ORGANIZATIONAL STUDY AT AMBUJA CEMENTS Ltd.

KOCHI

REPORT
Submitted to Mahatma Gandhi University in partial fulfillment of the requirements for the
award of the degree of
MASTER OF BUSINESS ADMINISTRATION
By

DIMPLE ROSE BOBAN

Reg. No. 180435

Under the guidance of

MR. SHYJU NAIR Dr. VP VIJAYAMOHAN

Company Guide Faculty Guide

DEPARTMENT OF MANAGEMENT STUDIES

MAR ATHANASIOS COLLEGE FOR ADVANCED STUDIES
TIRUVALLA

1
2019

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 MAR ATHANASIOS COLLEGE
FOR ADVANCED STUDIES
TIRUVALLA

CERTIFICATE

This is to certify that this report, based on the organisational study conducted
by Dimple Rose Boban, second semester MBA student of our college for 4
weeks starting from 1.04.2019 at Ambuja cements limited, kochi is a
bonafide record submitted in partial fulfillment of the requirements for the
degree of Master of Business Administration of Mahatma Gandhi
University, Kottayam.

Dr. V.P VIJAYAMOHAN Dr. SUDEEP B. CHANDRAMANA

Faculty Guide Head of Dept. of Management Studies

Fr. Dr. CHERIAN J KOTTAYIL Signature of the External Examiner

Principal

3
4
CERTIFICATE

FROM

THE

ORGANISATION

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 DECLARATION

I hereby declare that this report titled “Organizational Study at Ambuja cements
Limted”kochi has been prepared by me during the academic year 2019 - 2020, under the
guidance of Dr. V.P Vijayamohan, Department of Management Studies, MACFAST,
Tiruvalla.

I also hereby declare that this project report has not been submitted to any other University or
institute for the award of any degree or diploma.

Place: Tiruvalla Dimple Rose Boban

Date………….

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 ACKNOWLEDGEMENT

I honestly expressed to use this opportunity to thank the Almighty for his grace and
protection.
I would like to express my sincere gratitude to Dr. V.P Vijayamohan, for the valuable
direction and constant encouragement given for conducting the study.

I express deep sense of gratitude and indebtedness to Mr Shyju Nair, Mr. Kishore kumar and
Mr. Abhilash Aravindakshanpillai of Ambuja cements, Willington island for their kind co-
operation and constant encouragement during those days. I also like to thank managing
director and workers in the organization who helped me in the data collection.

Further, I do remember with friendly attitude, all my friends and relatives who consistently
encouraged me for completing this project work.

DIMPLE ROSE BOBAN

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 LIST OF TABLES

TABLE NO TITLE PAGE NO

1. Origin of cement industry

8
 LIST OF FIGURES

FIGURE NO TITLE PAGE NO

1. Organisation structure of
Ambuja cements limited
2. Structure of manufacturing
department
3. Structure of HR department

4.

5. channel of distribution

6.

7.

8.

9.

CONTENTS

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 Page No.

ACKNOWLEDGEMENT (i)
LIST OF TABLES (ii)
LIST OF FIGURES (iii)

Chapter 1. Introduction 10

Chapter 2. An overview of cement industry 14

Chapter 3. Profile of ambuja cements ltd. 19
organisation structure of ambuja cements ltd. 26
Chapter 4. Product profile
Chapter 5. Functional departments of ambuja cements ltd. Kochi
5.1 Production/operations department 30
5.2 human resource department 35
5.3 Marketing department 38
5.4 Finance department 42
5.5 Corporate finance 46
Chapter 6. Analysis
6.1 porter’s five force analysis, 49
6.2 swot analysis 53
Chapter 7. Findings, suggestions and conclusions 56
Bibliography 60

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 CHAPTER 1

INTODUCTION

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 An organization is a social arrangement which pursues collective goals, which
controls its own performance and which has a boundary separating it from its environment.
The word itself is derived from the Greek word “Organon” means “tool”. An organization is
a group of individuals co-ordinate into different levels of authority and segments of
specialization for the purpose of achieving the goals and objectives of the organization. An
organisation is a planned coordination of a number of people and their activities for the
achievement of some specific goals through diversion of labour, and hierarchy of authority.
An organisation study involves the study of the structure and functioning of its departments.
Organising or Organization is one of the important functions of management. Almost all the
organisations are different but they have certain common features. All are collection of
people, linked together by formal and informal relationships, they have hierarchical orders
that are engaged in co-operative activities and they all have identical boundaries..

Organizational study comprise different areas that deal with the different aspects of
the organizations, many of the approaches are functionalist but critical research also provide
alternative frame for understanding in the field. Fundamental to the study of management is
organizational change. The study of the people in organization is important for future
managers. Structure of an organization is very important for its functioning and growth.

The organization selected for the study was “Ambuja Cement Limited” Ernakulam
district. The company was started off in 1983 which makes it a body of knowledge and
experience. The company has over four decades of experience in cement manufacturing.

This report consist of a detailed study of the industry, company, product profile,
organizational hierarchy, various departments and their functioning etc. This study helps to
familiarize the organization, current scenario of cement industry. The study of the people in
organization is important for future managers. Structure of an organisation is very important
for its functioning and growth. It provides the basic framework for its progress and expansion
for future managers it is important to study the organisational structure and functioning of
successful organisations so that they as future managers may guide organisations towards
success and profitable functioning.

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 1.1 Scope of the study

The study helps to understand the overall functioning of the organization. The study
emphasises on the role of organizational contribution in terms of business and social
connections evolved through the making of its products and services. It also helps to
understand the functioning of various departments such as finance, marketing, operation etc.
and how each department is linked for the total functioning of the organization. It provides an
opportunity to see the practical constraints faced by the managers while putting theory into
practice.

1.2 Objectives of the study

 To study the organizational structure of the Ambuja cements ltd. kochi

 To analyse the functioning of the various departments in the organization.

 To have the primary awareness regarding vision, mission and policies of the organization.

 To gain knowledge about the company, industry and the future development.

 To study the strengths, weaknesses, opportunities, and threats of the organization and to
suggest some measures for improving the performance of the organization.
 To learn about the practical aspects of the managerial functions of the different departments.

1.3. Need and Significance of the study

The organization study in Ambuja Cements Ltd offered a real business corporate
world experience and helped to understand the practical application of the theories learned in
classroom .The organizational study about has provided with information of various aspects
and has been of valuable help and assistance for achieving excellent results in the future
Endeavour of an executive.

1.4. Methodology of the study

The method used to conduct the organizational study is the qualitative form of
analysis. The study covers topics like company profile, product profile, functioning of
various departments etc. But enough attention is given for careful and complete observation

13
 of the organization and its function. The study mainly based on secondary data. Primary data
also used where the secondary needs more explanation and clarity The secondary data are
collected mainly from company supplements and web information. The primary data were
collected by direct interviews with departmental heads, staffs and workers and also through
direct observation.

