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Cementing new identity

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Large cement companies cracked the code and invested heavily in high visibility ATL (above the line) advertising, says Sandip Ranjan Ghose of Birla Corporation.

The advertisement of an iconic tea brand features a shop-owner trying to sell a packet of ordinary tea to a customer- saying "Chai toh chai hi hota hain".. The lady refuses to take it, explaining why she preferred only that particular brand. Cement marketing used to be similar with little differentiation between the offerings by manufacturers.

There was another reason for the late marketing evolution of the cement industry. As long as cement was under the control regime customers had little choice. They had to pretty much settle only for what was available.

At best, there were some perceived differences, determined largely by visual attributes such as colour and fineness. These, at times, resulted in the products of certain plants commanding a marginal premium over others. Because of this, the name of the plant where the cement was produced became the brand rather than the company that owned it. So, the trade would refer to it as Jamul, Satna, Maihar, Kota, etc. depending on the source of supply.

Thus, there was little incentive for cement-makers to invest in marketing. All brands of cement were generically positioned in terms of strength. Rarely did the communication extend to technical parameters such as setting time, workability and other BIS standards. Therefore, it is not surprising that the sales teams of cement companies were referred to as marketing. A practice that has not entirely disappeared since not all companies have a separate dedicated brand marketing vertical.

Life began to change in the 90s after decontrol – when, with a surge in capacities, the industry saw cycles of supply-demand imbalance and, consequently, the impact of real competition in the market. The first serious attempt at brand building was probably by Gujarat Ambuja, which came to challenge the dominant player in its home turf.

The advent of multinationals and the ensuing spree of consolidation, most notably Grasim’s merger with L&T cements, permanently changed the rules of the game. Soon, cement companies became one of the biggest advertisers on television and dominated the outdoor space, covering practically every inch of exposed wall in the countryside.

What makes India different from many other countries is the route-to-market. With a very high component of retail customers – the Individual Home Builder (IHB) segment – bulk of cement sales, including supplies to small or medium-size builders and contractors, happen in bags through the trade network. RMC, still is at a nascent stage and only large sites, can handle bulk deliveries. Thus, it is essentially a B2C business – in which dealers and stockists are the first level of customers.

Large companies cracked the code and invested heavily in high visibility ATL (above the line) advertising. Television commercials-especially cricket sponsorship-pleased the channel partners and wall paintings helped raise TOMA (top of mind awareness) with rural consumers. However, marketers soon realised they were missing a vital link in the chain – the influencers, comprising Masons, Engineers and Contractors.

This led to a renewed emphasis on influencer contact programmes through BTL (Below the Line) marketing activities. From simple gratification schemes, market leaders started developing more sophisticated technical selling competencies.

Separate Technical Services or Customer Service Teams were formed with the mandate for customer conversion through on-site demonstration. So, cement marketing drew from both pure play consumer and industrial product categories to developing a unique marketing mix, that is a combination of B2B and B2C businesses. The large players were naturally the early adapters as they jostled for space at the premium end of the market. This saw a burst of creativity but without any significant product innovation.

The first major disruption came with the introduction of laminated bags – pioneered by the erstwhile Lafarge for its Concreto brand of slag cement. The "tamper proof" packaging provided the consumer with a "reason to believe" the superior quality claim, addressing two common concerns of moisture absorption and pilferage. On the back of this innovation and smart celebrity advertising, Lafarge was able to establish itself over peers in its core markets.

However, not everyone was impressed. Traditional companies thought the extravagance of MNCs and large Indian conglomerates were wasteful. Much like the "tea-seller" they saw little point in branding a commodity. The old guard preferred to remain "price-takers" (and, in some cases, "cost warriors") and not spend resources for the race for price leadership.

