1. Analysis of Pakistan
Cement Industry

2. Pakistan’s manufacturing sector constitutes as the second largest sector of the
country’s economy contributing 13.5 percent to GDP and generating biggest
number of industrial career opportunities with technology transfer.
The major reason for the existence of this industry is the availability of the raw
materials. Pakistan has unlimited reserves of limestone and clay, which can support
the industry for another 50-60 years.
The annual production of the cement at the time of the creation of Pakistan was
only 300,000 tones per year. By 1954 the production increased to 660,000 tonnes
per annum against a demand of 1,000,000 tonnes per annum. At this time PIDC
(Pakistan Industrial Development Corporation) took initiative and established two
cement factories Zealpak (240,000 tonnes) and Maple Leaf (100,000 tonnes)
having a capacity of 340,000 tones, thereby increasing the production to 1,000,000
tonnes per annum.
Introduction

3. Pakistan is among the world’s fastest-growing construction markets and is
predicted to grow an average 12 percent yearly for the next five years especially
because of China-Pakistan Economic Corridor (CPEC) mega projects. The cement
sector is aiming to even raise its capacity, riding a wave of Chinese-financed
infrastructure projects across Pakistan.

5. World Cement Exporters
The major world exporters of Cement Industry are as follows:
 China (2500 million metric tons)
 India (280 million metric tons)
 United States (83 million metric tons)
 Iran (75 million metric tons)
 Turkey (75 million metric tons)

6. China is the world’s market leader of cement. The annual production of cement
in China is whopping 2500 million metric tons. These cement companies are
mostly owned and operated by the state due to which the cement manufacturing
companies has the support from the government and they require very less capital.
The main reason of manufacturing so much cement is the growing population and
urbanization due to which more and more people are moving to cities and
metropolitans from rural areas. Though the cement industry is huge, it is criticized
and praised at the same time. The cement industry is undoubtedly responsible for
the huge and brilliant infrastructure but it has also resulted to a huge amount of
pollution which is really bad for the environment.
Market Leader

7. At the start of the PRC in 1949, the Chinese cement industry was relatively small
with many small cement kilns spread throughout towns and villages. In the 1980s
a trend towards large integrated cement plants emerged and several
government-owned cement producers were established to raise production. In
2000 the government began to reduce the number of small cement plants on the
basis of their inefficiency and high levels of emissions. These efforts are ongoing.
Market Leader

8.  ANHUI CONCH CEMENT CO., LTD.
 CHINA NATIONAL BUILDING MATERIAL CO., LTD.
 CHINA NATIONAL MATERIALS COMPANY LIMITED
 CHINA RESOURCES CEMENT HOLDINGS LIMITED
 FUJIAN CEMENT CO., LTD.
 GANSU QILIANSHAN CEMENT GROUP CO., LTD.
 GANSU SHANGFENG CEMENT CO., LTD.
Major Cement Manufacturers in China

9. Statistics of Pakistan Cement Industry
July to
June
Production
Capacity
Local
Despatches Exports
Total
Despatches
Capacity
Utilization
Surplus
Capacity
(Mn. Tonnes) (Mn. Tonnes) (Mn. Tonnes) (Mn. Tonnes) % age
(Mn.
Tonnes)
1998-1999 16.41 9.62 - 9.62 58.63% 6.79
1999-2000 16.38 9.94 - 9.94 60.67% 6.44
2000-2001 15.53 9.93 - 9.93 63.95% 5.60
2001-2002 16.10 9.83 0.11 9.94 61.73% 6.16
2002-2003 16.32 10.98 0.47 11.45 70.16% 4.87
2003-2004 17.28 12.54 1.12 13.66 79.08% 3.62
2004-2005 17.91 14.79 1.57 16.35 91.32% 1.56
2005-2006 20.83 17.05 1.51 18.55 89.08% 2.28
2006-2007 30.50 21.03 3.23 24.26 79.56% 6.23

10. Statistics of Pakistant Cement Industry
2008-2009 42.28 20.33 10.98 31.31 74.05% 10.97
2009-2010 45.34 23.57 10.65 34.22 75.46% 11.13
2010-2011 42.37 22.00 9.43 31.43 74.17% 10.94
2011-2012 44.64 23.95 8.57 32.51 72.83% 12.13
2012-2013 44.64 25.06 8.37 33.43 74.89% 11.21
2013-2014 44.64 26.14 8.14 34.28 76.79% 10.36
2014-2015 45.62 28.20 7.20 35.40 77.60% 10.22
2015-2016 45.62 33.00 5.87 38.87 85.21% 6.74
2016-2017 46.39 35.65 4.66 40.32 86.90% 6.08
2017-2018
(6 Month)
46.94 19.84 2.41 22.24 94.77% 1.23