1.5. Limitations of the study

 The validity of the study depends on the authenticity and truth revealed by the records of the
company and the information provided by the employees.
 No objective criterion was included in the study for the evaluation and performance of
effectiveness related issues.
 The method used for data collection mainly provides qualitative data, and therefore may lack
precision.

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 CHAPTER 2

AN OVERVIEW OF CEMENT INDUSTRY

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 INDUSTRY PROFILE

Cement is the most vital binding component in any construction activity. In the most
general sense of the world, cement is a bonder, a substance that sets and hardens
independently, and can bind other materials together. The word ‘‘cement’’ traces to the
Romans, who used the term ‘opus caementicium’ to describe masonry resembling modern
concrete that was made from crushed rock with burnt lime as binder.

Origin of cement industry

Table no.1 origin of cement industry

Years Happenings

16 Century Roman’s was the first to use pozzolan

cement in the making of Pantho

1760 John Smeaton was first to develop best

composition of hydraulic cement

1824 Joseph Aspdin was granted a patent for

“Portland cement

2.1 Global Scenario

The demand of cement upon the industrial activity, real estate and construction
activity. Since activities are taking place in all these sectors hence demand too is increasing
globally. In 2010, the world production of hydraulic cement was 3,300 million tonnes. It is
the Chinese cement industry which has shown a rapid growth over the last five decades. The
production of cement was less than 3 million tonnes in 1952, but in 1999 the total production
of cements reached 573 Million tonnes. Thus China, accounting for about one third of the
global cement production ranks first in the world today in terms of cement output. In a
research paper found that cement consumption has a higher degree of correlation with the
gross national product per capita than any other of the indicators examined. Among the

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related economies India has the lower per capita consumption. Though it has increased from
28kgs in 198081 to around 147 kgs in 2008-2009 but still it is very low as in the similar
period the per capita consumption in Saudi Arabia was around 1245 kgs, Japan 491 kgs, US
285 kgs, China 1040 kgs, Brazil 271 kgs and Russia 378 kgs.

During the last five years there have been planned efforts to look at the energy and
environmental issues of these plants with the help of international organisations. China holds
the major share in the cement industry. The Chinese cement industry has seen a rapid growth
over the last five decades. The production of cements was less than 3 million tonnes in 1952,
but in 1999 the total production of cement reached 573 million tonnes. Thus china,
accounting for about one third of the global cement production rank first in the world today in
terms of cement output.

During the last five years, there have been planned efforts to look at the energy and
environmental issues of these plants with the help of international organisation like UNIDO,
IVAM Environmental Research and University of Amsterdam. These international bodies
have undertaken the study for cleaner production technology and energy conversation
measures in these cement plants.

In 2011 the world production of hydraulic cements was 3,300 million tonnes. The top
three producers were China with 1800, India with 220 and USA with 63.5 million tonnes for
a combined total of over half the world total by the world’s three most populated states. For
the world capacity to produce cement in 2012 the situation was similar with the top three
states (China, India & USA) accounting for just under half the world.

In India the margins of cement companies were impacted in the first half of FY’14
due to high volatility in foreign exchange rate. One of the main components for power, higher
calorific coal, is largely imported. The impact of cost cannot be easily passed on to the
customers due to capacity utilization pressure and so volatility towards higher side would
make direct impact on the industry.

2.2 Indian Scenario

Manufacture of cement was first started in Madras in [Link] the year 1951, there
were 21 factories with an annual production capacity of 3.28 million tonnes. India is the
second largest producer of cement in the world. Since 1956, the production, distribution and

17
price of cement were regulated. The process was maintained uniformly all over the country
through a freight equalization formula. In the earlier year the growth was rather slow mainly
decontrolled in 1982 and fully 1989 at the time of partial decontrol, the industry had an
aggregate capacity of 30 million tonnes annually.
The origin of Indian cement industry can be traced back to 1914 when the first unit
was setup at Porbandar with a capacity Of 148.28 million tonnes and more than 300 mini
cement plants with an estimated capacity of 11.10 million tonnes per annum. The financial
performance of the cement industry has also recorded impressive growth. The growth of the
Indian cement companies has also attracted global companies. Top global companies such as
Lafarge of France, Holcim of Switzerland, Ital cementi of Italy and Heidelberg cements of
Germany have entered in cement production in India. Their investment in the Indian cement
sector is also giving a boost to the Indian economy. There are about 11 types of cement
produced in India. They are Clinker Cement, Ordinary Portland Cement, Rapid Hardening
Portland Cement, Oil Wet Cement, White Cement, Sulphate Resisting Portland Cement etc.
Cement is a key infrastructure industry. The global cement industry is worth about 180
billion dollars. Its total production is about 2783 million tonnes.
The cement industry presents one of the most energy- intensive sector within the
Indian economy and is therefore of particular interest in the context of both local and global
environmental discussions. Increases in productivity through the adoption of more efficient
and cleaner technologies in the manufacturing sector will be effective in merging economic,
environmental and social development objectives. A scenario analysis concludes the report in
highlighting the energy efficiency and productivity improvements that could be achieved by
employing more efficient technologies.

Year 2014 is the centenary year for Indian cement industry as the first plant was set
up in Guajrat with 1000 MT capacity per year in the year 1914. It look India eight decade to
reach first 100 million MT marks however the next 100 million metric ton addition took
consolidation too has taken place where top two groups have almost controlling one third of
total domestic capacity.

Year 2014 is the centenary year for Indian Cement industry as the first plant was set
up in Gujarat with 1000MT capacity per year in the year 1914. It took India eight decade to
reach first 100 million MT marks however the next 100 million metric ton addition took just
one decade. Though lot many cement brands are available but still cement is largely

18
considered as commodity. This industry is freight intensive and so the priority of each
company is to sell it at the nearby areas only as long distance transportation generally makes
it non economical. This makes it regional dominant industry are broadly Indian cement
market is divided into five regions namely east, west, north, south and central. Among these
south zone has the largest installed capacity which accounts for almost one third of total
capacity. As far as overall demand and capacity is concerned, the capacity in India was
always more than the demand and during sluggish period it gives a lot of pressure to margins
of cement companies.

2.3 state scenario

The cement industry presents one of the most energy- intensive sector within the
Indian economy and is therefore of particular interest in the context of both local and global
environmental discussions. Increases in productivity through the adoption of more efficient
and cleaner technologies in the manufacturing sector will be effective in merging economic,
environmental and social development objectives. A historical examination of productivity
growth in India’s industries embedded into a broader analysis of structural composition and
policy changes will help identify potential future development strategies that lead towards a
more sustainable development path. Issues of productivity growth and patterns of substitution
in the cement sector as well assign other energy- intensive industries in India have been
discussed from various perspectives. Historical estimates vary from indicating an
improvement to a decline in the sector’s productivity. The variation depends mainly on the
time period considered, the source of data, the type of indices and econometric specifications
used for reporting productivity growth. Regarding patterns of substitution most analyses
focus on inter fuel substitution possibilities in the context of rising energy demand. Not much
research has been conducted on pattern of substitution among the primary and secondary
input factors: capital, labour, energy and materials. However, analysing the use and
substitution possibilities of these factors as well as identifying the main drivers of
productivity growth among these and other factors is of special importance for understanding
technological and overall development of an industry.
A scenario analysis concludes the report in highlighting the energy efficiency and
productivity improvements that could be achieved by employing more efficient technologies.
The origin of Indian cement industry can be tracked back to 1914 when the first unit was
setup at Porbandar with a capacity of 1000 tonnes. Today the cement industry comprises of
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125 large cement plants with an installed capacity of 148.28 million tonnes and more than
300 mini cement plants with an estimated capacity of 11.10 million tonnes per annum.

