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Cement Industry in Pakistan
‡ Cement is one of the major industries of Pakistan.

‡ Cement sector contributes 0.76 percent to GDP while it maintains a


weight of 4.41 percent in the overall manufacturing.

‡ Pakistan Cement Industry has huge potential for export of cement to


neighboring countries like India, U.A.E, Afghanistan, Iraq & Russian
States.

‡ The country at present has 29 cement plants with an installed


capacity of producing around 39 million tones of cement.

‡ There has been a robust growth of cement demand seen both in


domestic and exports market during the last decade.
Cement Exports

‡ Pakistan is ranked 5th in the world¶s cement exports after a


huge increase of 47 percent in exports during last fiscal year.

‡ Pakistan could achieve the mark of 13 to 14 million tonnes


exports by the end of the fiscal year keeping in view Indian
market which has once again started importing cement from
Pakistan.
SWOT ANALYSIS
Strengths:

‡ Availability of raw material


‡ Export Market
‡ Cement Industries operating at max capacity
‡ Growing housing demand
‡ Rise in govt. developmental spending
‡ Low labor cost
‡ Duty free port at Gawadar
Weaknesses

‡ Highly leveraged sector


‡ Plants located very close to each other and tapping the same
market
‡ High oil prices
‡ The stage of industrial development, in most of the segments, is
still at a very low level of technology and the existing industrial
base is very narrow and consists of very basic industries such as
cement, sugar, textile, cigarette, edible oil, fertilizer, soda ash,
caustic soda, PVC etc.
Opportunities
‡ Availability of capacity
‡ Major player moving to coal based power plant
‡ Taping new geographical areas in foreign market
‡ Existing export potential is very high
‡ Coal based power plants
‡ Record PSDP allocation (Rs. 621 billion) in the
FY10 budget.
‡ Declining Interest Scenario.
Threats
‡ Rupee parity on depreciation
‡ Law & order situation
‡ Exchange rate
‡ Power availability
‡ Increase in production cost
‡ Low Domestic Demand
‡ Capacity expansions in Iran and other GCC countries
‡ Few small factories may shut their plants in the wake
of severe losses.
Main players
COMP

ME  M| COMP

ME  M|
OL OL
 AL ABBAS CEMENT AACIL 10 FECTO CEMENT FECTC

 ATTOCK CEMENT ACPL 11 GHARIBWAL CEMENT GWCL

 BESTWAY CEMENT BWCL 12 JAVEDAN CEMENT JVDC

 CHERAL CEMENT CHCC 13 KOHAT CEMENT KOHC

 DADABHOY CEMENT DBCI 14 LUCKY CEMENT LUCK

 DEWAN CEMENT DCL 15 MAPEL LEAF CEMENT MLCF

 D.G.KHAN CEMENT DGKC 16 PINOEER CEMENT PIOC

 DANTO CEMENT DNCC 17 THATTA CEMENT THCCL

 FUJI CEMENT FCCL


LUCKY CEMENT
‡ Lucky Cement is the largest manufacturer of cement in
Pakistan, and is also the current market leader in both
capacity and sales.

‡ Lucky Cement is an omnipotent cement plant of Pakistan, and


rated amongst the few best plants in Asia.

‡ It has the capacity of producing 25,000 tons per day of dry


process Cement.

‡ Lucky Cement Company is continuously working towards


their plant improvement & fuel efficiency of the plant.

‡ Lucky Cement aims at producing cement to suit every user.


