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I Can Ambuja

I Can Ambuja

Ambuja Cement’s innovative green building offering – Ambuja Plus Cool Walls – for Individual Home Builders (IHBs) launched at different locations since last year has been enjoying a successful buy-in from various customers. The buyers are thrilled with the unique benefits offered by this product’s features.

The revolutionary offering with ‘Heat Barrier Technology’ ensures a 5° C temperature difference indoors, no matter how hot or cold the external temperature is – thus saving energy. The product’s properties are such that it does not require curing either, thus water is saved.

Introduced in a few cities in the states of Chhattisgarh, Gujarat, Punjab, Maharashtra and Himachal Pradesh, contractors and customers alike have expressed satisfaction on this green offering in terms of its performance, strength, finishing and quality of optimising space among others.

Here are the testimonials of our happy customers…

ACC v/s Ambuja Cem: Which one is better?

The cement industry went through a sea of change in the last couple of decades. In many ways, leading cement players ACC and Ambuja Cements represent this paradigm shift. As such, we have provided a comparative analysis of these leading cement players. In the next few articles, we will compare the two companies on several important parameters.

Management quality

Both ACC and Ambuja Cements are now controlled by Swiss-based Holcim Group, one of the most respected cement companies in the world. However, both have had very different beginnings.

ACC is one of the oldest cement companies in India. It was born out a historic merger of 10 cement companies in 1936. Until some time back when the Aditya Birla Group consolidated its cement assets under UltraTech Cement, ACC was the largest cement manufacturer in India. In the latter part of the 20th century, ACC diversified into some other businesses and made some wasteful acquisitions. These businesses became a drag on the company's balance sheet. Between 1999 and 2000, the Tata Group sold off its entire 14.45% shareholding in ACC to subsidiary companies of Ambuja Cements. Effectively, the Ambuja Group became the single largest shareholder of ACC and took over management control. From the time Ambuja took over management control of ACC, it revamped the latter's business strategy. ACC decided to exit its non-cement businesses and focus on its main business.

Ambuja Cements, on the other hand, entered the cement industry as late as 1983. Despite being a late-comer, Ambuja managed to grow into one of the largest and most profitable cement companies in the country. What is commendable about the company's management is the fact that it is has focussed purely on its cement business and used its cash quite prudently. It has resisted venturing into new businesses. This shows that the company's leader have been very clear in their vision.

Cement capacity

As of today, both the companies have almost a similar cement capacity. Ambuja Cements has 27.35 million tonnes per annum (mtpa) of cement capacity. On the other hand, ACC is marginally ahead at 28.68 mtpa. Both Ambuja and ACC account for about 9.5% and 10% respectively of the total domestic cement industry. However, a major differentiating factor is the pace at which both companies have added additional capacity over the year. The chart below shows the cement capacities of the two companies since 1995.
As is evident from the chart, in 1995, ACC was the biggest cement company with a capacity of 9.5 mtpa. In comparison, Ambuja stood much lower at just 2 mtpa. Over these 16-17 years, while Ambuja has managed to grow its cement capacity at an impressive rate of 17.2% CAGR (compounded annual growth rate), ACC has added capacity at a much slower pace of just 6.8% CAGR.

Utilisation rates

Capacity addition must not be view in isolation. The other important parameter to watch along with it is capacity utilisation rate. Utilisation rate (Actual Production/Installed Capacity) measures how well a company utilises its capacities. If a company keeps on adding capacity despite low utilisation rates, it reflects management's inefficiency, lack of vision and frivolity. The chart below shows the utilisation rates of the two cement players.

 

Over the last 16-17 years, while ACC has reported an average capacity utilisation rate of 86%, Ambuja's average utilisation rate stands tall at 93%. During certain years, Ambuja managed to produce even more than its total installed capacity. So the company has not only added capacity at a rapid pace, but has also achieved high utilisation rates throughout most of its operating past. This shows the high level of efficiency in Ambuja's operations.

Geographical spread

Given that cement is a low-value bulk commodity, it is a freight intensive industry and transporting it
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