SUMMER TRAINING PROJECT REPORT

"ON THE TOPIC OF CUSTOMER SATISFACTION OF JAYPEE CEMENT IN ALLAHABAD REGION

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMISISTRATION

SUBMITTED BY:

SUBMITTED TO:

Ankit Srivastava Excel Business Academy

Mr. S.K.P.Gupta (Senior GM-Marketing)

PREFACE

Summer training provides a feel of corporate environment to students. It is a pre-requisite for the successful completion of MBA course. Students get a chance to understand business organizations working style and they learn skills to survive in this competitive corporate world. In summer training management students perform tasks and duties allocated to them under the guidance of guide from industry. Actually training is an opportunity to sharpen their skills and to adjust them in highly competitive situations. I got the opportunity to complete my summer training in JAIPRAKASH ASSOCIATES LIMITED, regional marketing office (RMO), Allahabad. I was instructed to do a marketing survey regarding CUSTOMER SATISFACTION IN ALLAHABAD DISTRICT. The study covers a brief introduction about cement market in main city, semi urban areas and rural areas of Allahabad District. I covered mainly authorized dealers of above mentioned area and collected sufficient information from them to complete my project. My product was cement and Allahabad is big market of cement. It is a highly competitive market and when I visited many dealers I came to know about various facts and ground realities of cement market. In my four week training , I got some experience about market conditions of cement market. I enjoyed my training and learned some valuable things from my marketing officers and other members of the organization.

ACKNOWLEDGEMENT

First of all I would like to express my deep gratitude to Shri. A.K.Nandi (DGM-TTG) for providing me an opportunity to complete my summer

training at Regional marketing office, Allahabad. I would like to extend my sincere thanks to Mr. S.K.P.Gupta (Senior GM-Marketing) for giving me an approval to this project in this organization. I would also like to show my warmest thanks to Mr.Rejwan Ali (Dy. Marketing Manager). Mr.Rejwan Ali helped me since the beginning of this project and has been with me up to the successful completion. I feel highly obliged in expressing my sincere thanks to the management and all the members of marketing department, RMO, Allahabad who gave me their valuable time and support to complete my project successfully.

DECLARATION

I, hereby declare that I have read the project thoroughly and have understood it also, made for partial fulfillment of the project. I, hereby declare that all the information provided in the project report is true to the fullest of my knowledge and it bears no resemblance to any other written material whatsoever. In the event of any information provided in this project report being found incorrect or misleading. I shall be liable to any outcome at any given day.

I further declare that all the facts and figures given in this project report are the outcome of my own research and findings.

Ankit Srivastava MBA 3rdSEMESTER

Excel Business Academy Bangalore

INDEX
Sr. No 1. 1.1 1.3 1.4 1.5 2. 2.1 2.2 3 4. 5. 6. 7. 8. 9. 10. 11. Introduction Introduction to Project Topic Objectives of study Significance of the study Limitation of the Study Industry Profile Global Cement Industry Indian Cement Industry Company Profile Methodology Adopted Data Analysis & Interpretation Observation & Finding Limitations Recommendation Conclusion Bibliography Annexure Particulars Page No. 7-8 9 10 10 11 12-39 12-15 15-39 40-49 50-52 52-61 62-63 64 65 66 67 68-72

List of tables, charts and graphs

Sr. No 1 2. 3. 4. 5. 6. 7. HISTORICAL MILESTONE General perception about jaypee Highest selling cement at counter Number of Jaypee customer Basis for consumer purchase Basis for selling Jaypee Cement Satisfaction level with the availability of the product Satisfaction level with the brand promotion of the company Type of customer Average monthly sale Awareness about customer service help desk Problem faced during consumption Complaint settlement with satisfaction 40 53 53 54 55 55 56 Particulars Page No.

8.

57

9. 10. 11. 12. 13. 14.

58 59 59 60 61 61

Suggestions for improving marketing of product

Introduction
This is like a dream come true to work with one of the biggest companies of India in cement division. I enjoyed working with brand Jaypee. At regional marketing office, Allahabad. I got the opportunity to do a marketing survey and to observe the cement market of Allahabad. Allahabad is a big market for cement and cement consumption of this city is increasing day by day. It is a rapidly growing city and a no. of offices, malls, shopping complexes, schools, colleges are being constructed in this city. Cement is the basic necessity for these constructions. All the cement companies are observing the market potential of this city and they want to expand their business in this city.

Jaypee, Prism, ACC, Birla, Mycem, Maiher are the main competitors in this market. Jaypee group is a major competitor in Uttar Pradesh. Jaypee group is doing business in various sectors such as Civil engineering, Private hydropower, Cement, Hospitality, Integrated Township, Information Technology, Thermal, Transmission Line etc.The company realized that it was time to reinvent its identity. In its new avtar, the company is now known as Jaiprakash Associates Limited(JAL).

Jaypee group knows that to become market leader one should have close observation over market. To assess exact situation of market a no. of surveys are conducted by the group such as Dealer survey, Retailer survey,Market potential survey,Engineers and Architects survey etc.

As a summer trainee at Jaiprakash Associates Limited(JAL) I did survey regarding service level to dealers from the cement companies operating in Allahabd district. I covered dealers of various cement companies and collected
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information from them. I observed dealers are suffering with fluctuating cement price and improper communication of prices and schemes. Improper and delayed delivery is also a serious problem. Duplicate cement availability in the market is also hampering the sale of dealers. If Jaypee cements wants to lead in the market then it has to improve its service level mainly in terms of communication of schemes. Jaypee has an edge over other companies that its delivery is faster than others but in some regions its delivery is poor. So Jaypee should improve its delivery in those regions.

About the study

I started my summer training at Jaiprakash Associates Limited, regional marketing office, Allahabad. I got the opportunity to do a marketing survey and my topic was Assessment of customer satisfaction in Allahabad market. I started my survey from main city market. After covering city market I visited Semi-urban and rural cement market also. I covered cement dealers of various brands such as Jaypee, Prism, Birla, ACC, Mycem, and Maiher. In order to come to a conclusion regarding service level to dealers random sampling was done. I got a questionnaire from Jaypee office and I got this questionnaire filled from each and every dealer. The questionnaire contains 19 questions regarding quantity of cement sold, time taken to execute orders by the companies, price communication, scheme communication, frequency of receipt of bills, frequency of receipt of account statement, promotional items provided by the companies, technical support provided by the companies, frequency of visit marketing officers, quality of cement bag and quality of cement redressal of complaints. After collecting data from respondents I started data analysis using Microsoft excel. To show an effective analysis I used tables and graphs. I concluded the result from analysis and wrote the results under conclusion section. During my marketing survey I found a no. of information about cement market and wrote them in observations and findings section. I observed the problems of dealers and to solve these problems I gave some suggestions in my report.

Objective of the Study

The primary Objective of the project is:
TO ASSESS THE CUSTOMER SATISFACTION IN ALLAHABAD DISTRICT.

Secondary Objectives are: 1- What are the general problems of dealers?

2- How can dealers be served in a better way?

3- To find out which areas dealers are not getting proper support from the company?

4- What other companies are doing to serve their dealers and where Jaypee cement is lagging behind them?

5- What are the competitive advantages for Jaypee cements and What are the areas of improvement?

6- What is the market position of Jaypee cement?

Significance: To reflect current satisfaction level To know basis of consumer purchase To know what is the customer perception about JAYPEE Cement To know what problems dealers faces in JAYPEE Cements

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Limitations of the study: Getting accourate responses from the respondents due to their inherent problems were difficult. They were partial and not very cooperative. Traffic and time was also a constraints for me Survey was conducted in the month of January and February and Allahabad was very cool nearly 5-10 degree Celsius temperature, it was very difficult to visit dealers in the morning but I would have been able to cover more number of dealers and then definitely my report would have been more prominent and more aligned with exact market realities. I got the dealer list from Jaypee cements dump but address of dealers was not properly given in the list so it took too much time to find them.

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Industry Profile

Global Cement Industry

Cement is a basic ingredient for the construction industry. Cement is made out of limestone, shell, clay mined out of a quarry close to the plant. The raw material is crushed, and then heated at temperature in excess of 1000 oC in rotating kiln to become clinker. Clinker is then mixed with gypsum and ground to a fine powder to produce final grade of cement. The technology is a continuous process and is highly energy intensive. Cost of cement is 29% energy, 27% raw materials, 32% labor and 12% depreciation.

The weight/to price ratio make transportation cost very high. The competitive radius of a typical cement plant for most common types of cement extends no more than 300 kilometers. However, cement can be shipped economically by sea and inland waterway over great distances, extending greatly the competitive radius of cement plants with access to waterborne shipping lanes. Thus, the location of a cement plant and the cost to transport the cement it produces through its distribution terminals bear significantly on the plants competitive position and the prices it may charge. The minimum efficient size for a cement plant is around 1 million ton a year.

