Professional Documents
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DreaMerger 2016
Online Slot: 6 PM to 8 PM
Please remember the following:
1. You have 2 hours to solve the case study. This will test your logical,
analytical, reasoning and innovative skills.
2. All solutions must have the participants name and college.
3. Attach your solution in an email and send it to us on this email id-
dreamerger2k16@gmail.com
4. Please mail it to us before 8 PM. Entries after 8 PM will be disqualified.
5. All files must be in PDF format.
6. Solutions should not exceed 3-4 pages, in Times New Roman, size 12.
7. You are not expected to use any additional information. Bear in mind
that this case is based on 5th September, 2016. All facts and characters
are fictional.
8. State your assumptions clearly and justify them. Please show all relevant
calculations (if any).
Anhuoni Konch Cement Company Limited was founded on Sept. 1st 1997.
Listed in Hong Kong on Oct. 21, 1997, it pioneered the overseas listed company
in Chinese cement industry. The company mainly engaged in the production
and sales of cement and commodity clinker, is also the largest single brand
supplier all over the world. It is one of the largest cement manufacturer and
seller in Mainland China, headquartered in Anhui Province.
The high-grade cement and commodity clinker of "KONCH" brand are the
company's leading products. Products under this brand include portland
cements, ordinary portland cements, slag portland cements, compound
portland cements, sulphate resistance cements, cements, highway portland
cements, oil well portland cements, non-magnetic portland cements, nuclear
station portland cements and white cements, among others. The company is
currently running in countries in like UAE, Malaysia and Indonesia.
FINANCE & INVESTMENT CELL
Besides its high technological development, the company has seen a standstill
due to macroeconomic doldrums in China. Due to imposition of strict control
over new production capacity of the cement industry, investment in the
industry continued to decline, with cement investments decreasing by 19.4%
year-on-year. To worsen the situation, the Chinese government has also
stepped up efforts to eliminate backward production capacity, leading to
continuous decline in growth of production capacity of the industry. The
cement industry has seen a drop from 10% to 7% annual growth over the
years. Besides the macroeconomic doldrums which China is facing, the direct
cement plant emissions is also becoming a significant problem in the country,
forcing cement companies to shut their plants.
Anhuoni Konch is now looking to overcome the revenue losses and to establish
its brand in foreign countries so to increase its production altogether, thereby
making its product more competitive globally with focus on making the output
environmental- friendly.
FINANCE & INVESTMENT CELL
The recent development in the Indian economy is working as a boost for the
cement industry here. The finance ministers allocation of19,000 crore for
rural road development and sum allocation of 55,000 crore for roads and
highways in this year's fiscal budget is providing an upper edge to cement
industry to prosper.
Having strong market value in country like UAE and different parts of Africa
and Europe, the company is now looking into expanding its reach further in
foreign markets, but only restricted due to funds required to expand its foreign
base. U.T. wants to add range so to cater larger market needs, which can be
done through successful consolidation with Anhuoni Konch.
After 1983, the company acquired United Drapery Stores, which owned many
of Britain's most well-known high street clothes shops and department stores,
including John Collier, Richard Shops and the chain of Allders department
stores. Till 1999, acquired various companies from various sectors and then
the company finally acquired Pioneer International, an Australian building
materials business.
HandSom's two largest markets are the United Kingdom and the United States.
It is one of the world's leading producers of aggregates (particles of rock, gravel
and sand), and a major producer of bricks and concrete pipes. It also
produces ready-mixed concrete, asphalt, cement and cement related materials.
The annual turnover of the company is 112.5 mt/yr.
The company has a strong R&D department and has been successful in having
advancements in lubrication technology, especially in fully synthetic based
products. High quality, synthetic lubricants such as the Mobil SHC range
deliver advantages which mineral oils cannot match. Mobil SHV lubricants, for
example, can last up to six times longer and the upper operating limit is
typically higher than the maximum operating temperatures for high quality
mineral oils. It has also developed Mobil SHC 600 series- a high performance
gear oils, which can reduce the power consumption of some gear box
applications by up to 8% compared with mineral oils.
The company now wants to tap other countries, especially the middle-east
regions, India, China etc. to not only decrease the production cost, but also to
delve into the advantages which other countries policies provide, in order to
expand in the future to cover up the current.
Lorenzo Zambrano was the chairman and chief executive officer until his death
on May 12, 2014. About one-third of the company's sales come from its Mexico
operations, a quarter from its plants in the U.S., 15% from Spain, and smaller
percentages from its plants around the world.
In the past, Demex has acquired companies like VENCEMOS, RMC Group and
Rinker Group Ltd. It is the Mexicos Monopolist, with a market share of 87.6%.
It has developed a number of educational and social responsibility initiatives,
such as- it instituted the Premio Demex, an annual award that recognizes
works in the fields of sustainability, accessibility, construction and
architecture. Also, it funds the Catedra Blanca, an honors architecture courses
in three universities: the ITESM, in Monterrey, the Universidad
Iberoamericana, in Mexico City, and the Barcelona School of Architecture. The
company, with strong R&D, is currently working to bring innovation in their
products and to make them more environment-friendly.
Over the years, they are facing difficulty to establish global relations, due to
language and cultural disparities. They have been accused of violating
environmental laws in the United States as well. Environmental watchdog
groups and the United States Environmental Protection Agency are threatening
to file suit claiming the company has committed numerous violations of the
Clean Air Act in Lyons, Colorado. During tests conducted, the Monterey Bay
(California) Unified Air Pollution Control District reported high levels of
chromium VI, also known as hexavalent chromium, a cancer causing chemical
agent, at an elementary school and fire department in Davenport, California.
Facing a cut-throat competition from foreign competitors, the business model
of the company still follows a conventional approach, which makes them lag
behind in the market. Adding to the fuel, the possibility of Trump winning the
American presidential elections can create more problems for Demex.
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