|ASEC is an Egypt-based consulting and engineering company serving the cement
industry for the past 25 years. Five Egyptian cement companies and a Swiss Group jointly
the company. ASEC has a stake in the under-construction grey and white cement plants at
Sinai, Egypt. The plants are expected to be commissioned in 2000 and 2001, respectively,
with a capacity of 1.4 million tpa (grey cement) and 0.4 million tpa (white cement). The
Egyptian market is undergoing a significant transformation, with the presence of four
global majors, who are in the process of consolidating their positions in this currently,
Holtec provided support to ASEC in
drawing up market entry strategies for the Sinai units. The distribution, pricing,
branding and down-stream strategies, for both grey and white cement, were formulated after
an extensive study in the second half of 1999. Earlier, Holtec also carried out an
Egyptian Cement Sector Study in March, that year.
|A Cement Terminal on the Nile
Key Assignment Information
- Market study in the entire Nile delta and Sinai
- Estimation (current) and projection (future) of market-wise
supply and demand; evaluation of market parameters like pricing, branding, distribution
channel and consumers
- Studied inter-country cement flow in the Middle East and
- Over 100 consulting days of field work in data collection
and interactions with predominantly Arabic speaking population.
- About 100 consulting days of home office work including data
analysis and strategy formulation.
Objective and Coverage
- Market transparency was obtained through market visits and a
market research across 25 key markets.
- The client, being a new entrant, felt an imperative need to
draw out a detailed Marketing Plan for both market entry as well as the short and medium
term. The focus of the Marketing Plan included distribution, pricing, branding and
downstream investments like in Ready Mix Concrete (RMC).
- To arrive at the distribution strategies, the regional
demand supply gap and competitors status in relevant markets was assessed. An optimal
market-wise distribution plan for the total volume was formulated using Holtecs
proprietary CAMA model (Competitive Advantage & Market Attractiveness). Following
this, the distribution channel (location and numbers) was recommended.
- The pricing strategies took into account the price
differential across markets, users and brands. Price waterfall analysis for various brands
across markets was used to assess the competitive position and the ability to withstand
price pressures. Future prices were projected based on the emerging demand-supply
scenario. Using these, a pricing strategy was suggested.
- The extent and determinants of branding in the Egyptian
cement market were investigated to understand customer buying behaviour and the
channels selling process. After considering effective advertising & promotion
means in the country, cost-effective branding approaches were identified.
- Market potential for Ready Mix Concrete across all parts of
the country was assessed and locations were prioritised to look at possible down stream
Holtecs understanding and
assessment of the marketing environment proved instrumental in arriving at key market
entry strategies for a new cement producer in a transforming market.
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