By

PANKAJ RAWAT
 OVERVIEW
Ambuja Cements Limited

Type Public, (BSE: 500425), (

NSE: AMBUJACEM)
Industry Cement
Founded 1986
Mumbai, Maharashtra,
Headquarters
India

Suresh Neotia, Founder,

Chairman Emeritus
N. S. Sekhsaria,Co-
Key people
Founder, Chairman Onne
van der Weijde, Managing
Director

Products Cement
7,332.71 crore (US$1.63
Revenue
billion)

Website www.ambujacement.com
 Introduction to Ambuja Cement
Ambuja Cements was set up in 1986. In the last decade the company has grown tenfold.
The total cement capacity of the company is 23 million tonnes approx. Its plants are some
of the most efficient in the world. With environment protection measures that are on par
with the finest in the developed world.
Ambuja Cements Limited, formerly known as Gujarat Ambuja Limited is a
major Cement producing company in India. The Group's principal activity is to
manufacture and market cement and clinker for both domestic and export markets.
The Company also operates a hotel through its subsidiary GGL Hotel and Resort
Company. It has shown innovation in utilizing measures like sea transport, captive
power plants, and imported coal and availing of govt. sops and subsidies to
constantly check the costs.
The company's most distinctive attribute, however, is its approach to the business. Ambuja
follows a unique homegrown philosophy of giving people the authority to set their own
targets, and the freedom to achieve their goals. This simple vision has created an
environment where there are no limits to excellence, no limits to efficiency. And has
proved to be a powerful engine of growth for the company.
Brief History -- a growth story

 Capacity built up from 0.7 Mio t in 1986 to 22.0

Mio t as of today at CAGR of 18%
 Organic growth and growth through
acquisitions
 2001 - Private equity investors (American
International Group & Government of
Singapore) invested in ACIL
 2005 - ACIL restructured as a joint venture
with Holcim
 2006 - Founder promoters sold part of their
holding in ACL in favour of Holcim
 ACL is a Holcim Group company since May
2006
 Major Achievements of Ambuja
Cement

•Most profitable cement company in India.

•Lowest cost producer of cement in the world.
•Its environment protection measures are at par with the best in the world.
The pollution levels at all its cement plants are lower than the rigorous
Swiss standards of 100 mg/NM3.
•The only cement company to be awarded with the National Quality Award.
•First cement company to receive the ISO 9002 quality certification.
•Received ISO 14000 Certification for environmental systems.
•India's largest exporter of cement.
•Received Best Award for highest exports by CAPEXIL.
•First company to introduce the concept of bulk cement movement by sea in
India.
Strategy
 Strong presence in growing markets of North &
West
 Largest exporter of cement
 Grinding close to market
 Premium brand
 Extensive & primarily exclusive distribution network
 Over 6,600 dealers and 20,500 retailers
 Captive Infrastructure
 Port, Receiving Terminals and Power Plants
(230 MW)
 Sea Transportation
 Seven vessels
MISSION AND VISION
MISSION:
Delighted customers
Inspired employees
Empowered partners
Energized society

VISION:
To be India’s most admired company
Organization Structure of the Company
PLANT LOCATIONS IN INDIA
Competitors
 Market Share of Major Players of Cement Industry (April 2010)

Market Cap. Sales

 Particulars Last Price Net Profit Total Assets % Market share
(Rs. cr.) Turnover
ACC 792.75 14,880.42 7,474.15 1,212.78 5,409.76 21.57

