 "Holcim cements its twin brands' independence")
Holcim's key man for the complex ACC-Ambuja restructuring, Onne van der Weijde, knows the value of the two cement brands in India. In an industry that was hitherto commoditised and with strong intermediary influencers like contractors and dealers affecting purchase decisions, both Ambuja and ACC have succeeded in branding themselves.
Ambuja Cements has been the more aggressive of the two, but some taglines in recent memory such as "Ye dewaar toot ti kyun nahi hai? Tootegi kaise, Ambuja Cements se jo bani hai!" and "ACC Cement, Sada atoot raho" have made a mark in the world's second-largest cement consumption market.
Weijde, the managing director of Ambuja Cements, says, "Clearly, we have reinforced our brands and we want to invest in both. There is, categorically, no plans to merge them. These are two blue-chip companies and it is a pleasure to work (with both)," explaining that the restructuring which sees ACC becoming a subsidiary of Ambuja that will have Holcim as the parent, will still have two separate brands and marketing teams.
Weijde says he has to ensure the two brands are made available in the market, where no less than 40 cement manufacturers jostle for space, inspite of the current slowdown in the construction sector.
As a result, some of the national players were quick to rope in brand ambassadors. When the industry was nearly doubling its capacity on the back of increased consumption (which had been growing in double-digits), such instantly recognisable endorsements began to play an important role in go-to-market ploys.
However, Holcim's two brands have refrained from using a celebrity as an endorser, though the recent ads for Ambuja star the actor Boman Irani in a twin role of brothers struggling to pull down a wall separating their homes.
At work is the heritage of the two brands that convinced both their current and former brand custodians of their equity in the market. ACC is the older of the two, in operation since 1936 with a larger manufacturing capacity, while Ambuja, three-decade old in the market, stands neck and neck with it due to some nifty branding.
Put together, they have around 17 per cent of the manufacturing capacity of the 350-million-tonne capacity market. The two have the largest dealer networks. Ambuja has a stronghold in the west while the southern markets are tapped by Holcim through ACC. Northern and eastern markets see both compete against each other.
The current growth in demand for cement has gone below 5 per cent owing to the brakes on the construction industry. As a result, cement companies are selling at discounted price and also operating at not more than 80 per cent capacity (Ambuja sold 21.3 million tonne and ACC sold 24.11 million tonne in the year 2012, for example).
However, the brands are at an advantage compared to regional brands. Though, a few like Shree Cement have proved to be tough competition for Ambuja in the western market.
When the sales in the south face pricing pressure, rampant construction in the north and west compensate for the fluctuation down south. The two brands, with their regional strongholds, ensure that Holcim does not get affected by such regional headwinds.
"I am fine with it if there are certain markets where both of my brands are present. They are very strong and independent brands. And, a bit of competition is not bad. It will keep both the marketing teams sharp," says Weijde.
Ambuja Cements has been the more aggressive of the two, but some taglines in recent memory such as "Ye dewaar toot ti kyun nahi hai? Tootegi kaise, Ambuja Cements se jo bani hai!" and "ACC Cement, Sada atoot raho" have made a mark in the world's second-largest cement consumption market.
Weijde, the managing director of Ambuja Cements, says, "Clearly, we have reinforced our brands and we want to invest in both. There is, categorically, no plans to merge them. These are two blue-chip companies and it is a pleasure to work (with both)," explaining that the restructuring which sees ACC becoming a subsidiary of Ambuja that will have Holcim as the parent, will still have two separate brands and marketing teams.
Weijde says he has to ensure the two brands are made available in the market, where no less than 40 cement manufacturers jostle for space, inspite of the current slowdown in the construction sector.
Over the last decade, cement became less commoditised. With global cement giants looking to wedge a firm footing - from Switzerland's Holcim, France's Lafarge and Vicat, Germany's Heidelberg to the Irish firm CRH - and increasing number of regional players, branding the building material became indispensable.
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As a result, some of the national players were quick to rope in brand ambassadors. When the industry was nearly doubling its capacity on the back of increased consumption (which had been growing in double-digits), such instantly recognisable endorsements began to play an important role in go-to-market ploys.
However, Holcim's two brands have refrained from using a celebrity as an endorser, though the recent ads for Ambuja star the actor Boman Irani in a twin role of brothers struggling to pull down a wall separating their homes.
At work is the heritage of the two brands that convinced both their current and former brand custodians of their equity in the market. ACC is the older of the two, in operation since 1936 with a larger manufacturing capacity, while Ambuja, three-decade old in the market, stands neck and neck with it due to some nifty branding.
Put together, they have around 17 per cent of the manufacturing capacity of the 350-million-tonne capacity market. The two have the largest dealer networks. Ambuja has a stronghold in the west while the southern markets are tapped by Holcim through ACC. Northern and eastern markets see both compete against each other.
The current growth in demand for cement has gone below 5 per cent owing to the brakes on the construction industry. As a result, cement companies are selling at discounted price and also operating at not more than 80 per cent capacity (Ambuja sold 21.3 million tonne and ACC sold 24.11 million tonne in the year 2012, for example).
However, the brands are at an advantage compared to regional brands. Though, a few like Shree Cement have proved to be tough competition for Ambuja in the western market.
When the sales in the south face pricing pressure, rampant construction in the north and west compensate for the fluctuation down south. The two brands, with their regional strongholds, ensure that Holcim does not get affected by such regional headwinds.
"I am fine with it if there are certain markets where both of my brands are present. They are very strong and independent brands. And, a bit of competition is not bad. It will keep both the marketing teams sharp," says Weijde.