CHAPTER I

1.1 INDUSTRY PROFILE

India is the second largest producer of cement in the world. No wonder, India's cement
industry is a vital part of its economy, providing employment to more than a million people,
directly or indirectly. Ever since it was deregulated in 1982, the Indian cement industry has
attracted huge investments, both from Indian as well as foreign investors. India has a lot of
potential for development in the infrastructure and construction sector and the cement sector is
expected to largely benefit from it. Some of the recent major initiatives such as development of
98 smart cities are expected to provide a major boost to the sector. Expecting such developments
in the country and aided by suitable government foreign policies, several foreign players such as
Lafarge-Holcim, Heidelberg Cement, and Vicat have invested in the country in the recent past. A
significant factor which aids the growth of this sector is the ready availability of the raw
materials for making cement, such as limestone and coal.

EVOLUTION OF INDIAN CEMENT INDUSTRY

The history of the cement industry in India dates back to the 1889 when a kolkata based
company started manufacturing cement from Argillaceous. But the industry started getting the
organized shape in the early 1900s. In 1914, India Cement Company Ltd was established in
Porbandar with a capacity of 10,000 tons and production of 1000 installed. The World War I
gave the first initial thrust to the cement industry in India and the industry started growing at a
fast rate in terms of production, manufacturing units, and installed capacity. This stage was
referred to as the Nascent Stage of Indian Cement Company. In 1927, Concrete Association of
India was set up to create public awareness on the utility of cement as well as to propogate
cement consumption.

The cement industry in India saw the price and distribution control system in the year 1956,
established to ensure fair price model for consumers as well as manufacturers. Later in 1977,
government authorized new manufacturing units ( as well as existing units going for capacity
enhancement) to put a higher price tag for their products. A couple of years later, government
introduced a three-tier pricing system with different pricing on cement produced in high, medium
and low cost plants.

Cement industry in our country plays a major role in the growth of the nation. Cement industry
in India was under full control and supervision of the government. However, it got relief at a
large extent after the economic reform. But government interference, especially in the pricing, is
still evident in India.

CEMENT PRODUCTION AND GROWTH

Domestic demand plays a major role in the fast growth of cement industry in India. In fact the
domestic demand of cement has surpassed the economic growth rate of India. The cement
consumption is expected to rise more than 22% by 2018-19 from 2017-18. In cement
consumption, the state of Maharashtra leads the table with 12.18% consumption, followed by
Uttar Pradesh. In terms of cement production, Andhra Pradesh leads the list with 14.72% of
production, while Rajasthan remains at second position.
The production of cement in India grew at a rate of 9.1% during 2017-18 against the total
production of 347.8 MT in the previous fiscal year. During April to October 2018-19, the
production of cement in India was 502 million tonnes. The cement companies are also increasing
their productions due to the high market demand. The cement companies have seen a net profit
growth rate of 85%. With this huge success, the cement industry in India has contributed almost
8% to India's economic development.

TECHNOLOGY UP-GRADATION

Cement industry in India is currently going through a technological change as a lot of

upgradation and assimilation is taking place. Currently, almost 93% of the total capacity is based
entirely on the modern dry process, which is considered as more environment-friendly. Only the
rest 7% uses old wet and semi-dry process technology. There is also a huge scope of waste heat
recovery in the cement plants, which lead to reduction in the emission level and hence improves
the environment.

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 (1940-1981)

During the Second World War, cement was declared as an essential commodity under the
Defense 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 comparison with the figure of a mere 27.9MT in 1980-81, 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
liberalization had peaked; ironically, however, the economy slipped into recession. taking the
cement industry down with it. For 1992-93, the industry remained stagnant with no addition to
existing capacity.

MARKET SIZE
Cement production capacity stood at 502 million tonnes per year (mtpy) in 2018. Capacity
addition of 20 million tonnes per annum (MTPA) is expected in FY19- FY 21.

The Indian cement industry is dominated by a few companies. The top 20 cement companies
account for almost 70 per cent of the total cement production of the country. A total of 210 large
cement plants account for a cumulative installed capacity of over 410 million tonnes, with 350
small plants accounting for the rest. Of these 210 large cement plants, 77 are located in the states
of Andhra Pradesh, Rajasthan and Tamil Nadu.

