A step into the future, today
The lockdown announced by the Government to respond to the threat of a pandemic was a once in lifetime experience for India as a country. The Cement industry, taking cautious steps, responded to it using new age digital technologies. Here is a real story from Dalmia Cement, through an interview with Pramesh Arya, Executive Director- Marketing.
Vikas: When you restarted operations in April after the first phase of lockdown, what were the challenges you had to overcome and how did you manage?
Pramesh: On the manufacturing front, as you can imagine, there was an issue of getting manpower because like many other industries, we work with a significant number of contractual workers, who had started migrating by then. That became one challenge to start full scale operations.
Another challenge was on the logistics side. The underlying reasons are all the same but manifested differently in different areas. The trucks were available but drivers weren't around. Then, while our transportation partners were willing to work with us, there was the issue of inter-state movement of materials. In certain areas, local people were trying to deny entry to everyone, not just trucks carrying cement but everyone who was an outsider. There was this apprehension, that we don't want any risk of infection even if it is with good intent of ensuring our world keeps running. Similarly, in our warehousing and Godown operations, there were manpower issues.
Fortunately, our close relationship with our vendors and contractors helped us get priority treatment from them within the limitations that existed. It's at times like these, when your relationship with your vendors and suppliers and contractors gets tested. It's heartening to say we, together with our entire network of partners, were able to resolve most, if not all challenges that came our way on a day to day basis.
For our sales and Technical Services teams, movement in the market was obviously restricted. We quickly moved to a virtual connect program right from the beginning of the lockdown, and it is still in action today. Wherever a little bit of on-ground connect is possible locally - within the markets that were in green zones, our teams are in the field to work with our dealers while taking all precautions - masks, social distancing etc.
Vikas: - Were you able to foresee these issues, during February-March, or did they come as a shock?
Pramesh: - From the end of February but surely early March onwards, the signs were there- there were news reports from across the globe, on the way it has evolved in most countries. Everybody had this hope that India will escape mostly unscathed, like we did during H1N1. At the same time, there was always this likelihood we may have the same kind of scaling up of infections like in most countries. As a company, we wanted to ensure our business continuity plans were in place, and we started activating them at appropriate intervals.
Fortunately, Dalmia Cement has been on a major digital transformation journey across the company for the past few years - in many cases, before our industry itself started moving in this direction. During the lockdown, this preparation over the years helped tremendously.
Vikas: - How did you take care of the dealers because there must have been materials stuck either en route, or at your plants in silos or maybe in your warehouses? How was it taken care of, to protect everybody's interests? Payments and cash flow must have become issues as well. So, how was this situation being handled?
Pramesh: - On stock movement, we followed government guidelines, and for the first few days, our network quietened down. As and when local conditions changed, we took actions that met both business and safety needs. On the stock in the market, given the fast movement of cement across the network, dealers in this industry keep limited stocks in terms of inventory. In rural areas, beyond the first few days, as it was clear that Covid19 wasn't present, markets picked up even as the lockdown was in effect, with construction work resuming. In May, even government projects resumed work- they had to complete certain jobs before the monsoons, including important local municipal projects etc. So whatever stock the dealers were holding got liquidated quickly, and we had fresh demand from dealers. How we overcame this was that we did most of our sales and supplies directly to the sites. We switched more or less to 100 percent direct delivery. Even the dealer community appreciated that being done from the company's side. For challenges such as these, our strong technology and logistics backbone helped.
On the collection side, yes, there was a challenge. As a company, we practice healthy fiscal practices, keeping both our and dealers' interest in mind, and there isn't a lot of credit floating in the market at any time. During the lockdown, unique challenges emerged. Dealers in small towns wanted to make payments, but there was no one to collect the cheque. In smaller towns, it's still not all digital, and we worked on logistics on how to get the cheque sent to the bank. Again, as a company we have worked hard on ensuring digital payment adoption is at a high level, so these challenges were far and few between.
Vikas: - We have been hearing a lot about the social responsibility work executed by Dalmia Bharat Group in such kinds of situations and particularly, taking care of your stakeholders. Will you be able to say something on that? Pramesh: - The Dalmia Bharat Group has always been into nation building. We actively partner towards such issues at the national to the grassroots levels. As an organization, we contributed Rs. 25 crores to the PM-CARES Fund. Our employees also generously raised over Rs. 1.6 crores through one-day salary donations. Separately, in many different states, we contributed to CM funds; and donations to selected non-government organisations which were working at the grassroots were also enabled.
While we supported governments, it was important our stakeholders could rely on us for help. Our technical services teams quickly moved to identify groups or communities of labour who were stranded, because the lockdown came suddenly. Across the country, we put together supply chains to help them with rations and other needed items. Where construction was still on, we worked on matching available manpower with active sites. This was done at a micro level, matching projects and labours at say, the taluka level in every state we are present in. And almost every single officer has such wonderful stories to tell.
We quickly moved to engage the contractors' community on Do's and Don'ts at construction sites through Whatsapp. We organized webinars with doctors from chosen local hospitals so they could ask all that question about Covid19, including for dealers and their families.
For our dealers, we launched a program called 'Dalmia Cares: Stay Home Stay Safe' - we rolled out over 20 different activities over the course of the lockdown. Every other day, we had different activities to keep them engaged and entertained, to keep them in a positive spirit, including their family members.
Vikas: So, this was done digitally?
