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Heidelberg cement

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It will help to gain knowledge on Heidelberg Cement. I have presented it on my MBA presentation.

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Heidelberg cement

  1. 1. Heidelberg Cement Bangladesh Limited(HCBL) Presented by: Partha Pratim Dey
  2. 2. Slogan of Heidelberg Cement For better building
  3. 3. Heidelberg the giant  HeidelbergCement is a German multinational building materials company headquartered in Heidelberg, Germany.  It is a DAX 30 Corporation.  In 2014, it was the world's third largest cement producer, the market leader in aggregates and fourth in ready mix concrete.  In 2014 the company produced around 78 million tons of cement.  The company employs some 45,000 people at 2,350 locations in more than 40 countries with an annual turnover of approximately €11 billion.
  4. 4. Activities in abroad  Activities abroad began with the acquisition of part of Vicat Cement, France in 1972.  In 1977, a massive program of purchases in North America began with the acquisition of Lehigh Cement  In 1993, it acquired part of SA Cemeteries CBR of Belgium, which already had a major multinational operation.  A major step was the acquisition of Scancem in 1999, with operations in Northern Europe as well as Africa.  Indocement in Indonesia was included in 2001.  In 2007, the British company Hanson was acquired, acquisition of Hanson plc in August 2007.
  5. 5. Coverage in the human planet
  6. 6. Overview of Cement Industry in Bangladesh  Cement industry of Bangladesh is running with excess capacity. Most plants operate at 50 to 60 percent efficiency. Against 20 to 21 mn MT annual local demand, there exists around 33 mn MT production facility as of 2014. Currently, cement consumption per capita in the country is roughly 107 KG, which is 210 KG in India, 265 KG in Pakistan, 310 KG in Sri Lanka and 570 KG in Korea. According to Bangladesh Cement Manufacturers Association there are more than 125 cement factories in the country.  The industry is oligopoly in nature where top 10 players held almost 85% of market share and Pricing control. The leading position seized by Shah Cement (15.91%) followed by Heidelberg Cement (9.76%) and Meghna Cement (8.08%), according to Bangladesh Cement Manufacturers Association (BCMA) in 2012. Bangladesh has no source of cement clinker which makes it one of the largest importers of clinker and limestone in the world by importing an estimated 10 mn - 15 mn MT from India, Thailand, Indonesia, the Philippines and China annually. So profitability of the sector largely depends on uninterrupted import facility and favorable foreign exchange condition.
  7. 7. HCBL’s recent operations in Bangladesh  HCBL has signed an agreement with MAX Group JV in April 2015 under which HCBL’s brand “Rubi Cement” will be used for 5.2 Km long flyover from Muradpur to Lalkhan Bazar, Chittagong.  HCBL has signed an agreement with Gerico Bangladesh in August 2014 under which “ScanCement” will be used for the Construction of “Feed Plant, at Gazipur. Total estimated cement consumption will be 5000 MT (approximately) in 14 months.  HCBL started operation in the southern parts of Bangladesh opening a warehouse in Nowapara, Jessore in 2014.  The company holds price leadership through strong brand image and international quality control.  The Company’s involvements in some of the well-known projects, i.e., Gulistan Jatrabari Flyover, Four Lane Dhaka- Chittagong national highway, Third karnaphuli Bridge etc. enhanced the goodwill of the firm as well as future business prospect.
  8. 8. Distribution channel of HCBL
  9. 9. SWOT Analysis of HCBL Strengths  Strategic location of factory in Dhaka & Chittagong.  Port facility of Chittagong.  Strong Brand equity of Scan and Ruby with premium price.  Strong sales force and dealer network through Information Technology.  Strong relationship with corporate Customer and large end user.  Creating service and awareness through advisory cell and other marketing policies.  Consistent quality.  Organizational positioning as “Quality Leader.”  Owning PCC as the category.  Owning pride project as a referral.  Brand close to end users through direct marketing
  10. 10. SWOT Analysis of HCBL Weakness  Price is expensive than consumer’s perceived value.  Logistics dependencies on rented truck.  No conveyer belt: Expensive coaster delivery.  One product line.  High production cost.  No conveyer belt for coaster.  Day time delivery.  Selective distribution.  Less availability and product knowledge provided to the end users.  No commission for retailers in existing distribution channel.
  11. 11. SWOT Analysis of HCBL Opportunities  Growth of cement market in Bangladesh due to development work.  Demand for quality cement.  New Product line.  Educating customer  Affiliation with regular consumers through seminars and advisory cell.  Scan/Ruby cement has its unique quality product and brand image, which is quite important to establish new clients both inn Government and Private sector.
  12. 12. SWOT Analysis of HCBL Threats  Other popular brands offers lower price.  Low priced Brand loyalty-price sensitiveness.  Increased competition through unhealthy pricing practice by competitors.  Increased price of intermediary raw materials in international market.  Entry of other reputed multinational in the market.  Merger of local grinder cross border delivery from India.  Other cement company provides more commission than HCBL to retailers and dealers.  New entry of Lafarge Surma cement will participate in the market share, as a result, more market saturation may cause less profitability.  Less encouragement and incentives has been taken by the government to neutralize the present rising price of most primary raw materials of construction.
  13. 13. Question and Answer

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