PRODUCTION SCENARIO
The cement industry worldwide is facing growing challenges in the context of saving material
and energy resources as well as reducing its CO​2 emissions. The International Energy Agency
highlighted in its 'Road Map for the Cement Industry' that the main levers for the cement
producers are the use of alternative materials, be it as fuel or raw material and in addition the
reduction of the clinker/cement factor by utilisation of well tried and proven materials like slag,
fly ash, pozzolanas or limestone fines. This underlines that in the years to come cement will
depend on OPC clinker to a high degree. New cements will therefore most certainly first take
into account higher amounts of main constituents besides clinker which show pozzolanic or
latent hydraulic properties.

Artificial materials that originate from natural or industrial resources but require additional
thermal treatment and/or activation may also have a role to play. It is not clear at present to what
extent cements based on magnesia can play a role. On the other hand, sulphoaluminate cements
may have a significant role to play. Unfortunately, due to their specific raw materials as well as
their performance in concrete they will most probably not be able to substitute relevant parts of
today's cement markets.
COMPANY PROFILE
INTRODUCTION OF HEMAVATHI CEMENT PRIVATE LIMITED

Hemavathi Cement pvt Limited is one of the major Company in the cement industry of
Karnataka. Its plant was begun in 2016 & is located near KIDB industrial area of Hassan. The
main reason for setup the plant in Hassan is Hassan is nearer to the coastal town Mangalore. The
area has huge deposits of limestone, a key of ingredient in the manufacturing of high quality of
cement.
The plant with an installed capacity of 0.2MTPA (million tons per year). Loose cement is
dispatched to foreign countries through by sea-route.Hemavathi Cement has large port facility at
Mangalore. Hemavathi Cement has rented ships to carry the bulk cement to the foreign countries.
This has brought substantial saving by bringing down the transportation costs, which plays a
major role in deciding prices. Bulk cement is also exported to Srilanka, the island Mauritius and
gulf Country. Hemavathi Cement Ltd. has captive power plant comprising of 58bmw DG sets
andis self-sufficient.

COMPANY PROFILE

Name Hemavathi Cement pvt Ltd.

Address Flat No 246, KIDB growth center. HN Pur
Road. Hassan
Contact No 8105488038
E-mail hemavathicements@gmail.com
Chief Promoter Mr Shain pasna and Mr Janardhan Reddy
Size of Unit Medium Scale(investment of 6 crores)
Form of Organization Private Limited Company
Bankers State Bank of India and IDBI

Year of Establishment 2016

Main Product Cement
Main Market Southern part of India and foreign market

VISION
The vision of the Hemavathi Cement is to become “ The Large cement manufacturing company
in India with in the span of 15 years.”

MISSION
To provide better quality product and with reasonable price.
To gain mutual trust of the share holders, employees, customers and suppliers.

OBJECTIVES
The main objectives of cement industry are:

1. To build strong brand image.

2. To make business profitability within a shortest period.

Hemavathi Cements’ location of the plant is very beneficial for its existences as the area is
surrounded by limestone, which is one of the basic raw materials in cement production.
Company is also benefited as the area of the plant site is near the sea coast which facilitates the
transportation through sea route.

Location factors are very much important in establishing a cement plant.

1. Input

In terms of input, about 1.5 tons of limestone is required to produce one ton of cement. Hence
location of the plant is based on the limestone deposit. The major cash out flow come by way of
royalty and cash payments. India’s estimated total reserve of cement grinding stone is about 90
billon tons.

2. Power

It is used in raw material grinding. Clinkerization of lime stone is done in the kiln operation and
then clinker is grinding with gypsum to form cement. The plant required 80 to 90 units tons
consume for cement produced.

3. Coal

Coal is another major input, which along with electricity forms 40% of total cost. There is a
several coal shortage for the industry. The coal is generally imported from certain African
countries, which are unloaded at Mangalore port that is near to the factory site.

4. Labor
On growing modernization of plants, the requirement for skilled man power has increased then
that of unskilled man power. The cheap availability of labor from the nearby areas has proved to
be great help for the company.

CHAPTER II

SWOT ANALYSIS

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to

evaluate a company's competitive position and to develop strategic planning. SWOT analysis
assesses internal and external factors, as well as current and future potential.
A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths
and weaknesses of an organization, its initiatives, or an industry. The organization needs to keep
the analysis accurate by avoiding pre-conceived beliefs or gray areas and instead focusing on
real-life contexts. Companies should use it as a guide and not necessarily as a prescription.

