AmbujaAmbuja

CementCement

Brief HistoryBrief History

Gujarat Ambuja Cements Ltd was established as Gujarat Ambuja Cements Ltd was established as Ambuja Cements Private Ltd in 1981 by Narotam Ambuja Cements Private Ltd in 1981 by Narotam Satyanarayan Sekhsaria.Satyanarayan Sekhsaria.

In 1983 the company floated a public issue and in In 1983 the company floated a public issue and in 1993, GACL commissioned its second cement plant 1993, GACL commissioned its second cement plant at Ambuja Nagar. at Ambuja Nagar.

In 1996 , GACL set up its third 1 mtpa plant at In 1996 , GACL set up its third 1 mtpa plant at Ambuja NAgar, named Guj LineAmbuja NAgar, named Guj Line

In 1997, GACL acquired Modi Cement. This plant In 1997, GACL acquired Modi Cement. This plant was renamed as Ambuja Cement Eastern Limitedwas renamed as Ambuja Cement Eastern Limited

In 1998 GACL acquired the Nadikudi and Proddatur.In 1998 GACL acquired the Nadikudi and Proddatur.In 1999 GACL acquired 51% stake in Delhi based DLF In 1999 GACL acquired 51% stake in Delhi based DLF Cement.Cement.

This company invested its money in the cement This company invested its money in the cement business because of factors such as :business because of factors such as : stable demandstable demand

lack of substituteslack of substitutes limited competitionlimited competition

Its focus :-

Best quality cementGood packagingLogistic management - strong distribution network Customer service

About Ambuja CementAbout Ambuja Cement

Capacity built up from 0.7 Mio t in 1986 to 18.0 Mio t as of today at CAGR of 18%

Organic growth and growth through acquisitions

2001 - Private equity investors (American International Group & Government of Singapore) invested in ACIL

2005 - ACIL restructured as a joint venture with Holcim

2006 - Founder promoters sold part of their holding in ACL in favour of Holcim

ACL is a Holcim Group company since May 2006

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►Capacity built up from 0.7 mn. Capacity built up from 0.7 mn. Tonnes in 1986 to 16.0 mn. Tonnes in 1986 to 16.0 mn. Tonnes today.Tonnes today.

►Sea transportation of bulk Sea transportation of bulk cement from Gujarat to 3 cement from Gujarat to 3 terminal ports at Surat, Mumbai terminal ports at Surat, Mumbai & Sri Lanka.& Sri Lanka.

►A captive port at Muldwarka A captive port at Muldwarka (Gujarat) for inward / outward (Gujarat) for inward / outward movement of goods.movement of goods.

Cement Plant

Grinding Station

Terminal

Port

North – Central Region

Cement Capacity 7.0 Mio t

Positioning - ACLPositioning - ACL

South-West Region

Cement Capacity 8.0 Mio t

Eastern Region

Cement Capacity 3.0 Mio t

Investment in India – Core ThemesCapital spending continues to be strongUptrend in industrial cycle – Avg. IIP growth at 10.2% being strongest in the past 11 years.Strong underlying strength reflected in secular rising trend in the Indian Capital market.Emphasis on infrastructure – US$ 320Billion planned expenditure.Real Estate – Backed by IT/ITES leading to development of Tier II citiesRetail – Malls & Multiplexes

World gaining confidence in Indian economic growth

Demand Drivers

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StrategyStrategy Strong presence in growing markets of North Strong presence in growing markets of North

& West& West Largest exporter of cementLargest exporter of cement Grinding close to marketGrinding close to market Premium brandPremium brand Extensive & primarily exclusive distribution Extensive & primarily exclusive distribution

network network Over 6,600 dealers and 20,500 retailersOver 6,600 dealers and 20,500 retailers

Captive Infrastructure Captive Infrastructure Port, Receiving Terminals and Power Plants Port, Receiving Terminals and Power Plants

(230 MW)(230 MW) Sea Transportation Sea Transportation

Financial performance showing improving trajectoryFinancial performance showing improving trajectory

5 5 68

22

14 17 2026

63

34

30 30

31

36

0

10

20

30

40

50

60

70

2001-02 2002-03 2003-04 2004-05 2006

Sal

es a

nd

EB

ITD

A (

INR

Bil

lio

n)

27

28

29

30

31

32

33

34

35

36

37

EB

ITD

A M

arg

in (

%)