As a consequence of a relatively low minimum efficient plant and transportation costs cement production is highly fragmented. It is estimated that there are around 1500 integrated cement production plant in the world. Although the industry has seen the emergence of strong global players such a Lafarge of

12

CEMEX, the share of the four largest firms account only for 23% of the overall demand.(Globalization cement industry, Phillip Lasserre,2007)

Cement is distributed in bags or is delivered to construction sites through readymix Lorries. The major segments of the industries are: Aggregates: quarries and crushing minerals to be mixed with cement to make concrete. Cement production Ready Mix: distribution of ready to use concrete.

Demand

World cement demand was 2,283 million tons in 2005, with China accounting for 1,064 million ton (47% of total). The expected demand for 2012 is estimated at 2836 million ton. China will increase its demand by 250 million tons during the period, an increase higher than the total yearly European demand.

Demand for cement in Million Tons 2005-2012 Growth rate:Countries North America Western Europe Asia/Pacific 2005 170 208 1500 2012 200 208 1900 Growth 2.9% 2.2% 5.2%

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Other region

405

500

4.7%

World Cement Demand

2283

2836

4.7%

Main Global Competitors

Lafarge
Lafarge is a French industrial company specializing in four major products: cement, construction aggregates, concrete and gypsum wallboard and it operates in 76 countries. In 2010 the company was the world's second-largest cement manufacturer by mass shipped behind Holcim. Over the past years it invested heavily in emerging countries. Its recent association with the Chinese group Shui on gave the group a 21 MT presence in this country.

Holcim
Holcim is a Swiss based global company supplying cement and aggregates (crushed stone, sand and gravel). The company also supplies ready-mix concrete and asphalt including associated construction services. The Holcim Group holds majority and minority interests in more than 70 countries on all continents. The Group employs some 90,000 people. Holcim has a strong presence in India.

Cemex
CEMEX is the world's largest building materials supplier and third largest cement producer. Founded in Mexico in 1906.Orginated from Mexico by 2005 it had achieved an estimated production capacity of 94 million tons per year. It
14

was the number one producer of ready-mix with 76 million tons, one of the largest aggregate producers with 175 million tons and one of the top cement traders in the world, selling more than 17 million tons in 2005. It is present in the America, Europe and Asia, although not in India nor China.

Heidelberg Cement
Heidelberg Cement is a German cement and building materials company. It is currently (as of 2010) the world's third largest cement producer, the market leader in aggregates and fourth in ready-mix concrete. In 2010 the company produced around 78 million tons of cement. The company employs some 53,000 people at 2,500 locations in more than 40 countries with an annual turnover of approximately EUR 11 billion.

Indian Cement Industry

The cement industry is one of the main beneficiaries of the infrastructure boom. With robust demand and adequate supply, the industry has bright future. The Indian Cement Industry with total capacity of 165 million tons is the second largest after china. Cement industry is dominated by 20 companies who account for over 70 % of the market. Individually no company accounts for over 12% of the market. The major players like L&T and ACC have been quiet successful in narrowing the gap between demand and supply. Private housing sector is the major consumer of cement (53%) followed by the government infrastructure sector. Similarly northern and southern region consume around 20-30% cement while the central and western region are consuming only 16-18% (report on cement industry in India, Shobhit Chandak, 2008) India, world's second largest cement producer after China, right from laying concrete bricks of economy to waving fly overs cement industry has shown and
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shows a great future. The overall outlook for the industry shows significant growth on the back of robust demand from housing construction, Phase-II of NHDP(National Highway Development Project) and other infrastructure development projects. Domestic demand for cement has been increasing at a fast pace in India. Cement consumption in indias forecasted to grow by over 22% by2009-2010 from 2007-2008. Among the states,Maharashtra has the highest share in consumption at 12.18%, followed by Uttar Pradesh. In production terms Andhra Pradesh is leading with 14.72% of total production followed by rajasthan. Cement production grew at the rate of 9.1% during 200607 over the previous fiscals total production of 147.8 million tons. Due to rising demand of cement the sales volume of cement companies are also increasing & companies higher production, higher sales and higher profits. The net profit growth rate of cement firms was 85%. Cement industry has contributed around 8% to the economic development of India. Outsiders (foreign players) eyeing India as a major market to invest in the form of either merger of FDI (Foreign Direct Investment). Cement industry has a long way to go as Indian economy is poised to grow because of being on verge of development. The company continues to emphasize on reduction of costs through enhanced productivity, reduction in energy costs and logistics expenses. The cement sector is expected to witness growth in line with the economic growth because of the strong co-relation with GDP. Future drivers of cement demand growth in India would be the road and housing projects. As per the Working Group report on Cement industry for the formulation of the 11 th Plan, the cement demand is likely to grow at 11.5% per annum during the 11 th plan and cement production and capacity by the end of the 11 th Plan are estimated to be 269 million tons and 298 million tons, respectively, with capacity utilization of 90%.

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Despite the growth of Indian cement industry lags behind the per capita production. Supply for cement is expected to remain tight which, in turn, will push up prices of cement by more than 50%. The most important factor for better prices is consolidation of the industry. It has just begun and we will see more consolidation in the coming years. Other budget measures such as cut in import duty from 12.5% to nil etc. are all intended to cut costs and boost availability of cement. Badly the adverse effects of global slowdown have not speared this industry too. Demand is sluggish, the government is keeping an eagle eye on prizes, domestic coal and pet coke, prizes have increased sharply and utilizations rates are down. The numbers coming out are a reflection of grim times. ACC the countrys largest cement company thats controlled by Swiss giant HOLCIM, registered 2% fall in august sales. It is the biggest fall in august sales. It is the biggest fall since Feb2007. Production fell by 5%. To stand against the problematic situation, government as well as cement industry has taken some steps. Companies are focusing on cost of transportation. One of the strategies is to decrease dependence on road & opt for sea logistics as that can cut transportation cost by 30-50%. Some plants are adopting futuristic plan such as setting up captive power plant, moving closer to the customers by creating clicker, crushing and capacity in key markets, to be more customer centric to generate better revenue. India should push for stricter regulations of market place as to control the prices of big companies and prevent them from forming cartels and exchanging information. To fight with the high inflation, government wants to import more cement from Pakistan. However cement prices are not very much high as other items but still they are increasing. And the reason of high price is surging cost of raw material and transportation cost. Apart from this government also discussed with cement industry not to have increase in prizes and keep consumer interest in mind.

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Now the question arise in front of the government is whether the demand by the government is possible to increase through expenditure on infrastructure or not according to the current state of economy when so many crises are going on or how the government allocation of US$3.23billion for the National Highway Development, Project will keep the demand for cement alive? And to what extent the prices of cement should be increase so that consumer cant affect. Cement industry in India has also made tremendous strides in technological up gradation and assimilation of latest technology. Presently,93 percent of the total capacity in the industry is based on modern and environment friendly dry process technology. The induction of advanced technology has helped the industry immensely to conserve energy and fuel and to save materials substantially. Indian cement industry has also acquired technical capability to produce different types of cement like Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement , Sulphate Resisting Portland Cement ,White Cement etc. Some of the major clusters of the industry in India are: Satna (Madhya Pradesh), Chandrapur

(Maharashtra),Gulbarga (Karnataka), Yerranguntla (Andhra Pradesh), Nalgonda (Andhra Pradesh), Bilaspur (Chattisgarh), and Chandoria(Rajasthan).

Current Scenario
Indian cement industry is currently second largest producer in the world. The origins of Indian cement industry can be traced back to 1914 when the first unit was setup at Porbandar with a capacity of 1000 tones. Today cement industry comprises of 130 large cement plants and more than 300 mini cement plants that is again increasing on an everyday basis. The industrys capacity at the end of the year reached 188.97 million tons which was 166.73 million tons at the end of the year 2006-07. Cement production during April to March 2007-08
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was 168.31 million tons as compared to 155.66 million tons during the same period April to March 2006-07. Dispatches were 167.67 million tons during April to March2007-08 whereas 155.26 million tons during the same period. During April-March2007-08, cement export was 3.65 million tons as compared to 5.89 million tons during the same period. The cement industry in India has gone over a consolidation phase. Some examples are Gujarat Ambuja taking a stake of 14 per cent in ACC and taking over Rassi and Sri Vishnu Cement. Grasim has also acquired the cement business of L&T, Indian Rayons cement division and Sri Digvijay Cements. Foreign cement companies are also picking up stake in large Indian cement companies. Swiss cement major Holcim has picked up 14.8 per cent of promoters stake in Gujarat Ambuja Cements (GACL). Holcims acquisition has led to the emergence of two major groups in the Indian cement industry, the Holcim-ACC-Gujarat Ambuja Cements combine and the Aditya Birla Group through Grasim Industries and Ultratech Cement. Lafarge, the French cement major has acquired the cement plants of Raymond and Tisco. Italy based Italcementi has acquired a stake in the K.K. Birla promoted Zuari Industries cement plant in Andhra Pradesh, and German cement company Heidelberg Cement has entered into an equal joint venture agreement with S P Lohia Group controlled Indo-Rama Cement.

