Holcim cementing strategy to tap rural market in India

NEW DELHI: The world’s second largest cement manufacturer, Holcim, which controls India’s largest cement maker ACC and Ambuja Cement, is firming up an elaborate plan to tap India’s rural markets and hopes to achieve a “substantial shift” in revenues from this market in the next 3-5 years.

The Swiss major has mandated the National Council for Applied Economic Research (NCAER), a Delhi-based poilcy research organisation, to conduct a comprehensive study on rural housing in India. The report will also review the existing policies and programmes of the government and identify opportunities for public-private partnerships. It’s findings will form the basis for Holcim to devise its strategy for rural housing and infrastructure.

Broadly, Holcim will seek participation in government programmes as well as private housing by engaging local government, local builders and skilled manpower. “We have done it successfully in Indonesia, Mexico, Sri Lanka and Ecuador and we think we can replicate it in India on a much larger scale,” says Holcim Asia Pacific management team member Amit Kothari.

Mr Kothari said the initiative was started in post-Tsunami Indonesia as a CSR project but soon turned into an attractive business model. “We can’t make much headway in India if we just keep supplying cement.

By institutionalising training and development programmes, we can create a large class of skilled manpower such as masons, who can then aspire for a better living. These masons could in a way act as our brand ambassadors,” he says, adding, “We recognise masons as having a major influence on the choice of building material in rural housing projects.”

ACC has already signed an MoU with an NGO ‘Development Alternatives’ to set up a Center of Excellence for Sustainable Construction and Rural Housing, which will train masons and other skilled workers needed for construction industry. Besides targeting masons, Holcim is also looking at partnering local contractors and local government agencies for a share in public projects.

The company won’t take up construction projects but would act as a building material and technology supplier to local contractors. “Any stand-alone enterprise will not be of much help. Engaging local government will be the key to success,” says Mr Kothari. The company plans to pilot its project in a year from now and leverage the distribution strength of both ACC and Ambuja to make it a success.