Final Report on Lafarge Aggregates

8/6/2019 Final Report on Lafarge Aggregates

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A

PROJECT REPORT

ON

Marketing research and

For

Aggregate products

MASTER OF MANAGEMENT STUDIES (MMS)

UNIVERSITY OF MUMBAI

SUBMITTED TO

MARATHA MANDIRS

BABASAHEB GAWDE INSTITUTE OF

MANAGEMENT STUDIES

MUMBAI CENTRAL

SUBMITTED BY

VIVEK DATTARAM CHAVAN

DECLARATION


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I, Taware Niketan Prakash of Master of Management Studies (Semester III) of

Babasaheb Gawde Institute of Management Studies (BGIMS), hereby declare that I

have successfully completed this project on marketing research and Preparation of

IMC plan for ASUS product as a part of my Summer Internship. The information

incorporated in this project is true and original to the best of my knowledge.

Signature

ACKNOWLEDEGEMENT

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At the commencement stage of the research study, I was not quite sure about

the magnitude and dimensions of the research and the related efforts needed. Except

for the strong will bestowed by almighty to pursue the study with patience and

sincerity I would have not been able to complete it.

I am grateful to our director Prof. Atul Thakurdas , Prof, Anu Sharma , Prof.

Parmar & my mentor Mr. Romi Suri & Mr.Giriraj Karkera for all the support given

during data collection which has precisely assisted my accomplishment.

I am also thankful to my family and my friends without whom it wouldnt

have been possible to complete this research.

I sincerely thank all the people who knowingly or unknowingly helped me in

the work.

Contents

Sr.no Topic Page

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no.

1 Executive Summary

2 Objectives of Project

3 Literature Review Lafarge: General information

4 Product line information

5 Project Design

6 Observations and findings

7 Data analysis

8 Limitations

9 Annexure

10 Conclusion

11 Bibliography

Chapter 1: Executive Summary

Title of the project: Customer Segmentation & Price mapping Study for aggregates

market in Mumbai

Name of the company: Lafarge Aggregates & concrete India Private Limited.

Mentor Name: Mr. Sachin Patil.

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Summary of Project:

This project is an attempt to decipher the market potential for products widely used in

the construction & building material space in a different format of consumption.

These products known collectively as Aggregates in global terminology assume a

formidable significance due to a huge demand for it in an ever growing sector

Construction Industry, here in India as also because some of the natural alternative to

these products become increasingly difficult to procure due to environmental

regulations imposed on them.

We are talking of Sand & Coarse stones of specific dimensions called popularly in the

local Mumbai market as Reti & Khadi -1 number & Khadi -2 number.

Our products are 0/4mm Fine Aggregate for Reti , 4/10mm Coarse Aggregate

for Khadi-1 number & 10/20 Coarse Aggregate for Khadi-2 number

For the first time an organized player like Lafarge plans to entering into the aggregate

market & this project aims understand customers purchasing pattern of aggregates &

identify key parameters which influence customer buying decision while purchasing

aggregates segment wise & geographic location wise.

For this study segments are defined based on Lafarge segment definition terminology

Civil contractor ( Residential/commercial)

Infrastructure Contractor (Road, Bridges, Water supply, Drainage, Metro Rail,

Other mention)

Commercial ready mix manufacturer

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Commercial asphalt manufacturer

Paving / precast manufacturer

Builder

Captive ready Mix Player

Lafarge is currently doing trading business in the aggregate market in Mumbai since

year 2009 with average sales of around 35,000 to 40,000 tons per month. In last three

years it has developed up solid customer base across segments & has made inroads

into unstructured aggregate market in Mumbai. It has developed its sales team,

technical team & logistic team . Lafarge will be starting its first aggregate Greenfield

project in Badlapur. Lafarge aggregate division decided to conduct study to do

customer segmentation & price mapping across segments & geography wise which

will be a divisive tool for Lafarge aggregate sales team to sales aggregate from

Badlapur plant. So I did customer segmentation and a price mapping study to assist

them understand the current market scenario. My main aim of the project is to

understand customers current pain areas and assist Lafarge to provide better service

in those areas. I had to prepare this plan by performing the market research on given

product line in selected region.

So this project will give you the brief idea about the marketing research and IMC plan

for aggregate market.

I have discussed following points through my project:

1) I am giving the basic information about Aggregates, product line, there features

and market research plan.

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2) Then I am discussing about project design .Then I designed the research process

with the sample size of 54 builders and civil contractors from south mumbai. Then I

am discussing about observation and findings about the project.

3) In the data analysis part, I have shown actual analytical results of data secured from

research process and the graphical representation.

4) In the final part, I have discussed about the Limitation of the project.

I have tried my level best to put best efforts to take out maximum data from the given

region, and to use that data for the preparation of my recommendation. I am sure this

will help Lafarge in future.

Chapter 2: Objectives of Project

Objectives of summer placement:

1) To do market research on Aggregate product mainly 10mm, 20mm and

crushed sand our main objective is to study the market position of above

mentioned Aggregate products in Mumbai market. For this I have select south

Mumbai as my sample region.

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2) To understand the current pain areas of the customers.-The objective of the

project was to understand the current pain areas of the customers and the issues faced

by them in the current market from their existing suppliers.

To understand the purchasing patterns of aggregates: The objective was met by

identifying key parameters which influence customer buying decisions while

purchasing aggregates.

To identify the gap between customer needs and marketing offerings: The

objective of the study was to identify and analyze satisfaction level of customers

across parameters by identifying the loop holes.

To capture the usage patterns across segment and geographic location: This

objective is met by doing a complete customer mapping of aggregate users and also

understanding demand of aggregates segment wise.

To create awareness in the minds of the customers: One of our other objectives of

this research program was to create awareness in the minds of customers about

Lafarge and its new plant at Badlapur.