CHAPTER 3

A PROFILE OF AMBUJA CEMENTS Ltd.

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 HISTORY

Gujarat Ambuja cement ltd. Established its first modern cement plant of 0.7 million
tons per annum capacity in 1986 at Ambujanagar district Gir Somnath, in Gujarat. During the
short span of 13 years, Ambuja and its subsidiaries have generated capacity of nearly 9
million tons per annum in the northern, western and eastern regions of India, it is also geared
up for locating many new projects in other states of India and also in some foreign countries.
The cement utilization for the year ending March 1999 was 80% for Indian cement industry
whereas Ambuja achieved over 110% with this Ambuja has emerged as cement major, not
only in terms of productivity but also promoting continual improvement of its environmental
performance, energy efficiency and resource conservation.
Since the inception of the organization, Ambuja cement has followed its corporate
philosophy of sustainable development and has always taken a conscious decision of its
commitment towards the same.
Ambuja Cements Ltd a part of the global conglomerate LafargeHolcim is among the
leading cement companies in India. Ambuja Cement was founded in 1983 by Narotam
Sekhsaria and Suresh Neotia, two traders with very little knowledge of cement or
manufacturing. What made up for this lack was their farsightedness: Anticipating that cement
would be a critical resource for a developing economy like India, they invested in a state-of-
the-art cement plant in Gujarat and went on to build a trusted cement brand that has become
synonymous with quality and strength. The company sells cement under the Ambuja brand.
Ambuja Cements Ltd (ACL) was incorporated in the year 1981 as Ambuja Cements Pvt Ltd.
The company was established as a joint venture between the public sector Gujarat Industrial
Investment Corporation (GIIC) and Narottam Sekhsaria & Associates. In May 19, 1983 the
company was rehabilitated into a public limited company. Subsequently the company name
was changed to Gujarat Ambuja Cements Ltd. Further the name was changed to Ambuja
Cements Ltd. Ambuja Cements is a major cement producing company in India. The principal
activity of the company is to manufacture and market cement for both domestic and export
markets. The company has five integrated cement manufacturing plants and eight cement
grinding units. It is the first Indian cement manufacturer having a captive port with three

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 terminals along the country's western coastline to facilitate timely cost effective and
environmentally cleaner shipments of bulk cement to its customer.

ACL is a relatively young company in the industry. It begins operations in the

industry. It begins operations in 1986. But in the short span of 18 years, it has set a new
benchmark in every cement quality to power consumption and from marking to environment
management.

ACHIEVEMENT OF THE COMPANY

1. Fastest project commissioning

The first cement plant in Gujarat was set up in 22month as against the normal 3 years. Their
second plant in Gujarat was set up in just 13 months, a world record.

2. Fastest stabilization
All the cement plants have reached 100% productions within 6 months whereas the industry
norm is 12 months.

3. Highest productivity
Ambuja cement holds distinction of operating its plant at a very high productivity level. The
Gujarat plant operates above the rated capacity levels. E.g. the kiln of their first cement plant
produces 4000 tones a day as against the rated capacity of 2500 tones.

4. Lowest power and coal consumption

Their power and coal consumption levels are one of the lowest in the world.

5. Bulk cement transportation

In 1993, they have set up a whole new way of transporting cement. Bulk cement is
transportation by sea. It includes a dedicated port at the Gujarat plants and unloading terminal
in Mumbai and Surat. All of them fitted with mechanized conveying system. It also includes
five special cement ships. Their people practice a simple philosophy –“give a man orders and

22
 he’ll do the task reasonably well. But let him set his own targets. Give him freedom and
authority and his task becomes a personnel mission “I can.”

Different plants, their subsidiary companies and their location:

1. Ambuja Nagar
It is 40km away from Veraval in Saurashtra Gujarat. This location consists of
three units.

2. Darlaghat
It is near Shimla in Himachal Pradesh with one unit.

[Link]
It is near chandrapur in Maharashtra with one unit.

4. Ropar
It is a grinding unit in Punjab.

Milestones of company

1986

- Sets up its first cement manufacturing plant at Ambujanagar, Gujarat with a capacity of 0.7
million tons.

1987

- Installs a new generation high-efficiency air separator which close-circuits the operation of
the cement million mill. With this the company achieved significant energy efficiency in its
kilns bringing down power costs.

1992

- Introduces an innovative concept of bulk transportation in the country. Sets up a port and
orders and commission three ships specially designed for the purpose.

1993

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- Adopted Kodinar Taluka in Junagadh district, Gujarat for all-round development at a time
when Corporate Social Responsibility (CSR) was not common currency. It marks the
unveiling of the “human face” of Ambuja.
1994-95

- Sets up new unit of 9.4lakh tons, Ambuja Cement, at the existing premises of Ambujanagar,
Gujarat. Sets up to one-million tons cement plant as Suli, Himachal Pradesh.

1996-97

- Achieves highest-ever export by an Indian cement company: 5.33lakh tons of cement and
clinker are exported.

2000-2001

- Commences work on a million ton capacity plant at Maratha Cement Works, Chandrapur,
Maharashtra.

2005-2006

- Holcim enters into a strategic alliance with Gujarat Ambuja Cement to participate in the
growth market of India, making a public purchase offer to the shareholders of ACC and
Ambuja Cement Ltd.

2009-2010

- Launches Ambuja’s knowledge initiative program, Ambuja Knowledge Center, to enable

industry professional to get a first hand feel of the world of the cement and concrete.
- Commissions two grinding units of 1.5 million tones – Dadri (Uttar Pradesh) and Nalagarh
(Himachal Pradesh).

2011

- Completes 25 Years of operation.

- Achieves water-positives status, as certified by an independent foundation, Norske
VERITAS.

2012-2013

- Wins CII sustainability Award 2012, presents by the president of India.

- Board approves a proposal to acquire Hold rind Investment Ltd, Mauritius (Holcim),
followed by a merger of Holcim India into Ambuja.
2013-2014

- Sets up the first fully automatic one million tone capacity terminal in Mangalore.
- Ranks 10th across sector in Carbon Disclosure Leadership Index.

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 2015-2016

- Declared 4 times water positive

- Becomes part of Lafarge Holcim with Holcim merging with Lafarge – creating the most
advanced group in the building materials industry.
-

Vision of the organization

To be the most sustainable and competitive company in our industry.

