Case study related to Operations

1. -Swapnil Zeple (14344)

2. • GACL was established as ACPL in 1981 by
Narotam Satyanarayan Sekhsaria
• Advantages of cement business
i. Stable demand,
ii. Lack of substitutes
iii. limited competition
• Started at a 0.7 million tonnes per annum
(mtpa) in Ambuja Nagar, Gujarat

4. • In 1997, GACL became fourth largest cement manufacturer in
India.
• By the late 1990s, GACL had emerged as one of the most
energy efficient and technologically advanced cement
manufacturer in India.
• GACL had large distribution network of 11,500 outlets.
• GACL was not only the market leader; it also ranked very high
on the profitability criteria.
• Competitive advantages of GACL
I. Use of better quality limestone
II. Innovative energy management efforts
III. Strong retail presence in Mumbai, Gujarat and Punjab

5.  Indian Cement Industry-Companies and their
Market share (%) in 2001
22%
24%
5%5%
5%
3%
36%
Market share (in %)
Grasim-L&T combine
GACL-ACC
JK Group
India Cements
Madras Cements
Lafarge
Others

6.  Location of a Plant
 Take advantages of substantial sales tax and income tax
incentives
 Gujarat, HP, Punjab plants get sales tax benefit of about 90%
of its fixed assets for a period of 14 years
 Chandrapur plant got sales tax benefit for 18 months
 HP plant-
a. prioritized power supply at a guaranteed cost for five years
from the date of commissioning
b. This region was cement deficit at that point of time
c. Plant was closer to the mines and the Punjab grinding unit.
d. Area had substantial limestone deposits

7.  Infrastructure development
 GACL built a conveyor across three valleys on its own within 18
months
 Cut down the distance from 17 km to just 2.8 km.
 The belt moved 800 tonne of limestone per hour.
 Reduction in set up time
 Empowerment of engineers
 They define their own job
 Authority to take on-time decisions
 Allow to set daily, weekly and monthly targets
First plant was commissioned within 22 months instead of 3 years
And second plant was commissioned within in a record time of 13 months

8. Major cost
components
Fuel- 20%
Freight- 17%
Raw material- 17%
Power- 16%
Adopted a two-
pronged strategy
Enhancing plant
productivity
Reducing cost of
each cost component

9. Mining
Process
•GACL worked hard to reduce mining expenses
•The company introduced an Australian device Surface Miner
•Surface miner is energy efficient and it also recovered more material from a given
area.
Kiln
Operations
• Required high power and directly related to the cement quality.
• GACL arranged training in Japan cement plant for engineers.
• Brought down power cost from 120 units/ton to 90 units/ton.
Kiln
Productivity
• Implementation of larger pre-heater
• Productivity increases by 12.5%

10. Quality
•GACL installed a centrally operated computerized process control system
•Useful to evaluate optimum mix of raw material and redesign accordingly
Capacity
Utilization
•GACL installed 24-hour monitoring system and introduced weekly checks
•Run its plants for 40 days continuously
•GACL achieved more than100% capacity utilization during 1999
Quality
Control
•The practice of reporting quality related data 48 times per day

11.  POWER
 Setup of fuel based captive power plants in Gujarat
and Himachal Pradesh in 1998
 Selling extra power generated
 Small measures reduced GACL’s power
consumption from 120 units/tonne of cement to
88-90 units/tonne of cement

12.  FUEL
 Import cheaper higher quality coal from South
Africa
 Import of better quality furnace oil for its diesel
generator
 Use of groundnut husk instead of coal .Overall coal
consumption reduced by 3%
 Replacement of v belt drives by flat belt drives

13.  FREIGHT
 Use of sea route
 Set up of modern ports & freight handling
terminals at Muldwarka,Surat and Panvel
 Cost of transporting cement to Mumbai by road
worked out to be 1800 per tonne and 400 per tone
by sea.
 GACL saved roughly 160 million annually.

15.  Portland Cement - Portland cement is by far
the most common type of cement in general
use around the world
 Masonry cements are used for preparing
bricklaying mortars and stuccos, and must not
be used in concrete.
 Expansive cements are designed to offset the
effects of drying shrinkage that is normally
encountered with hydraulic cements.

16. • White blended cements may be made using white
clinker
• Colored cements are used for decorative purposes.
• Very finely ground cements are made from
mixtures of cement with sand or with slag or other
pozzolan type minerals that are extremely finely
ground together.

17.  "Natural" cements correspond to certain
cements of the pre-Portland era, produced
by burning argillaceous limestones at
moderate temperatures
 Geopolymer cements are made from
mixtures of water-soluble alkali metal
silicates and aluminosilicate mineral
powders such as fly ash and metakaolin.

18.  Current production capacity – Around 366 MT
 India is the second largest producer of cement in
the world
 In India, the housing sector is the biggest demand
driver of cement, accounting for about 67 per cent
of the total consumption. The other major
consumers of cement include infrastructure at 13
per cent, commercial construction at 11 per cent
and industrial construction at nine per cent.

19. 67%
13%
11%
9%
Cement consumption
Housingsector
Infrastucture
Commercialconstruction
Industrialconstruction

20.  ACC Ltd.
 Gujarat Ambuja Cements
 Indian Cement
 UltraTech Cement
 Jaypee Cement
 JK Cement
 Ramco Cement
 Prism Cement
 Shree Cement
 Rain Cement

21. THANK YOU!