D.G.Khan Cement
‡ D.G. Khan Cement Company Limited (DGKCC), a unit of Nishat
group, is the largest cement-manufacturing unit in Pakistan with a
production capacity of 5,500 tons clinker per day.
‡ DGKC is one of the market leaders in cement industry, with a
market share of 10.5%, second only to Lucky Cement. It is one of the
most cost efficient companies in the industry.
‡ The company manufactures two types of cement:
± Ordinary Portland Cement (OPC)
± Sulphate Resistant Cement (SRC).
‡ DGKC is setting up a new cement production line of 6,700 clinker,
the single largest production line in the country, first of its kind in
cement industry of Pakistan.
‡ The new plant would not only increase the capacity but would also
provide proximity to the untapped market of Northern Punjab and
NWFP besides making it more convenient to export to Afghanistan
from northern borders.
M
PLE LE
 CEME 
‡ The production of grey, white and oil well cements by the Company at 3,174,512
metric tons compares favorably to 2,431,352 metric tons in the corresponding period
last year.

‡ The Company made significant dispatches of grey cement and clinker for export. In
light of weak domestic demand, the Company is concentrating on building export
volumes to achieve higher capacity utilization.

‡ The basic earnings per share (EPS) Rs. 2.78 in negative for the year ended June 30,
2009 as compared to Rs. 1.96 in negative last year.
ATTOCK CEMENT
‡ The year 2008-2009 is by far the most successful year in the history
of the Company in terms of production, sales and profitability.
‡ This was the first year after the successful commissioning of Line 2
that the Company was able to achieve 100% production from its new
line.
‡ FALCON as a brand has got immense popularity in the markets of
Iraq, Somalia and Djibouti and every effort is now being made to
consolidate our brand position in these markets. As far as local sales
are concerned, your company has also shown consistency, despite
the fact that the overall local demand had shown negative growth of
around 14%.
‡ The Company would supply its products in diverse markets to
achieve a healthy and growth oriented sales mix, focus towards a
strong presence of its products in all the markets to achieve dynamic
financial results, with maximum returns to all the stakeholders.
‡ ACPL has played a major role and it will continue its contribution in
building the nation.
Ratios
‡L    Pos  on
‡ Eff  n
‡ L !
‡ P of   
‡ M " #o 
‡ P $E n n!
‡ P of   
‡ 
LE
‡ Cn! n M "   % o  !
C& 
L" Cn fo  foo# n! sons:

‡ Considering the continuous improvement in the fundamentals, financial


soundness and sustained market leadership, we hereby, prefer to invest in
LUCKY CEMENT COMPANY LIMITED.

‡ LUCKY CEMENT is currently the market leader in the cement sector both in
term of production capacity and sales and therefore enjoys a huge chunk of
total cement exports. The investment preference is based on the following
factors:

‡ Continuous expansion accompanied by a growth in sales.

‡ Sustained market leadership both in terms of production capacity and sales.

‡ Major exporter of cement

‡ Improved operating performance during the past five years.


Ë #o oos L" Cn fo 
foo# n! sons:

O Declining Debt to Asset ratio, thereby decreasing the financial


charges burden.

‡ Improved Earnings

‡ Regular Dividend payments

‡ Low P/E Ratio.


CONCLUSION
‡ V  

‡ Long Term   
 

± Lucky cement would be ± Stable increase in sales in last 3
appropriate stock with years 55%, 35% & 55%
acceptable risk level. respectively

± Degree of Operating leverage is


± As the financial result 40%
showed lucky has the
largest capacity and market ± Business operating earning risk is
42%
share and the industry on
increasing there would ± Cumulative growth of the Lucky is
most probable chance of 17% which twice of the industry
increase in sale with the growth that shows the market
increase in over?   penetration
?

CONCLUSION
‡ V  

‡ Short Term   
 

± Slightly risky stock for higher ± Rapid increase in sales by 70 %
returns that Attock cement last year and 9% and 30 % in
stock would be suitable stock. previous year respectively
± DGKC attaining the
economies of scale that ± Business operating earning risk 32
making the company result % just because of the reduction
highly positive. operating expense which does not
seem sustainable in long term
± Nevertheless Attock has the
lowest capacity among the ± Cumulative growth of Attock is
four companies that can create 14% which gone up because of last
big obstacle in future. year boost, otherwise there no
± Moreover, Attock has the significant growth in the period of
shoot up growth that shows boom.
the riskiness of the stock
' 

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