STRATEGIC MANAGEMENT INDIVIDUAL ASSIGNMENT

BY NIDHI DUBEY
SECTION C
202213027
ABOUT THE COMPANY
UltraTech Cement Limited is the Aditya Birla Group's cement flagship firm. UltraTech,
a USD 7.1 billion construction solutions behemoth, is India's largest manufacturer of
grey cement and ready mix concrete (RMC) and one of the top manufacturers of
white cement. It is the world's third largest cement production, after China.
UltraTech has a total capacity of 119.95 Million Tonnes Per Annum (MTPA) of grey
cement. It has 22 integrated production units, 27 grinding units, one clinkerisation
unit, and 8 bulk packaging terminals. UltraTech has over one lakh channel partners
across the country and a market reach of more than 80% in India. The Building
Products business is
an innovation hub that offers an array of scientifically engineered
products to cater to new-age constructions
VISION
&
MISSION
VALUE FRAMEWORK
Integrity: Acting and taking decisions in a manner that is fair and
honest. Following the highest standards of professionalism and being
recognized for doing so. Integrity for us means not only financial and
intellectual integrity, but encompasses all other forms as are generally
understood.
Commitment: On the foundation of Integrity, doing all that is needed
to deliver value to all stakeholders. In the process, being accountable
for our own actions and decisions, those of our team and those on the
part of the organization for which we are responsible.
Passion: An energetic, intuitive zeal that arises from emotional
engagement with the organisation that makes work joyful and inspires
each one to give his or her best. A voluntary, spontaneous and
relentless pursuit of goals and objectives with the highest level of
energy and enthusiasm.
VALUE FRAMEWORK
Seamlessness: Thinking and working together across
functional groups, hierarchies, businesses and geographies.
Leveraging diverse competencies and perspectives to
garner the benefits of synergy while promoting
organisational unity through sharing and collaborative efforts
Speed: Responding to internal and external customers with
a sense of urgency. Continuously striving to finish before
deadlines and choosing the best rhythm to optimise
organisational efficiencies.
5 C OF MARKET
ANALYSIS
Company
Product: It manufactures ordinary portland cement commonly
used in dry -lean mixes, general purpose ready-mixes, and even
high strength pre-cast and pre-stressed concrete. It produces
Portland blast furnace that has features like lighter colour, better
concrete workability, easier finishability, higher compressive and
flexural strength, improved resistance to aggressive chemicals
and more consistent plastic and hardened consistency. It also
manufactures portland pozzolana cement. Ultratech cement
exports over 2.5 million tonnes per annum which accounts for
30% of country's total exports. It exports to countries like Africa,
Europe and the Middle East. Product
5 C OF MARKET
ANALYSIS
Collaborators
Collaboaration with Hindalco Industries.: Hindalco Industries
and UltraTech Cement, the metals and cement businesses of the
Aditya Birla Group, collaborated to launch an innovative green
product for the transport industry. Hindalco and UltraTech
collaborated to help transporters and cement companies
enhance their supply chain efficiencies and reduce greenhouse
emissions. Aluminium as a metal is not only safer, durable, and
sustainable but also more efficient and costeffective. Vehicle
manufacturers around the world are now choosing aluminium to
create smarter vehicles that contribute to reducing air pollution
5 C OF MARKET
ANALYSIS
Customers
Customers of UltraTech Cement includes the following:
Individual house builders (IHBs)
Masons
Engineers
Channel partners like dealers & retailers

Climate
At UltraTech, the Environment strategy focuses on four key areas:
Climate change (Carbon emissions)
Energy Management
Water management
Circular economy (Waste/Resource Management)
Biodiversity Management
5 C OF MARKET
ANALYSIS
Competitors
Ambuja Cements: This is a subsidiary of LafargeHolcim, a global leader in
building materials. It has a production capacity of 29.65 million tonnes of
cement per annum and a market share of 8.2% in India.
ACC: This is also a subsidiary of LafargeHolcim and one of the oldest
cement companies in India. It has a production capacity of 33.41 million
tonnes of cement per annum and a market share of 9.2% in India.
Shree Cement: This is one of the fastest growing cement companies in
India and the largest producer of power from waste heat recovery. It has a
production capacity of 40.4 million tonnes of cement per annum and a
market share of 11.1% in India.
Dalmia Bharat: This is one of the leading cement manufacturers in India
and the first to become carbon negative. It has a production capacity of
26.5 million tonnes of cement per annum and a market share of 7.3% in
India.
STRATEGIC PROGRESS
 PORTERS FIVE FORCES
BARRIERS TO ENTRY (HIGH)

1 2 3 4
RAW MATERIAL LOCATION COMPETITION COST
Cement being a high bulk and low Strategic cement plant location High level of competition in the cement High capital costs and long gestation
value commodity, outward freight balances raw material access and industry. The Indian cement industry is periods. a new cement works producing 1m
accounts for close to one fifth of market proximity. Limestone's vital weakly oligopolistic in nature on a national tonnes a year, the smallest worth building,
the total manufacturing cost. In role, 1.4-1.5 tons per clinker ton, level with top 6 firms among more than costs around $200m. It is much cheaper for
addition, for every tonne of cement reinforces the need to minimize 100 firms capturing 55% of the cement an incumbent to expand
produced, close to 1.7 tonnes of assembly costs by locating near market. This nature has been consistent
raw material is transported. deposits. through the years.
 PORTERS FIVE FORCES
BUYERS POWER (LOW)