● Strengths​ describe what an organization excels at and what ​separates it from the
competition​: a strong brand, loyal customer base, a strong balance sheet, unique
technology, and so on. For example, a hedge fund may have developed a proprietary
trading strategy that returns market-beating results. It must then decide how to use those
results to attract new investors.
● Weaknesses​ stop an organization from performing at its optimum level. They are areas
where the business needs to improve to remain competitive: a weak brand,
higher-than-average turnover, high levels of debt, an inadequate supply chain, or lack of
capital.
● Opportunities​ refer to favorable external factors that could give an organization a
competitive advantage. For example, if a country cuts tariffs, a car manufacturer
can export its cars into a new market, increasing sales ​and ​market share​.
● Threats ​refer to factors that have the potential to harm an organization. For example, a
drought is a threat to a wheat-producing company, as it may destroy or reduce the crop
yield. Other common threats include things like rising costs for materials, increasing
competition, tight labor supply and so on.

ORGANIZATION SWOT

STRENGTH

The quality of the product is high.

The cost of the product is cheaper when compared to other brands.
Low cost of production due to the easy availability of raw materials and cheap labour.

WEAKNESS

When compared to other brand it lacks in advertisement.

Weak brand name.
Low production rate.
Less training.
Poor lab facility.
Low marketing budget.
OPPORTUNITY

The government promotional measures in manufacturing sector in India which is a huge

opportunity for Hemavathi cements and other manufacturing companies.
Growing industry.

THREATS

Dominance of few highly branded players in the cement sector.

Competition from local market.
Lack of availability of raw material.
New regulations.

TOWS MATRIX
TOWS analysis is a tool which is used to generate, compare and select strategies. Strictly
speaking it is not the same as SWOT analysis, and it is certainly not a SWOT analysis which
focuses on threats and opportunities. This is a popular misconception. TOWS may have similar
roots. TOWS is a tool for strategy generation and selection; SWOT analysis is a tool for audit
and analysis. One would use a SWOT at the beginning of the planning process, and a TOWS
later as you decide upon ways forward.

There is a trade-off between internal and external factors. Strengths and weaknesses are internal
factors and opportunities and threats are external factors. This is where our four potential
strategies derive their importance. The four TOWS strategies are Strength/Opportunity (SO),
Weakness/Opportunity (WO), Strength/Threat (ST) and Weakness/Threat (WT).

Strength/Opportunity (SO)​: Here you would use your strengths to exploit opportunities.

Weakness/Opportunity (WO)​: Indicates that you would find options that overcome
weaknesses, and then take advantage of opportunities. So, you mitigate weaknesses, to exploit
opportunities.

Strength/Threat (ST)​: One would exploit strengths to overcome any potential threats.
Weakness/Threat​ (WT): The final option looks least appealing; after all, would relish using a
weakness to overcome a threat? With Weakness/Threat (WT) strategies one is attempting to
minimise any weaknesses to avoid possible threat.
CHAPTER III
MC KINSEY’S 7S FRAME WORK
The model is based on the theory that, for an organization to perform well, these seven elements
need to be aligned and mutually reinforcing, so the model can be used to help identify what need
to be realigned to improve performance, or to maintain alignment and performance during other
types of change. The Mc Kinsey 7s frame work is a management model developed by well
known business consultants Robert H. Waterman Jr. and tom peter who also developed the
MBWA, “Management by walking Around “ motif and authored in the 1980s.

This was the strategic vision for group, to include business, business units, and team. The 7s are
structure, strategy, system, skills, style, staff, and shared values.

The model is most often used as an organizational analysis tool to assess and monitor change in
the internal situation of an organization.

Where the type of change restructuring new processes, organization merger, new system, change
of leadership, and so on –the model are used to understand how the organization elements are
interrelated and so ensure that the wider impact of change made in one area is taken into
consideration.

LET’S LOOK AT EACH OF ELEMENTS SPECIFICALLY:

 ❖ Strategy: The plan devised to maintain and build competitive advantage over the
competition.
❖ Structure: The way the organization is structured and who report to whom.
❖ Shared value: When the model was first developed, these are the core values of the
company that staff members engage in to corporate culture and the general work ethic.
❖ Style: The style of leadership adopted.
❖ Staff: The employee and their general capabilities.
❖ Skills: The actual skills and competencies of the employees working for the company.

HARD ELEMENTS
The three “hard” elements are strategy, structure, (such as organization charts and reporting
lines), and systems (such as formal process and IT systems.) these are relatively easy to identify,
and management can influence them directly.