This diametrically opposite strategies of two sets of players had an interesting impact on the market structure, polarising it into two distinct segments of premium and discount brands that came to be popularly known as "A" and "B" Group. The price gap between these was accentuated during 2010-2011 when the industry saw one of the steepest declines in demand growth. Since then, the twain has not met though, as we shall see later, there has been some cross currents between them.

The sustained investment in brand building had a positive fall out for the industry. Years of commoditisation of the product had led to very low consumer engagement with the category. But, with increasing visibility, thanks to the rural penetration of satellite television and high viewership of sports (primarily cricket) and news channels (rise in political awareness and high stake elections), consumer involvement with cement palpably increased.

This shift in consumer mindset coincided with the rise of aspirational middle class in "Bharat" comprising tier 2 and 3 cities, small towns and "urban" areas. This was in sync with trends in related products for construction and home-building, such as paint, tiles, sanitaryware and toilet fittings. The sentiment of "you build a home only once" resonated with "new India"more than ever before.

During the last decade, if one were to analyse, cement price increased marginally in real terms. However, the cost push on Fuel, Power and Logistics was relentless. This put margins of cement companies under pressure. This could only be partially insulated by tax incentives for new units and reducing lead to market by setting up grinding units closer to cementitious sources and consumption centre. But, manufacturers realised that the cushion will not last for ever. Salvation in the longer run, therefore, lies in improving realisation while ruthlessly pursuing cost reduction. Thus was born the new cult of "Premiumisation" in cement industry. Companies in the so-called"B" segment jumped on to the premium bandwagon by launching brands in paper (LPP) bags. Group A leaders launched"super-premium" variants with special attributes. While everyone was nibbling at different ends of the pie – a clear strategy was not in sight.

MP Birla case study
Sometimes, necessity is the mother of virtue. Birla Corporation faced a unique challenge. Due to historical legacy, it had inherited a slew of regional brands across the geographies where it was present. While Birla Chetak, often called Ghoda Chhap Cement by consumers, was its dominant brand in Rajasthan and North India, Birla Samrat (popularly referred to as Satna Cement) was its flagship in Central India. In the East, it had a niche premium slag cement, Birla Unique.

This put serious impediments in developing an unified brand strategy for the Company. There was considerable confusion in brand recognition among consumers and the trade due to the presence of several cement brands with the "Birla" suffix in the same markets. To resolve that it was imperative to have a common brand identity. Also, without a sizeable national presence it was not possible to provide adequate ATL support to each of the brands.

Merging the brands was not an option " because that would destroy the strong regional equity of each brand. Therefore, a mega brand transition like what UltraTech undertook after its acquisition of L&T’s Cement Division was neither advisable nor viable given Birla Corporation’s size and scale of operations.

The problem was compounded – when Birla Corporation acquired the Cement Business of the Reliance ADAG group in 2016. The Business Transfer Agreement provided a very short window for using the Reliance brand name. So, a quick name-change was almost a condition precedent of the deal. This posed several challenges on the marketing front. Though Reliance Cement had a very short life-span it had established its own brand salience. Reliance Group insignia gave it a special halo that could not be easily substituted in the trade and consumer mind-space.

At the same time, any value destruction of the brand would jeopardise the financials of the deal. However, the marketing team saw this as an opportunity to create a brand architecture for the group under a new MP Birla franchise. The strategy was based on segmentation of the market both in terms of price-points and geographies. Reliance Cement brand morphed into MP Birla Perfect Plus and became the group’s flagship premium cement brand across all markets.

The seamless brand transition ensured business continuity with minimum disruption in the trade channel, which helped the company scale-up and consolidate within a short time. Since then, MP Birla Perfect Plus has been extended into new geographies, increasing its share in the premium cement segment. Now, nearly 40 per cent of MP Birla Cement’s trade sales come from the premium segment " one of the highest among its peer group.

The Brand Architecture is founded upon the strong pillars of the regional Heritage Brands (Chetak and Samrat), flanked by Super-Premium and niche offerings. To have a common pan-India offering for the non-trade and Institutional customers and preserve the sanctity of trade (B2C) segment – MP Birla Cement has two special brands Multicem (blended cement) and Concrecem (OPC).