Mission of the organization

- create value for all

 Delighted customers
 Inspired employees
 Enlightened partners
 Energised society
 Loyal shareholders

 Healthy environment

SIZE OF THE UNIT

Size of industry is decided on the capital investment of unit is fixed assets. The size of
industry is classified in four type and they are as under.

(1) Small Scale Industry

(2) Medium Scale Industry

(3) Large Scale Industry

1. Small Scale Industry:

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 The investment of an industry in its fixed assets does not exceed Rs. 3crores are known as
small scale industry.

2. Medium Scale Industry:

The investment of an industry in its fixed asset is more than Rs. 3crores but not exceed Rs.
5crores are known as medium scale industry.

3. Large Scale Industry:

The investment of any industry in its fixed assets is more than Rs. 5crores are known as large
scale industry. “Ambuja Cement Ltd.” is large scale industry.

FORM OF ORGANIZATION

Whether, a particular type of organization will be suitable to a particular type of

business or not is largely dependent upon different factors e.g. nature of business, motive and
incentives, finance requirement, scale of operation etc.

A comparative idea for different forms of business organization is given below:

 Sole proprietorship
 Partnership
 Joint Hindu Family Business
 Co-operatives
 Joint Stock Company
 Public Enterprise
 Private Enterprise

The name Ambuja Cement Ltd. Itself suggests Ambuja is a Public Company.

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 ORGANISATION STRUCTURE

According to Sheldon, “Organization is the process of combining the work which individuals
and groups have to perform with the facilities necessary for its execution.”

Fig.1 Organisation structure of Ambuja cements limited:

BOARD OF DIRECTOR

MANAGING DIRECTOR

CHIEF CHIEF CHIEF HUMAN CHIEF FINANCE CHIEF FINANCE

MANUFACTURI- MARKETING RESOURCE OFFICER OFFICER(CORPOR
NG OFFICER OFFICER OFFICER ATE FINANCE)

REGIONAL DIRECTOR HRBP REGIONAL FINANCE

HEADS SALES(SOUTH) FINANCE HEAD
HEAD

DEPARTMENT/ REGIONAL PLANT HR UNIT FINANCE REGIONAL

SECTION HEAD HEAD HEAD CONTROLLER

OFFICERS TERRITORY SALES

MANAGER

TERRITORY SALES
OFFICERS

Long arms

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 CHAPTER 4
PRODUCT PROFILE

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 The products of Ambuja cements are as follows:

1. Ambuja Cement

An established brand in India, Ambuja Cement is known for its high strength, high
performance Ordinary Portland Cement (OPC) and Pozzolana Portland Cement (PPC). OPC
& PPC both are high quality active hydraulic binders & are preferred brands in the market for
all the construction applications.  The company currently has a manufacturing capacity of
29.65 million tonnes. 

2. Ambuja plus roof special

Ambuja Plus Roof Special is a special quality PPC cement with advanced SPE
technology. It extracts 100% of silicate gel from cement that helps in making the concrete
stronger, denser and leak proof, resulting in strengthening of the roof.

3. Ambuja plus cool walls

Ambuja Cement has recently launched an innovative green building offering–

Ambuja Plus Cool Walls – for Individual Home Builders (IHBs) in Raipur. The
revolutionary product with ‘Heat Barrier Technology’ ensures maintenance of a 5° C
temperature difference indoors; no matter how hot or cold the external temperature is; thus
saving energy.. The product gives multiple benefits of superior strength and durability as well
as ensures ambient temperature in the house.

4. Ambuja cement compocem

Ambuja became the first cement company in India to launch Portland Composite
Cement (PCC). The uniqueness of this product was a formula that contained an optimum
combination of fly ash and slag – both waste products. This allowed the substitution of
natural materials. 

5. Ambuja buildcem

Ambuja developed an innovative way of using fly ash to produce high strength
Portland Pozzolana Cement (PPC) and branded it as Ambuja Buildcem which helps in
building strong and durable structures.

6. Ambuja powercem

Ordinary Portland cement is the most common type of cement and is a basic
ingredient of concrete & mortar. Ambuja branded it as Powercem Raw materials used in the
29
 manufacture of Powercem consist mainly of lime, silca, alumina and iron oxide. Ambuja
OPC meets all applicable Chemical & Physical requirements as per the IS specifications IS
269:2015. Ambuja Powercem is available in grades 43 & 53 in Bag & Bulk.

7. Ambuja railcem

Ambuja Railcem (OPC 53-S) is a high Blaine Portland cement, useful for making concrete
Railway sleepers. Apart from its main usage of concrete sleepers manufacturing, it can also be
used in pre- stressed concrete elements. Ambuja OPC 53S meets all applicable Chemical &
Physical requirements as per the IS specifications - IS 269: 2015. Ambuja Railcem is available
in Bags.

Product Benefits:

1. Constructing sleepers for hi-speed trains

2. Strong & Durable Construction
3. High early strength

30
 CHAPTER 5
FUNCTIONAL DEPARTMENTS OF AMBUJA CEMENTS

31
 The various department of ambuja cements are as follows:

5.1. PRODUCTION/MANUFACTURING DEPARTMENT

Production is a process of combining various materials inputs and immaterial inputs

in order to make something for consumption, it is the act of creating output, a good or
services which has value and contributes to the utility of individuals. Production staff must
ensure that goods are produced on time and are of the right quality. Checking quality does not
mean just examining goods after they have been produced. The materials must be purchased
at a competitive price. This is not necessarily the cheapest price, but takes account of other
factors, such as the reliability of the supplier, the quality required and the delivery date.
Production staff must ensure that goods are produced on time and are of the right quality.
Checking quality does not mean just examining goods after they have been produced. Today
quality is built in at every stage of the process, starting with raw materials.

In ACL, the whole process is computerized, where process operating persons

closely monitor the whole plant operation through visual display. Computerized process
control system with the field instrumentation ensures the steady and smooth operation of unit.
The whole process is displayed on the computer and any change of problem in the process is
easily identified so that necessary step can be taken immediately. If any deficiency found in
the production process immediately it is altered in the computer and immediate action is
taken by the respective staff.

PRODUCTION PROCESS

ACL follows a specific type of process. The cement passes qualities

and grades. According to the mode of preparing the raw mix three different processes can
manufacture cement.
A. Wet process
B. Semidry process
C. Dry process.

32
 ACL uses dry process cement manufacturing. Selection of dry
process is based on the fact that dry process consumes less thermal energy and minimizes the
pollution. The total process is divided into various stages which are:

1. Mining

The lime stone is mixed from pen cast quarry by conventional

drilling and blasting method. The blasted material is excavated by hydraulic excavators
loaded into haulage dumper/tripper having carrying capacity of 18MT at Darlaghat, Ambuja
nagar and Maratha cement works. After drilling excavators, loaders, toppers, dozers, make
the handling and transport of the material and brought to the crusher the material is then made
of 70mm size. The crushed material passes on conveyer belt. The belt conveyer takes crushed
material into limestone yard. Occasionally the limestone is also ripped by hydraulic ripper
/dozer; ripping digs out Marl, as it is very soft and loose. The company is also using surface
miners for limestone production from miles. Thus drilling and blasting are totally avoided.

