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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.

Birla White market share saw a gradual increase to 60 per cent in 2006-2007 due to the company's innovative strategies

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.

Necessity is the mother of invention, and the company has demonstrated that by making a single product into a multi-product unit
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.