To understand customers perspective about the brand: During the research we

also tried to understand the customer perspective about Lafarge and what values do

they associate with Lafarge

To analyze the data collected: The objective was to collect and analyze the required

data to guide Lafarge to devise sales plan for Badlapur project.

To develop Customer Data : This objective will be used after operation of the

badlapur plant.

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Chapter 3: Literature review

Lafarge: General information

Introduction About Lafarge Global

Lafarge was founded in 1833 by Joseph-Auguste Pavin de Lafarge in Le Teil, to

exploit the limestone quarry in Mont Saint-Victor between Le Teil and Viviers.

In 1864 Lafarge signed its first international contract for the delivery of 110,000

tonnes of lime to the Suez Canal construction project. It developed calcium aluminate

cements. It was also an early pioneer in the production of white Portland cement, still

made at the company's original Le Teil plant.

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In 1919, a public company was formed, named "Socit anonyme des chaux et

ciments de Lafarge et du Teil."

In 1980, it joined with the cement company Coppe to become SA Lafarge Coppe.

Lafarge purchased a plant from the National Gypsum Company in early-1987. Ten

years later, it bought Redland plc, a leading British quarry operator.

In 2001, Lafarge, then the world's second largest cement manufacturer, acquired Blue

Circle Industries (BCI), which at the time was the world's sixth largest cement

manufacturer, to become the world leader in cement manufacturing.

In 2006, Lafarge North America shareholders accepted a $3 billion tender offer from

Lafarge Group which gave the parent company full control over the North American

business, removing LNA from the New York Stock Exchange. Previously the Group

had owned 53% of LNA shares

In December 2007, Lafarge announced the purchase of the Orascom Cement Group,

an Egyptian based cement producer with operations across Africa and the Middle

East, from Orascom Construction Industries (OCI).

On May 15, 2008 Lafarge acquired Larsen & Turbo Ready Mix-Concrete (RMC)

business in India for $349 million.

About Lafarge Aggregates & Concrete India (P) Ltd.

In line with its strategy to develop its Aggregates & Concrete business in emerging

markets, Lafarge went on with the acquisition of L&T Concrete for an enterprise

value of INR 14.8 billion (USD 349 million). Lafarge acquired through L&T

Concrete 66 highly efficient concrete plants located across India, in key markets such

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as Delhi, Kolkata, Mumbai and Bangalore, with total estimated volumes of 4.1Mm3

in 2008 and a market share of approximately 25%. The acquisition will be accretive to

Lafarge earnings per share from 2009. With this acquisition, Lafarge established itself

as the leader in the Indian ready-mix concrete market. The ready mix concrete market

is still in an early stage of its development in India, but offers strong growth and value

creation potential. The Indian construction market is developing to meet significant

demand for new housing, urbanization and infrastructure. This acquisition was an

important step in Lafarge's strategy to develop its Aggregates & Concrete business in

emerging markets. It is with a planning provide the Group with an excellent platform

to develop further its Aggregates & Concrete business in the fast-growing Indian

market, along with a very experienced team. India offers strong potential for

introducing innovative products. Lafarge boasts the world's leading research facility

in building materials and has developed innovative, value-added concrete products

over the last ten years which contribute to improving construction methods and

working conditions on building sites. One of Lafarge's key strategic focuses today is

innovation in concrete, which translates into an markets. Lafarge is also aiming to

offer the Indian market its most advanced and value creative solutions for

construction.

Lafarge: World

World leader in building materials, Lafarge extracts resources from the heart of the

earth to make materials to bring to the heart of life. Present in 78 countries, the Group

responds to the worlds demand for housing and infrastructure. Lafarge is driven by

the needs of its customers, shareholders, local communities and architects. The Group

creates high value-added solutions which encourage creativity whilst leaving a lighter

trace on the world.

Profile

Lafarge holds top-ranking positions in each of its Businesses: Cement,Aggregates, Concrete and Gypsum.

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Lafarge at a glance

At a global level, Lafarge is:

n 1 in Cement,

n 2 in Aggregates,

n 3 in Concrete,

n 3 in Gypsum.

The Group controls a unique portfolio of Businesses:

Cement: 59.7%,

Aggregates and concrete: 31.5%,

Gypsum: 8.8%.

(Figures at 12/31/2010 as a % of sales)

Mission: anticipate needs to drive advances in construction methods

Lafarge designs and produces building materials to meet the requirements of people

throughout the world for:

sustainable construction,

housing,

transport,

healthcare,

education,

Essential infrastructure for economic growth and social progress.

Solid values: respect, care, rigor

Essential values guide Lafarge's development:

integrity,

ethics,

courage,

empathy,

openness,

commitment.

Lafarge believes that ongoing advances in building materials must integrate respect

for people, their different needs and their environment. This strong conviction is

reflected in a strategy which combines industrial know-how with:

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performance,

value creation,

respect for employees and local cultures,

environmental protection,

conservation of natural resources and energy

Principles of Action

Becoming the undisputed world leader in building materials

Lafarge is committed to:

offering our customers the best in innovative materials and reliable products

and services,

reinforcing our position as the world leader in relation to our suppliers,

employees, customers and shareholders.

Upholding commitments to all stakeholders

Lafarge is committed to:

generating value for our clients,

delivering the value creation that our shareholders expect,

giving our employees every opportunity to contribute and develop their

talents,

contributing to building a better world for our communities

The Lafarge Way

The Lafarge Way is built around 3 concepts.

Making our employees successful: Lafarge aims to enable each individual to

succeed.

Delivering continuous performance improvement: Lafarge continually

strives to optimize its products and services.

A multilocal organization:Lafarge's goals are local but remain integrated

into our global approach

StrategyOur strategy seeks to strengthen our place as world leader in building materials

in terms of market share, innovation, customer image, geographical spread and

profitability. Sustainable development also forms an essential part of the

Group's strategy.