2. Crushing and pre-blending.

Limestone, after being blasted, is crushed as it is in the form of

boulder up to 1.2 sq. Meters. This is dumped into dump hopper and pushed into the single
rooter impact crushed. Its rated capacity is 600-1200 MT per hour.
The crushed limestone is conveyed to pre-blending yard for pre-homogenization of raw
material. With the introduction of the surface miner, crushing has been avoided; only material
is being transported through belt conveyer to the pre-blending yard. The single boom stacker
travels on the rail to make linear stockpiles having capacity of 2*24000MT at Ambujanagar,
2*30000MT at Darlaghat and 2*6500 MT at Ghadchandur. Continuous pneumatic flap time
samples, samples the input material is evenly stacked as alternative layers of limestone and
marl “chevron” type stockpiles.

3. Reclaimed:

Bridge type reclaimed reclaims the stockpiles so made; which cuts

the layer across the width. This ensures uniform and consistent supply ensures uniform and
consistent supply of pre-blended raw material to the plant. Reclaimed has travelling belts
controlled by variable speed drive unit. The D.C. motor is provided for this purpose. The
machine is driven to the pile with a working speed which can be varied from 0.3 to 3km/hr.
This action combined with the transportation of reclaimed pulls material down from the pile.
The chain scrapper catches the material and feeds to convey belt through chutes, reclaimed
cuts the pile vertically so the homogeneous mixing of limestone is taken on the conveyer belt.

4. Hopper:

Reclaimed material is taken to the hopper through conveyer belt.

These are three hoppers:
1. Limited hopper capacity 600 tones
2. Sweetener hopper capacity 200 tones
33
 3. Additive hopper capacity 200 tones.
The sweetener and additive are added with limestone. The final raw mix is then conveyed on
the belt towards raw mill.

5. Blending silo:

The fine material from raw mill is blended and homogeneity enters
into silo and material comes out from silo is stored.

6. Rotary kiln.

The main motor makes the kiln rotating at speed of 3 to 4 rpm.

Ground and blended raw material are fed into kiln and the contents are transported to the
combustion zone of kiln. The retention time in the kiln is one hour with the heating
temperature of about 1200 to 1400 degree Celsius. The normal length of kiln in Ambuja is 61
meters.

7. Clinker cooling, crushing and storage:

The hot clinker coming out from kiln is cooled slowly by means of
air provided by fans. This clinker is crushed in clinker crusher and then stored in storage yard
with help of deep bucket conveyor.

8. Coal mill:

Coal mill is same as raw mill. It is used to crush the coal to make
fine and then after coal is stored in coal silo. The fine coal is used o fire and kiln at both
sides. The coal is burned inside the kiln to create high temperature for combustion purpose.

9. Cement mill:

The crushed clinker is taken into the clinker hopper in cement mill
where it is added with gypsum and fly ash from their hoppers with the help of weight feeders.
The mixture is then taken to the bell conveyor and fed on to the ball mill. Two H.T. motors
rotate the ball mill. It contains metal ball mill of various sizes like 40mm, 60mm, 70mm, etc.
The mill rotates and hence the mixture of clinker, gypsum, and fly ash grinds in the mill. The
fly material is taken out from the mill by creating an air drought. This the final product
cement stored in storage vessels known as cement silo.

10. Packing plant

Packing plant is the final stage of the cement manufacturing. The

cement is taken out from the silos. The packer machine is used to fill the cement bags. When
the cement weight of 50kg is filled in the bag, the bag falls automatically in the conveyer
belt. The conveyer belts transfer these cement bags from packer to either truck or wagon

34
 directly. Also, there is facility to load the bulk cement into tanker truck, which carries the
bulk cement to the port from where it is exported.

Production function
 Ordering stock of raw materials from suppliers
 Storing and checking the stock of raw materials
 Planning production schedules to maximize machine capacity and staff levels
 Producing or assembling the finished product
 Checking the quality of the product
 Checking production is on schedule and resolving delays or problem
 Packing and storing the final products before distribution
 Scheduling routine machinery and equipment as required.

fig 2. STRUCTURE OF MANUFACTURING DEPARTMENT

M.D

CHIEF
MANUFACTU
RING OFFICER

REGIONAL
HEAD

DEPARTMENT/
SECTION HEAD

OFFICERS

35
 5.2. HUMAN RESOURCE DEPARTMENT

The human resource function of management is mainly concerned with the

acquisition, development and maintenance of an efficient and resource management is
concerned with the management of people at work the recruitment, selection, utilization, and
development of human resources by and within the enterprise.

Lawrence A. Appley observes: “management is the development of people

and not the direction of things… management and personnel administration are one and the
same. Management is personnel administration”

The society for personnel administration defines human resource

management as the art of acquiring, development, and maintaining a complete workforce in
such a manner as to accomplish with maximum efficiency and economy the functions and
objectives of the organization.

The personnel department in ACL, handles time keeping system, securities

office, employee’s welfare, labor problems, etc.

Functions of HR Department

The human resources department handles many necessary functions of business. It is

instrumental in providing labour law compliance, record keeping, hiring and training,
compensation, relational assistance and help with handling specific performance issues.
These functions are critical because without those functions being completed, your company
would not be able to meet the essential needs of management and staff.

The main functions of the HR department are as follows:

1. Hiring the employees:

36
 Hiring consists of the following:

 Recruitment
 Selection
 Onboarding
 Confirmatiom

2. Fixing the payroll ( calculating the fringe benefits, calculating the statutory payments)

3. Providing training and development to the employees( both on the job and off the job training
is provided)

4. Performance of the employees is measured on a 1 year basis and gives reatings to the them
and provide transfers and promotions according to the ratings.

5. Separation of the employees.( resignation and clearing dues of the employee)

6. Promoting industrial relations.

7. Communicating with the trade unions.( discussing the issues)

Functions of HR Manager

 Build the valuable relationship with the internal Client

 Sets realistic timeliness and plans for introduction of new HR policies and procedures

 Leads the nomination process for talent and succession

 To maintain good cooperate relations.
 To select right type and number of employees
 Maintenance of all personnel records.
 Co-ordination with the other department in recruitment of employees.

 Implementing all policy matters.

 Salary/wage administration.

 To maintain effective and efficient work force.

37
 SECURITY

The security is also a function that comes under the human resource
department. The functions performed are as follows:

 Gate in and out(movement of vehicles)

 Access control

STRUCTURE OF HR DEPARTMENT

Fig 3. Structure of HR department

M.D

CHRO

HRBP

PLANT HR

38
 5.3. MARKETING DEPARTMENT

The term marketing is derived from Latin word ‘marcutus’ which means a place were business is
conducted.
Market: - The market means a place where buyer and seller meet each other and the deal finalize.
Marketing: -marketing means to delivered goods and services at a right time, at a right place, and to the
right person. – it’s known as marketing. T he bases of marketing are selling of the product. But the term
marketing is very wide and various.
It is the responsibility of Marketing Department to organization it’s department in such away that it can
help to satisfy the human wants. It does not help in the sales and distribution of the goods and services
only but it also helps in customers satisfaction.