Ambuja Cements 92.4 14,070.76 6,281.71 1,402.27 5,961.54 18.12

UltraTechCement 839.6 10,451.83 6,436.96 977.02 5,743.73 18.57

Shree Cements 1,598.50 5,568.73 2,740.57 577.97 2,644.31 7.91

Cements 124.75 3,524.81 3,470.78 432.18 5,619.41 10.01

Cements 114.8 2,731.89 2,538.50 363.52 3,723.65 7.32

Birla Corp 304.65 2,345.97 1,809.70 323.51 1,515.48 5.22

Prism Cement 49.95 1,489.76 629.86 96.23 661.65 1.82

Dalmia Cement 179.7 1,454.48 1,778.68 158.63 3,606.48 5.13

Binani Cement 67.3 1,366.87 1,497.32 108.66 1,254.73 4.32

 Competitive Advantage
COMPETITIVE ADVANTAGE: Low Cost Producer
• Ambuja Cement is the lowest cost producer of
cement in the world due to following factors:
Freight: The most successful of GACL’s innovative
strategies of cost cutting was idea of Sea Transportation.
Fuel: Fuel strategy was also cost cutting factor
Power: They have established their own captive power
plant of 178 MegaWatts
BUSINESS
ETHICS
AND CODE
OF
CONDUCT
1. Applicability
The Code of Conduct will apply to all the members of the Board of Directors and
all the employees of the Company in M grade. clause 25 of this Code requiring annual confirmation is applicable to Directors and
employees in grades MOA and above.
2. Honest and Ethical Conduct
The Company expects all the Directors and the Employees to act in accordance with highest professional standards, integrity and high
morals and ethics.
3. Conflict of Interest
The Company expects that the Directors or Employees of the Company shall not engage in any business relationship or activity which
might conflict with the interest of the Company.
4. Accounting & Financial Reporting
The Management shall ensure that all business transactions shall be recorded in true, fair and timely fashion in accordance with the
accounting and financial reporting standards, as applicable to the Company. They will ensure the reliability and accuracy of its accounts,
records and reports.
5. Confidentiality
a. The Directors and Employees shall strive to protect confidential information acquired, generated, gathered or which otherwise comes into
their possession during the course of business. All such information should be maintained in strict confidence, except when disclosure is
expressly authorised by the Company or required by the law.
b. Confidential information includes all non-public information, intellectual property rights such as trade secrets, business research, new
products, new projects and plans, business strategies, customer, employee and suppliers’ lists and any unpublished financial or price
sensitive information.
6. Compliance with Laws, Rules and Regulations
The Directors and Employees shall keep themselves updated in relation to laws/statutory compliances applicable to their scope of work. The
Directors and employees of the Company shall comply with all laws, rules and regulations and shall not commit any illegal or unethical act.

7. Fair Competition
The Company is committed to respect the principles and rules of fair competition prohibiting anticompetitive behaviour and abuse of a
dominant market position.
8. Bribery and Corruption
The Directors and Employees shall not be involved in bribery and corruption while conducting the Company’s business. They are prohibited
from offering or providing any undue pecuniary or other advantage for the purpose of obtaining, retaining, directing or securing any
improper business advantage or for personal gain.
SWOT Analysis
 

 
•Growth at approx CAGR of 9% in last 5 years
•Growing Domestic cement consumption at
approx CAGR of 8% in last 3 years
• Highly Capital Incentive so difficult for
small entrant
• Not much restriction by govt.
• Market consolidation taking place
 

• High Oil Prices, Cost of Power increase

production cost
• Supply exceeds Production lead to
competition in price
• Low Quality as compared to international
standard but improving
Oppurtunities
High Mortgage Penetration - Low Interest
Rates
•Easy loan availability for housing finance
•Increased investments in Infrastructure
•Increased govt. outlay on BHARAT
NIRMAN, GOLDEN QUADRILATERAL,
BRTS etc.
Threats
•Further Hike in Oil Prices
•Use of plastic engineering in construction
•Sub prime market loss may affect
Cost drivers

 Captive Power Plants, AFR

Power

Fuel (coal) AFR/process efficiency /

international sourcing

Clinker Composite cement

content

Grinding facility close to end user,

Transport production close to raw materials
Terminal logistics
 CORPORATE GOVERNANCE
The principles on which the good corporate governance is
based are simple principles of fairness, transparency and
accountability . Broadly speaking, Corporate Governance
denotes the following .
Direction and control of the affairs of a company;
Taking account of the needs of the environment and the
local community .
Maintaining excellent relations with both customers and
suppliers;
  CORPORATE SOCIAL RESPONSIBILITY
 

The Ambuja Cement Foundation is the Corporate Social

Responsibility wing of Ambuja Cements Ltd. that works with the
rural communities surrounding Ambuja’s manufacturing sites.
The Foundation is engaged in a variety of people-centric,
integrated rural development projects.

Since inception, the Foundation has expanded its reach and

diversified its programmes to include as many members of its
stakeholder group as possible. While working with the
participation
of the people, ACF has held its mission statement central
to all its operations.
Presently the Foundation has made its presence felt in ten states
across the country and is engaged in programmes like Natural
Resource Management, agricultural development and
improvement of health status, educational support and economic
enhancement.
 
 The Future Looks Bright for Ambuja Cement
The momentum of growth in the infrastructure and housing industry is a good sign for the cement industry. The
government has set a growth target of 9 % for the economy during XIth Plan (2007 – 2012). The cement demand
growth is projected at 9.5% CAGR for the XIth plan.

Further, the government has emphasized on public-private partnerships for removing bottle-necks for developing
the infrastructure in the country. We see that the private sector is poised to play a very major role in the
development of this infrastructure.

Given the overall economic growth, inflow of foreign investments, thrust on infrastructure development and
boom in the housing construction, we believe the cement demand should display strong growth in the next 3 to 5
years. In view of this robust growth, many cement companies have announced fresh capacity expansion.

It is expected that over the next 5 to 7 years, new capacities of over 110 million tonnes would be set up across the
country.

While there are high growth opportunities, there also lie big challenges ahead. Bunching of new capacity in a
short span could lead to pressure on prices and distribution network in 2010. We are gearing up to meet these
challenges.
 Expansion projects
Clinker Cement
Location Cluster 2007 2008 2009 2010 2011 (million t) (million t)

Rauri North Clinkering 2.2 -

Dadri North Grinding - 1.5

Nalagarh North Grinding - 1.5

Roorkee* North Grinding - 1.0

Rabriyawas North 0.6 -

Clinkering
Surat SW Grinding
1.0

Ahmedabad SW Grinding 1.5

Bhatapara East Clinkering 2.2 -

Farraka* East Grinding - 1.0

Total 5.0 7.5

Capital outlay (in USD million) Greenfield Brownfield

Clinker 388
Grinding 302
Captive power plant 203

** Already
Already commissioned
commissioned
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