Clear and ambitious strategic priorities

2 strategic priorities:

Cement, primarily in growth markets.

Innovation, particularly innovative construction systemscorresponding to the new market trends of sustainable construction solutions

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and affordable housing.

3 operational priorities:

The health and safety of our employees and contractors - the Group's

biggest priority is to become accident-free.

Cost-cutting - the significant progress seen in recent years shows that

cost-consciousness has now become part of Group culture.

People development - the Group is focusing on four key aspects:

filling our talent pipeline, developing our talents, leveraging diversity and

optimizing the effectiveness of its organization

Continued growth in emerging markets

The urbanization and demographics of emerging countries are driving substantial needs

for infrastructure and housing.

Despite the economic and financial crisis, global cement demand grew by approximately9% in 2010, supported by the dynamism of most large emerging markets.

Lafarge is well placed to benefit from this growth thanks to its well diversified

geographical portfolio,strengthened during recent years by a cement capacity increase

program and the acquisition of Orascom Cement in January 2008.

Emerging markets accounted for 74% of Group's current operating income in 2010, and

they are the target for most of its new production capacity projects.

Innovating to meet customer needs in terms of sustainable construction

In recent years, the Group has expanded its offer ofhigh value-added products and

systems to meet its customers' expectations in terms of performance, ease of use, reduced

application time and recycling.

The growing demands of sustainable development are also drivers of innovation:

preservation of the environment and the combat against climate change, health protectionand corporate social responsibility.

Lafarge supports building methods respectful of man's future and his environment by

partnering with different industry players. It focuses its innovations on reducing the

carbon footprint of its products and buildings, improving the energy efficiency of its

production processes and of buildings built with its solutions, and reducing construction

costs

Expansion of emerging markets

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Emerging markets drive global growth in the sector

Around the world, cement production is increasing by 5% per year for 20 years. This

means 100 million additional tons of cement is being consumed every year. Despite the

crisis, it grew by approximately 9% in 2010.

This growth is predominantly driven by urban and demographic development in emerging

markets that are facing strong demands in infrastructures and housings. In these countries,

the cement market is growing at a significantly faster rate than the general economy.

Lafarge is positioning itself as a leading player in this context.

Lafarge strengthens its positions

In the 1990s, the Group established solid positions in emerging markets through a

combination of acquisitions and organic growth.

More than 60% of Lafarge's workforce is employed in emerging countries (Asia,

Africa, Central and Eastern Europe, the Mediterranean Basin, Middle East and LatinAmerica). In 2010, these countries accounted for 53% of Lafarge's turnover. In the

Cement Business, emerging markets account for, in 2010, 69% of its results.

Most of the Group's new production capacity projects are located in emerging markets. In

2010, Lafarge continued to implement its capacity increase in emerging countries with 12

million tonnes started up in Africa, Middle East and Asia

Moving towards new industrial practices

Cost structure

In general, the cost of manufacturing our different products can be broken down as

follows:

energy accounts for 33% of the cost of producing cement,

raw materials (more than 50% of which are cement) represent 75% of the cost of

ready-mix concrete. Delivery expenses account for approximately 20% of the cost,

raw materials (primarily gypsum and paper) represent 40% of the cost of

plasterboard,

energy, raw materials and labor represent 50% of the cost of producing aggregates.

Reducing the environmental footprint of our activities

The cement industry emits CO2. Since the 1970s, the Group has been working to reduce

its ecological footprint in order to respond to needs for infrastructure, housing, hospitals

and schools whileconserving natural resources.

This approach focuses on:

the modernization of plants and the improvement of industrial processes,

product research and innovation,

the use of alternative fuels and materials, with the aim of reducing the

consumption of non-renewable natural resources and limiting CO2 emissions.

Towards sustainable construction

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The building consumes vast amounts of energy and is the source of 40% of the CO2

emissions of developed countries.

Lafarge is working to invent the building methods of tomorrow. The entire life cycle

of the building needs to be reconsidered, from the use of recyclable materials to the

integration of renewable energies and the reduction of pollution

Corporate governance

Governing bodies

The Board of Directors of Lafarge has 17 members, of whom 10 are independent

directors. The Board of Directors relies on SpecializedCommittees to examine questions

relating to the Group's operations.The Executive Committee implements the policies defined by the Board of Directors

Transparency and efficiency

A majority of the members of the Board of Directors, the Corporate governance and

the Nominations Committee, the Remunerations Committee and the Audit Committee

are independent. The Chairmen of the 3 committees (the Audit Committee, the

Corporate governance and the Nominations Committee, the Remunerations

Committee) are also independent.

In 2007, the Board adopted the principle of appointing a Vice Chairman, to be

chosen from amongst the independent directors.

The Group has established a Code of Business Conduct and a system forannual

internal evaluation. Its goals:

to evaluate the operations and efficiency of the Board of Directors,

to improve the way it functions.

Our priorities

Fighting climate change

Lafarge develops and is implementing a comprehensive strategy contributing to

the overall objective of limiting the Earth's temperature increase to a maximum

of 2C. The Group surpassed its 2010 objectives 1 year in advance and set itself 3

new targets for 2015 and 2020, in the framework of its partnership with WWF.

They now encapsulate the entire construction chain.

Reducing CO2 emissions

Lafarge is aware of challenge which climate change presents for the entire planet.

Since 2001, the Group committed itself to ambitious objectives in the framework of a

pioneering partnership with WWF.

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Lafarge has fulfilled and surpassed in advance its 2010 objectives, because of the

context of the economic downturn, which has significantly impacted production

volumes:

- 10% absolute gross emissions* in industrialized countries: they were

cut by 36.5% in the Cement business between 1990 and 2010,

- 20% net emissions* per ton of cement produced worldwide: they fell

by 21.7% between 1990 and 2010.