Functions of Marketing Department

 Promoting products and services through a variety of advertising and promotional methods.
 To generate sales.
 Preparation of schemes
 Historical data analysis
 Receipt of Order
 Review of Order
 Acceptance of order
 Communication in house
 Amendment to order
 Payment Receipt
 Determine Customer Satisfaction
 Providing technical advice
 Keeping customer records up to date

39
MARKETING MIX

Marketing Mix of Ambuja Cement analyses the brand/company which covers 4Ps
(Product, Price, Place, Promotion) and explains the Ambuja Cement marketing strategy. 

Product:
Ambuja Cement is a leader in cement manufacturing in India. The main product for
Ambuja Cement is cement which is well suited for Indian environment. In cement products
93% consists of PPC cement i.e. Portland Pozzolana Cement. Ambuja Cements has a special
cement designed for the needs of roofs known as Ambuja Plus Roof Special. It It also
provides other specialised building materials such as Powercem and cement grout for specific
requirements of large projects. This gives an insight in the offering in the Ambuja Cements
marketing mix product strategy.
Apart from this Ambuja Cements provides customized services to individuals,
masons, contractors, architects and engineers. The individuals are provided with basic
services, products and even expert site services such as mix proportioning, concrete testing
etc by Ambuja Cements. The masons and contractors are provided not only with their
products but also with services such as skill enhancement workshops, certification, soft skill
programmes and updates latest from the industry. The architects and engineers are provided
with a variety of products and specialised training, workshops, technical lectures, customised
solutions, mix design trials, onsite support team.

Price:
Ambuja Cements has a varied pricing strategy based on demand, product type,
industry trend and competition. This sector has a competitive pricing strategy although
majority of fluctuations are dependent on the prices of raw materials, taxes imposed by the
government, transportation costs, demand and intensity of competition in certain region.
Since cement is not a one-time one unit buy product. Sales of Ambuja Cements products is
dependent in providing discounts on the purchasing quantity of bulk orders which range from
200 bags to 1000 bags or more. Since this industry faces tax fluctuations and demand
fluctuations, production is affected hugely and whole industry gets affected as a whole where
the smaller players find it difficult to survive. This gives an overview of the pricing strategy
in the marketing mix of Ambuja Cements.

Place:
Ambuja cement is reaching its customers through its well distributed network of
dealers, sales offices and warehouses present across the country. The Ambuja Cements sales
offices have dedicated sales team which looks after the customers which can be basic for
individuals to specialized service to engineers or contractors. Ambuja Cements has across the
country 4 captive ports and 4 bulk cement terminals to supply efficiently to the various needs
of the customer present across the country. Ambuja Cements has a network of 48000+
retailers and dealers with whom it has built trust and hence is able to convert sales and stand
out in the situation of stiff competition.

Promotion:
Ambuja Cement has tried to gain customer mindshare with the help of its series of ad
campaigns which have been running through years. Ambuja Cements has also associated
with the wrestler Khali in its recent advertisement in 2015 and was quite a hit. Ambuja
40
Cement uses all media to create brand awareness in its marketing mix promotion strategy.
Ambuja Cements also takes part in variety of event and campaigns to build relations with its
customers as well as show case its research and development by providing innovative
solutions at various global and national platforms. Some noteworthy events are Ambuja
Cements took part in Make in India week-2016, showcase solutions at Green Building
Congress 2016, 7th Vibrant Gujrat Summit 2015. It also organised Ambuja Jaipur Marathon
2014. Ambuja also stands out by supporting various CSR initiatives through its Ambuja
Cement Foundation. This Foundation has supported various schools and setting up Institutes
for skill development such as Skill and Entrepreneurship Development Institutes. Hence, this
completes the Ambuja Cements marketing mix.

CHANNEL OF DISTRIBUTION

Fig no.4 channel of distribution

PLANT ( GRINDING
UNIT)

PLANT ( PACKING)

DIRECT WAREHOUSES DIRECT

CUSTOMER CUSTOMER
TRADE NON TRADE

DISTRIBUTORS DIRECT
DEALERS

REATAILERS

END USERS

41
STRUCTURE OF MARKETING DEPARTMENT

Fig no.5. Structure of marketing department

M.D

CMO

DIRECTOR
SALES(SOUTH)

REGIONAL PLANNING
HEAD

B&P AND
CHANNEL

TERRITORY SALES
MANAGER LOGISTICS

TERRITORY SALES
OFFICERS

SALES
REPRESENTATIVES

42
 5.4. FINANCE DEPARTMENT

The part of an organization that manages its money. The business function of a
finance department typically include planning, organizing, auditing, accounting, for and
controlling its company’s finance. The finance department also usually produces the
company’s financial statement. Finance staff record all the money earned and spent so that
the senior managers always know how much profit (or loss) is being made by each product or
each part of the business and how much money is currently held by the business. This enables
critical decisions to be made rapidly and accurately because they are based on accurate
information. The Finance Department ensures the flow of funds to these Units according to
the respective cash limits. The department cash to keep according the volume of cash used for
ever all operation. Preparation and completion of Budget estimates revised estimates and
supplementary grant. In many large businesses, different types of financial experts are
employed: management accountants monitor departmental budgets and current income from
sales, prepare cash flow forecasts and specialize in analysing day-to-day financial
information and keeping senior managers informed. Financial accountants are concerned with
the preparation of the statutory accounts. All companies must provide a Balance Sheet and
Profit and Loss Account each year, and most produce a cash flow statement as well. Finance
staff supports the accountants by keeping financial records, chasing up late payments and
paying for items purchased.

Functions of finance department

• Ensuring compliance with relevant laws

• Handling tax issues
• Preparation of financial statements
• Safeguarding assets through internal control
• Inventory management and control
• Payroll system
43
• Customer service function
• Providing information management
• Managing cash flow and liquidity issues
• Monitoring departmental budgets to check managers are not overspending
• Issuing regular budget reports to all departmental managers
• Producing cash flow forecasts and regular financial reports for senior managers
• Advising senior managers on sources of finance for capital expenditure
• Investment appraisal
• Cost control
• Working capital management

Objectives of Finance Department

• To provide a frame work for optimum financial decision making which is concerned with
designing a method of operating the internal investment and finance of the firm

• To make dividend based decisions

• To tap the right sources for raising the funds

• To develop policies for achieving the target of the company.

• To make appropriate decisions relating to the short term and long term funds

Duties of Finance Manager

• To monitor all the financial transactions of the company

• To advise the management raising of the funds and accounting of funds as and when
required.
• To keep the books o accounts of the company up to date.
• To initiate action for realizing any amounts and take follows up actions.
• To inspect the accounts of the company.

