MARKET
The market for cement, a raw material widely used in the construction industry, has recorded steady growth in Sri Lanka despite the rising cost of building materials and rising world oil prices. The building of houses, which is considered the main component in Sri Lanka’s construction industry, constitutes about 80% of the country’s total construction. The balance 20% comprises infrastructure development. Holcim (Lanka) Limited – the producer of Holcim Cement and the only company that manufactures cement in Sri Lanka – caters to the widest market.
Holcim expects the local cement market to grow in future, especially if operations commence on large-scale infrastructure development projects such as concrete roads and bridge building. Presently, the construction industry in Sri Lanka is growing at a rate of about 7%, with the main thrust being housing construction. The construction industry is heavily energy dependent and is globally considered a major energy consumer. Increasing world crude oil and gas prices influence construction activities, because of their impact on inflation. Cement production costs also increase with rising energy costs. Crude oil prices, which were just above US$ 30 a barrel in January 2004, rose to record-high levels, touching US$ 75 per barrel in August 2006 (Source: Central Bank Weekly Selected Economic Indicators, August 2006). Despite these factors, as well as inflation in Sri Lanka impacting the construction industry, Holcim’s sales volumes have grown at steady and satisfactory rates.
Holcim has a rich heritage resulting from its original brand name, Sanstha. Competitors have not been able to match the differentiated product range of Holcim, which has pioneered the introduction of application-based cement products to the local market. As a result of continuous innovation and adaptation of new technologies, the brand has gained a competitive edge and is the market leader. From time to time, rival companies marketing cement products locally have tried to compete, but Holcim has maintained its edge.
However, imitation has not posed serious challenges to the brand, which relies on innovation to lead and stay ahead of the pack. Holcim’s products are superior to those of its competitors. The manufacturer’s Switzerland-based parent company, Holcim, which maintains a global presence, is not content with merely satisfying customer needs. The brand claims it has far exceeded customer expectations through its latest range of products.
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ACHIEVEMENTS
About two years ago, the successful launch of the Holcim brand meant the end of the powerful brand, Sanstha. Until 2005, for nearly five decades, the Sri Lankan construction industry used an all-purpose cement type known as Ordinary Portland Cement (OPC). 
This cement was used in an undifferentiated manner, in various stages of the construction process, including building, plastering walls, concreting and a host of other uses.
In June 2005, Holcim launched the Application Based Cement (ABC) concept, which advocates different types of cement for different applications. The resulting value added to cement as a product has contributed to the market leadership Holcim enjoys.
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HISTORY
Holcim entered the Sri Lankan market in 1996 following the purchase of the then state-owned Puttalam Cement Company, which had been manufacturing cement under the vernacular brand name, Sanstha, in Sri Lanka for over 50 years. Holcim (Lanka) Limited launched its cement under the brand name Holcim in the local market in July 2004.
The parent company – based in Switzerland – is more than 100 years old. It first began its operations in a Swiss township by the name of Holderbank and has grown into a multinational company which operates globally. The company has invested heavily in research and development, and has introduced cutting-edge products to the market. This has enabled the brand to establish itself as a leading cement supplier to the world, being available in all five continents.
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PRODUCT
Holcim is a global brand with a commitment to quality and the highest production capacity in the industry. It operates in over 70 countries and is also a world leader in cement production. The international operation, which purchased cement-production facilities from the state-owned Puttalam Cement Company, maintains production facilities in Galle and Puttalam.
Holcim has invested significantly in its plant and process, resulting in enhanced production capacity, environment-friendly production processes, and safety for their employees and the community at large.
Holcim is the only brand of cement in the local market that offers a variety of application-based cement products. All other brands competing in the local market sell all-purpose cement, which is used for concrete, wall plastering and building requirements. In this regard, Holcim holds an edge over its competitors.
The introduction of application-based cement products to the market by Holcim caused a paradigm shift in the local construction industry. For instance, Holcim Supiri is specifically for concrete application and Holcim Pedereru is for wall building and plastering.
Holcim (Lanka) has a workforce of over 600 employees. Human resource development is key at Holcim. Regular training programmes are organised to motivate workers to help them understand their mission in relation to the company’s vision, as well as to encourage teamwork.
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RECENT DEVELOPMENT
Holcim’s strategies are concentrated on improving its triple bottom line. The company’s triune goals could be categorised as financial, social – including Corporate Social Responsibility (CSR) – and environmental.
With regard to the environment, Holcim has carried out projects to reduce dust emission and optimise waste processing. Systems have been installed to measure and monitor the effect of the company’s operations on the community and the environment. It has also initiated tree-planting campaigns.
In relation to CSR, Holcim has conducted many community-development projects, especially in the aftermath of the tsunami. When Sri Lanka’s coastal districts were severely impacted by the tsunami in December 2004, Holcim (Lanka) and its employees launched a reconstruction fund to assist victims of the disaster.
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PROMOTION
Holcim uses integrated communications when advertising its products. It uses media such as TV, print, radio and hoardings for advertising.
The company’s promotional strategies are focused on creating awareness among all its stakeholders. Due to increasing competition, Holcim needs to campaign vigorously in the local market. Seminars and technical sessions are also organised for house builders, contractors and masons, to make them aware of the attributes of Holcim’s newest range of cement products. Focused advertising, including above the line and below the line, helps to cut through the clutter.
Holcim’s significant investment in educating the consumer on the concept of application-based cement has paid dividends. For instance, sales of Holcim Pedereru grew a staggering 400% in its launch year.
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BRAND VALUES
Holcim has built its brand around the core values of local, heritage, and a perception of value and trust. And this has been a construct some half a century in the making. By being visibly connected to the community that it serves – its raw materials, for example, are sourced locally – Holcim has gained the trust of the consumer in a manner that allows the market to take its quality as assured.
In brand equity studies conducted by ACNielsen Lanka, Holcim has not only consistently maintained its leadership position, but its brand equity is several quanta above the rest of the brands that make up the marketplace.
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THINGS YOU DONT KNOW ABOUT Holcim
♥ Holcim – a Switzerland-based multinational company – is a global brand that maintains a presence in over 70 countries.
♥ Holcim Lanka took over operations of the state-owned Puttalam Cement Company in 1996, and in 2004, the Holcim brand replaced Sanstha.
♥ Holcim (Lanka) Limited is the only company which manufactures cement locally.
The company pioneered the introduction of application-based cement in Sri Lanka.
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www.holcim.lk