Process Technology
While adding fresh capacities, the cement manufacturers are very conscious of the technology used. In cement production, raw materials preparation involves primary and secondary crushing of the quarried material, drying the material (for use in the dry process) of undertaking a further raw grinding through either wet or dry processes, and blending the materials. Clinker production is the most energy intensive step, accounting for about 80% of the energy used in cement production produced by burning a mixture of materials, mainly limestone,
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silicon oxides, aluminum and iron oxides, clinker is made by one of two production processes: wet or dry; these terms refer to the grinding processes although other configurations and mixed forms (semi-wet, semi-dry) exist for both types. In the dry process, the raw materials are ground, mixed, and fed into the kiln in their dry state. In the wet process, the crushed and proportioned materials are ground with water, mixed and fed into the kiln in the form of slurry. There are different varieties of cement based on different compositions according to specific end uses, namely, Ordinary Portland Cement,

Portland Pozzolana Cement, White Cement, Portland Blast Furnace Slag Cement and Specialized Cement. The basic difference lies in the percentage of clinker used. Ordinary Portland Cement (OPC): OPC, popularly known as grey cement, has 5 per cent gypsum and 95 per cent clinker and It accounts for 70 per

other materials.

cent of the total consumption. Portland Pozzolana Cement (PPC): PPC has 80 per cent clinker, 15 per cent pozzolona and 5 per cent gypsum and accounts for 18 per cent of the consumption. It is manufactured because it uses total cement fly ash/burnt

clay/coal waste as the main ingredient. White Cement: White cement is basically OPC - clinker using fuel oil (instead of coal) with iron oxide content below 0.4 per cent to ensure whiteness. A special cooling technique is used in its production. It is used to enhance

aesthetic value in tiles and flooring. White cement is much more expensive than grey cement.
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 Portland Blast Furnace Slag Cement (PBFSC): PBFSC consists of 45 per cent clinker, 50 per cent blast furnace slag and 5 per cent gypsum and accounts for 10 per cent of the

total cement consumed. It has a heat of hydration even lower than PPC and is generally used in the construction of constructions. Specialized Cement: Oil Well Cement is made from clinker with special additives to prevent any porosity. Rapid Hardening Portland cement: Rapid Hardening Portland cement is similar to OPC, except that compressible dams and similar massive

it is ground much finer, so that on casting, the strength increases rapidly. Water Proof Cement: Water Proof Cement is similar to OPC, with a small portion of

calcium

stearate or non- saponifibale oil to impart waterproofing properties.

Manufacturing Process:
Mining Process
The main raw materials used in the cement manufacturing process are limestone, sand, shale, clay and iron ore. The cement manufacturing process starts from the mining of limestone, which is the main raw material for making cement. Limestone is excavated from open cast mines after drilling and blasting and loaded on to dumpers which transport the material and unload into hoppers of the limestone crushers.

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Crushing Stacking & Reclaiming of Limestone

The LS Crushers crush the limestone to minus 80mm size and discharge the material onto a belt conveyor which takes it to the stacker via the Bulk material analyzer. The material is stacked in longitudinal stockpiles. Limestone is extracted transversely from the stockpiles by the reclimers and conveyed to the Raw Mill hoppers for grinding of raw meal.

Crushing Stacking & Reclaiming of Coal

The process of making cement clinker requires heat. Coal is used as the fuel for providing heat. Raw Coal received from the collieries is stored in a coal yard. Raw Coal is dropped on a belt conveyor from a hopper and is taken to and crushed in a crusher. Crushed coal discharged from the Coal Crusher is stored in a longitudinal stockpile from where it is reclaimed by a reclaimer and taken to the coal mill hoppers for grinding of fine coal. Raw Meal Drying / Grinding & Homogenisation Reclaimed limestone along with some laterite stored in their respective hoppers is fed to the Raw Mill for fine grinding. The hot gasses coming from the clinkerisation section are used in the raw mill for drying and transport of the ground raw meal to the Electrostatic Precipitator/Bag House, where it is collected and then stored and homogenized in the concrete silo. Raw Meal extracted from the silo (now called Kiln feed) is fed to the top of the Preheater for Pyroprocessing.

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Clinkerisation
Cement Clinker is made by pyroprocessing of Kiln feed in the preheater and the rotary kiln. Fine coal is fired as fuel to provide the necessary heat in the kiln and the Precalciner located at the bottom of the 5/6 stage preheater. Hot clinker discharged from the Kiln drops on the grate cooler and gets cooled. The cooler discharges the clinker onto the pan / bucket conveyor and it is transported to the clinker stockpiles / silos. The clinker is taken from the stockpile / silo to the ball mill hoppers for cement grinding.

Cement Grinding & Storage

Clinker and Gypsum (for OPC) and also Pozzolana (for PPC) are extracted from their respective hoppers and fed to the Cement Mills. These Ball Mills grind the feed to a fine powder and the Mill discharge is fed to an elevator, which takes the material to a separator, which separates fine product and the coarse. The latter is sent to the mill inlet for regrinding and the fine product is stored in concrete silos.

Packing
Cement extracted from silos is conveyed to the automatic electronic packers where it is packed in 50 Kg bags. Polythene bags and distributed in trucks or rail. Bulk cement can also be distributed in bulk by truck, rail, or water depending on the customers needs.

Demand and Supply

The demand drivers for the cement sector continue to be housing, infrastructure and commercial construction, etc. we expect the proportion of infrastructure in
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total demand to improve further in future, as the thrust on infrastructure development is on the rise. During April-November 2007, cement demand grew by 10 percent year-on-year propelled by the growth witnessed in end user segments such as housing, infrastructure etc. CRISIL Research expects demand to remain strong and grow by 12 per cent in the next 2 years.Cement demand is expected to outstrip supply for the next year and half as no major capacities are coming on stream, thus providing enough flexibility to cement manufacturers to further hike the prices. Today cement from Andhra is going all over India, including Assam, Meghalaya, Jharkhand, Orissa, WestBengal, Chattisgarh, Gujarat and

Maharashtra. More cement is likely to flow into Tamil Nadu from the state in view of cut in sales tax. Any further increase in demand in the South India will benefit the cement industry here. Cement movement form Gujarat to Mumbai is also coming down due to exports while cement movement form Orissa into Andhra has stopped and, in fact, cement is flowing into Orissa as well. Earlier in 2006-07, the housing sector alone consumed 65 percent of the total domestic consumption. With the launch of several infrastructure projects, the housing consumption may come down to 55 per cent as the infrastructure and other sectors are expected to move up to 45 percent from the present 35 per cent. Still, the main sector of consumption continues to be housing including commercial space, occupying more than 60 per cent. The current demand in the state for 2005-06 is expected to cross 15 million tons. We expect the demand here to go past the 17.5 million tons mark in 2006-07 in view of irrigation and infrastructure projects being taken up in the state. Weaker sections housing, construction of public toilets, schools in rural areas apart from several private and public infrastructure projects will also give tremendous boost to the cement

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consumption in the state. Most importantly, irrigation projects, worth nearly Rs 1 lakh crore, will trigger unprecedented demand for the next 5-7 years.

