Grasim to cash in on Birla equity with new cement brand launch

Veeshal Bakshi in New Delhi

In an apparent bid to cash in on Birla brand equity, Grasim Industries Ltd now aims to garner nearly 50 per cent of its Rs 1,000-crore annual sales in the northern region from its newly launched Birla Plus cement. Described as a composite cement with better durability and workability, Birla Plus’ first launch in the northern region, which accounts for nearly 45 per cent of Grasim’s total cement sales of around Rs 2,200 crore, was in Uttar Pradesh this week.

This will be followed by Haryana over the next week, Madhya Pradesh, Punjab, Chandigarh, Himachal Pradesh and Jammu & Kashmir.

Grasim is among the top three players in the north Indian market, with a 16-17 per cent marketshare. The other two big players are Gujarat Ambuja Cement and ACC.

Grasim’s senior vice-president (marketing) Mr Jayant Dua told The Financial Express that the company’s plan is to convert up to 50 per cent of its volume sales to Birla Plus.

So does this mean that Vikram Premium cement will be phased out? Mr Dua says there is no such plan and both Vikram Premium and Birla Plus will be available in the market.

He said the new brand has been introduced at the same price as the company’s other brand Vikram Premium which retails in the price range of Rs 140-150. Birla Plus will be primarily targeted at the rural market.

Mr Dua said the company will not spend huge sums of money on advertising but go in for “its time-and-tested method of creating awareness among contractors, builders, architects, masons and other intermediaries through a one-to-one contact programme”.

The company claims that the new brand has been introduced after a detailed research and development (R&D) exercise spread over two years and has properties like low permeability, porosity and low heat of hydration which make it resistant to corrosive compounds
like sulphates, chlorides, acids and strong alkalies. The cement is also described as being more “dense” and gives better finish after construction.

Mr Dua expects better demand from the rural market this year compared to the previous year in the wake of a good monsoon. “September sales of the industry in the north were up 10 per cent over the same month of 2000. We expect October sales to follow a similar pattern though there could be a slight slowdown due to festivals,” he said.

Grasim’s production capacity will go up soon with the commissioning of the one million tonne per annum (mtpa) capacity grinding unit in Punjab. The company’s primary source for feeding the north market at present is the 3 mtpa unit in Malwa region of Madhya Pradesh and the 1.75 mtpa plant in Rajasthan. Some supplies are also sourced from the Raipur unit in eastern Uttar Pradesh.