windmills.
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 out flow 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 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.
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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 Haryana offer a freeze on power tariff for 5 years, while
Gujarat offers exemption from electric duty.
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PLANTS
UltraTech Cement Limited has 12 integrated plants, 1 white cement plant, 11 grinding units
in India and 1 clinkerization plant in UAE, 15 grinding units( 11 in India, 2 in UAE, 1 each in
Bahrain and Bangladesh)and 6 bulk terminals (5 in India and 1 in Sri Lanka).
As part of the seventh biggest cement manufacturer in the world, UltraTech Cement has
eleven integrated plants, one white cement plant, one clinkerisation plant in UAE, 15
grinding units 11 in India, 2 in UAE, one in Bahrain and Bangladesh each and five
terminals four in India and one in Sri Lanka. These facilities gradually came up over the
years, as indicated below:
2011 :: UltraTech Cement Middle East Investments Limited, a wholly owned subsidiary of
the Company has acquired management control of ETA Star Cement together with its
operations in the UAE, Bahrain and Bangladesh
The cement business of Grasim demerged and vested in Samruddhi Cement Limited in May,
2010. Subsequently, Samruddhi Cement Limited amalgamated with UltraTech Cement
Limited in July 2010.
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)
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
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.
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 as per Securities & Exchange Board of India (SEBI) Regulations, 1997.
Grasim increases its stake in L&T to 14.15 per cent
Arakkonam grinding unit
2001 :: Grasim acquires 10 per cent stake in L&T. Subsequently increases stake to 15.3 per
cent by October 2002
Durgapur grinding unit
1998-2000 :: Bulk cement terminals at Mangalore, Navi Mumbai and Colombo
1999 :: Narmada Cement Company Limited acquired
Ratnagiri Cement Works
1998 :: Gujarat Cement Works Plant II
Andhra Pradesh Cement Works
1996 :: Gujarat Cement Works Plant I
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SUGGESTION
On the basis of above study carried out by me,the following suggestions are
submitted: To increase the sales of Ultratech Cement in such area there is a need of time to time
demo program, seminars & meetings.
There is a need of more promotional activities specially in sub dealer and outside
Bhagalpur area.
Time to time offers should be provided to the customer from the Ultratech company.
Need to available all the construction parts, material and tools our distributor office.
Ultratech Company should change the colour of PSC bags.
The company must improve its supply so as the demand for the cement can easily be
met.
It must target the rural markets as they are providing a good marketing opportunity
these days.
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References/Bibliography
http://www.ultratechcement.com
http://in.reuters.com/
http://bilumi.org/Main/?gclid=CIub5da1z6QCFVJB6woddHPrEA
http://www.adityabirla.com/social_projects/overview.htm