DEMAND DRIVERS
Indian cement demand skewed towards housing. The demand from the housing sector is 53% of the total Indian cement demand. There are fears of a slowdown in the demand from the housing sector due to a drop in real estate prices in the country. The worry is that builders may postpone construction of new buildings if the property prices were to correct. Infrastructure to give demand a big boost Our analysis shows that infrastructure should be the biggest growth driver for Cement demand in the country. If we were to look only at order books of the top eight construction and manufacturing equipment companies in India, we find that their combined order book has virtually doubled over the last two years from INR1,000bn(USD25bn) over the next 24-30 months. to INRI,950bn(USD48.75bn) for completion

COST
Over the past five years, cost of cement production has grown at a CAGR of 8.4%. also the producers have been able to pass on the hike in cost to consumers on the back of increased demand. Average realizations have increased from Rs. 1,880 per ton in FY 03 to Rs. 3,133 per tons in FY 07, at a CAGR of 13.6%, which has been reflected in higher profit margins of the industry. To reduce the cost of production, the industry has focused on captive power generation. Proportion of cement production through captive power route has increased over the years. Also, cement movement by rail has increased over the years.
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Freight and energy costs are also increasing; however, in the current market scenario, manufacturers have the flexibility to pass on the increase in costs to end consumers. Let us have a look at the cost factors affecting the cement industry. Capacity Utilization: Since the industry operates on fixed cost, higher the capacity sold, the wider the cost distribute on the same base. But one should also keep in mind, that there have been instances wherein despite a healthy capacity utilization,margins have fallen due to lower realizations. Power: The cement industry is energy intensive in nature and thus power costs form the most critical cost companies in cement manufacturing ( about 30% to total expenses). Most of the companies resort to captive power plants in order to reduce power costs, as this source is cheaper and results in uninterrupted supply of power. Therefore, higher the captive power consumption of the company, the better it is for the company. Freight: since cement is a bulk commodity, transporting is a costly affair (over 15 %). Companies, which have plants located closer to the markets as well as to the source of raw materials have an advantage over their peers, as this leads to lower freight costs. Also, plants located in coastal belts find it much cheaper to transport cement by the sea route in order to cater to the coastal markets such as Mumbai and the states of Gujarat and Tamil Nadu. On account of sufficient reserves of raw materials such as limestone and gypsum, the raw material costs are generally lower than freight and power costs in the cement industry. Excise duties imposed by the government and labor wages are among the other important cost components involved in the manufacturing of cement.

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Operating Margins: The company should have a consistent record of outperforming its peers on the operational performance front i.e. it should have higher operating margins than its competitors in the industry. Factors such as captive power plants,effective capacity utilization results in higher operating margins and therefore these factors should be looked into. Since cement is a regional play on account of its high freight costs, the company should not have all its plants concentrated in one region. It should have a geographical spread so that adverse market conditions in one region can be mitigated by high growth in the other region. Government Policies: Government Policies have affected the growth of cement plants in India in various stages. The control on cement for a long time and then partial decontrol and then total decontrol has contributed to the gradual opening up of the market for cement producers. The stages of growth of the cement industry can be best described in the following stages: Price and Distribution Controls(1940-1988) During the Second World War,cement was declared as an essential commodity under the Defence of India Rules and was brought under price and distribution controls which resulted in sluggish growth. The installed capacity reached only 27.9MT by the year 1980-81. Partial Decontrol(1982-1988) In February 1982, partial decontrol was announced. Under this scheme,levy cement quota was fixed for the units and the balance could be sold in the open market. This resulted in extensive modernization and expansion drive, which can be seen from the increase in the installed capacity to 59MT in 1988-89 in

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comparison with the figure of a mere 27.9MT in1980-81,an increase of almost 111%. Total Decontrol(1989) In the year 1989,total decontrol of the cement industry was announced. By decontrolling the cement industry, the government relaxed the forces of demand and supply. In the next two years, the industry enjoyed a boom in sales and profits. By 1992, the pace of overall economic slipped into recession taking the cement industry down with it. For 1992-93, the industry remained stagnant with no addition to existing capacity. Government Controls The prices that primarily control the price of cement are coal, power tariffs, railway,freight,royalty and cess on limestone. Interesting, all of these prices are controlled by government.

REQUIREMENTS Coal
Coal is the main fuel for manufacture of cement in India. The

consumption of coal in a typically dry process system ranges from 20-25% of clinker production.20 This means for per ton clinker produced 0.20-0.25 ton of coal is consumed. The cement industry consumes about 10 million tonnes of coal annually. Since coalfields like Bharat Coking Coal Limited

(BCCL),

Central Coalfields Limited (CCL) supply poor

quality of

coal, the industry has to blend high-grade coal with it. However, non-coking coal and petroleum coke attracts a customs duty of 5%, which increases the cost of production in the sector.
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Electricity
Cement industry consumes about 5.5 billion units of electricity

annually with one tone of cement requiring approximately 120-130 units of electricity. Since since state governments supply electricity in India and

different states have different tariff structure, the power tariffs vary

according to the location of the plant and on the production process. As a result, cement plants Another major in different states attract different power tariffs.

hindrance to the industry is severe power cuts. Most of the

cement producing states such as Andhra Pradesh, Madhya Pradesh experience power cuts to the tune of 25-30% every year causing substantial production loss.

Infrastructure
To reduce uncertainity relating to power, most of the leading companies like

ACC,Indian Rayon, and Grasim rely on captive power plants. A few companies are also considering power generating windmills.

Limestone
This constitutes the largest bulk in terms of input to cement. For one tonne of Since, cement, the approximately plants near 1.6 tonnes of producing is less

limestone pay

required.

limestone

deposits

transportation cost than others, the location of cement plant is determined by the location of limestone mines. The total limestone deposit in the country is

estimated to be 90 billion tones, with Andhra Pradesh enjoying the largest share of Pradesh 8%, and and 34%, followed by Karnataka, shares Gujarat, Madhya of 13%, 13%,

Rajasthan,

with respective

6.5%.

However, cement-

manufacturing companies have

29

to

shed large

sums

of

money

by

way

of

royalty payment to the

central government and cess on royalties levied by the state government.

Transportation
Cement is mostly packed in paper bags now. It is then

transported either by rail or road. Road transportation beyond 200 kms is not economical therefore about 55% cement is carried by the railways. There is also the problem of inadequate availability of wagons especially on western railways and southeastern railways. Under this scenario, there is a need to encourage transportation

through sea, which is not only economical but also reduces losses in transit. Today, 70% of the cement movement worldwide is by sea compared to 1% in India.However, the scenario is changing with most of the big players like L&T,ACC and Grasim having set up their bulk terminals.

Infrastructure for Future

The consumption of cement is determined by factors influencing the level of housing and industrial construction, irrigation projects, roads and laying of water supply and drainage pipes etc. The level and growth of GDP and its sectoral composition, capital formation, development expenditure, growth in population, level of urbanization, etc, in turn, determine these factors. But the domestic demand for cement is mainly from the housing activities and infrastructure development. The government paved the way for the entry of the private sector in road projects. It has amended the National Highway Act to allow private toll collection and identified projects, bridges, expressways and big passes for private construction. The budget gave substantial incentives to private sector construction companies. Ongoing liberalization will lead to an
30

increase in industrial activities and infrastructure development. So it is hoped that Indian cement industry shall boom again in near future.

Incentives in States
Most state governments, in order to attract investments in their respective states, offer fiscal incentives in the form of sales tax exemptions/deferrals. In some states, this applies only to intrastate sales, like Madhya Pradesh and Rajasthan. States like Haryana offer a freeze on power tariff for 5 years, while Gujarat offers exemption from electric duty.

Installed Capacity
India is the worlds second largest cement producing country after China. The industry is characterized by a high degree of fragmentation that has created intense competitive pressure on price realizations. Spread across the length and breadth of the country, there are 120 large plants belonging to 56 companies with an installed capacity of around 135mn tons as on March 2002.

Opportunities threats and risks:

The cement industry is going through a boom period with sustained capacity utilization of over 90%. While the Indian economy has slowed down, there has been no economic meltdown unlike in western countries, thanks to the inherent strength of the Indian economy. The Government still expects GDP growth of 8-9% p.a., as per recent political pronouncements. Cement industry has not been affected by the economic slowdown and is still registering 8-10% p.a. growth. While large addition to capacities in the industry is on the anvil, the anticipated boost to infrastructure development such as roads, ports, airports, power plants and housing and with the global economy showing early signs of revival, the
31

demand-supply imbalance could get corrected in a short period. As per NCAER study ,under high growth scenario, the demand for cement (including exports)is expected to increase to 244.82million tons by 2010-11. As per the study,the demand is expected to be much higher at 311.37 million tons in 2012, if the optimistic projections of the road and the housing sectors are met.the industry has responded to this with substantial new capacity announcements. The materialization of these capacities, however, is likely to be delayed due to a number of factors including timely delivery of equipment and construction of the plant due to heavy oreder book position of the suppliers. It is expected that demand growth will outstrip supply till the materialization of such new capacities. However, the current high level of international crude prices and its impact on the domestic prices of petroleum products is likely to make a dent in the profitability but its impact will have to be seen depending upon the ability of the economy to pass on such cost increase to the consumer. While the freight cost could be optimized on the imported coal through usage of companys own ships for part of the quantity, the international prices of imported coal and its volatility together with the strengthening of the Dollar against Rupee could derail this .this could impact the delivery prices of imported coal and also the cost of production. The Government has taken steps to increase the availability of indigenous coal for its expanded capacity across various plants which can mitigate of such high cost of imported coal for the plants located near the coal fields in India. The Governments continuing efforts to rein in cement prices by freeing imports and banning exports could artificially disable the normal market price mechanisms for determining the price. The rise in the price of cement is because of the gap of demand and supply in the market. The demand for cement is much higher than its actual supply. But
32

with the production maximization, which can be encountered in next few years, this gap may narrow down, that may ensure the market to be in equilibrium. Decreasing per capita consumption doesnt affect the total consumption for the cement. It means the infrastructure; contacted housing is using the bulk of the production. In spite of High price of the product, the hick of demand because of the increasing rate of infrastructural development. Domestic price of cement is rising as well as the imported cement price is lowering. So altogether the supply of the cement, which is affordable, will increase. This may in decrease the gap between supply and demand. Major demand was from the housing sector, which may shift to infrastructural as lots of infrastructural development processes has already being taken up and due to the increased price, housing segment started showing a showdown.

