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Cement sector of pakistan

carefully analyzed the sector of cement in Pakistan

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Cement sector of pakistan

  1. 1. CEMENT SECTOR OF PAKISTAN Group Members Ali Habib Yumna Qaiser Hafiz nadeem A Project for Professor Mazhar Farid
  2. 2. Introduction & History:  The industry was nationalized in 1972.  Cement industry is one of the few industries that existed in Pakistan before the partition of the sub- continent.  Pakistan has inexhaustible reserves of limestone and clay, which can support the industry for another 50-60 years.  Besides producing OPC, the Pakistani cement industry also started producing SRC, Slag cement and white cement.  At the time of independence in 1947 there were four cement factories with an installed capacity of 4 Lac tons per annum.
  3. 3. Continue..  The cement sector contributes Rs.15-20 billion per annum to the National Exchequer.  The industry in Pakistan is paying Rs.90 per bag as excise duty as compared to Indian producers who pay only Rs.17.50 per bag. Now the price of bag is Rs.490.  The present demand for cement in Pakistan is around 9.5 million tons per annum.  Pakistan is a country rich in deposits of limestone, shale and gypsum, which are the main ingredients for the production of cement.
  4. 4. TYPES OF CEMENTS The five types of cement manufactured in Pakistan are:  Ordinary Portland Cement (OPC)  Slag Cement.  Sulphate Resistant Cement (SRC)  Super Sulphate Resistant Cement (SSRC)  White Cement. The chemical composition of cement is as under: CaO 70% SiO2 23% Al2O3 04% FE2O4 03%
  5. 5. MANUFACTURING PROCESS The manufacturing process can be of any of the 3 types:  Wet Process; an obsolete method of manufacturing due to poor kiln heating and large water requirements.  Semi-Wet Process; not popular due to high levels of fuel and energy consumption and suited for materials with extreme elasticity. Quite obsolete.  Dry Process; suitable for materials with low moisture content. Low fuel usage as compared to the wet process, less maintenance requirements, higher kiln efficiency due to pre- heating facility and low kiln setup and maintenance costs.
  6. 6. Revenue of Cement Sector Pakistan cement sector continued to deliver double profitability growth as it grows by 13% to Rs.46.6 Billion in the fiscal year ended June 30,2016.
  7. 7. ALL PAKISTAN CEMENT MANUFACTURER ASSOCIATION APCMA is the apex body of the cement manufacturers of Pakistan. It is registered body under section 3 of the Trade Organization Ordinance 2007 wide license no 14, dated April 26, 2008 issued by Ministry of Commence. It was incorporated on14th of September 1992 under section 32 of the Companies Ordinance 1984.
  8. 8. S. No. Name of Executive Committee Member Designation in APCMA Executive Committee Representing Unit 1 Mr. Sayeed Tariq Saigol Chairman Maple Leaf Cement Factory Limited 2 Mr. Fareed Noor Ali Fazal Senior Vice Chairman D.G. Khan Cement Limited 3 Mr. Babar Bashir Nawaz Vice Chairman Attock Cement Pakistan Limited 4 Mr. Muhammad Ali Tabba Member Lucky Cement Limited 5 Mr. Omer Aizaz Sheikh Member Kohat Cement Company Limited 6 Mr. Azam Faruque Member Cherat Cement Company Limited 7 Mr. Muhammad Tausif Paracha Member Gharibwal Cement Limited 8 Lt. Gen. (Rtd.) Sardar Mahmood Ali Khan Member Fauji Cement Limited 9 Maj. Gen. (Rtd.) Ghulam Mustafa Kausar Member Askari Cement Limited 10 Syed Asif Shah Member Bestway Cement Limited 11 Syed Mazhar Iqbal Member Pioneer Cement Limited
  9. 9. APCMA IMPORTANCE  APCMA plays a significant role in projecting the cement industry to the Government and coordinating various activities in respect of formulation of Government policies for the cement industry through its continuous dialogues and interactions.  Helps in preparation of important Government documents concerning cement like Reports for Five Year Plans, etc.  Focuses infrastructural problems (Rail, Coal, Power, etc) and suggests suitable measures for their solution.
  10. 10. Representors of major Players  Mr. Muhammad Ali Tuba is the member of APMCA and he is representing the Lucky cement company.  Mr.Azam Farooq is the member of APMCA and he is representing the Cherat cement company.  General Sardar Mehmood Ali Khan is also the member of APMCA and he is representing the Fauji cement company.  General Ghulam Mustafa kausar representing Aksari cement company.