(* Gross/net emissions: net emissions equal gross emissions minus emissions related

to the burning of waste.)

Going beyond plants

The construction sector accounts for 40% of the global energy demand, and for 30%

of the overall greenhouse gas emissions.

In 2011, the Group announced it 2nd generation commitments, set up in the

framework of the partnership with WWF International. Lafarges 3 new targets for

2015 and 2020 are in line with a comprehensive, ambitious and original approach.

They go beyond plants CO2 emissions and encapsulate the entire construction chain:

Reducing CO2 emissions per ton of cement produced by

33% between 1990 and 2020;

Developing 10 innovative products ranges and contributing to500

sustainable construction projects by 2015;

Promoting CO2 performance enhancement policies which areadapted to Lafarges industry in international and professional organizations.

Relying on industrial ecology and innovation

To meet these objectives, the Group is:

reducing energy consumption,

modernizing its plants and constantly improving its industrial

processes,

developing industrial ecology through alternative fuels and

industrial waste, particularly slag, fly ash and pozzolan, to manufacturecement.

Lafarge also invests in research to:

develop clinker which produces less CO2. For example, new

clinkers Aether incorporate less limestone and can be heated to lower

temperatures, which will allow a 25 to 30% cut in CO2 emissions.

perfect processes which make more efficient use of energy,

optimize the composition of concrete and improve recycling.

Promoting sustainable construction to other industries

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Lafarge has set itself the objective to build a common vision on climate change and

CO2 performance, together with other industries and cement players, but also with

its stakeholders, such as WWF.

The Group addresses all actors in the value chain and participates inpartnerships and

collective actions, such as:

the WBCSD (World Business Council for Sustainable Development),

the EEB (Energy Efficiency in Building) project,

the WBCSD Cement Sustainable Initiative (CSI), which was co-chaired by

Bruno Lafont in 2010,

the Building Energy Foundation,

UNEP (United Nations Environment Program),

Upstream collaboration with clients, architects, engineering and construction

companies in developed and emerging countries

Implementing Clean Development Mechanisms

Lafarge conducts a number of projects aimed at implementing Clean Development

Mechanisms (CDM) within the framework ofthe Kyoto Protocol.

Three projects have already been recognized by the CDM Executive Committee:

in Morocco, the Tetouan wind farm supplies 50% of the electricity

used by the local Lafarge cement plant,

in Malaysia, 5% of the thermal energy for the Rawang and Kanthan

cement plants comes from biomass,

in India, fly ash from conventional power plants is recycled for use in

cement.

These 3 Clean Development Mechanisms provide annual savings of 160,000 tons of

CO2, an environmental benefit equivalent to planting 10.6 million trees per year!

Protecting biodiversity

Because of its geographic scope, its long term business and local impacts,

Lafarge continues its strong commitment to biodiversity and rehabilitation of its

quarries. The objective is to preserve the animal and plant ressources present in

these natural environments

A biodiversity management system

Lafarge has established a comprehensive biodiversity management system in

partnership with the WWF:

a specific methodology,

tools to evaluate the challenges of the site, programs to maintain and improve biodiversity.

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The objective is to work with local experts and environmental associations to

establish biodiversity programs for all sites located in a sensitive area or presenting

real potential for wildlife.

In partnership with the WWF Lafarge has also developed abiodiversity index to

monitor and track ecological changes at the Group's quarries and sites.

Criteria include:

the rarity of identified species,

the surface area of the natural environment.

The ratings underpin action programs.

In 2010:

94% of quarries are screened according to these WWF criteria.

84,5% of quarries have a rehabilitation plan.

47% of quarries located in sensitive areas have a biodiversity

program.

Partnerships with specialists

Lafarge works closely with specialists to expand its understanding of biodiversity:

A panel of experts and stakeholders is consulted in all biodiversity

matters.

International experts: the indicators developed with WWF have

been reviewed and have inspired key perfomance indicators for the CSI

(Cement Sustainability Initiative).

Local experts such as:

the "Museum d'Histoire naturelle" (France) and English Nature

(United Kingdom) lend their expertise during the creation of natural habitats

on rehabilitated sites,

the Wildlife Habitat Council (United States) has recognized the

attention to biodiversity shown in the Group's industrial approach by

certifying 74 of its Cement and Aggregates sites

Conserving waterHighly exploited by human activities, water is the must-consumed resource in

the world. Therefore, reducing its water footprint is a priority for Lafarge.

Water, a key component of the WWF partership

With the renewal of its WWF partnership in 2009, Lafarge integrated water in its 5

main commitments. The aim was to develop a better understanding of its water

consumption to better reduce it.

Through the partnership, Lafarge:

maps sites located in areas of water scarcity and measures their water

footprint,

reduces its water consumption,

preserves fragile wetlands, recycles water by collecting washing and cooling water.

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recognizing and rewarding the best performers from business units

to individuals.

Lafarge has come a long way on its journey but recognizes it has further to go to

achieve zero incidents and occupational illnesses. That's why Health & Safety is the

Group's number one priority.

Sustainable construction

The environmental footprint of buildings needs to be reduced throughout their

lifecycle in order to respond to the challenges of climate change. Lafarge follows

a rigorous methodology, invests in innovation and brings together all its partners

to develop solutions promoting sustainable and efficient construction solutions.

The Lafarge approach: a sustainable building throughout its life cycle

Buildings represent nearly 40% of global energy demand. Reducing constructions'

environmental footprint is an essential tool in fighting climate change. At least 80% ofa building's energy consumption occurs during its use. It is therefore vital to improve

its performances throughout its lifecycle.

To do this, Lafarge has developed an approach based on 3 priority focuses:

economizing energy consumption;

reducing greenhouse gas emissions;

keeping construction costs as low as possible;

while improving structures' other environmental and social footprints as much as

possible.