Main Companies in India

Associated Cement Companies Ltd (ACCL)
Associated Cement Companies Ltd manufactures Ordinary Portland Cement, composite cement and special cement and has begun offering its marketing expertise and distribution facilities to other producers in cement and related areas. It has twelve manufacturing plants located throughout the country with exports to SAARC nations. The company plans capital expenditure through expansion of existing units and/or through acquisitions. Non-core assets are to be divested to release locked up capital. It is also expected to actively pursue overseas project engineering and consultancy services.

33

Birla Corporation Ltd

Birla Corp's product portfolio includes acetylene gas, auto trim parts, casting, cement, jute goods, yarn, calcium carbide etc. The cement division has an installed capacity of 4.78 million metric tons and produced 4.77 million metric tons of cement in 2003-04. The company has two plants in Madhya Pradesh and Rajasthan and one each in West Bengal and Uttar Pradesh and holds a market share of 4.1 per cent. It manufactures Ordinary Portland Cement (OPC), Portland Pozzolana Cement, fly ash-based PPC, Low-alkali Portland cement, Portland slag cement, low heat cement and sulphate resistant cement. Large quantities of its cement are exported to Nepal and Bangladesh. Going forward, the company is setting up its captive power plant to remain cost competitive.

Century Textiles and Industries Ltd (CTIL)

The product portfolio of CTIL includes textiles, rayon, cement, pulp & paper, shipping, property & land development, builders and floriculture. Cement is the largest division of CTIL and contributes to over 40 per cent of the company's revenues. The company has an installed capacity of 4.7 million tons with a total cement production of 5.43 million tons in 2003-04. CTIL has four plants that manufacture cement, one in Chhattisgarh, two in Madhya Pradesh and one in Maharashtra. Going forward, the company has scripted a three-pronged strategy closing down its shipping business, continuing with its chemicals and adhesive division, and focusing on cement, rayon and paper as its long-term business plan.

34

Grasim-UltraTech Cemco
Grasim's product profile includes viscose staple fibre (VSF), grey cement, white cement, sponge iron, chemicals and textiles. With the acquisition of UltraTech, L&T's cement division in early 2004, Grasim has now become the world's seventh largest cement producer with a combined capacity of 31 million tons. Grasim (with UltraTech) held a market share of around 21 per cent in 2003-04. It has plants in Madhya Pradesh, Chhattisgarh, Punjab, Rajasthan, Tamil Nadu and Gujarat among others. The company plans to invest over US$ 9 million in the next two years to augment capacity of its cement and fibre business. Its also plans to focus on its international ventures, ramping up the capacity of Alexandra Carbon Black in Egypt to 1,70,000 tone per annum (from 1,20,000 tpa) and raising the capacity of the carbon black plant in China from 12,000 tpa to 60,000 tpa.

Gujarat Ambuja Cements Ltd (GACL)

Gujarat Ambuja Cements Ltd was set up in 1986 with the commencement of commercial production at its 2 million tone plant in Chandrapur, Maharashtra. The group has clinker- manufacturing facilities at Himachal Pradesh, Gujarat, Maharashtra, Chhattisgarh, Punjab and Rajasthan. The company has a market share of around 10 per cent, with a strong foothold in the northern and western markets. Its total sales aggregated US$ 526 million with a capacity of 12.6 million tons in 2003-04. Gujarat Ambuja is India's largest cement exporter and one of the most cost efficient firms. GACL has a 14.45 per cent stake in ACC, making it the second largest cement group in the country, after GrasimUltraTech Cemco. The company has free cash flows that it is likely to use to grow inorganically. The company is scouting for a capacity of around two

35

million tonne in the northern and western markets. It has also earmarked around US$ 195-220 million for acquisitions

India Cements
India Cements is the largest cement producer in southern India with a total capacity of 8.81 million tons and plants in Andhra Pradesh and Tamil Nadu. The company has a market share of 5.4 per cent with a total cement production of 6.36 million tons in 2003-04. Its product portfolio includes Ordinary Portland cement and blended cement. The company has limited its business activity to cement, though it has a marginal exposure to the shipping business. The company plans to reduce its manpower significantly and exit non-core businesses to turnaround its fortune. It also expects the export market to open up, with the Gulf emerging as a major importer.

Jaiprakash Associates Limited

Jaiprakash Industries, now known as Jaiprakash Associates Limited (JAL) is part of the Jaypee Group with businesses in civil engineering, hospitality, cement, hydropower, design consultancy and IT. It has an annual capacity of 4.6 million tonnes with plants located in Rewa & Bela (Madhya Pradesh) and Sadva Khurd (Uttar Pradesh). The company has a market share of 3.8 per cent with the cement division contributing US$ 172 million to revenue in 2003-04. The company is upgrading its capacity to 6.5 million tones through the modernizing of the existing units and the commissioning of a new grinding unit at Tanda (Uttar Pradesh) with an investment of US$ 163 million. Jaiprakash Associates has decided to concentrate on its core business of construction and engineering and leave its cement plant to its subsidiary Jaypee Rewa Cement Ltd. The

36

company manufactures a wide range of world class cement of OPC grades 33,43,53, IRST-40 and special blends of pozzolana cement.

JK Synthetics
JK Synthetics, a Singhania Group company, started manufacturing nylon at Kota in 1962. Subsequently, it diversified into PSY/PFY, nylon tyre-cord, cement (in 1975), acrylic and white cement (in 1984). The company has a market share of 2.7 per cent. JK Synthetics Limited is restructuring its business divisions into two separate entities- JK Cements and JK Synthetics. After the restructuring, it will be left with a cement plant at Nimbahera in Rajasthan, with a capacity of 3.26 million metric tons and manufacturing white cement.

Madras Cements
Madras Cements Ltd is one of the oldest cement companies in the southern region and is a part of the Ramco group. The company is engaged in cement, clinker, dolomite, dry mortar mix, limestone, ready mix cement (RMC) and units generated from windmills. The company has three plants in Tamil Nadu, one in Andhra Pradesh and a mini cement plant in Karnataka. It has a total capacity of 5.47 million tons annually and holds a market share of 3.1 per cent. Madras Cements plans to expand by putting up RMC plants. As Karnataka is a promising market, the company is further expanding its capacity from the present 1.5 million tons to 3.4 million tons through an investment of US$ 9 million.

37

Foreign players
Holcim
Holcim, earlier known as Holderbank, has a cement production capacity of 141.9 million tones. It is a key player in aggregates, concrete and construction related services. It has a strong market presence in over 70 countries and is a market leader in south America and in a number of European and overseas markets. Holcim entered India by means of a long-term strategic alliance with Gujarat Ambuja Cements Ltd (GACL). The alliance aims to strengthen their clinker and cement trading activities in South Asia, the Middle East and the region adjoining the Indian Ocean. Holcim also intends to use India as an additional base for its IT operations, R&D projects as well as a procurement sourcing hub to generate additional synergies and value for the group.

Italcementi Group
The Italecementi group is one of the largest producers and distributors of cement with 60 cement plants, 547 concrete batching units and 155 quarries spread across 19 countries in Europe, Asia, Africa and North America. Italcementi is present in the Indian markets through a 50:50 joint venture company with Zuari Cements. All initiatives in southern India are routed through the joint venture company, while Italcementi is free to buy deals in its individual capacity in northern India. The joint venture company has a capacity of 3.4 million tonnes and a market share of 2.1 per cent.

Lafarge India
Lafarge India Pvt. Ltd, a subsidiary of the Lafarge Group, has a total cement capacity of 5 million tones and a clinker capacity of 3 million tons in the
38

country. Lafarge commenced operations in 1999 and currently has a market share of 3.4 per cent. It exports clinker and cement to Bangladesh and Nepal. It produces Portland slag cement, ordinary Portland cement and Portland Pozzolana cement. The Indian cement plants are located in Chhattisgarh and Rajasthan. Lafarge Cement has become the largest cement selling firm in the Indian markets of West Bengal, Bihar, Jharkhand and Chhattisgarh.