44
STRUCTURE OF FINANCE DEPARTMENT

Fig no. 6. Structure of finance department

M.D

CFO

REGIONAL
FINANCE
HEAD

UNIT FINANCE
HEAD

5.5. TECHNICAL DEPARTMENT

Technical support refers to services that entities provide to users of products

or services. In general, technical support provide help regarding specific problems with a
product or service, rather than providing training, provision or customization of product, or
other support services. 

Role of technical support

45
 Help individual house builders to build strong and durable houses. Provide site assistance
related to good construction practices by interacting with them. Give site demonstrations for
good construction practices.
 Educate the masons\contractors ffor good construction practices. Provide them information
related to the new methods or techniques pertaining to construction.
 Interactions with professionals regarding concrete technology and new construction practices.
Share cases related to new development in construction.
 Support large buyers for producing high grade concrete and special concrete like self
compacted concrete or colour concrete or high density concrete .
 Conduct technical seminars, workshops, lectures for various segments like professional,
individual house builders etc.
 Support our dealer network through market movement and site visits.
 Help market for establishing new products related to cement and construction.

STRUCTURE OF TECHNICAL DEPARTMENT

fig no. 7. Structure of technical department

M.D

CMO

DIRECTOR
TECHNICAL

REGIONAL HEAD

TECHNICAL HEAD

TSE 46

LONG ARM
 5.6. CORPRATE FINANCE

Corporate finance is an area of finance that deals with sources of funding, the

capital structure of corporations, the actions that managers take to increase the value of the
firm to the shareholders, and the tools and analysis used to allocate financial resources.

FUNCTIONS OF CORPORATE FINANCE

 Separation of Management and Ownership:

One of the basic functions of corporate finance is actually the separation of

management and ownership. This time, that the company is not really restricted by just
capital typically provided by an owner / founder only. The general public requires ways for
investing their extra money. They’re not content of placing all their funds in risk free
accounts with bank. They would like to take a calculated risk with some of their money. It is
because of this reason that money areas come with emerged. That they serve their dual
require to offering corporations with supply of funding whereas in addition they offer their
people having a range of choices concerning investment and returns on investments.

 Collaboration between Capital Markets and Company:

Functions of corporate finance looks just like a collaboration around each company as
well as with capital markets. The function of financial manager along with other expert’s
professionals within the corporate finance domain are two folds. Firstly, they have to make
sure that the company has adequate funds which they’re using the best sources of funding
that have that minimal costs. Next, they’ve to make sure that that company is actually placing

47
 each funds appropriately and also creating best returns on investments for its corporation.
These two decisions are that the primary functions of corporate financing in every company.

 Finance Decisions:
Considering that company now has access to capital market for fulfill their funding
specifications. But, their company confronts numerous options about funding. That the
company could firstly decide whether that it wants to increase debt capital or perhaps equity
capital. Even there are various choices when selecting either equity or debt capital for a
company. They may choose corporate loans, public fixed deposits, bank loan, debentures to
raise capital from the market. Financial innovation then securitization, has provided vary of
instruments your company can easily use to increase capital. The functions of corporate
finance manager so are promising that the company has possible capital and appropriate
capital structure. They have each appropriate combination concerning equity and debts along
with other financial devices.

 Investment Choice:
When the company has raised required capital from various sources, their financial
manager deals with the following big move. The decision must be to deploy the funds in a
manner so it yields the best returns for shareholders. Company needs to be aware of its cost
of capital. Looking for these investments plus deploying each funds effectively your
investment decision. It’s also recognized when cost management and it is a fundamental
functions of corporate finance.

 Acquisition of Resources:
Acquisition of resources suggests fund generation on cheapest possible ways. Fund
resources generation is actually available through two groups. Liability (This consists of
warranties out of bank loans, goods, as well as payable account.) and equity (This includes
money from retained profits, investment returns or selling stocks.)

 Allocation of Resources:
Allocation of resources means is actually nothing and yet investment funds
concerning income / profit maximization. Investment is categorized in 2 groups. Fixed assets
48
(Land, Buildings, Machinery etc.) and current assets (receivable accounts, cash, stock, etc.)
Broad functions of corporate finance tend to be: Budgeting of Capital, Financial
Management, Raising of Capital or Financing, Risk Management. 

STRUCTURE OF CORPORATE FINANCE

Fig no. 8. Structure of corporate finance

M.D

CFO

FINANCE
HEAD

REGIONAL
CONTROLLER

49
CHAPTER 6
ANALYSIS

50
6.1 SWOT ANALYSIS

SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person
or organization identify strengths, weaknesses, opportunities, and threats related to business
competition or project planning. It is a tool that identifies the strengths, weaknesses,
opportunities and threats of an organisation. Specifically, SWOT is a basic, straight forward
model that assesses what an organisation can and cannot do as well as its potential
opportunities and threats. Users of a SWOT analysis often ask and answer questions to
generate meaningful information for each category to make the tool useful and identify their
competitive advantage. SWOT has been described as the tried-and-true tool of strategic
analysis.

Strengths and weakness are frequently internally-related, while opportunities and threats
commonly focus on the external environment.

a. Strengths of Ambuja Cements :

 Leading Cement Manufacturer in India: 

Ambuja Cements has been one of the leading Cement manufacturers in India. Even though
there have been significant capacity additions in the industry and a slow demand growth in
India.

 Strong dealer network: 

Ambuja Cements has a strong dealer network, which has helped the company to withstand
intense competition.

 Extremely strong in west:

 
The company has a very strong network on the west coast which has supported sustainable
strong market position in Mumbai, Surat and Cochin. There are pockets which are covered
majorly by Ambuja cement only.

51
  Cost advantage  through infrastructure:

 Ambuja has made its processes more efficiently and soured low priced inputs through
which it has been able to achieve a cost advantage.

 Excellent financial backing: 

Ambuja cements is known to be a financially sound company. Its financial resources were
further increased when HOLCIM (another major player in infrastructure) invested in
Ambuja.

Marketing consistency: 

There are two ads of Ambuja which are legendary. First is the tagline “Iss cement mein
jaan hai” which caught the attention of consumers all across. The second was the
marketing campaign with the Great Khali which said that only Ambuja cement could make
homes that dont get destroyed even by khali. The brand has picked the quality of “strength”
very well and portrayed it regularly and consistently.

b. Weaknesses

Heavily dependent on Indian market:

 Ambuja been geographically concentrated depending heavily on the Indian market for its
revenues.

 Lack of product diversification: 

Unlike many competitors, Ambuja does not have diversified product range. This reduces its
potential to expand its market share.

 Known more for small works:

 While Ultratech focuses on large contracts and huge buildings, Ambuja is known more for
repair works and hence it loses out its brand image where the builder lobby is concerned.

[Link] of Ambuja Cements :

 High growth in Cement Industry:

 
India is the second leading cement producer in the world. The country’s cement production
is expected to grow at high speed. This creates an opportunity for Ambuja to tap the
demand created.