Sales EBITA EBITA margin

ACL’s EBITDA in FY 2006 witnessed an impressive growthACL’s EBITDA in FY 2006 witnessed an impressive growth

Power

Clinker content

Fuel (coal)

Transport

Captive Power Plants, AFR

AFR/process efficiency / international sourcing

Composite cement

Grinding facility close to end user, production close to raw materials

Terminal logistics

Cost driversCost drivers

80

81

82

83

84

85

86

87

88

89

90

2001-02 2002-03 2003-04 2004-05 2006

700

705

710

715

720

725

730

735

740

745

Electricity (Kw h/T of Cmt) Coal/Other Fuel (Kcal/Kg of clinker)

Consumption per unit of Production

Increase Captive Generation

66

72 7276

80

50

550

1050

1550

2050

2001-02 2002-03 2003-04 2004-05 2006

50

60

70

80

90

Total Consumption Captive %

Measures Measures Shift from liquid to solid Shift from liquid to solid

fuel to reduce cost of fuel to reduce cost of captive energy cost by captive energy cost by approx. Rs.2 per unit.approx. Rs.2 per unit.

Reduction dependence Reduction dependence on grid power, with the on grid power, with the construction of construction of additional power plants additional power plants aggregating to 178 MWsaggregating to 178 MWs

Captive power ensures Captive power ensures continuous and continuous and consistentconsistent supply of supply of power power

Energy

GACL has a large distribution network of GACL has a large distribution network of 11500 outlets. it is one the first cement 11500 outlets. it is one the first cement companies in the country to recognize the companies in the country to recognize the importance of brand building.importance of brand building.

GACL had merged as one of the most GACL had merged as one of the most energy efficient and technologically energy efficient and technologically advanced cement manufacturer in India.advanced cement manufacturer in India.

GACL was the overall market leader in the GACL was the overall market leader in the Indian cement industry and earned a huge Indian cement industry and earned a huge profitprofit

GACL worked hard to reduce mining GACL worked hard to reduce mining expenses.expenses.

GACL implemented new technologies that GACL implemented new technologies that could access lime stone in smaller areas where could access lime stone in smaller areas where blasting is not possible.blasting is not possible.

Ambuja Cement – 2009Ambuja Cement – 2009Capacity to increase from 16 mn. Tonnes Capacity to increase from 16 mn. Tonnes

to 22 mn. tonnesto 22 mn. tonnesNew Projects:New Projects: Eastern RegionEastern Region

2.2 mn. tonne 2.2 mn. tonne clinkerisation plant at clinkerisation plant at Bhatapara in Bhatapara in Chhattisgarh Chhattisgarh (Q12009) (Q12009)

Northern RegionNorthern Region1.8 mn. tonne 1.8 mn. tonne clinkerisation plant in clinkerisation plant in Himachal Pradesh Himachal Pradesh with 2 grinding with 2 grinding stations aggregating stations aggregating to 3.0 mn. tonnes. to 3.0 mn. tonnes. (Q2 2009)(Q2 2009)

Power Plants:Power Plants: 178 MW at different 178 MW at different locations.locations.

Panipat

Rauri

Dadri

Bhatapara

Cement Plants Grinding Station Sea Terminal Port

Total Outlay of Rs. 3500 Crores

mn. tonnes

Demand expected to grow by over 10%, Demand expected to grow by over 10%,

on a back of strong GDP growth (Cement on a back of strong GDP growth (Cement

historically has grown 1.2 times of GDP)historically has grown 1.2 times of GDP)

New Supply is limited in next two yearsNew Supply is limited in next two years

Demand to outstrip supply.Demand to outstrip supply.

Consolidation drive has changed the face Consolidation drive has changed the face

of industry. of industry.

The way forwardThe way forward

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Ambuja Growth PlansAmbuja Growth Plans

Plan to grow to 20 mn. tonnes in next 3 Plan to grow to 20 mn. tonnes in next 3

yearsyears

By way of Productivity enhancement By way of Productivity enhancement

and Acquisitionsand Acquisitions

Growth to be funded from free cash Growth to be funded from free cash

flowsflows

ChallengesChallenges

Cement is energy intensive Cement is energy intensive

industry industry

Coal, Power & Oil constitute major Coal, Power & Oil constitute major

costscosts

Increasing cost of fuelIncreasing cost of fuel

Better realisation only in few Better realisation only in few

markets markets

33