This refers to the effect customers can exert on a particular industry. In the cement
industry, the bargaining power buyers is low because the majority of buyers are bulk
buyers. For example, big construction firms, corporate who want to build their own
offices, etc. These buyers can bargain with the cement companies. Moreover, one
potential bargaining power with the buyers is the threat of importing cement. However,
this threat is limited to an extent as the cost of import will increase the overall cost of the
project. Pure buyer power exists when only one buyer exists in the market. In the
cement industry, facts suggest that this effect is minimal. The power of consumers is
limited due to the lack of substitutes, the small number of cement firms, and the demand
that consumers have for the product
 PORTERS FIVE FORCES
SUPPLIER POWER (MODERATE)

In this industry, the suppliers exert a very high power. This is so because the raw
materials form a very large part of the process in the manufacturing of cement. Shortage
in supply of raw materials can cripple the whole plant and can lead to huge losses.
When the suppliers demand something, the negotiations have to be completed quickly
and the result is more or less in favour of suppliers. But since all the raw materials are
natural resources, they are under the Government's control. Companies have to buy
rights from the government to set-up the cement plant. Hence the suppliers power is
moderate.
 PORTERS FIVE FORCES
INTER FIRM RIVALRY (HIGH)

Cement industry is one of the highly competitive markets in India. Many players in this
industry are large scale players with huge capital invested in setting up the production
units. This factor raises the exit barrier for the companies. Hence, they stay in the
industry and start aggressive competition. Also, the differentiation in types of cement is
marginal, hence the switching cost to customers is not high, so firms compete intensely
to gain market share. Also, sometimes problem of overcapacity comes into play. This
leads to a price war and competition intensifies.
 PORTERS FIVE FORCES
THREAT OF SUBSTITUTE (LOW)

No product exists to date that can substitute effectively for cement. While construction
firms can use less cement in exchange for using other materials that have some
cementitious quality, that substitution effect is negligible on the market price of cement.
The choices are virtually non-existent to cement consumers, hence the threat of
substitutes is very low. In India, cement is the ultimate material used for almost all type
of construction work. Bitumen is one of the substitutes of cement but these days cement
is even replacing bitumen. Another substitute for cement is engineering plastic. This also
cannot replace cement in many areas of work. Hence, there is practically no material to
substitute cement.
ULTRATECH'S VALUE CHAIN
 STRENGTH WEAKNESS
It is India’s biggest cement company. Although UltraTech provides various other
It is the largest exporter of cement clinkers. It is construction products and services, but the brand is
a part of the prestigious Aditya Birla Group that associated with Cement only, so it has to work on
helps the brand. positioning the brand as a construction materials
It has an annual capacity of 60+ millions tones. brand, which can be achieved by implementing
UltraTech accounts to about 30% of the total branding activities.
Indian Exports. Most of the plants have ISO It is not operating /exporting in US market which is a
9001, ISO 14001 and OHSAS 18001 huge market for Cement industry.
certification. Brand awareness of Ultratech is lesser as
UltraTech Cement Limited has integrated compared to global players
plants, white cement plant and many grinding
units in India

OPPORTUNITIES THREATS
Product commoditization in Capital Goods
It should enter the US market by Mergers and industry affects UltraTech Cement.
acquisitions. Demographic shift impacts short-term profits,
It should do worldwide branding activities that long-term margins for UltraTech.
would help the brand grow as a whole. Legal distrust, WTO complexity limit
Tech boosts industry, enabling UltraTech UltraTech's investment in emerging markets.
Cement to diversify product offerings. Local export partnerships risk IPR loss due to
Evolving customer preferences drive UltraTech weak frameworks.
to track industry trends vigilantly. Urban saturation and rural stagnation hinder
Online shift opens doors for UltraTech to UltraTech's market expansion.
expand construction offerings digitally.
 Revenue (in cr) Net Profit (in cr)
70000

60000

50000

40000

30000

20000

10000

BASIC 0
18-19 19-20 20-21 21-22 22-23

FINANCIAL
PERFORMANCE
 EPS
300.00 ROE
20.00

250.00

15.00
200.00

150.00
10.00

100.00

5.00
50.00

0.00
18-19 19-20 20-21 21-22 22-23 0.00
18-19 19-20 20-21 21-22 22-23

/Equity
1.00

BASIC
0.80

FINANCIAL
0.60

0.40

PERFORMANCE
0.20

0.00
18-19 19-20 20-21 21-22 22-23
MERGERS & ACQUISITONS
2013 - Acquired Jaypee Group's Gujarat cement unit for ₹3,800 c.r India’s largest cement
maker, UltraTech Cement, acquired the Gujarat cement unit of Jaypee Cement Corporation,
the third largest in the business, for Rs. 3,800 crore. The acquisition took UltraTech’s capacity
up to nearly 59 million tonnes per annum (mtpa)
2017 - Acquired Jaiprakash Associates's six integrated cement plants for ₹16,189 cr.
UltraTech Cement completed the Rs 16,189 crore acquisition of Jaiprakash Associates' six
integrated cement plants and five grinding units, having a capacity of 21.2 million tonnes.
Post-acquisition, UltraTech's grey cement manufacturing capacity has gone up to 93 million
tonnes per annum.
Mergers & Acquisitons 2018 - Entered into a scheme of arrangement with Century Textile
and Industries to demerge Century's cement business into ultratech
Nov 2018 - Acquired Binani Cement for ₹7,266 cr. The Board of Directors of Century Textiles
and Industries Limited (Century) had approved a Scheme of Arrangement between the
Century, UltraTech Cement Limited (UltraTech), and their shareholders and creditors for the
demerger of its cement division into UltraTech Ultratech Cement announced that the Braj
Binani group flagship company has become a subsidiary of Ultratec