 Benefits due to GST: 

Cement Industry is going to be benefited with GST as overall taxation going to drop from
current 25 per cent to about 18 per cent. Also, logistics cost is also to be decreased by GST.
52
 Make in India:

 With the government’s initiatives to increase production in India, Ambuja, being a core
India company, can see many advantages.

 Increase production:
 
The cement industry runs on the basis of “Who can produce the most”. As on date,
Ultratech has the highest production capacity. But even Ultratech runs out of supply at
times and the demand is high. Thus, an increased production can help the brand reach new
heights.

d. Threat of Ambuja Cements :

 Litigation for cartelization in the industry: 

After the complaints from Builders Association of India (BAI), the Competition
Commission of India (CCI) published an order to stop cartelization in the Cement Industry.

 Intense Competition: 

There is a lot of competition in the cement industry for Indian as well global companies.
This allows limited market share in the industry.

53
6.2. PORTERS FIVE FORCE ANALYSIS

Porter's Five Forces Framework is a tool for analyzing competition of a business. It draws
from industrial organization (IO) economics to derive five forces that determine the
competitive intensity and, therefore, the attractiveness (or lack of it) of an industry in terms of
its profitability. An "unattractive" industry is one in which the effect of these five forces
reduces overall profitability. The most unattractive industry would be one approaching "pure
competition", in which available profits for all firms are driven to normal profit levels. The
five-forces perspective is associated with its originator, Michael E. Porter of Harvard
University. Porter's five forces include three forces from 'horizontal' competition--the threat
of substitute products or services, the threat of established rivals, and the threat of new
entrants--and two others from 'vertical' competition--the bargaining power of suppliers and
the bargaining power of customers.
Fig no.9. porters five force analysis

54
 Threat of new

entrance

Competitive
Bargaining power BargainingPower
Rivalry
of suppliers of buyers
within an
industry

Threat of
substitutes

 Bargaining Power of Buyers: Low

More than 65% of the consumers of cement in India are accounted by the housing
sector, which in turn comprises of retail customers forming the bulk of the customer base.
However, since retail buyers are highly disaggregated, consequently, they are unable to
exercise much bargaining power. The lack of substitutes of cement also worsen the situation.
The cement market is oligopolistic in nature, which means that it is dominated by a small
number of cement firms; hence, buyers have fewer options with respect to choosing a cement
brand of their choice. The demand for cement is inelastic. It is one of the core products in the
construction industry. The derived demand for cement cannot be done away with. Hence, its
demand exists even at higher price points. Hence, overall there is a low bargaining power
with buyers.

 Bargaining Power of Suppliers: Moderate

Most of the companies in this industry own limestone reserves. Hence, for this raw
material, there is no bargaining power with suppliers. Coal Linkages have also reduced.
Hence, companies have to depend upon alternative sources for fuel, where suppliers can
dictate prices. Moreover, government can exercise a lot of power with respect to coal and
power prices. In addition to that, cement companies rely heavily on railways and freight
carriers for carriage outward over which the govt. can exercise severe control. The govt. can
force new prices on the cement industry, which it then has to pass on to the buyers in the
form of higher prices. Hence, overall, suppliers have moderate to high bargaining power.

55
 Threat of Substitution: Low
There is no threat of Substitution for cement. A few distant substitutes for cement
may include materials such as timber and steel. However, timber can only be used for low
rise buildings, and not for high rise buildings. Although steel can be used for the same,
building regulations may require the structural steel to be encased in concrete for fire
protection purposes. Hence, cement enjoys an important position in the industry.

 Threat of New Entry: Low

The capital costs of entering the industry are very high which approximate to around
Rs. 7,200 per tonne. The raw material sources required for cement manufacturing such as
limestone and gypsum are limited in nature. Moreover, the govt. clearances required are also
cumbersome to obtain and involve high costs, time and efforts. Existing players have been
able to benefit from economies of scale and have been able to lower their costs. It will be
difficult for a new player to replicate the same. Wide Distribution and Marketing Channels
also play the role of important strategic assets which cannot be replicated by a new player in
the industry. This further reduces entry. A rising trend in costs means lower IRR for new
green field capacities. Hence, overall there are high barriers to entry.

 Inter-firm Rivalry: High

The market is oligopolistic in nature. The few large companies that dominate the
market enjoy economies of scale. However, competition is regional in nature, as cement
cannot be transported across regions. Additionally, the cement industry is cyclic which leads
to intense rivalries in times of downturn, and faces intermittent phases of shortage and excess
capacity. None of the firms have real pricing power due to homogeneous product, over-
capacity and fluctuating demand and prices. Overall, inter-firm rivalry is moderate to high.
Because of the huge investments involved, the exit barriers for the industry is high as more
and more firms decide to stay in the business in order to recover their fixed costs.

56
 CHAPTER 7
FINDINGS, SUGGESTIONS AND
CONCLUSION

57
 FINDINGS

 The company is providing good working condition

 The production department is having advanced machines for the efficient production

 The new workers are provided with on the job and off the job training.

 Good relationship exists between the management and the workers there by resulting in
sound working atmosphere.

 A good co-ordination exists between various departments.

 They have an effective security system.

 Ambuja Cements has a strong dealer network, which has helped the company to withstand
intense competition.

 Ambuja cemts has an excellent financial backing.

58
 CONCLUSION

Ambuja is people centric, market driven organisation, which aims to do its business in
most ethical way possible. Ambuja tries to include diverse opinion in its decision making; it
also tries to maintain diversity in its culture, bringing people with different perceptions and
personalities together and making them work as a unit. It not only employs traditional way of
motivation, but it also tries to inculcate modern and new methods of motivation. Its
employees work with motto of “I CAN”, which is a tagline of Ambuja. It also tries to balance
the needs and demands of various stakeholders, without deviating from end goals. Like any
organisation, it’s not free from threats and problems The entry of new comers in the cement
sector offering high and attractive packages to the talented work force is biggest threat to the
goal of Ambuja. The positive thing about all this is Ambuja has identified its threats and
weak points and are working to overcome these issues. Quick adaptation of latest
technologies like Enterprise resource planning (SAP), streamlines all the processes and
makes Ambuja one step ahead of its competitors. The goal of Ambuja to become a market
leader in the country and create a brand image of being best in industry is not far. Yet,
solutions to threat with slightly increased financial motivation can do miracles to an already
established firm. In the end, Organisational Behaviour study and application is not static
concept but it is dynamic and continuous one, so continuous monitoring with identification of
threat and formulation of strategy, must happen at all the time.

59
 SUGGESTIONS

 More concentration can be given to the quality improvement technologies for meeting the
future competition. The Company needs modernization and up gradation of technology

 Strict supervision can be implemented to make the workers and employees to do their work
properly and more effectively

 Management can take essential steps to explore new areas for product diversification
concerned with industry by that firm will get a favourable rate of profit.

 The management can arrange more training programme for the employees for technical up
dation

60
BIBLIOGRAPHY

61