To achieve these objectives, the Group uses the life cycle assessment (LCA) method,

which quantifies a product's or building's environmental footprint throughout its life

(greenhouse gas emissions, air pollution, water consumption, transport, etc.).

And to raise the public's awareness of its commitment to more efficient and

sustainable construction, Lafarge has createdEFFICIENT BUILDING, an

approach relying on measurable factual data. EFFICIENT BUILDING is meant to

highlight the particular benefits of a solution, construction project, partnership or

innovation, such as its contribution to energy performance, durability or to optimizing

resources used throughout a construction's life.

Involving the whole sector in innovation

Lafarge believes that a building's environment footprint begins from its design stage. In

order to offer solutions upstream in the value chain, the Group focuses on innovation,

devoting over 50% of its R&D investments in 2010, representing more than 70 million

euros, to sustainable construction.

The Group works in close collaboration with the leading research centers and

prestigious universities worldwide, including:

MIT (Massachussetts Institute of Technology) in the United States: the Ecole des Ponts et Chausses and the CNRS in France;

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Tsinghua University in China;

IIT Madras in India.

Lafarge also carries out research in collaboration with architecture firms and

engineering offices to offer solutions with environmental characteristics most suited to

projects. For example, the Group worked with the firm Arte Charpentier to design

Essilor's new R&D center, which sets an environmental benchmark.

Collaboration with players in the sector also includes partnerships with project

owners, such as Bouygues Construction, with whom Lafarge develops innovative

solutions responding to sustainable construction challenges

Taking the lead in sectoral bodie

Lafarge works in numerous bodies and working groups, on an international and local

level, to promote more sustainable construction and contribute to progress towards

more sustainable methods of construction, in its sector and beyond.

The World Business Council for Sustainable Development (WBCSD)

Lafarge is a member of the World Business Council for Sustainable Development

(WBCSD), an organization of 200 large companies committed to a sustainability

approach.

In the context of the WBCSD, Lafarge is particularly active in 2 programs: CSI and

EEB.

Cement Sustainability Initiative (CSI)

Along with 23 cement manufacturers operating all around the world and representingmore than 40% of global production, Lafarge had the idea of setting up the "Cement

Sustainability Initiative". The program offers a framework for dialogue

between cement manufacturers which agree to do all they can to:

protect the climate,

preserve resources (natural raw materials and fossil fuels),

guarantee the health and safety of employees.

In 2010, the Chairman and CEO Bruno Lafont co-chaired the CSI, showing the

Group's permanent commitment.

Energy Efficiency in Buildings (EEB)In 2006, Lafarge launched the EEB in partnership with United Technologies Corp.,

the world's largest supplier of capital goods. This project aims to develop the way

construction is viewed, at every stage, from the design to the demolition of buildings.

The goal, by 2050, is to construct buildings which are self-sufficient in energy and

no longer produce any CO2.

17 multinational companies, all among the leaders in their sector, are now part of this

project: United Technologies, Bosch, Dupont, EDF, GDF Suez, Philips, Skanska,

Tokyo Electric Power Company, etc.

With the Fondation Btiment-EnergieFour major players in the building and energy sectors (Lafarge, Arcelor, EDF and GDF-

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Uses of Aggregates

Important component of composite materials

Concrete and asphalt concrete

Serves as reinforcement to add strength to the overall

composite material

Drainage applications

Relatively high hydraulic conductivity value as compared to most soils

Base material

Under foundations, roads, and railroads

Provides a stable foundation or road/rail base with predictable,

uniform properties (e.g. to help prevent differential settling

under the road or building)

Low-cost extender that binds with more expensive cement or

asphalt to form concrete

Properties of Aggregates

Physical Properties

Grading (Particle size distribution)

Durability

Particle shape and surface texture

Abrasion and skid resistance

Unit weights and voids

Absorption and surface moisture

Chemical Properties

Organic & Inorganic impurities

Chlorides and sulphates

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Reactivity

Properties of concrete influenced by aggregates.

Aggregates constitute 60-80% of concrete volume

Strongly influence concrete's freshly mixed and hardened properties, mix

proportions, and economy

Cement and water requirements, workability, pumpability, and durability of

concrete

Particle shape and surface texture

Influence the properties of freshly mixed concrete more than the properties of

hardened concrete

Rough-textured, angular, and elongated particles require more water to

produce workable concrete than smooth, rounded compact aggregate

Consequently, the cement content increases

Test methods of aggregates

General Tests

Sieve Analysis

Water Absorption

Aggregate Impact Value

Aggregate Abrasion Value

Aggregate Crushing Value

Specific Gravity Test

Alkali Aggregate reactivity test

Tests pertaining to manufactured sand

Flow Cone test - Shape

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Methylene Blue Value test (MBV) - Noxiousness

Gradation

Properties of concrete

Relatively high compressive strength

Significantly lower tensile strength

The elasticity of concrete is relatively constant at low stress levels but starts

decreasing at higher stress levels as matrix cracking develops

Very low coefficient of thermal expansion

As concrete matures it continues to shrink

Due to the ongoing reaction taking place in the material

The rate of shrinkage falls relatively quickly and keeps reducing over time

Considered to not shrink due to hydration any further after 30 years

All concrete structures will crack to some extent

Shrinkage, settlement and tension

Creep in Concrete

When subjected to long-duration forces

Permanent movement or deformation in order to relieve stresses

Specialist applications require different types of concrete

Regular concrete

High strength concrete

High-performance concrete

Self-compacting concrete

Shotcrete

Pervious concrete

Cellular concrete

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Roller-compacted concrete

Asphalt concrete

Production of concrete

In its simplest form, concrete is a mixture of paste and aggregates. The paste,

composed of portland cement and water, coats the surface of the fine and coarse

aggregates. Through a chemical reaction called hydration, the paste hardens and gains

strength to form the rock-like mass known as concrete.