SOFT ELEMENTS
Soft elements can be difficult to describe, and are less tangible and more advanced by culture,
this soft skills elements are important as the hard elements if the organization are going to be
successful.

ORAGANIZATION STRUCTURE
General organization chart is a blue print of company organization. Anybody understands a
position of employees. General organization structure process is very important and hard
process.
We can understand an authority and responsibility of officers and employees. And also general
structure showed a relationship between officer to officer, employees to employees. And also
shown a group activity, so best structure means a best result.
According to our observation, authority is in the hand of top level management and
responsibility rests with medium and low level management.

The major department of Hemavathi cement pvt ltd as follows:

1. Production Department
2. Marketing Department
3. Human resource Department
4. Accounts Department
Production Department

Production is the process where raw materials are converted into finished goods. All the process
is differ to each product.
Production means creation of utilities and covers all the activities of procurement, allocation and
utilization of resource such as energy material etc.

Manufacturing Process:
Manufacturing means to make semi-finished goods into finished goods and manufacturing
process summation of all the steps making semi-finished goods into finished goods.
Every manufacturing firm should have sound manufacturing process to manufacture goods
without sound. Manufacturing process, manufacturing cost will be directly reflect in the profit if
the organization.
The basic raw material required to produce cement are as follows:
1. LIMESTONE

2. RED CLAY

3. GYPSUM

4. COAL

5. FLY ASH

6. SILICA s

According to the mode of preparing the raw mix three different processes can manufacture
cement:
A. Wet Process

B. Semidry Process

C. Dry Process
Production Processing chart

1. MINING & CRUSHING OF LIMESTONE:

Limestone is the basic raw material to produce cement. It is mainly obtain from the open cost
mining. The limestone is hauled through dumpers up to the 70 to 75 mm size. The crushing of
limestone is done through hopper crushed material passed on the conveyor belt in which the
addictive material is added to the material.
2. CRUSHING OF GYPSUM & COAL:

The second stage of cement manufacturing is to crush the gypsum & coal by griddling machine.
3. MAKE A CINKER:
Clinker is a precondition to make cement. So to make cement of clinker is needed. So, to make a
clinker all crushed material like limestone, gypsum & coal water with the help of elevator.
4. STORAGE OF CLINKER:

After a making of clinker it storage in a one place. It’s called silo. As per the requirements
clinker is send at required place weighing bin.
5. DRYING OF CLINKER:

After making a clinker, it dried in heating machine at 1200-1400 degree Celsius

temperature. Minimum 1 hour required for drying the clinker.

Marketing Department

The bases of marketing are selling of the product. But the term marketing is very wide
and various. The marketing head office located in Bangalore
PRICING POLICY:
Price is the main factor to satisfy the customer. Prices are known by different names like - fees,
fare, commission etc. The pricing policy is directly or indirectly affects the fixed cost, variable
cost, Government policy etc.
(A) COST ORIENTED PRICING:

In this product the price is decided as per the cost of product and it is also known as target
pricing.
(B) DEMAND ORIENTED PRICING:

In this product the price is decided as per the consumer demand.

Hemavathi Cement Ltd. has many competitors in India . they have set prices taking into
consideration all of them. Thus, the prices are always fluctuating it is also fluctuated by
government.
Hemavathi Cement Ltd. looks upon following factors for determining prices:-
(1) Cost of production.
(2) Advertising.
(3) Distribution cost.
(4) Sales promotion cost.
Hemavathi Cement Ltd. provides some motivation like gifts, discounts; commission etc. for
increases the efficiency of the dealers, stockiest to selling more.

Human Resource Management

Hemavathi Cement Ltd established the line and staff type of organization. HR department is
under direct control of vice president and Senior Manager
1) ​To recruitment of employee.
2) ​To conduct interview for selection of efficient person.
3) ​To make man power planning.
4) ​To give guidance, and motivation to the employee.
5) ​To dealing with transfer and promotion.
6) ​Wage and salary administration.

DISTRIBUTION

1) Karnataka (20 %)
2) Kerala (80%)

1) karanatka
*Bangalore
* Hassan
*Chikkamanglore
* Mysore
* HoleNarsipura

2)Kerala
* Ynadu
* Calicut
*Malappuram

Distrubution channels

Satar international company

* Kerala
* Kasaragod

United agency

* Calicut
* Malappuram