Essay About Cement Companies And Saturn Cement

Managements Restructuring Stargh Group
Assignment PART 2STAR GROUP: A typical Indian entrepreneurial firm that did not adapt to changeThe US$350 million Star Group is a multinational enterprise spanning Asia, North America and Africa, and 15,000 employees worldwide.The ownership was largely entrepreneurial with a family owner who had channelized funds from other investors in the family or community but he acts as the sole decision maker with the majority of shares under his name.The Group has a presence in India, the USA, Uganda and Kenya. The Star Group has two cement companies located in Western India that supplies across the regions mentioned.In this case, we focus on the 2 cement companies that are individual entities. One of the two cement companies, the US$91 million Jupiter Cement has been commissioned in 1998. The second, US$69.2 million Saturn Cement, commissioned in 1996. Each company has an augmented capacity of 1.6 million tons of cement per annum. The cement sold by Jupiter Cement is branded as “Jupiter” while the cement sold by Saturn Cement is branded as “Saturn”. Saturn enjoys a marginal price premium over Jupiter (about US$0.08 per 50 kilograms). Saturn is positioned as a high value cement for homebuilders while Jupiter focuses mostly on institutional sales and caters to large contractors and building companies. Both the companies’ products include Ordinary Portland Cement (OPC) 53 Grade and 43 Grade, Pozzolana Portland Cement (PPC) and Sulphate Resistant Portland Cement (SRPC). Jupiter and Saturn are structurally and financially independent though they are owned by the same group.

Both plants apply the latest ‘Dry Process pre-calcination’ technology comparable to international standards. The plants, operating at over 100% capacity, are also one of India’s cost effective cement plants. Due to their proximity to two large ports, Porbandar and Veraval/Okha situated on the Arabian Sea coast, the plants have competitive access to export markets of the Middle East, Sri Lanka and the Maldives.Vision:To be the most sustainable and competitive company in the building products industryMission:To create value for all customers, employees, partners, shareholders, the environment and the society at largeIndustry Overview SummaryGovernment policies affected the cement companies in India at various stages. The price of cement is dependent on the cost of power tariffs, freight, and limestone. A low-value commodity, transporting costs for cement render the prices of cement to distant destinations uncompetitive. As a result the sphere of sales is within the radius of 150–300 km from the site of production. This is the reason why cement accounts for not more than 0.20% of total world exports. Limestone deposits in India are located in the states of Madhya Pradesh, Rajasthan, Maharashtra and Gujarat. This has led to concentration of cement units, called ‘clusters’ in these states. There are six such clusters in the country accounting for  more than 55% of the total cement capacity. Star Group concentrates in the Western cluster of the market.