CEE Jul-Sep-2012

Lot is happening in the area of technology and leaders need to keep themselves abreast of the latest developments in the various fields particularly in the area of AFRs etc.. Technology decides speed, quality and requirement of various resources like manpower, energy, fuel etc. required for manufacturing of a product. Since technology decides various aspects of production it also affects cost directly and in turn govern the ability of the leader to deal with the external environment. Adoption of suitable technology, in-time up– gradation and regular innovation are must for sustaining the business. It is necessary that suitable technology based on the local needs should be adopted. To successfully overcome the challenges, it is not necessary to learn to effectively utilize the resources but also innovate and transform the organisation through decisive leadership and bold measures. Cost whether it is capital investment or of operation both are very important. The leaders must try to keep the project cost as low as possible, which I am sure, is possible through careful study of various project requirements including import of technology I machines etc. We have number of examples in cement industry, where the leaders have been able to cut the cost of project and also cost of operation through installation/adoption of low cost technology and then upgrading that to the level of not less than the best available technology (BAT) through innovations and kaizens. Such remarkable works are happening in the industry due to acceptance of the challenges and taking onus of failure, if any, by the leaders. The business environment in the country is undergoing through rapid transformation and engineers without exposure to deal with an external environment will not be able to lead the organisations successfully. In the present day context the external environment has emerged as the most powerful force to deal with. We are witnessing number of projects facing heat of the external environment nationwide including some of our own industry projects. Systematic interventions through knowledge and practice are needed to transform organisation and individuals beyond current limits to new levels of effectiveness in dealing with external environment and efficiency in terms of cost and technology. The Leaders must effectively deliberate on these aspects for growing and sustaining the business during turbulent times, which is always present in varying degrees. Green Field Plants and Expansion CEMENT MAKERS MIGHT DECELERATE EXPANSION IN 12TH PLAN PERIOD The cement sector might not have a smooth sailing in the current five-year Plan (2012 -17) in terms of expansion. Known for its fast and aggressive plan in the previous Plan period, cement companies seem unlikely to continue their pace of adding capacities this time around. According to a working group's report, India would require 480 million tonnes (mt) of standing capacity by 2011 - 2012. Land acquisition , environment clearances, poor demand and inadequate supply of raw materials such as limestone, coal and fly ash might hamper expansion plan , say industry officials and market experts. During 2007 -12, the companied added 150 mt of fresh capacities taking it to 330 mt, about 10 per cent more than the targeted 300 mt. The first few years of the period saw cement makers post exorbitant profits which were utilized for rapid expansion. "Land acquisition is a big issue. None of the state government is providing land to set up units, and getting clearances from different authorities take time. New expansion is tough," says Shri H. M. Bangur, Chairman and Managing Director of north– based Shree Cement. For the last couple of years, the company has been trying to acqu ire land in Karnataka, which will take another few months, he says. Shree Cement is not alone. Majority of the cement makers are facing hurdles. "That's why, more than half of the new capacities during 2007-12 were brown-field expansions," says chief financial officer of a south-based cement company. Sunil Singhania, equity head at Reliance Mutual Fund, says, "Capacity creation is very difficult in India due to paucity of land and limestone deposits among others. And several cement companies have written down assets. I believe capacity additions going forward will not be as aggressive as it has been in the past. And probably, expansion will be slower than the demand growth." Sector analysts agree with Bangur and Singhania, According to them, at a time when IS