| EXPANSION STRATEGY STUDY |
|
| Grasim
Industries Ltd., India (Aditya
Birla Group) |
| Grasim, is one of the largest companies in
the well-diversified Aditya Birla Group with interests in textiles, fertilisers, power,
aluminium, software, banking. The group has recently consolidated all its cement business
under Grasim. With a total capacity of 11 million tpa, Grasim ranks third in size in the
Indian Cement Industry. Having witnessed unprecedented growth in the last decade, the
Indian Cement Industry is going through a period of consolidation, which has seen the
emergence of three national majors and several regional majors. At this juncture, it is
critical for a cement company to chalk out its growth plans clearly. Holtec assisted Grasim to formulate a growth
strategy within the framework of its overall corporate objectives |
| Cement Map - Grasim Cement 
|
Key Assignment Information
- A comprehensive study covering all relevant factors for determining a strategy for
business expansion for a cement company
- Growth options covering acquisitions, greenfield/ brownfield expansions, downstreaming
and strategic alliances were formulated and interactively evaluated
- Evaluations made on the basis of both hard (parametric) and soft (non-parametric)
factors
- About 50consulting days were spent at the field in data collection and about 200
consulting days at the home office covering data analysis and strategy formulation.
|
Objective and Coverage
- The prime objective of the assignment was to recommend a growth strategy that would take
the Company from its present position towards becoming a more dominant player.
- Assessment was made of the national and regional economies of the country, current and
future growth rates, composition of national income, outlook for sectors that could affect
cement industry e.g. housing, infrastructure, etc
.
- Analysis of industry structure, size and composition of competitors market,
segmentation, growth expectations, etc. was also done
- Scenario building under alternate competitor strategies was a key technique for
formulation of growth options.
- Growth options were formulated and evaluated considering the addition in terms of market
share and synergy with Grasim's existing cement business.
- The assignment included an assessment and valuation of more than 20 cement companies in
India using multiple valuation techniques,
determining acquisition risks, financial sensitivities and various
other decision-influencing soft factors
- A key feature of the assignment was to offer growth options to Grasim under different
capital investment budgets
Holtec’s recommendations were
instrumental in Grasim's decisions on its growth strategy over the next 5 years.
Holtec has executed 15 similar
assignments. |