  11. 11. Total numbers of cement industries in Pakistan There are total 28 cement industries in Pakistan. The demand of the cement is now increasing at a much slower pace then it was before, now the supply of the cement in the market is being controlled by the cartel of the cement makers association (APCMA). Since its inception APCMA is deciding upon the price of the cement to be offered to the public.
  12. 12. At present the total installed capacity of 28 cement plants (23 private and 5 public sector) is 17.312 million tons. Of these 8 are in Sind, 12 in Punjab, 5 in NWFP, 2 in Baluchistan and 1 in Islamabad. The industry has experienced a steady growth rate of 8%, with 9% in the North Zone and between 4.5% and 6% in the South Zone.
  13. 13. Askari Cement Limited - Wah Askari Cement - Nizampur Attock Cement Pakistan - Hub Chowki, Lasbela Bestway Cement Limited - Hattar Bestway - Farooqia Cement Limited - Hattar Bestway Cement Limited - Chakwal Bestway-PakCem Company Limited - Chakwal Cherat Cement Company Limited-Nowshera Dandot Cement Limited - Jehlum Dewan Hattar Cement Limited - Hattar Dewan Hattar Cement Limited - Dhabeji D.G.Khan Cement Limited - D.G.Khan D.G.Khan Cement Limited - Chakwal Fauji Cement Company Limited - Fateh Jang Fecto Cement Limited - Sangjani Flying Cement Limited - Lilla GharibWal Cement Limited - Jehlum Kohat Cement Company Limited - Kohat Lucky Cement Limited - Pezu Lucky Cement Limited - Indus Highway, Karachi Maple Leaf Cement Factory Limited - Daudkhel Pioneer Cement Limited - Khushab Power Cement Limited - Nooriabad, Dadu
  14. 14. MAJOR PLAYERS OF CEMENT SECTOR IN PAKISTAN  Lucky Cement Company Limited - Pezu(KPK)  Fauji Cement Company Limited - Fateh Jang.  Askari Cement Company – Nizampur.  Cherat cement Company.
  15. 15. Lucky Cement Company  This company currently has the capacity of producing 25,000 tons per day of dry process Cement. Lucky Cement Limited (LCL) is one of the largest producers and leading exporters of quality cement in Pakistan, with a production capacity of 7.75 million tons per annum. The company is listed on Pakistan and London Stock Exchanges.
  16. 16. Board of Directors  Mr. Muhammad Yunus Tabba Director  Mr. Muhammad Ali Tabba Director  Mr. Muhammad Sohail Tabba Director  Mr. Jawed Yunus Tabba Director  Mrs. Mariam Tabba Khan Director  Mrs. Zulekha Tabba Maskatiya Director  Mr. Muhammad Abid Ganatra Director
  17. 17. Contribution towards Corporate social responsibility  Lucky cement Company plans to construct a primary school near its factory in Pezu,Khyber-Pakhtunkhwa.  Female Despensary at Pezu.  Lucky Cement provided financial assistance to Children Cancer Hospital for the smooth running of their functions.  Lucky welfare despensary at KPK,Pezu.
  18. 18. Fauji cement Company  A longtime leader in the cement manufacturing industry, Fauji Cement Company Limited, headquartered in Rawalpindi, operates a cement plant at Jhang Bahtar, Tehsil Fateh Jang, District Attock in the province of Punjab.  Fauji Cement is ISO certified for its Quality & Environment Management Systems and has won number of awards in its category. The company was incorporated in Rawalpindi in 1992.  Best quality production and are well maintained with annual total production capacity of 3.43 million tons of cement.
  19. 19. Board of Directors General Khalid Nawaz Khan, HI(M) Sitara-I-Esar (Retd) CHAIRMAN / DIRECTOR.  Maj Gen Muhammad Farooq Iqbal, HI(M) (Retd) Director  Brig Asmat Ullah Khan Niazi, SI(M) (Retd) Director  Mr. Parvez Inam. Director  Mr. Jawaid Iqbal. Director
  20. 20. Contribution towards Corporate social responsibility  FCCL established a medical dispensary in 1998, where first aid to the local community is provided free of cost.  Relief goods worth Rs.2.2 million weighing 30 tons and Rs.11 million in cash were donated to PM RELIEF FUND for our distressed brothers and sisters of earthquake October 2005.
  21. 21. Aksari Cement Company  Aksari Cement Ltd is one of the leading manufacturers of Cement in Pakistan. It originated way back in 1921 and since then has progressed very effectively and gained the trust of millions of people around the globe.  Production capacity of 8,925 tons per day.