39

Company Profile
The Jaypee Group is a well diversified infrastructural industrial conglomerate in India. Over the decades it has maintained its salience with leadership in its chosen line of businesses - Engineering and Construction, Cement, Private Hydropower, Hospitality, Real Estate Development, Expressways and Highways. The group has been discharging its responsibilities to the satisfaction of all its shareholders and fellow Indians, summed by its guiding philosophy of "Growth with a Human Face". With a single minded focus in mind, to achieve pioneering myriads of feat in civil engineering Shri. Jaiprakash Gaur, Founder Chairman of Jaiprakash Associates Limited after acquiring a Diploma in Civil Engineering in 1950 from the University of Roorkee, had a stint with Govt. of U.P. and with steadfast determination to contribute in nation building, branched off on his own, to start as a civil contractor in 1958, group is the 3rd largest cement producer in the country. The groups cement facilities are located in the Satna Cluster (M.P.), which has one of the highest cement production growth rates in India. HISTORICAL MILESTONE:Year 1958 1979 1980 1983 Events Completed first work as contractor in Kota(India). Jaiprakash Associates Pvt Ltd (JAPL) formed. Hotel Siddharth and Vasant Continental set up. Establishment of Jaypee Rewa Cement Plant(JRCL) with an initial capacity of 1 million tones.

40

1986 1992

Formation of Jaiprakash Industries Limited(JIL). Formation of Jaiprakash Hydro Power Ltd(JHPL) to operate 300 MW Baspa II HE Project

1996

Establishment of Jaypee Bela Cement Plant(JBCP) with an initial capacity of 1.9 million tones.

2000

Formation of Jaypee Cement Ltd.(JCL)by merging JRCL and JBCP.

2003

Formation of Jaiprakash Associates Ltd.(JAL) formed by merging JIL with JCL.

2005

Share of JHPL listed on BSE/NSE. First Hydropower company to be publicly held and listed in the country.

2006

Merger of Jaypee Greens with Jaiprakash Associates Ltd.(JAL).

Business of Jaypee Group Civil Engineering

Initially, the Jaypee Group started as civil engineering contractors. Jaiprakash Associates Ltd., the flagship company of the Group, is a leader in Construction of river valley and hydropower projects on turnkey basis for more than 4 decades. The company is currently executing various projects in hydropower / irrigation / other infrastructure fields and has had the distinction of executing simultaneously 13 hydropower projects spread over 6 states and the neighbouring country Bhutan for generating 10,290 MW of power. Jaypee Group undertakes projects involving:41

 Large quantities of rock excavation (both surface and underground) Controlled earth/rock fill Concrete manufacture and placement (including chilling) Fabrication and erection of penstock liners Hydro-mechanical equipment procurement and erection Steel Structures Expressway Construction Real Estate Development

Cement
Jaypee group is the 3rd largest cement producer in the country. The groups cement facilities are located in the Satna Cluster (U.P), which has one of the highest cement production growth rates in India. The group produces special blend of Portland Pozzolana Cement under the brand name Jaypee Cement (PPC). Its cement division currently operates modern, computerized process control cement plants with an aggregate installed capacity of 26.20 MnTPA. The company is in the midst of capacity expansion of its cement business in Northern, Southern, Central, Eastern and Western parts of the country and is slated to be a 35.90 MnTPA by FY12 (expected) with Captive Thermal Power plants totaling 672 MW. Keeping pace with the advancements in the IT industry, all the 260 cement dumps are networked using TDM/TDMA VSATs along with a dedicated hub to provide 24/7 connectivity between the plants and all the 120 points of cement distribution in order to ensure track the truck initiative and provide seamless integration. This initiative is the first of its kind in the cement industry in India.
42

In the near future, the group plans to expand its cement capacities via acquisition and greenfield additions to maximize economies of scale and build on vision to focus on large size plants from inception. The Group is committed towards the safety and health of employees and the public. Our motto is Environment Cement Division of Jaiprakash Associates Limited with its Plants at Jaypee Rewa Plant(JRL), Jaypee Bela Plant(JBP),JAAGO & JCBU has been awarded the Integrated Management System comprising of ISO-9001:2000, ISO14001:2004 & OHSAS-18001:1999 by the world renowned Bureau Veritas Certification. ISO-9001:2000 covers Quality Management System. ISOWork For Safe, Healthy, Clean & Green

14001:2004 covers all Environment Issues including conservation of Natural Resources and Reduction of Emissions and Wastes. OHSAS-18001:1999

covers Operational Safety and reduces Risk to People, Plant & Machinery.

Private Hydropower
Hydropower- a renewable source of energy on whch the future of our country rests. It conserves our nations fossil fuel reserves, is in abundant supply and simultaneously is non-polluting in nature. Keeping all this in the backdrop of mind, Government of India(GOI) opened up of private hydropower projects. The GOI has an ambitious plan of providing power for all by the year 2012. For this the government identified an optimal mix of 40:60 to meet the peak shortage demand. Seeing the vast potential present in the hydropower generation, the house of Jaypee ventured into private power generation on Build Own Operate(BOO)

43

basis. JAL has so far the distinction of participating in 54% of new hydropower projects under Indias Tenth Five Year Plan.

Hospitality
The Hotel division of Jaiprakash Associates Ltd. owns and operates four Five Star Deluxe hotels and is a significant player in north of India. All the hotels enjoy the patronage of most illustrious of the families, businessmen leaders and dignitaries from around the world. This leading chain of Deluxe hotels in India offers luxurious accommodation, exquisite dining facilities, interesting leisure options and a pleasant environment to provide a comfortable stay for our esteemed guests. The first two five star hotels in the capital were set up in the back drop of the Asian Games in 1980 - Hotel Siddharth and Hotel Vasant Continental. An ode to the cosmopolitan culture of Delhi these two five star hotels unfold the finest lifestyle experiences. An exquisite blend of business and pleasure, makes them a perfect place to confer, relax or pamper your senses. Pioneering the concept of Deluxe hotels Hotel Jaypee Palace Agra, is a hotel and convention centre. The hotel is a fine blend of the Mughal architectural brilliance and it combines classic qualities, simultaneously blending luxury and exclusivity with modern style, flair and sophistication. Jaypee Residency Manor , Queen of hills, Mussoorie is a tribute to the majesty and splendor of the Mussoorie hills. Built on an individual hilltop, the Hotel offers an amazing 180 degrees of the most awe inspiring view of the hills. Whether staying for business or for pleasure, whether running a conference or a meeting, arranging receptions or any other special occasion, the Jaypee Hotels
44

has it all to make that affair a memorable one. Each visit is an experience of a lifetime.

Integrated Township
Jaypee Greens, the real estate division of the Jaypee Group has been creating lifestyle experiences from building premium golf-centric residences to building mega townships and self sustained mega cities since its inception in the year 2000. Jaypee Greens, Greater Noida is a maiden real estate project of the Jaypee Group and it has undeniably established its position amongst the finest developers in Asia with having been awarded the highest possible accolade in the international property arena. It is a premium 452-acre golf-centric lifestyle real estate development situated in Greater Noida integrating homes with golf course, landscaped emerald spaces, resort living and commercial developments. The project is created to offer a lifestyle at par with world-class residential spaces. India's first 'Wish Town' at Jaypee Greens, Noida has been developed as a diverse, progressive, vital community spread over 1162 acres that combines sophisticated living with pure natural surroundings. A picturesque community with numerous golf facilities, mixed with world class residences, recreational areas, commercial and institution spaces. It offers excellent education facilities, international standard health care facilities, recreational and entertainment centers, various art and cultural galleries, museums, spiritual centers, hotels, multiple shopping complexes, corporate offices, IT parks and public services. With Jaypee Greens Sports City, the company is working with a vision to create one of the world's premier sports destinations, in sync with the vision to craft Indias foremost sporting world with top of the line infrastructure.
45

Conceptualized as an integrated city, where one gets everything that he dreams of in his neighborhood, it includes world-class sports venues with latest facilities, a proposed calendar of international sporting events - providing a platform. Built on 2,500 acres of land within the sports development zone, Jaypee Sports City will feature a magnificent long motor racing track- first time ever in the country, a of dedicated cricket stadium with 100,000-seat capacity and other sports facilities.

