CEMENT : GAP ANALYSIS : EXECUTIVE SUMMERY

• India is the second largest producer in the world with current production of 360MT may increase to 421 MT by 2017
How large is the • Govt Initiatives- 12th 5y plan $ 1Trillion on infra-increases 190MT industry capacity, 98 Smart cities;
market? • Investments-$3000 Mn FDIs from 2000-15. (Birla-$750 Mn for 2 Lafrge Plants; Dalmia-$300 for expansion; JSW from 5MT to 30MT
• Growing at a CAGR of 15% reaches to 600MTPA by 2025

• Perfectly competitive market-top 20 cement companies account for almost 70 per cent of the total cement production
Who is our • A total of 188 large cement plants together account for 97 per cent of the total installed capacity with 365 small plants for the rest
competition? • 77 out of 180 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.
• Top 5 – Ultratech, ACC,Ambuja,Shree,Prism combinedly generates 40% of the installed

Value proposition Key target customers GTM

B2B
• Ambuja-High Strength & High • Housing - 67% (Residential/Real estate • Focused S&M effort for developers
Performance developers) & industrial developers in target
• ACC-India's First Name in • Infrastructure 13% (Projects such as Roads, micro-markets
Cement and Concrete power, ports etc) –Rigorous lead generation & mgmt
• Shree-Successful Delivery • Commercial const-11% (Office spaces, • Offer competitive pricing
• Prism Cement-Cement & Shopping Malls..)
What is the Building materials • Industrial construction-9% • Potentially low cast warehouses
GTM strategy? • Penna Cement-The best quality near micro-markets/big customers
cement in India Buying behaviour • Expand plants network over time
• Ultratech-Everything related to B2C
building under oneroof • Opportunistically play in retail
• Housing-Complete solution for House
construction-Depends on contractors or market in beginning
Customer Top 3 Pains?
local masons • Explore channel creation over time
• Depends on Target Customers
• Infrastructure Industrial Govt/PSUs –L1
Basis
• Commercial Const-Lowest supplier
• Ability to be cost competitive – leverage easy availability of captive fly ash
Source of
• Assured quality and speedy delivery, on the promised timelines
advantage • GAP?? In Process
HOW BIG IS THE MARKET? – WORLD
 HOW BIG IS THE MARKET? – INDIA
• Second Largest producer in the world with current production of 360Mt and may increase to
421MT by 2017 = 27Bn USD
• Govt. Initiatives – 12th 5y plan $1Trillion on infra - 98 smart cities
• Investments - $3000 Mn FDIs from FY 2000-15
• Growing at a CAGR of 15% reaches to 600MT by 2025 ~ 50Bn USD

100

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11 9

Total Housing Infra Commr Industrial

 FINANCIALS
COMPANY SALES RM P&F HR PBDIT PAT
UltraTechCement 22,936.17 21% 21% 5% 20% 9%
ACC 11,738.21 24% 21% 6% 15% 10%
Ambuja Cements 9,978.12 16% 23% 6% 24% 15%
Shree Cements 6,453.57 15% 24% 7% 22% 7%
Prism Cement 5,593.88 47% 14% 6% 7% 0%
India Cements 4,440.88 14% 29% 8% 11% -4%
Penna FY14 1,562.00 20% 26% 3% 13% 4%
Industry Avg 25% 20% 6% 18% 8%
Difference~ -5% 5% -3% -5% -4%
* Prices@ Apr’15

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HOW TO BRIDGE THIS GAP?

PLACE
• Location
• Website
• Direct Sales
• Multi-Channel

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 EXECUTIVE SUMMARY
Blend %
OVERALL TRADE NON - TRADE Non
Sales (RS/Tn)

Trade
Trade
Budget Actual LFY Budget Actual LFY Budget Actual LFY CY LY CY LY
Realization (Rs)

OVERALL TRADE NON - TRADE

NR (CY) NR(LY) NR (CY) NR(LY) NR (CY) NR(LY)

Receivables
Receivables(Lc Rs)

Value of Goods Collections

Type
Sold (YTD) (>180) (90-180) (30-90) (<30)
Trade
Non Trade
OverAll
 EXECUTIVE SUMMARY
Avg. Delivery Time
Logistics (Rs/Tn)

OVERALL TRADE NON - TRADE

Trade Non Trade

CY LY CY LY CY LY CY LY CY LY

OF
OS

SFDC Orders(%) VISIT(%) MARKET DATA(%) OTHERS

CRM

CY LY CY LY CY LY CY LY

xxxx xxxx Xxxx xxxx xxxx xxxx

Brand Score ATL (XX) BTL(XX)

Electronic
Branding

Type Outdoor Digital POP Meets CRM Others

Media
Budget
Spending
Things to Remember
PARAMETER UOM DIVISION Remarks
SALES MT or Bags (50Kg) TRADE Dealers
NON-TRADE Direct
Primary, Secondary & Distance From Production
Tertiary Unit
(Net Turnover (Price x It is a measure of
Quantity) – Logistics Profitability in Cement
Costs (Primary Freight + Industry
Net Realization Rs Secondary Freight + C&F
+ Loading & Unloading +
Demurrages) / Total
Quantity Sold
DSO is the index which
says how good are your
collections. Penna sells
at 1month credit but they
Receivables/ Collections Rs Pl refer Previous slide
will collect with in avg.
18days . In industry many
players give 60 days
credit.

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 Things to Remember
PARAMETER UOM DIVISION Remarks
Logistics Cost Rs/Tn Primary Freight + Secondary Freight + 25% of Total costs
C&F + Loading & Unloading +
Demurrages
Price Rs/Bag Industry has three Category A Target is to jump to top
(Premium brands like Ultra tec & ACC) - category
340
Category B (Penna, Indian, Bharthi…) -
300
Category C (Petty Players) -260
Branding Spent Vs Budgeted Refer previous slide Pushing for more
robustness & accountability
Discounts & Others Various types of discounts & Offers
such as Quantity discount, price
discounts, cash discounts, Gold coins,
foreign trips… are prefixed at the
beginning of the year. Loyality/
Rewards program is about to start

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Best Product?
Consistency
Quality Control Supply Reliability
Value Creation

Customization Matching Applications Knowledge

Convenience Packaging Taking on Responsibility

Value Delivery
BEST PRODUCT SUPPORTED WITH BEST BRANDING
STRATEGY
Promotions

Reco. From Editorial Corporate

Bill Board & Other Others
People Content Outdoor Ads
Branding

Papers TVC ( To be Application

Engineers Know. Videos
Articles relased)
Bus paintings
Magazine
Architects Radio Sponsoring best
Articles Architectures/bu
Bus Shelters ildings or Apts..
Digital
Masons Case Studies Marketing
Shutter/Wall Co-branding with
developers or
Paintings OEMs
Builders & Civil Engg
Spon. Events
Contractors stories
Flex Boards College Visits
Existing
Website
Proposed