  22. 22. Board of Directors Gen Khalid Nawaz Khan, HI (M) Sitara-i-Esar (Retd) (Chairman).  Mr. Qaiser Javed  Dr. Nadeem Inayat  Major General Muhammad Farooq Iqbal, HI (M) (Retired)  Major Gen Ghulam Mustafa Kausar, HI (M) (Retired)
  23. 23. Contribution towards Corporate social responsibility  Aksari cement education trust (ACET) in 1994.  This trust runs two high school for boys and girls in which 1300 children are of their employees as well as non-employees are also studying
  24. 24. Cherat cement Company  Cherat Cement Company Limited is a Pakistan-based company, which is engaged in manufacturing, marketing and sale of Ordinary Portland Cement.  Capacity to produce 13 lac tons cement per annum  Cherat Cement Company Ltd grew revenues 7.83% from 6.57 billion to 7.08 billion
  25. 25. Board of Directors Mr. Omar Faruque (Chairman)  Mr. Akbarali Pesnani Director  Mr. Shehryar Faruque Director  Mr. Arif Faruque Director  Mr. Asif Qadir Director  Mr. Saquib H. Shirazi Director
  26. 26. Contribution towards Corporate social responsibility Cherat company invests in community and welfare schemes through generous donations to education system and free medical dispensary for neighboring community.  Charity During the year the Company made a donation of Rs.3.54 million. The main focus of the company was on education and health.
  27. 27. TAX PARTICPATION OF CEMENT SECTOR  The cement sector contributes Rs.15-20 billion per annum.  The industry in Pakistan is paying Rs.90 per bag as excise duty as compared to Indian producers who pay only Rs.17.50 per bag  The rapid escalation in excise duties has transformed the sector to a loss making industry from one that was earning around 35% profit margin previously.
  28. 28. Apart from excise duty the sector adds to the state revenue in the form of: Import duties on spares and parts Excise duty on all raw materials Provincial royalties on limestone, gypsum etc.
  29. 29. CONTRIBUTION TOWARDS EXPORTS The industry in Pakistan is paying Rs.90 per bag as excise duty as compared to Indian producers who pay only Rs.17.50 per bag. In the last six years, the export market has shrunk. whereas the industry exported about 10.98 million tons (26% of its total production capacity) in 2008, the first five months of 2015-16 saw this number drop to 2.56 million tons.
  30. 30. Reduction in exports was due to two major factors:  Prohibitively high sales tax and excise duties (both federal and provincial) make the price of Pakistani cement uncompetitive in the international market and  The drying up of traditionally thriving export markets such as the UAE and South Africa which have now built up their own cement production capacities and no longer require cement from Pakistan.
  31. 31. Market Segmentation  The cement market in Pakistan is divided into two zones: the North zone and the South zone. The North zone includes Punjab, Azad Kashmir, N.W.F.P. and the upper region of Baluchistan. The remaining area of the Baluchistan and entire Sindh constitute the Southern zone.  The Northern zone has faced an under-supply situation while the Southern zone has experienced over-supply situation. The demand of the Northern zone was used to be met by the production of the Southern zone.
  32. 32. The number of plants is less than double in the south zone as compared to those in the north but total production in the latter region is nearly 3 times that in the former area.
  33. 33. Recommendation  There is no any research & development center in the cement sector that could work for efficiency in production, quality, marketability and conducting feasibility for production of new products, optimizing production cost and expansion of cement industry.  The government should devise friendly policies in order to promote and encourage the cement industry.  Government should decrease tax rate on cement which is comparatively higher than other cement producing countries.
  34. 34. Continue..  It is really very important for every industry to adopt modern technology for improvement of its production efficiency, so the cement industry should adapt new and advanced technology in order to produce best quality cement to meet the local demand and export demands.  The government should make railway completely operational because it is the most reliable and cheapest source of transportation for not only cement industry but also for the entire industry.
  35. 35. Conclusion  The role of cement industry in the economic development had been very reasonable as it contributed in the economy in terms of profit, investment, returns to investors, taxes, assets, equities, sales volumes and number of employees.  However, the performance of cement industry did not remain satisfactory on account of optimum utilization of the total capacity of plant and the achievement of desired level of indigenization.  Cement industry plays a very important role in the economic development of Pakistan.
  36. 36. REFERANCES http://www.apcma.com/data_productioncapacity.html http://www.ravimagazine.com/analysis-of-pakistani-cement-industry-a-report/ https://markets.ft.com/data/equities/tearsheet/profile?s=CHCC:KAR www.ravimagzine.com www.wikipedia.com/cementsectorpakistan https://www.app.com.pk/overview-of-the-economy-2015-16/ http://www.fccl.com.pk/main/financial_statements/annualreport2015.pdf http://www.lucky-cement.com/ www.aksaricement.com https://www.dawn.com/news/1241255 www.fccl.com

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