Gujarat Ambuja - Redefining Operational Efficiency

BACKGROUND NOTE contd...

GACL had a large distribution network of 11,500 outlets. It was one of the first cement companies in the country to recognize the importance of brand building. The company's cement, sold under the Gujarat Ambuja brand name, enjoyed good brand equity and sold at a premium. The company was the overall market leader in the Indian cement industry (Refer Table I).

TABLE I
INDIAN CEMENT INDUSTRY – COMPANIES AND THEIR
MARKETSHARE (2001) (in %)

GACL was not only the market leader, it ALSO ranked very high on the profitability criteria. Its new plants, use of better quality limestone, innovative energy management efforts, and strong retail presence in Mumbai, Gujarat and Punjab gave it a strong edge over its peers. Its cost per rupee of sales was much lower than most of its competitors, resulting in much better operating margins (Refer Tables III, IV and Figure I).

TABLE II
CEMENT COMPANIES – OPERATING MARGINS

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