Albeit a very evolved architecture – it has probably yielded results with MP Birla Cement’s high share of trade sales (81.61 per cent) and blended cement (92.5 per cent) in the portfolio, during April to December/FY20.

The future of Cement Marketing, like almost every other category, is clearly Digital. We already find companies investing heavily in Data Analytics, CRM and Loyalty programmes for trade and Influencers and preparing for e-selling. The consumer today is more aware, tech savvy and looks for the best while building his dream house. The key would be to provide segmented solutions.

The future clearly belongs to brands offering segmented solutions to customers. Those who understand and connect with the consumers best will ultimately win the game.

ABOUT THE AUTHOR: Sandip Ranjan Ghose is the Chief Operating Officer of Birla Corporation (MP Birla Group). He has worked in senior leadership roles at Hindustan Unilever, ABP Group, HT Media and Lafarge. He is an ICF – PCC Leadership Coach. Ghose is a popular blogger, op-ed columnist and social-media influencer.

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Concrete

Sambhv Steel Tubes is Now Certified as a Great Place to Work

This certification, valid from January 2025 to January 2026.

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Sambhv Steel Tubes Limited, one of the key manufacturers of electric resistance welded (“ERW”) steel pipes and structural tubes (hollow section) in India in terms of the installed capacity as of March 31, 2024 (Source: CRISIL Report) is pleased to announce that it has been officially certified as a “Great Place to Work® for 2025. 
This certification, valid from January 2025 to January 2026, is a testament to the company’s commitment to fostering a workplace environment built on trust, collaboration, innovation, and employee well-being. Sambhv Steel Tubes also invites talented professionals who share its values of trust, collaboration, and innovation to join its team and be part of its growth journey. The Great Place to Work® certification is a recognized benchmark for workplace excellence. It is awarded based on employee feedback and an evaluation of workplace practices. Achieving this certification underscores Sambhv Steel Tubes’ dedication to nurturing a culture where Sambhv Steel strives to ensure that employees feel valued, supported, and empowered to grow both personally and professionally 
The DRHP is available on the website of the Company at www.sambhv.com, SEBI at www.sebi.gov.in, websites of BSE Limited at www.bseindia.com and National Stock Exchange of India Limited at www.nseindia.com and the website of the book running lead managers, i.e. Nuvama Wealth Management Limited and Motilal Oswal Investment Advisors Limited at www.nuvama.com and www.motilaloswalgroup.com, respectively. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risk, please see the section entitled “Risk Factors” of the RHP, when filed. Potential investors should not rely on the DRHP for making any investment decision. This announcement does not constitute an offer of the Equity Shares for sale in any jurisdiction, including the United States, and the Equity Shares may not be offered or sold in the United States absent registration under the US Securities Act of 1933 or an exemption from registration. 
Any public offering of the Equity Shares to be made in the United States will be made by means of a prospectus that may be obtained from the Company and that will contain detailed information about the Company and management, as well as financial statements. However, the Equity Shares are not being offered or sold in the United States. CRISIL Market Intelligence & Analytics (CRISIL MI&A), a division of CRISIL Limited, provides independent research, consulting, risk solutions, and data & analytics to its clients. CRISIL MI&A operates independently of CRISIL’s other divisions and subsidiaries, including, CRISIL Ratings Limited.
Image Source: Sambhv Steel Tubes

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Cement Industry Key to Growth, Jobs, and Nation Building in Budget

Budget presents opportunities for cement sector in growth, jobs, and infra.

