Ambuja Cements Case Study – The Billion-Dollar Cement Manufacturing Company

Ambuja Cements Ltd. (ACL) began cement production in 1986 and is India's largest cement manufacturer. Narotam Sekhsaria and Suresh Neotia, two traders, started Ambuja Cement in 1983. As a result, revenue from operations increased by 1.51% to INR 6,169.47 crore, compared to INR 6,077.29 crore in 2020.

By Digital Yug Feb 16 2022 2:02PM 942 Read
Ambuja Cements Ltd Story - India's Largest Cement Manufacturer

Ambuja Cements Ltd.(ACL) began cement producation in 1986 and is india's largest cement manufacturer. it was formelry known as Gujarat Ambuja Cements Ltd but later renamed Ambuja Cements Ltd. ACl has a reputation for being one of the world's most efficient producers.In addition, its environmental protection policies got regarded as among the best in the country. Ambuja Cement is also one of the india's most profitable and forward-thinking cement enterprises. Let us get to know the success story of this gaint that is a billion-dollar company.

Ambuja Cements – Key Highlight

  • Startup Name - Ambuja Cements Limited
  • Founed - 1983
  • Founders - Narotam Sekhsaria, Suresh Neotia
  • C.E.O. - Neeraj Akhoury
  • Industry – Cement
  • Headquarters - Mumbai, Maharashtra, India
  • Prent - LafargeHolcim
  • Website - www.ambujacement.com

Ambuja Cements - Major Cement Producing Company

Ambuja Cements Limited is a holding company established in India that specializes in the production of clinkers and cement. The company's main business is cement and cement-related products. In addition, the business offers a variety of items for both B2B and retail customers.

In the micromaterials area, they also co-own two brands. Alccofine contains various micro slag elements, and Dirk Pozzocrete, which contains superfine fly ash. Metro rail, dams, roads, flyovers, bridges, and tunnels are examples of projects where it got used.

Fun Fact: ACL has a capacity of 27.25 million tons of cement. Across the country, the company operates five integrated cement manufacturing plants and eight cement grinding units.

Ambuja Cement Founders - Narotam Sekhsaria & Suresh Neotia

Narotam Sekhsaria and Suresh Neotia, two traders with minimal expertise in cement or manufacturing, started Ambuja Cement in 1983. Their foresight compensated for this deficiency: They invested in a state-of-the-art cement plant in Gujarat, anticipating that cement would be an essential resource for a developing economy like India, and went on to construct a trusted cement brand that has become synonymous with quality and strength.

In its captive plants, ACL has also pioneered the development of multiple bio-mass, co-fired technologies for generating greener power.

Fun Fact : ACL is the first Indian cement company to construct a captive port with three terminals along the country's western coastline to promote timely, cost-effective, and environmentally friendly bulk cement shipments to its customers. The company has its ship fleet.

Ambuja Cement - Business Model

The Cement and Cement Related Products section is the backbone of Ambuja Cement's business plan. They offer a variety of products for both the B2B and retail markets. For example, Ambuja Plus Roof Special, the company's product, is designed to construct roofs and slabs. It can also install rainwater harvesting technologies on the top. In addition, Ambuja Powercem, which caters to the ready-mix (RMX) sector; Ambuja Railcem, which got built for railways; and Ambuja Buildcem, which caters to the needs of the mass housing segment, are among the company's products.

Ambuja Cement - Partnership

  • Since These are material products that must be created, stored in a warehouse, and distributed to clients, as the name implies. Physical items can be profitable, but if you don’t manage your operational costs properly, your profit margins will be minimal.
  • January In January, Holcim paid INR 21.4 billion for a 14.8% promoters' interest in GACL. As a result, it now owns 61.62 percent of Ambuja Cements' stock.

Ambuja Cement - Joint Ventures

  • Counto Microfine Products Private Limited
  • Wardha Valley Coal Field Private
  • OneIndia BSC Private Limited

Ambuja Cement - Subsidiaries

The following are some of Ambuja Cement's subsidiaries:

  • India's Kakinada Cements Limited
  • India's MGT Cements Private Limited
  • India's Leaders for Nature
  • The Associated Chambers of Commerce and Industry of India (ASSOCHAM)
  • India's Chemical Limes Mundwa Private Limited
  • Nepal's Dang Cement Industries Private Limited
  • India's Dirk India Private Limited
  • Business Biodiversity Initiative in India (IBBI)
  • India is part of the Global Compact Network. G4-16
  • Indian Industry Confederation (CII)
  • Indian Chambers of Commerce and Industry Federation (FICCI)
  • Bombay Management Association (BMA.)
  • Chamber of Indian Merchants (IMC.)
  • Bombay Chamber of Commerce and Industry (BCCI)

Ambuja Cement - Revenue and Growth

Ambuja Cements, a subsidiary of Swiss corporation LafargeHolcim, recorded a rise of 87.77 percent in net profit to INR 440.53 crore from INR 234.61 crore the previous year. In the year-ago period, revenue from operations was INR 2,852.46 crore, up 8.63 percent.

During the quarter, revenue from operations increased by 1.51% to INR 6,169.47 crore, compared to INR 6,077.29 crore in the same period last year. Total expenditures were INR 5,144.38 crore, down from INR 5,400.94 crore the previous year. Ambuja Cements' consolidated results reflect the financial performance of its step-down firm, ACC.

Ambuja Cement - Competitors

Ambuja Cement's main competitors are.

  • Aditya Birla
  • Ultratech
  • The India Cements Ltd
  • Dalmia
  • Holcim
  • AkzoNobel
  • JK Lakshmi
  • Shree Cement

Ambuja Cement - Challenges Faced

  • Slow Growth - Since the year 2019, the industry's growth has slowed. In the annual reports, ACC Ltd. and Ambuja Cements Ltd., both subsidiaries of Europe's largest construction material manufacturer LafargeHolcim, stated that the Indian cement industry's growth was 9% in 2018 plummeted to 7-8% in 2019.
  • Capacity Expansion - The company identified continuous capacity expansion as a critical concern for the cement industry, citing an imbalance in total installed capacity vs. capacity utilization.
  • Pandemic - In 2020, the coronavirus epidemic harmed the company's expansion significantly. However, the company follows the government's standards and the standard operating procedure for social distancing.

Ambuja Cement - Future Plans

Some of their upcoming plans are as follow:

  • The company's Sustainable Development Ambition 2030 provides a comprehensive framework for addressing difficulties in four key thematic areas: climate, circular economy, water and nature, and people and communities.
  • The 2030 Plan envisions a construction industry that is innovative, climate-neutral, and resource-circular.
  • It will be environmentally friendly, inclusive, and mindful of water and nature, which will improve people's quality of life.

Ambuja Cement – Merger with ACC

ACC and Ambuja, two of India's most prestigious cement companies, have been part of the same worldwide cement company for a long time. The markets have been buzzing with rumors of an all-out merger between ACC and Ambuja. Finally, it appears that this is becoming a reality. Both A.C.C. and Ambuja declared independently in early May 2017 that they are considering a merger

Bimlendra Jha, the MD & CEO of Ambuja Cements, resigned and replaced ACC's Neeraj Akhoury.

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Digital Yug is an Indian digital media platform that posts real life stories, events, news, and blogs about startups, entrepreneurs, and successful people. The company was founded by Dr Anil Diggiwal in 2018 and is currently a privately owned, bootstrapped organization. This Jaipur based company publishes & focuses on undiscovered, small startup stories.

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