11. A largest cement manufacturers of Pakistan with a production capacity of 14,000
tons per day (4.200 million tons/annum). 1986 Initially it was state-owned
company with thousands of employees.
The company established their first active plant in southern Punjab city Dear Ghazi
Khan and then they established their second plant in northern Punjab's
city Chakwal.
D.G. Khan Cement

12. Headquarters: Lahore, Punjab
Plants: D.G Khan & Chakwal
Company Type: Public Company
NOE: 1001-5000 employees
Dealers: 2200
Market share: 12%
Exporting Countries: 10
Specialties: Ordinary Portland Cement &Sulphate Resistance Cement
D.G. Khan Cement

13. Ratios

14. Lucky Cement Limited was founded in 1993 by Abdur Razzak Tabba. The company
started with factories in the Pezu located in Lakki Marwat District district of the
North West Frontier Province(Khyber Pakhtunkhwa). It now, also, owns a factory in
Karachi.
Lucky Cement Limited is one of the largest producer and leading exporter of
quality cement in Pakistan with the production capacity of 7.75 million tons per
annum. The company is listed on Karachi, Lahore, Islamabad and London Stock
Exchanges.
Lucky Cement

15. Headquarters: Karachi, Sindh
Plant: Karachi & Lucky Marwat
Company Type: Public Company
NOE: 1001-5000 employees
Dealer: 200
Market Share: 16%
Specialties: Ordinary Portland Cement, Sulphate Resistance Cement, Block
Cement & Clinker
Lucky Cement

16. Lucky Cement

17. Maple Leaf Cement is the third largest cement factory in Pakistan. It was set up in
1956 as a joint collaboration between the West Pakistan Industrial Development
Corporation and the government of Canada. It is strategically located at Daudkhel
(District Mianwali) in Northern Pakistan, which is an area rich in raw materials
required for the production of cement.
The total capacity of maple leaf is 11,700 tpd. The capacity of White Cement has
also increased from 100 tpd to 500tpd with the addition of a new plant. Maple Leaf
cement has 9% of the market share of OPC and is a leading brand in Pakistan with a
diverse customer base. It is also the largest producer of White Cement in the
country with 80% of market share.
Maple leaf

18. Headquarters: Lahore, Punjab/Pakistan
Plant: Mianwali
Company Type: Public Company
NOE: 501-1000 employees
Market Share: 8%
Specialties: Ordinary Portland Cement, Sulphate Resistance Cement, Low
Alkali Cement, Wall Coat Maple Cement & White Cement
Maple leaf

19. Ratios

20. 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.
Services:
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.
All Pakistan Cement Manufacturer Association

21. Represents on all major policy making bodies concerned with cement.
Supplies desired information to all concerned Ministries
Helps in preparation of important Government documents concerning cement like
Reports for Five Year Plans, etc.
INDUSTRY:
APCMA identifies and strengthens industry’s role in the economic development of
the country.
Provides up-to-date statistical data/information to the industry and other agencies.
Interacts for Industry's problems with the Government and co-ordinates various
activities with other bodies.
Focuses infrastructural problems (Rail, Coal, Power, etc) and suggests suitable
measures for their solution.
All Pakistan Cement Manufacturer Association

22. Political:
 Coal rates, power tariffs, freight plays a very important factor in the price
determination, interestingly, government control all of these prices.
 The government policies proved to be amazing for the cement industry of
Pakistan.
 Higher spending by the Government towards PSDP (Public Sector Development
Program) led to the increase of cement demand in Pakistan.
 The public sector projects under this program includes the construction of large
and small dams, powerlands, highways, roads, irrigation canals, rapid transit
systems and flyovers etc.
PEST Analysis

23. Economical:
 Cement sector is running at 97-99 percent capacity utilization per month.
 This sector is expanding by nearly 30 million tons over the next five years.
 Cement industry is among the highest contributors to the national exchequer
over the last four years and has paid Rs189 billion in taxes.
 Future of cement industry is very bright. Pakistan is among the world’s fastest-
growing construction markets and is predicted to grow an average 12 percent
yearly for the next five years especially because of CPEC mega projects.
 A large number of government infrastructure and housing projects are under
construction.
PEST Analysis