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The Cement Manufacturers’ Association (CMA) welcomes the Union Budget 2025-26 presented by the Honourable Finance Minister Nirmala Sitharaman. CMA Member Companies have been at the forefront of nation building by significantly contributing to infrastructure development, employment generation, and economic growth. CMA believes that the Budget presents a commendable vision for India’s development through strategic investments in people, economy, and innovation.
Commenting on the Budget, Neeraj Akhoury, President, Cement Manufacturers’ Association (CMA) and Managing Director, Shree Cement Limited, stated, “CMA hails the Union Budget, announced under the leadership of Prime Minister Narendra Modi for its comprehensive focus on holistic and inclusive development. The Budget reinforces a transformative journey towards building a resilient economy for advancing India’s development goals. The various initiatives announced by the Government balance people’s aspirations with the future requirements for the Country’s economic growth. The focus on increased investments on infrastructure across States amplifies opportunities and avenues for the growth of the Cement sector. We appreciate the sustained core focus on infrastructure and reiterate our commitment to being partners in Nation’s progress.<p></p>
<p>The increased spending on large scale housing and infrastructure projects will drive demand for construction materials allowing capacity expansion and promotion of innovation in sustainable practices. We are certain that despite challenges these measures will support the Cement Industry in achieving a consistent CAGR growth rate of more than 6 per cent of installed cement capacity in the present financial year. Policy reforms in Budget 2025-26 signal a reaffirmation of the Government’s intent to augment socio economic growth across core sectors.”
The Cement Industry plays a vital role in creating direct and indirect employment across various sectors, including manufacturing, logistics, and construction, thereby supporting millions of livelihoods. Additionally, the industry remains a key contributor to the Government exchequer through taxes, duties, and levies, strengthening the country’s fiscal framework.
Parth Jindal, Vice President, Cement Manufacturers’ Association (CMA) and Managing Director, JSW Cement Limited, said, “The Budget presented by Finance Minister Smt. Nirmala Sitharaman is a forward-looking roadmap that will play a pivotal role in shaping the future of India’s cement industry, in line with the country’s vision for a Viksit Bharat by 2047. It prioritizes growth in key sectors such as infrastructure, manufacturing, and technology. The increased investment in technology will accelerate advancements in green cement solutions, driving both sustainability and innovation within the industry. Notable allocations, including Rs 200 billion to foster innovation and Rs 1.5 billion in 50-year interest-free loans to states for capital expenditure on infrastructure development, are expected to significantly bolster growth in the core sectors, including cement sector.
He further added, “The Budget’s focus on a three-year pipeline of projects under the public-private partnership (PPP) model will incentivize private sector investment and catalyse a transformation in the infrastructure landscape. Additionally, the establishment of five National Centers of Excellence for skill development, as part of the ‘Make for India, Make for the World’ initiative, will ensure that India’s emerging workforce is well-equipped to meet the demands of a rapidly growing economy.”
In light of the recent Budget announcements, which prioritise infrastructure expansion and affordable housing, the Cement Industry is poised to leverage these opportunities by ensuring steady and sustained supplies of Cement to meet the Nation’s growing domestic market and infrastructure demand coupled with sustainable and innovative technologies. With a strong commitment to sustainability and efficiency, the Cement Industry will continue to drive India’s progress and economic resilience.

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Concrete

GMDC Inks Long-Term Limestone Supply Deal With JK Cement

The agreement has been signed for supply of 250 million tonne.

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State-owned GMDC said it has entered into a long-term pact with JK Cement Ltd for the supply of limestone from its upcoming mine in Gujarat. 
The agreement has been signed for supply of 250 million tonnes of limestone over a period of 40 years from its upcoming Lakhpat Punrajpur Mine in Lakhpat Taluka of Kutch district in Gujarat. 
This agreement will help JK Cement Ltd in setting up an integrated mega-capacity cement plant, fostering industrial growth in the region.Kutch’s coastal proximity, improved access to domestic and international markets, and cost-efficient logistics position it as an ideal hub for cement production. 
The state-owned company has five operational lignite mines in Kutch, South Gujarat, and Bhavnagar region.          

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