Information Technology
We are living in an era of information driven enterprise. Focus is consistently placed on automation techniques that increase the productivity and profitability of the enterprise with reduced costs across various functional heads. IT is an enabler in this context. The Groups Infotech arm JIL Information Technology Limited (JILIT) specializes in providing services in the area of: IT Infrastructure Management Software Development & Consultancy Multimedia Services Content Management, Security & Delivery Agricultural Content Development Learning Solution

JILIT manages the entire IT Infrastructure of the various Group companies that include over 10 construction sites in some of the remotest terrains of the country including 200 cement locations in the interiors of India and 3 University Campuses that house over 7000 computers and various servers.

The company has set up and operates the largest private network of VSATs in Northern India that connect the Groups various project sites, cement locations
46

and Hydropower stations. This facilitates seamless connectivity for video conferencing of remote locations and data connectivity for the ERP solutions of the E&C, Cement and Hydropower divisions and Educational institutions. JILIT is one of the leading education content provider for schools in India. A pioneering initiative was taken in the year 2000 when JILIT conceptualized and developed the first of its kind digital classroom teaching aid that serves to assists in teaching, difficult to visualise topics and concepts in Science, Mathematics and Social Sciences. Today more than 10000 teachers in 500 schools across 152 cities and a few other countries for example Dubai, Kuwait, Oman, Bahrain and South Africa are trusting our educational content for adding value to their classroom teaching process and inturn providing benefit to over 150000 students. Other innovative solution from JILIT include Campus Connect (integrated resource planning solution for academic institutions), Online testing tools and Bizconnect.

Expressway
India has the worlds second largest road network, aggregating over 3.34 million kilometers. As Indian Economy grew in the early part of this decade, challenges & opportunities across entire spectrum emerged and so was the case of large expressways with unique model of ribbon development along it, which modeled as developed tracks of New India .The Group has entered into construction of expressways with the Yamuna Expressway project a 165 km access controlled 6 lane super expressway along the Yamuna river connecting Noida and Agra on Build Own Transfer basis. The project envisages ribbon development along the expressway at 5 locations totaling 25 million square meters for residential/industrial/institutional purposes and shall trigger multidimensional, socio-economic development in Western U.P. besides strengthening the Groups presence in real estate segment in this decade.
47

The Group successfully bid for and was awarded all packages (pkg. 1 to pkg.4) of prestigious Ganga Expressway contract by the Government of Uttar Pradesh. This is the largest private sector infrastructure project in India. The Company had emerged as the lowest bidder, as it bid for the least land for development, which was the most important criteria for bid evaluation. The 1047 km long 8 lane Ganga Expressway would be developed on the left bank of River Ganga, covering the stretch from Greater Noida to Ballia (Eastern Uttar Pradesh). The project will be built on Built-Own-Transfer basis. The Group would also get the rights for development of an estimated 30,000 acres of land along the expressway.

Environmental Policy
An Impetus for the Industry, a Conscience for Society. Jaypee group believes that harmony between the man and his environment is the prime essence of healthy life and living. The sustenance of our ecological balance is therefore of paramount importance. The Group recognizes its joint responsibility with the Government and the Citizens to protect and preserve the environment. The Group is thus, committed to making its operations environmentally acceptable, on a scientifically established basis, while fulfilling customers requirements for excellent quality, performance and safety. As such, the group has evolved an Environmental Policy the aim of which is to do all that is reasonably practicable to prevent or minimise, the risk of an adverse environmental impact arising from our business operations while working with, in and around the Nature.

48

The Environmental Policy reflects the continuing commitment of the Management and Employees for sound Environment Management of its operations. The Policy applies to bidding, sub-contracting, designing, planning, execution, testing, delivering service or a product to the customer and handling complaints, if any. The Policy is thus applicable to all the companies, subsidiaries, associates and affiliate companies of the Group.

Social Commitments
JAIPRAKASH SEWA SANSTHAN [JSS], a not-for-profit Trust promoted by Shri Jaiprakash Gaur, the Founder Chairman of the Jaypee Group, has been established to discharge its responsibility towards the society. The sansthan functions with a holistic approach for overall socio-economic development. Set up in 1993 the trust aims to realize the corporate philosophy of Growth with a Human Face and try to help reduce the pain & agony in society. JSS has translated its social responsibility into reality by building up schools and training institutes that cater to the needs of providing quality education to the rural masses. Under the Comprehensive Rural Development Programme (CRDP) adopted in villages surrounding the cement plant free health care and animal care programmes have been undertaken. The trust helps in times of natural catastrophe to reach the affected communities in distress.

49

Research Methodology
RESEARCH OBJECTIVES
The primary Objective of the project is:
TO ASSESS THE CUSTOMER SATISFACTION IN ALLAHABAD DISTRICT

Secondary Objective is: What are the general problems of dealers? How can dealers be served in a better way? To find out which areas dealers are not getting proper support from the company? What other companies are doing to serve their dealers and where Jaypee cement is lagging behind them? What are the competitive advantages for Jaypee cements and What are the areas of improvement? What is the market position of Jaypee cement?

RESEARCH METHODOLOGY
Data Sources Both primary data and secondary data were used for the study. Primary data were collected by survey method. Secondary data were collected form internet. Questionnaire was

administered by contacting each respondent personally.

50

Geographical Scope Various Cement industries dealers in ALLAHABAD market.

Research Design
This market research is both descriptive and exploratory in nature. This is descriptive because this research enables to describe present picture of service level to dealers from various cement companies. This is exploratory because this research further suggests discovery of new insights and ideas.

Sampling Plan
Sample Size: A sample size of 120 respondents was taken for the study Sampling Method: Non-probability/Convenience, Personal Interview The
sampling technique chosen for the study was Random Sampling Method. This is the most common method of selecting the sample. This is because the dealers are located in different areas of the city. It gives all dealers in a group an equal chance of being selected for the purpose of the survey.

Sampling Unit
Dealers of various cement companies operating in Allahabad district.

Sampling Frame
All the exclusive and multibrand dealers in Allahabad district.

51

Data Analysis:I have covered dealers of various cement companies operating in Allahabad district. Along with dealers to get exact idea of cement market some of nondealers have also been covered. I visited 120 dealers during my survey, some of them were exclusive dealers and others were multibrand dealers. Ques-1:-General perception about jaypee cement Number of dealers BEST GOOD OK 93 17 10 Percentage(%) 77.5 14.16 8.3

General perception about Jaypee Cement

Number of dealers 93 77.5 Pecentage

17

14.16

10

8.3

BEST

GOOD

OK

This graph shows that most of the dealers that is 77% thinks that Jaypee is the best cement brand in the market.

52

Ques-2:-Highest selling cement at counter? Company Jaypee Prism Birla Mycem ACC Maiher Number of dealer 51 20 27 8 10 4 Percentage(%) 42.5 16.6 22.5 6.6 8.3 3.3

Highest selling cement at counters

Number of dealer 51 42.5 27 20 16.6 8 6.6 10 8.3 4 3.3 Maiher Percentage

22.5

Jaypee

Prism

Birla

Mycem

ACC

This graph shows that Jaypee is the highest selling cement in the Allahabad market followed by Birla and Prism cement

53

Ques-3:-Number of Jaypee customer at your counter per day? Customers/day 0 to 5 05 to 10 10 to 15 15 to 20 20 to 25 Number of Dealers 30 35 22 20 13

Number of Jaypee customer/day

40 35 Number of Dealers 30 25 20 15 10 5 0 0 to 5 05 to 10 10 to 15 Customers /day 15 to 20 20 to 25 Number of Dealers

This graph shows that Jaypee customers/day ranges between 5-10 in most of dealers shop. Ques-4:- Basis for consumer purchase? Basis for purchase Number of Dealers Percentage(%) Price Packaging Brand Quality Any other 7 15 23 73 2 5.8 12.5 19.16 60.8 1.6

54

Basis for Consumer purchase of Jaypee Cement

Number of Dealers Percentage(%) 73 60.8

23 15 7 5.8 Price Packaging 12.5

19.16 2 1.6

Brand

Quality

Any other

This Graph shows that customers are focusing on Quality of the cement then any other aspects. Ques-5:- Basis for selling Jaypee Cement? Basis for selling Consumer Demand Availability Schemes Credit Availability Profitability Number of Dealers 95 3 8 7 7 Percentage(%) 79.16 2.5 6.6 5.8 5.8

Basis for selling Jaypee Cement

Number of Dealers 95 79.16 Percentage(%)

3 Consumer Demand

2.5

6.6

5.8

5.8

Availability

Schemes

Credit Availability

Profitability

55

Ques-6:- Are you satisfied with the availability of the product? Yes 107 89.16 No 13 10.8

Number of dealer Percentage(%)

Satisfaction level with the availability of the product

Number of dealer 107 Percentage(%)

89.16

13 Yes No

10.8

This graph shows most of the dealers that is 107 is satisfied with the availability of the product. Ques-7:- Are you satisfied with companies brand promotion? Yes 115 95.8 No 5 4.16

Number of dealer Percentage(%)

Satisfaction level with the brand promotion of the company

Number of dealer 115 95.8 Percentage(%)

5 Yes No

4.16

56

This graph shows that the dealers are satisfied with the brand promotion of the company. And the dealers who are not satisfied suggested to have more brand promotions through advertising, using popular celebrity and spreading awarenss and building personal relationship. Ques-8:- Which type of customer come to you? Type of customer Consumer Builder Mason Small contractors Dealers 46 40 18 16 Percentage(%) 38.6 33.3 15 13.3

Type of customer
Dealers 46 38.6 40 33.3 Percentage(%)

18 15

16 13.3

Consumer

Builder

Mason

Small contractors

From the above graph we can infer that mostly are the consumers and the builders who consume the Jaypee cement.

