Company: Ambuja Cement
Founded By: Narotam Sekhsaria and Suresh Neotia
Ambuja Cement was founded by Narotam Sekhsaria and Suresh Neotia in the year of 1983. Currently, the company is in partnership with LafargeHolcim and is part of the world leading building materials group since 2015. Formerly known as Gujarat Ambuja Cements Ltd., the company is listed in the National Stock Exchange and Mumbai Stock Exchange and is one of the premier cement manufacturing and marketing corporations of India.
Ambuja Cement has grown exponentially in just three decades of its existence from a single manufacturing unit of 700,000 tonnes annually to producing nearly 30 million tonnes of cement by the end of 2016. It currently has five integrated manufacturing units and eight cement grinders operating in various parts of the country.
The company was incorporated as a private limited entity and was formerly a joint venture between Gujarat Industrial Investment Corporation (GIIC), a government body and the Narotam Sekhsaria and Associates.
The co-founder of the company, Narotam Sekhsaria and Suresh Neotia came together and envisioned an exponential rise in cement demand in the rapidly developing Indian economy and invested in a cement manufacturing plant to be built in Gujarat.
The plant was built in a record time of two years and had all the modern equipment and facilities expected in a fully-modernized cement manufacturing unit. While the founders were new to the cement industry, they made up for the lack of experience with canniness and zeal to succeed.
They anticipated correctly that cement would become an essential resource and would be required in ever-increasing quantities for newer construction projects all over the country. Ambuja Cements became a public limited company on 19th March, 1983 and its name was changed to Gujarat Ambuja Cements Ltd. (GACL) on 19th May of the same year.
The Journey to Success
Ambuja Cement set up their cement manufacturing unit by collaborating with international partners Krupp Polysius from Germany who were the main suppliers of plant machineries, technical knowhow and design, Bakau Wolf and Fuller KCP provided additional machinery and tools.
The dry process precalcination technology was adopted for producing cement along with five-stage preheater for the main pyro processing system. For grinding, air swept roller mills, the state-of-the-art design from Polysius which were very energy-efficient were incorporated for the plant.
The computerized control and processing system were supplied by Larsen and Toubro to ensure optimum production rate and maximize the efficiency of the manufacturing unit. To meet the rising demand of cement, the plant’s manufacturing capacity was increased to 1,400,000 tonnes per year in 1985. Two diesel generators of 12.6 Megawatts capacity were imported and installed in the plant to further boost its power in 1989.
In 1990, a second manufacturing unit was commissioned to be set up in Suli village of Solan District of Himachal Pradesh. GACL Finance Ltd., Nippon Special Cements Limited and Concrete Investments Limited was incorporated as subsidiaries of Gujarat Ambuja Cements Ltd. in 1991.
The year of 1992 was very important year as the company achieved several milestones in its journey to become a leading name in the cement industry. During its years of operation the management of the company found that road transport was becoming increasingly costly and time-consuming, while being able to transport finite loads of cement at any given time. Thus, they started looking for alternative methods of bulk transportation of its primary commodity.
The decision to use the extensive coastlines of the state and the country was a pioneering idea and the work was started accordingly to build three ports along the western coastline of India. The first one to be constructed was in Mul Dwarka, eight kilometers from the Ambujanagar plant in Gujarat.
The second port was built Navi Mumbai to supply cement to the high-demand construction sector of the area. Work on the third port in Surat was already in the planning stage during the year. 1994 and 1995 saw further expansion of the company’s cement production capacity with new plants being set up in Himachal Pradesh and Gujarat, along with new sites for grinding mills.
Ambuja Cement submitted a proposal to set up a huge cement manufacturing unit in Jammu and Kashmir in the year 1997. It also further increased its production capacity by establishing new cement plants through its subsidiary organizations. A Memorandum of Understanding was signed between the owners of Modi Cement, an ailing cement company and GACL to revive its fortunes.
GACL went international in 1998 with the setting up of a new clinker cement manufacturing unit in Sri Lanka, where it increased its presence by setting up a cement unloading terminal at Galle Port and entering into a contract with Mahaveli Marine Cement, a Singhalese firm, to supply around 2.5 lakh tonnes cement annually.
The new millennium saw GACL further its expansion especially in Southern India with setting up a manufacturing unit in Andhra Pradesh, a cement port and packaging unit in Tuticorin, Tamil Nadu. Ambuja Cement merged with Holcim Cement of Switzerland in 2005, which subsequently entered in a merger of equals with Lafarge in 2016 to form LafargeHolcim, world’s leading building materials manufacturer.
Marketing and Promotions
Ambuja Cements has achieved a market leadership position in its category through visionary leadership, strategic partnerships, acquisitions and mergers. Its tagline “giant compressive strength” conveys the company’s commitment to deliver high-quality product to its consumers which is capable of meeting their expectations.
Three reasons are discussed below which have enabled the company to retain market leadership position and gain competitive advantage over other players in the cement market.
- Cost – As the company operates on a large scale and has control over production, stocking and distribution and bulk transport of its products all over the country and internationally, it is able to keep its operating costs at a minimum and retain the edge over competition
- Cheap Raw Material – the usage of a well-balanced fuel mix of 60-70% pet coke and 30% high-quality imported coal has also helped the company keep the cement manufacturing cost under control
- Strong Leadership – Being managed by visionary business leaders and being part of LafargeHolcim, world leaders in the sector has also played an important part in the success of Ambuja Cements as a leading cement conglomerate company of India
To sum up, Ambuja Cements has reached the pinnacle of building materials industry of India within a comparatively short span of three decades. With its total revenue exceeding a billion dollars by the end of the first decade of the new millennium, its amalgamation with the world leader of cement category has ensured the bright future of the successful company.