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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

Cement Makers’ Margins To Fall Rs 50-75 Per Tonne Amid West Asia Conflict

Crisil Sees Margins Easing Despite Steady Demand

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Crisil said operating margins of Indian cement manufacturers are expected to decline by Rs 50-75 per tonne (t) this fiscal to Rs 925-950 per t due to higher input costs triggered by the West Asia conflict. The analysis covered 18 cement companies accounting for nearly 90 per cent of India’s domestic cement capacity and noted margins had improved sharply to around Rs 1,000 per t in fiscal 2026.

Crisil noted that the reduction would be driven mainly by higher power and fuel costs, which account for about 30 per cent of total costs, as petcoke and imported coal prices have surged amid geopolitical uncertainties. Freight costs, which account for about a quarter of total costs, are also expected to remain elevated because of higher diesel prices. The impact on profitability is likely to be more pronounced in the first half of the fiscal year before easing commodity prices moderate cost pressures later.

The rating agency said steady domestic demand and strong balance sheets should keep credit profiles stable despite the moderation in margins. Green energy currently accounts for 35-40 per cent of the sector’s total electricity consumption and is expected to partly cushion higher energy costs. Operating cash flows are likely to remain resilient, supported by projected 6-7 per cent growth in cement demand this fiscal.

Crisil highlighted that demand growth will be driven primarily by infrastructure spending, which meets about one-third of sector consumption, and by a nearly 18 per cent higher budgetary allocation for core ministries that should support project execution. Weaker rural housing demand amid pressure on agricultural incomes from a possible below-average monsoon may be offset by improved urban housing demand supported by favourable home-loan rates and a strong pipeline of Pradhan Mantri Awas Yojana-Urban projects. Ongoing capacity additions will keep capital expenditure elevated and may lift net debt to EBITDA to between 1.2 and 1.4 times from around 1.0 time last fiscal, though ratios are expected to remain healthy.

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Concrete

UltraTech Board Approves Rs 50 bn Fundraise Via NCDs

Company to issue half a million debentures for expansion plan

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UltraTech Cement’s board of directors has approved raising Rs 5,000 crore (Rs 50 bn) through non?convertible debentures issued in rupees.

The finance committee cleared a proposal to issue up to 500,000 fully paid, unsecured, listed, rated, redeemable, rupee?denominated, non?convertible, non?cumulative debentures of Rs 1 lakh each (Rs 0.1 mn each), aggregating to the Rs 5,000 crore programme.

As of June 2026 the firm reported net debt of Rs 15,875 crore (Rs 158.75 bn) and said its capacity expansion projects under execution are backed by capital expenditure of about Rs 17,000 crore (Rs 170 bn) over the next two to two?and?a?half years.

UltraTech spent Rs 9,500 crore (Rs 95 bn) on capital expenditure in financial year 2026 and in April the group crossed 200.1 mn tonnes per annum of domestic grey cement capacity and 205.5 mn tonnes per annum of global capacity.

The chief financial officer indicated the company would take consolidated capacity beyond 242 mn tonnes per annum, with grey cement capacity reaching 212.7 mn tonnes per annum by the end of financial year 2027. He noted the net debt?to?earnings before interest, taxes, depreciation and amortisation ratio stood at 0.87 times as of June 2026 and the company was confident of ending financial year 2027 with the ratio below one time.

In the first quarter of financial year 2026?27 UltraTech’s net profit attributable to owners rose 16.8 per cent year?on?year to Rs 2,599.3 crore (Rs 25.993 bn) and revenue from operations increased 15.9 per cent to Rs 24,648.20 crore (Rs 246.482 bn). The board approval is expected to complement internal cash flows as the company advances its expansion programme.

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Concrete

Lokesh Lays Stone For Rs 31 Billion Cement Unit In Kadapa

Line-2 expansion to make Kadapa a major cement hub

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Andhra Pradesh Education and IT Minister Nara Lokesh on Wednesday laid the foundation stone for the Line-2 expansion of Dalmia Bharat Cement at Chinnakomerla village in Mylavaram Mandal in Kadapa district. The project carries an investment of Rs 31 billion (bn) and is slated for completion by the third quarter of the financial year 2028. The expansion is intended to boost industrial growth and employment generation across the Rayalaseema region.

Once commissioned, the Kadapa facility will become Dalmia Bharat’s largest integrated cement manufacturing ecosystem in southern India, creating over 1,000 direct and indirect jobs and opening new business avenues for regional micro, small and medium enterprises and transport operators. Lokesh said the expansion signalled growing corporate confidence in the state and reflected the practical ease of doing business that secured repeat investment.

He placed the project within the government’s wider economic targets and recalled the Yuvagalam padayatra commitment to generate two million (mn) jobs within five years, noting that the state would cultivate talent while industry created opportunities. Lokesh highlighted Andhra Pradesh’s competitive pursuit of major manufacturing accounts, mentioning past successes and a personal initiative to engage global investors when persuading them to anchor expansion in the state.

The plant will leverage Kadapa’s abundant limestone reserves to scale production and sustainability. Clinker capacity is planned to rise from two point five million tonnes per annum (mn tpa) to six point one mn tpa, while overall cement output will increase from three point six mn tpa to nine point six mn tpa. The unit is designed to operate on over eighty per cent renewable energy and deploy waste heat recovery, zero liquid discharge, water recycling and advanced AI systems to optimise efficiency. Industries Minister TG Bharat, BC Welfare Minister S. Savitha and Jammalamadugu MLA C. Adinarayana Reddy attended the ceremony.

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