24. Social:
 Pakistani consumers prefer buying branded cement like D.G Khan Cement, Lucky
Cement etc.
 Industry will create large number jobs in coming years.
PEST Analysis

25. Technological:
 Technological advancements are underway in developed countries and govt
have positive plans to bring in new technology.
 Emphasis is on creating highly energy efficient and environment friendly
technology to produce cement.
PEST Analysis

26. Porter’s Five Forces
Treat of New Entry:
 Threat of New Entry Entering the business is expensive.
 Huge players advantage from economies of scale.
 Wide appropriation and showcasing channels are critical key resources that are
hard to replicate by new players, along these lines restricting entry.
 Increasing costs implies bring down IRR for new green-field capacities.
 Generally high barriers to entry.

27. Porter’s Five Forces
Competitive Rivalry:
 Around 55% of cement is consumed by the housing sector, with retail customers
accounting for the bulk of the customer base. But retail buyers do not have
much leverage in dictating the pricing.
 Lack of substitutes also causes no buyer power.
 Local markets are dominated by small number of cement firms.
 Demand is inelastic— exists at all price points.
 Overall, no buyer power.

28. Porter’s Five Forces
Supplier Power:
 Most companies have captive limestone reserves, so no supplier power here.
 Coal linkages have reduced so companies depend more on alternative fuel
sources, where suppliers can dictate prices.
 Cement manufacturers have argued that price hikes in the industry are due to
increases in the price of both transportation and raw materials.
 This means that suppliers are powerful enough to force new prices on the
industry.
 Overall, moderate to high supplier power.

29. Porter’s Five Forces
Threat of Substitution:
No threat, as there is no substitute for cement. Other building materials such as
timber are only suitable for low-rise buildings. On the other hand, although steel
can be used for medium to high-rise buildings, building regulations normally
require structural steel to be encased in concrete for fire protection purposes. This
increases the importance of cement and hence reduces the threat of its
substitutes.

30. Porter’s Five Forces
Competitive Rivalry
 Large companies enjoy economies of scale.
 Competition is regional is nature, as cement cannot be transported across
regions.
 Given over-capacity, slowdown in demand weakens prices, so no real pricing
power.
 Overall, moderate competitive rivalry.

31. Swot Analysis
Strengths:
 Strong Industry Base
 Sustained Growth in Production and Exports
 Easy Availability of Production Resources
 Surplus Production for Local and Export Markets
 Good Local and International Reputation

32. Swot Analysis
Weaknesses:
 Lack of Innovation and Technology Development
 Absence of Vision to identify weaknesses
 Lack of Funds to Take Up New Projects
 Lack of Professional Expertise within Industry
 Dependence on Cartelisation for adequate Revenue
 Lack of Research & Development

33. Swot Analysis
Opportunities:
 Future Growth Potential
 Rising Demand
 Emerging Export Markets
 Construction Boom
 Developing a Long Term Vision and
Strategy
 Research to Develop New Products
 Focus on Cost Optimization
 Possible switch over to Cement Roads

34. Swot Analysis
Challenges:
 Low Per Capita Consumption
 High Incidence of Taxes
 High Input Cost
 Decline in Profitability
 Inadequate Bulk Loading Facility at Ports

35. 1. Extraction of Raw Materials
The raw materials are extracted from the quarry by digging the holes through
machines in mountain.
2. Storage and Blanding of Raw materials
3. Raw Grinding and burning
4. Cement grinding and Storage
5. Packaging and delivering
Production Process

36. Production Process

37. Production Process
Criteria Dry process Wet process
Hardness of raw material Quite hard Any type of raw material
Fuel consumption Low High
Time of Process Lesser Higher
Quality Inferior quality Superior quality
Cost of production High Low
Overall Cost Costly Cheaper
Physical state Solid Liquid
Comparison of Dry and Wet Process

38. Product price
Cement Price in Pakistan – 2017 (PKR)
Price Rate : Rs. 520 – Rs. 540
Lucky Cement : Rs. 530/-
DG Khan Cement : Rs. 535/-
Meaple Leaf Cement : Rs. 540/-

39. Thank you