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B.
C Chattopadhayay
Birla White Cement
August 2007
World Cement
Over
the years, the white cement industry has evolved
and, despite its chequered growth, today it is
gaining ground, driven by aesthetics and the new
form of buildings. The present production capacity
in India, spread among three manufacturers, is
over 800,000 tpa. The capacity utilisation during
2006-2007 was only 73 per cent, and the worldwide
figures for capacity utilisation are almost in
line in India. Consumption growth is projected
to be higher at five per cent. Although India
is the fourth largest consumer of white cement
in the world (the USA, Spain and France are top
three), it has no place in terms of per capita
consumption because of its high population base.
White
cement is primarily used in construction of residential,
commercial and institutional buildings for decorative
purposes. It is often used for flooring (in the
production of in-situ terazzo and mosaic tiles),
and also as adhesive for joining tiles, particularly
marble, cement paint and architectural plasters
for exteriors.
Some
45 per cent of white cement is used in the flooring
industry, but there has been a sharp decline in
its use since 2000 due to the introduction of
vitrified tiles. Vitrified tiles are perceived
to be a convenient, smart and economical alternative.
Today, their prices range from US$ 1 to US$ 2
per square ft, making them a sensible choice for
all segments.
White
cement applications also lost out on consumer
acceptance because of the high levels of skill,
effort and time required to finish floor and wall
surfaces. This trend is reflected in CAGR of the
white cement industry.
While
CAGR in the block period of 1991-1995 and 1996-2000
were 5.86 per cent and 6.19 per cent respectively,
in the subsequent block period of 2000-2005 CAGR
almost halved to 3.67 per cent. The projection
for 2005-2010 is 3.52 per cent notwithstanding
the construction boom in India. To make matters
worse, cheap imports started eating into the domestic
market and manufactures' share in 2000-2001.
Given
this scenario, Birla
White (a division of Grasim, an Aditya
Birla Group company) was quick to take action.
The company held a brainstorming session at the
Kharia plant (Rajasthan, India) in 2001 and a
series of strategic decisions were made.
Cost
efficiency
Fuel or furnace oil is the most critical input
cost (approximately 70 per cent) in the production
of white cement. Rising oil prices forced the
company to look for alternative fuels like PET
bottles, waste rubber etc. These measures reduced
costs without compromising the product quality.
The success achieved in this area helped to contain
the variables costs, despite the global increase
in oil prices.
Customer
retention
It was realised that sustaining and increasing customers
was the survival mantra for both trade and industrial
buyers. Customer engagement programmes were planned,
CRM was implemented, and active, pro-active and
alliance relationships were built. Assistance
was provided to industrial buyers to win businesses
from their customers and a key customer account
management team was appointed. As a result of all
this, the Birla White market share saw a gradual
increase to 60 per cent in 2006-2007 — a major
improvement considering that the market share was
below 50 per cent in 1999.
Business
redefinition
The restructuring process also involved a shift
in the way that the company was perceived. It was
important to emphasise that its business was not
cement manufacturing, but rather surface finishing.
In response to this, the company’s tagline
underwent a change from the ‘whitest white
cement’ to ‘my kind of design’, to
draw the attention of architects, engineers, builders
and end users. The company also explored various
ideas to increase usage and find more ways to use
white cement.
Innovation
strategies
The business redefinition helped the team to innovate
and develop new product concepts. Several concepts
within the surface finishing definition were translated
into tangible products in a couple of years, and
trials were undertaken before formally launching
these products into the market.
One of these newly launched products was Birla
White Wallcare Putty. Unlike white cement, which
is optional in building construction, Birla White
Wallcare Putty became almost mandatory as a pre-painting
surface preparation substance. The brand’s
growth has been phenomenal and is expected to exceed
the white cement revenues and profit in the near
future.
Necessity
is the mother of invention, and the company has
demonstrated that by making a single product into
a multi-product unit. The company itself is on
its way to becoming larger by 2010, a plan consistent
with its unit vision.
Architects
today are more demanding and willing to explore
the impossible. Birla White has been associated
with architects for nearly two decades, and has
succeeded in breaking the conventional cement
barrier and developing numerous designs and architectural
applications for walls and floors. Today, the
company boasts a portfolio that ranges from the
most basic wall finish to the most intricate of
claddings.
In
addition to the wallcare putty, the company also
developed Textura,
a ready-mix textured plaster, as well as Kool
n Seal and GRC
(glass fibre reinforced concrete). Some of the
major structures that were built using a mix of
white cement and GRC include: Hotel Leela Palace
in Bangalore; the Digamber Jain temple near Ajmer;
the airports in Bhuj (Gujarat), Ranchi and Gaya
(UP); the Kalyanprasad temple in Baroda, and the
Hotel Sonar Bangla in Kolkata.
Looking
into the future
As part of the latest step in the company’s
innovation strategy, it has launched the Birla
Yuva Ratna Award, a design competition for
budding architects. The aim of this initiative
is to encourage young architects to use white
cement creatively. The entries have been both
playful and eclectic, and creative use of digital
technology has been at the forefront of many designs.
Innovation is at the heart of Birla White’s
development and will continue to be so into the
future.
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