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Ques-9:- What is your average monthly sale? Monthly sale in MT 0 to 10 10 to 20 20 to 30 30 to 40 40 to 50 50 to 60 More than 60 Number of Dealers 8 20 30 20 21 10 11 Percentage(%) 6.6 20.8 25 20.8 17.5 8.3 9.1

Average monthly sale

35 30 25 Dealers 20 15 10 5 0 0 to 10 10 to 20 20 to 30 30 to 40 40 to 50 50 to 60 More than 60

Monthly sales in MT

From the above graph we can infer that most of the dealers monthly sale lies between 10 tons to 40 tons of cement. Ques-10:- Are you aware about customer service help desk (NirmanMitra)? Yes 78 65 No 42 35

Number of dealer Percentage(%)

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Awareness about customer service help desk

Number of dealer 78 65 42 35 Percentage(%)

Yes

No

From above graph we can infer that most of the dealer are aware of Nirman mitra that is 65%. Ques-11:- Are they facing problem while consuming the product? Yes 7 5.8 No 113 94.16

Number of dealer Percentage(%)

Problem faced during consumption

Number of dealer Percentage(%) 113 94.16

7 Yes

5.8 No

From the above graph we can infer that the product is easily consumable and the problem is negligible.

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Ques-12:- Did you find your complaint settled satisfactorily? Yes 108 90 No 12 10

Number of dealer Percentage(%)

Complaint settlement with satisfaction

Number of dealer Percentage(%)

108

90

12

10

Yes

No

This graph shows that the complaint of the dealers are listened properly and are settled satisfactorily.

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Ques-13:-Any suggestion for improving marketing of product ?What are the suggestion? Suggestions Changing brand ambassdor More advertising Number of dealers 65 38 Percentage(%) 54.16 31.6 14.16

Use of hoarding ,Poster and 17 banners

Suggestions for improving marketing of product

Number of dealers 65 54.16 Percentage(%)

38 31.6

17

14.16

Changing brand ambassdor

More advertising

Use of hoarding ,Poster and banners

From the graph we can infer that dealers basically want a change in the brand ambassador for improving the marketing of product.

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Findings & Observations

Allahabad is a big market for cement. This city is developing rapidly thats why a no. of offices,shoppig complexes, parks, roads, over bridges are being constructed and cement is basic requirement for these constructions. Prism cement has larger sale in the main city but Jaypee has an edge over other companies in outer areas. Dealers want cement delivery on time and efficient promotional support from the company. Allahabads cement market is not very professional rather than its dependent over personal relationship. A number of dealer said they are selling that particular cement because they have close relation with sales promoter or marketing officer and company persons are also more interested to serve those dealers who are close to them. Dealers are suffering with fluctuating price of cement. I started my market survey from 28thJanuary and within 15 days cement prices changed from Rs 260 to 275 per bag. Dealers are in trouble because with this continuously changing price small dealers are unable to retain their customer while big dealers are not affected very much because they are completing target and getting cash discount and quantity discount so they are able to sell at relatively low prices without incurring loss. Small dealers are also suffering with unclear schemes of cement companies. Targets are very high so they are not benefitted with these schemes. Duplicacy is another main factor thats why dealers are suffering Duplicate cement of each brand is available in the market non-dealers are selling duplicate cement at relatively low prices and even some dealers are keeping their prices low by stealing the cement from bags.

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 Dealers also face problems as according to them their consignees are not properly benefitted by the schemes provided by the companies. Since January cement market is suffering from shortage except Jaypee other companys delivery has been affected. Jaypee has also effect but in small extent. The dealers are satisfied with the product and its brand promotion. Exclusive dealers are served better than multibrand dealers from the companies. According to Mr.Rakesh Chandra Kesharwani owner of Rakesh Enterprizez ,Dhoomanganj Jaypees gifts are costlier than other companies and Jaypee is doing more promotional activities in Dhomanganj area. Jaypees production capacity is larger than other companies. Jaypee provides T-shirts and Caps to labors Jaypee cement hired SACHIN TENDULKAR as brand ambassador of Jaypee cement and this activity provided excellent brand recognition to Jaypee cement. Jaypees dealers whose sale is more than 500 MT are considered as a member of ANMOL PARIVAR and they are served better than others. Cement companies are supplying cement to government contractors for government projects thats why supply is getting affected.

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Limitations of the study

Though the present study aimed to achieve the objectives in full earnest and accuracy. It was hampered due to certain limitations. Some of the limitations of this study may be summarized as follows: Getting accourate responses from the respondents due to their inherent problems were difficult. They were partial and not very cooperative. I did sample survey not the census one so my findings may not be as muchin tune with their ground realities as may be considered desirable.. I got the dealer list from Jaypee cements dump but address of dealers was not properly given in the list so it took too much time to find them. Transportation facility of this city is very poor and I havent my personal vehicle, this is why I faced too much problems during my visit to dealers. Most of the times I found dealer is not present at the shop only servants are present so to meet with dealer I had to visit three to four times and it took too much time.

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Conclusions
During Four weeks of my training I visited many of the dealers of various cement companies and got appropriate information to fulfill the requirement of my project. Actually market surveys help the companies to assess the situation of the market and their strengths and weaknesses. I did the survey to assess the service level of different companies operating in Allahabad district with respect to their dealers. After collecting data and final analysis of collected data following conclusions have been drawn: Definitely Jaypee cements has maximum numbers of dealers in Allahabad district followed by Prism and Birla. Jaypee cement has more no. of dealers in larger dealer segment. Birla has also small dealers and Mycem ,ACC and Maiher have very few dealers in this district. Jaypee has definitely better delivery than others. Jaypee;s delivery of bill is faster than others and delivery of account statement of Jaypee is faster than Prism and Birla. Technical support of Jaypee provide a competitive edge to Jaypee over others Jaypees marketing officers visit the dealers frequently but they do not go to all the dealers. Target achievement, complaints and their resolutions, communication of schemes are main topic of discussion when marketing officers visit the shops. Dealers are almost satisfied with the brand and its quality . Redressal of grievances of Jaypee is better than others. Jaypee has the higher production capacity with its 24 plants all over the country.

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Recommendations
Jaypees main problem is two different colour cements from two plants. Blackish colour of cement of Rewa plant is because of more use of fly ash. Even it is true colour has no concern with quality but less educated dealers and customers are not able to get this fact so Jaypee has to do more and more dealer meet and Mistary meet and engineers has to communicate this message that colour does not affect the quality by practical demonstrations. At least at one site cement of one plant should be supplied. Marketing officers should visit the dealers more frequently. More no. of promotional items should be supplied. In kauhambi district wall painting has not been done since last 1 year so immediate wall painting is necessary in Manjhanpur and Sirathu market. Price communication and scheme communication should be clearer especially there should be some schemes for small dealers. Price fluctuation should not be very frequent. To avoid duplicacy there should be close observation on the market. Consignees should be benefitted properly through consignee schemes. Those regions where Prism has strong market, Jaypee should more promotional activities and dealers should be served more seriously.

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References and Bibliography

CR Kothari (2008) Research Methodology methods and techniques, new age international publishers, second edition,1,2,14-17. Marketing Management (Millennium Edition) by Philip Kotler ; PrenticeHall India Publications; Tenth Edition; Pg 175. Phillip Lasserre (2007) Globalization cement industry , global strategic management,1-6. Shobhit chandak (2006). Report on cement industry in India,1-19. http://business.mapsofindia.com/cement/retrieved on 1.06.2009. http://www.economywatch.com/business_and_economy/cement_industry.h tml/retrieved on 14.06.2009. http://www.jalindia.com/retrieved on 11.06.2009. http://www.ibef.org/industry/cement.aspx/retrieved on 11.06.2009. Google.com

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