Testing of concrete

Tests on Wet concrete

Workability

Slump test

Flow table test

Cohesiveness

Tests on hardened concrete

Strength

Compression tests

Flexure resistance tests

Durabilty

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Chloride penetration

Compliance tests

Non-Destructive tests

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Chapter 5: Project Design

During summer internship, we concentrated mainly on 3 products:

1) 10 mm

2) 20mm

3) crushed sand/river sand

So for this we focused on getting the Current market condition of aggregates. For

getting the information from all available sectors of Mumbai and analyzing it in a

effective manner.

1) Defining the type of questionnaire:

We designed the questionnaire in two parts

A) Open Ended

B) Close Ended

The close ended questions included satisfaction levels of their current source of

supply , areas of supply , the no suppliers , their comfort level with the current

material being supplied to them in terms of price, quality, payment terms, delivery,

customer management and documentation. We also included questions which helped

us study the factors that drive them to purchase aggregates.

The open ended questions mainly consisted of questions regarding Lafarge and their

awareness of an organized player like Lafarge getting into this unorganized market.

During the study we also briefed the customers about Lafarge and the company

coming up with a green field aggregate crusher in badlapur and noted their valuable

comments on the same.

2) We used database for interviewing customers from

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Projects today database

Lafarge Sales Team inputs

Real estate websites

Personally visiting key locations & identifying ongoing projects

3) Methodology

During Study we tried to cover all the above said segments by

interviewing players from each segments.

To cover players spread across whole metropolitan Mumbai area we

divided it in 4 regions

1. Central Mumbai

2. Western Mumbai

3. South Mumbai

4) In total I interviewed fifty five customers across all segments spread across entire

south Mumbai area to know their viewpoint regarding aggregate consumption,

pricing, source and satisfaction level and river sand consumption, pricing and

satisfaction level

Out of total sample size of 55 players we interviewed and got 55

responses (as some players are lying in more than one customer

segment)

Ready mix concrete

Road contractors

Builders

Civil Contractors

Target Products:

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10 mm, 20 mm.

Crushed sand.

We collect the information in following Sequence:

What kind of activities the company is into.

Collect the information regarding the current source of suppliers and the

quantity demanded.

Reasons: Why they keep multiple suppliers.

Collect information about the current price of material.

Take the ratings of their current suppliers related to price, quality, delivery,

customer management, Documentation.

Then we took the ratings of the purchase drivers.

Then the awareness of Lafarge.

Chapter 6: Observations and Findings

Observations and Findings:

For getting the appropriate information regarding the market, I conduct the

market research in south Mumbai region.

We prepared the set of questions regarding his current source of materials,

quantity demanded, no. suppliers, current satisfaction from suppliers and

purchase drivers.

While asking the questions I observed, whether he was aware about all the

product features, by asking some extra questions.

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We observed the content of questions should be easy that it would be easily

understand by builders.

We observed that currently customers are happy by keeping multiple suppliers

to maintain the security of supply.

We found that in south Mumbai due to the space constraints most of the

builders are ordering as and when required.

Most of the customers are happy with the current suppliers and the way things

are working out for them.

During this research, we also observed that most the customers are still not

aware of their pain areas.

We observed that most of the customers have given information in a

appropriate manner.

Other than the shortage of river sand no project has suffered in its work this

means that the supply of aggregate is appropriate.

The awareness of the company in the market is not that great, especially

amongst the small players.

About Lafarges entry in the aggregate market, some people were happy to

work with a organized sector, for some it didnt matter.

When asked about the satisfaction levels with the current materials being supplied to

them, the following were the findings.

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1. Price

Depending upon the market demand & supply of materials there were frequent

variations in prices. These variations never altered their demand for materials as the

projects had to be completed in the stipulated time frame.

On the other hand buyers have this thing in mind that Lafarge being in International

giant entered in Indian market will not be of great help as the overhead cost(of

Lafarge) in running the business with a proper streamlined system will eventually be

increase players cost.

Some of the players are ready to deal with Lafarge if there prices are competitive

enough compared to other suppliers. Those already dealing with Lafarge in aggregates

or RMC have given mixed response, some are happy with the cost and some are not.

2. Quality

The Shape, Size, geology and consistency of quality was of utmost importance to all

the players. But they tend to compromise on that which we realize when ask to give

the ratings about it. Lot of builders and contractors compromise on it to complete the

project as times the main constraint. Though the first purchase driver while buying

the material is Quality, a lot of them tend to compromise. A lot of big Builders have

brought it to my notice that quality material is unavailable or it is not as per their

standards. E.g. If ordered for 10mm metal, they get the material which is between 10-

15mm. This is due to the improper or insufficient quality parameters and standards

observed by the suppliers which ultimately affects the end product.

3. Payment Terms.

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Payment terms was important for some as they had this mutual understanding with the

suppliers, lot of them are not ready to do business with other players such as Lafarge

because of this factor. Though the term is between 30-60days, the transactions never

take place never on the mentioned time frame. Some of the builders and contractors

have faced a tough time and they have had gone through the situations when they

were suffered due to Lafarges payment term policies and that is why they do not

want to deal with us in future.

4. Delivery

Most of the players were satisfied with the delivery schedule and the quantity ordered

as per requirements. Delivery truck size and security supply was of least importance

to them.

Their dealings with the sales representatives were proactively dealt with and their

technical as well as commercial issues regarding quality were also resolved.

When asked about Lafarge some of them(between kurla & mulund) had problems

with delivery, they mentioned about Bhandup plant which is at a reasonable distance

from their projects and still they faced this problem, when told them about Badlapur

plant they were not sure whether to deal with us because of their past experiences.