Pramesh: Wherever it was possible, fully digitally. For dealers, we run a platform called Dalmia Delight, which is used for loyalty and recognition programs. For all our other communities, our teams were in touch using Phone, Whatsapp and on ground help as it was required, keeping social distancing norms in mind.
Vikas: We will now come to the brand. When we talk of Dalmia, the mother brand- how do you look at building Dalmia as a brand and what are the attributes of the brand you feel people would like to remember it for?
Pramesh: As a brand, we have a legacy of 80 years. People around the country have placed their trust in us over generations. Last year, we built on this legacy, and launched a new brand positioning and identity, which positions the mother brand as Dalmia Cement 'Future Today'.
As a brand, we are innovators and pioneers while being focussed on sustainability. Throughout the history of our organisation, we have been first to market with multiple products - we were the first company to launch oil well cement, railway sleeper cement and fast setting air strip cement.
As a company, our roots in sustainability are very deep. The CBP recognizes us as the world's greenest cement company. Our CEO and MD, Mr. Mahendra Singhi, is a strong advocate of sustainability. He has represented India and our company on various global forums, including WEF, the global climate summit among others. And all this R&D, product launches have been possible only through technology.
As a brand, we want consumers to remember us for building next generation cement products; offering best in class, technology led service experience, and being able to choose the 'greenest' cement they can buy to build a home for life.
Vikas: - When we talk about the brand, even the packaging of cement becomes very important. The industry has been launching new packaging constantly. What's your take on that?
Pramesh: Packaging has a functional role and a branding role. We launched BOPP packaging for our premium product, Dalmia DSP, many years ago, which is moisture resistant, tear resistant and improves the performance of the product because it keeps cement fresh for longer.
I think the important part in packaging, talking about going beyond, is the performance of packaging. So there what matters is the consistency of quality, your entire vendor network, the flexibility and stability of supplies. So that's another strength we have, we are able to ensure that all the plants get the right amount of packaging with the right quality all the time. Because as a brand, you get tested with every bag in the market, if a bag tears, the brand takes the damage. So, it's important to sustain that quality day after day, batch after batch and in every location.
We are always on the lookout for modern packaging techniques and engage with packaging companies around the world to find best in class alternatives for consumers.
Vikas: In the retail market in fact packaging becomes very important- it should appeal to a buyer otherwise cement as such is a mundane and routine product.
Pramesh: - While cement has traditionally been a low involvement product, today, not just in cement but across all categories in that context, it's an opportunity. If we go back to the narrative we are presenting with Dalmia Cement Future Today, we have given a completely new identity to the bag with the same thinking - in this category, the bag is your first manifestation of the brand identity and a big one.
Our new bags are very vibrant looking, with standard colour codes and a focus on enticing the customer. When our bag is displayed at the dealers' counter, we want it to inspire confidence in the consumer from the get-go.
Vikas: What can be done to improve the per capita consumption of cement in the country? If you compare to other countries, we're at very, very lowest stage, ~250 kgs per capita?
Pramesh: Cement consumption is governed by two things, the housing sector and infrastructure. Being a rapidly developing country, we have a long way to go on both. Across the country in our villages, there is a lot of conversion happening from kuccha to pukka houses. We are also seeing increases in the average size of the dwellings and basic penetration of housing itself. The government is doing a lot with the PM Awaas Yojana among other programs. At the same time, at the upper end, in terms of multi-story apartment complexes, it is a long way to go. The main challenges we need to resolve are access to adequate land banks, further roll out of affordable housing, and a sustainable real estate industry based on global norms.
Vikas: Like other cement companies, Dalmia Cement has been associated with cricket. For every major event in the cricketing world, many cement companies associate with them for promotions. In what way does it really help in brand building?
Pramesh: - As a brand, we want to be present in meaningful ways where our consumers are. It's a good medium for us to reach the consumer in a format which they enjoy. And secondly, it allows for high reach, high frequency, and high engagement - all goals we solve for while planning our media strategy.
In our case, we don't simply buy airtime - we create properties and partnerships. In the last few years, we have associated with major ICC tournaments and Team India's away tours. Each of these associations, we have created a full-fledged property - on ground presence, dealer campaigns and tours and digital promotions.
Vikas: - Any other message from your side to the audience and readers?
Pramesh: There are two things I'd like to express. One, strong, strategic investments in digitisation across all parts of the business, and an increases focus on digital marketing. In general, it is true for any industry that digital is here to stay and with Covid19, it's only getting stronger.
During the lockdown, we have already worked out a virtual PJP, which is a virtual market visit and contact program for our Sales and Technical Services teams. So, they are connecting with trade and contractors and other stakeholders virtually - not just a phone call, but a systematic program to ensure tracking, conversions and customer delight. In a short span of time, we were able to shift the frontline teams from physical in-market movement to a robust virtual way of continuing business operations.
Secondly, with the launch of Future Today, we are turning to digital marketing as an integral part of our 'go to market' as a brand. From the moment the customer searches for cement, to the time he is ready to go to the cement dealership, we are investing in all parts of his journey using the digital medium.
In the past year, we've done an innovation with Alexa, where the home builder can ask Alexa questions about construction and get professional responses from Dalmia Cement. All customers need to do is say, "Alexa, Ask Dalmia" and it will answer their construction queries with resources from Dalmia Technical Experts.
Vikas: Very innovative!
Pramesh: Absolutely! We've just made a beginning - this will of course get richer and deeper as we progress. We are investing in building digital properties across the board. As an industry, we are laggards when it comes to digital adoption. Dalmia Cement wants to lead this journey, and bring consumers the future, today!