5. Documentation

None of the players faced any problem about documentation as they emphasized on

proper challan, royalty slips, and invoices. This was the case when they dealt with

suppliers other than Lafarge. When asked about us, some were happy and some who

have dealt and who are currently dealing with Lafarge have problem of Batch sheet

which is the essential part along with the material delivered.

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Chapter 7: Data Analysis

We did the Processing on the available data with the following parameter:

1) Total Sample Size 55 Shopkeeper in a area of Dadar to churchgate.

2) % of Preferences = No. of times particular choice

Total no of responses

4) Average= No. of points

No. of responses

We found the above mentioned findings with the use following Pie chart. This pie

chart represent the composition of the sample size

What kind of activity the company was into:

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The current source of supply :

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From the above pie diagram we infer that 80% of the companies prefer to deal

through an agent or a broker,and just 20% deal directly with the crush owners.

The current areas of supply:

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In the above pie diagram we can see that the major part is occupied by companies

who dont know ,but this also includes the people whose supply keeps on fluctuating

depending upon the prices followed by uran, turbhe, wada and others which includes

vashi, borivili, pargaon.

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No of suppliers prefered by companies:

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The major part of the above pie daigram is occupied by the companies who prefere

more than 1 supplier, when asked questions about the reasons for keeping more than 1

supplier the common answer was for the security of supply.

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Company satisfaction from the current suppliers:

On the basis of price:

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When asked about their satisfaction level about price, we can see that on a scale of 5,

4.4 is an average rating for current price and 3.5 for the price satisfaction.

When asked questions on the same lot of companies were not happy with the price

variation but were helpless on the same.

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On the basis of Quality:

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On the basis of payment terms:

From this we can find that, most of the companies are happy with their current

payment terms and days which is between 30 days to 45 days.

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On the basis of delivery:

From the above we can find that, the companies are not facing much of an issue in

getting their deliveries on time only in some case where the trucks have got late due to

traffic jams, rest the quantity ordered , and requirement have alsmost perfect ratings.

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On the basis of customer management:

From the above we can observe that most of the companies are happy with their

current customer management, they are directly in contact with their suppliers.

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On the basis of Documentations:

From the above we can see that weighment slip is not received by the companies but

it is not a matter of concern for the companies because alsmost everyone is taking

material on measurement so they do not accept a weighment slip, in other cases where

the royalty slip is received by the companies only when its asked.

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The main purchase drivers in aggregates:

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From this we can observe that, the above are the main purchase drivers which have

got the highest ratings during the research.

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The purchase drivers with lest importance:

From this we can observe that most of the companies are not giving much importance

to the operating standards of the suppliers as the rating is very low, followed by core

fleet, plant capacity and supplier reputation.

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Has the project suffered in past 12 months due to supply of aggregates:

From the above we can notice that just the 2% i.e from a sample size of 55 only 1

company has suffered due to the shortage of supply that was because the government

had closed down a few quarries, rest of them have never had a issues from the supply

of aggregates but there have been stoppages in the work which was mainly due to the

shortage of river sands supply.

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The major decision makers in the company:

From this we can find that,in most of the companies purchase department is the major

decision maker, even if this is the case in most of the cases the site quality incharge

and the project managers play an important role in the decision making process.Most

of the RMC the site quality incharge play a very important role.

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Awareness about Lafarge:

From this we can find that, out of the total sample size 58% people were aware of

Lafarge but then the main reason of concern for the company is that even if this 58%

people are aware of Lafarge they just have a very rough idea of Lafarges business

that is because some of them have seen Lafarges RMC trucks on the road but not a

good awareness of the company, but in most of the cases this people are not the

decision makers.

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Would they be comfortable in purchasing Aggregates from Lafarge:

From this we can find that, 64% people are ready to deal with Lafarge but it depends

on a lot of things was one of the common answer, and the people who do not want to

deal with Lafarge are the people who have good relation with their current suppliers.

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Chapter 6- Recommendations :

From above analytical graph, we can easily point out that, Lafarge needs to

improvise on the following points:

1) PROVIDE VALUE ADDED SERVICE: Make sure you provide better

service than all your other competitors. If you want to charge premium price

its the premium service that is going to get the premium price.

2) IMPROVE YOUR PAST RELATION: If you have had any problems with

any customers please try to resolve the issues and try to build a better relation.

3) TRY TO UNDERSTAND CUSTOMERS PERCEPTION: Try and

understand customers perception about the brand and clear their doubts if

any. During the service I have come across people who had perceptions like

the color of aggregate will not be good in badlapur, and the travel time will be

too much.

4) TRY AND GET 1 CUSTOMER FROM EACH AREA: Initially try and get

1 customer from each area which will allow you to get a upper hand on the

delivery issues.

5) SPREAD AWARENESS: I have observed during my study instead of

Lafarge being such a big name in this industry its awareness amongst the

small builders and a contractors is very less. Lafarge has to capitalize on its

brand name

6) AVOID OVER COMMITMENT: This is one of the key recommendations

that avoid making commitments which are difficult to keep because when you

are not able to keep your commitments you frame a bad picture for customers.

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7) CREATE A STRONG DATA BASE: If the company aims at selling high

quantity of aggregates it needs to have a very strong data base, especially of

the small builders and contractors who are difficult to reach otherwise.

8) CREATE RELATIONSHIPS: The Company has to build a good relation

with the purchasing managers, make sure that we are in their good books and

their first preference even with a little higher price from the other suppliers.

Chapter 7 - Limitations

Some of the limitations of the study are :

TIME CONSTRAINT: This Study was carried on in a period of 2 months ,which

was not enough.Even the travel time between 1 site to another wasted alot of time.

QUESTIONNAIRE: This type of a study was completely new to this segment so it

was very difficult to make them understand the questionnaire and the reason for doing

the survey.

GENERATING LEADS: Intially generating the leads was not very difficult. We

took help of the directory but was not possible to make calls and meet each one of

them in their offices, then we took help of the net but most of the data was

outdated.Finally we decided to walk on the street and meet the mat the site and collect

the data.

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PRODUCT KNOWLEDGE: The people at the site were not aware of the product

most of them had to be made understood about shape size and then ask questions.

PAIN AREAS: Most of the customers are still not aware of their pain areas so the

questions had to be asked across different parameters.

SAMPLE SIZE: We have a very limited sample size to come to an anaylsis on an

entire south Market.There were a lot of area which was not covered due to the lack of

time and inconvience in travel.

RELUCTANT TO GIVE INFORMATION: This type of study is very new to this

class that is the reason most of the site managers where reluctant in reveling the

information.

ACURRACY OF THE DATA: Most of the people available at the site were not

aware of the price as it was done by the purchasing team, even the consumption

changes every month depending on the speed of work.

Chincpokli 3000 per brassNagpada/Mumbai central 2500 per brass

Girgaon 3500 per brass

Khetwadi 3800 per brass

Mazgaon 2500 per brass

Dadar (W) 2500 per brass

Shivdi 3500 per brass

Lalbaug 2300 per brass

byculla 2500 per brass

Dadar parsi colony 4200 per brass

Bhivandi 3000 per brass

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Chapter 8: Annexure

The questionnaire through which we had to extract information from the Builders,

contractors and other players was as follows:

Q1. Name of the company?

Q2. Address of the company?

Q3.Contact person with contact details

Q4. What kind of activities is your company engaged in:

Civil contractor ( Residential/commercial)

Infrastructure (Road,Bridges,Water supply,Drainage,Metro Rail, Other mention)

Commercial ready mix manufacturer

Commercial asphalt manufacturer

Paving / precast manufacturer

Builder

Captive ready Mix PlayerOthers

Q5. Where are your current projects located & at what stage they are (not applicableto commercial ready mix Player)

Project Stage

Location Contact person Under Execution Planned

Intial Stage partially completed

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Q6. What is the average monthly consumption of the following types of aggregates Project wise?

Product Type MT/Brass/CFT

40 mm

20 mm

12 mm

10 mm

6 mm

0-5 mm/Crushed Sand

Dust

River Sand

Q7. How many tons of aggregates have been consumed annually? (Cft/Brass/MT / annum)

& Future Aggregate Consumption projection?

2010 2011 P* 2012 P*

Location 1

Location 2

P* = Projected

Q8. Can you tell me at what price is the material supplied to you (Delivered price)Location wise?

40mm(per

ton/perBrass/

per cft)

20mm(per

ton/perBrass/

per cft)

10mm(per ton/per

Brass/ per cft)

6mm(per ton/perBrass/ per

cft)

Dust(per ton/per

Brass/ per cft)

River Sand(per ton/per

Brass/ per cft)

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Q9. What is your current source of supply?

a) Directly from the crusher ownerb)Indirectly, through an agent or a broker

Q10. From which of the following areas, is material supplied to you?

a. Uran b. Turbhe c. Wada d. Vasai/Virar e.Do Not know

Q11. How many players are supplying aggregates project wise & there supply

quantity/percentage & Reason for having so many suppliers

Q12. Are you satisfied with the current material being supplied to you, in terms of

(Please rate on 5 point Scale 1 lowest to 5 highly satisfied?)

Q12. Are you satisfied with the current material being supplied to you, in terms of

(Please rate on 5 point Scale 1 lowest to 5 highly satisfied?)

a. Prices

1. Price,2. Variation in

Price

b. Quality

1. Shape2. Size

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3. Geology (colour)

4. Consistency quality

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5. Providing technical support - test reports/sieve analysis

c. Payment terms ( Pls mention your current

payment schedule)

30 days 45 days 60 days Advance

Any other Pls

mention

d. Delivery -

1. Adherence to Delivery schedule

2. Delivery as per ordered quantity

3. Delivery Truck size as per your requirement.

4. Security of Supply

e. Customer Management-

1. Proactive order booking2. Resolving technical(quality)/commercial issues

3. Sales Representative reachable/availability

4. Sales Representative Relationship

f. Documentation1. Challan

2. Royalty Slip

3. Invoices

4. Weighment slip

Q13. What are the factors that drive you to purchase aggregates ( Please rate on 5

point Scale lowest priority to 5 Highly priority)

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Chapter 9: Conclusion

From this project, I can conclude that there has to be an aggressive and strategic

action plan in order to get success in the market. As a MMS graduate, I learned many

essential things while working on this project. This project thought me the importance

of research while the getting the success. Company has to invest there time and

resources for getting the exact amount of information from market. They have to

show instant plan to remove some drawbacks then only they can remain in the

competition. Any corporate should have excellent and proper communication plan

which will effectively convey your message to your target customer.

So IMC plan will be helpful in planning such activities to bring the proper results in

less investment, IMC plan will be helpful to correlate all above the line activities and

below the line activities to target our target customer .for any company,

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Communication process in as a tool by which they can understand the needs of their

customers and can take the efforts to satisfy it.

In the case of ASUS also, there are many problems. ASUS has excellent quality in

there products but due they lack in aggressiveness in there communication process.

Because of this, they are not able to retain there position in the Indian market. They

have there specific target customer. ASUS has variety of products but they have not

launched them in a aggressive manner in an Indian market. ASUS has to come with a

effective promotional plan which will increase the attention of other customers to

them. ASUS has to target different customer group. They have to target technical

student to increase the sells. They have to go beyond existing marketing methods to

achieve the success. I have tried my level best to include all such activities which will

increase the awareness regarding ASUS and that will help ASUS to built the brand

image in the minds of their consumer.

Chapter 10: Bibliography

Final Report on Lafarge Aggregates

Documents

Transcript of Final Report on Lafarge Aggregates