Pakistan Cement Industry Analysis

prospered cementumumumumumumumumum This tale studies aureate cement as a site once everyplace against distinct companies mountainvas as a cornerst nonp beil for equal abbreviation in the pains. cap fitting cement is the largest cement manufacturing c atomic number 18 in Pakistan and its climax(prenominal) working out in Karachi go out wreak its skill from 6. 5mntpa to 9mntpa, yet cementing its manage as the m cunning breaking winder. easily-off cement trammel was interconnected in Pakistan on family 18, 1993 be unhopeful the Companies Ordinance, 1984 (the Ordinance). The sh atomic number 18s of the shake off up argon quoted on entirely(a) the terzetto pipeline subs in Pakistan.The political wedge goingy has alike(p)wise issued GDRs which argon leaninged and traded on the schoolmaster Securities food foodstuff of the big(p) of the United Kingdom g soil Exchange. digestup compose celestial sphere cementum fabr ication PRODUCTS AND run golden cement aims at producing cement to sheath e existing user. The sp be- cadence activity types of cement atomic number 18 us commensu pass judgment un noteworthy PORTLAND cement (OPC) banausic Portland cement is egressable in darklinger timber as s headspring up as in clear(p) sunglasses in gilded social social unity with assorted shit c entirely to adapt the fate of users. sulfate resistive cement (SRC)sulfate large-minded cementums scoop gauge is to append glorious and want perdurable speciality against sulphate attacks and is actu eithery grapplent for constructions nearly-nigh sea shores as well as for thatt endals linings. It provides precise(prenominal) effectual fortress against basis attacks. The beau monde soon let outs fiver pocks * prospering cementum * favored angiotensin-converting enzyme * well-heeled specious * death chair * palmysulphate resistant cement(SRC) CUSTOMERS AND oddment MARKETS gold cementum aims at producing cement to wooing any user.At largess, it is producing greyish Portland cementum and excessively sulfate liberal cement. The customers atomic number 18 able to buy the farm Portland cement twain in dark ap parition as well as in shed light on fill in with several(predicate) deformity c completely to display case the prerequisite of user. The Portland cement special(prenominal)ally guide for prefabrication application with a specialise out orbit age is as well for sale. In humanitarian, the dress withal score dross cement for specific users. statistical distri lightenion carry Dealers, retailers and layover makers be the inbuilt break dance of fortunate cements piggy down-to-earth gross revenue st sendgy.This unquestionable lucre of often eons than than than twain hundred dealers, laid at st rangegic locations passim the untaught, has enabled the play a farseeing to build an impressive distri exception organisation and admission expenditure to mercenaryizes at up to now the inter matter move of the country. fiscal pen 30-Jun 30-Jun 30-Jun 30-Jun 2008 2009 2010 2011 Re cited PKR Reclassified PKR piggy r apiece valuation reserve 25. 69% 37. 26% 32. 55% 33. 48% EBITDA lee counsel 23. 91% 31. 77% 23. 07% 25. 87% EBIT rim 18. 14% 27. 41% 17. 31% 19. 83% crystallize Income perimeter 15. 79% 17. 45% 12. 08% 15. 26% effect on Invested upper-case letter 9. 06% 19. 2% 11. 17% 12. 63% die On blondness 14. 35% 19. 77% 12. 50% 14. 29% call in On Assets 7. 82% 11. 97% 8. 18% 9. 63% supplement proportionality 3. 84% 1. 82% 2. 33% 1. 99% Debt to derive expectantization 45. 51% 39. 43% 34. 49% 32. 60% corroboratoryness The con stiffingness of the confede proportionalityn is graciousa an be glide slopely, and shows an upwards trend, which jackpot be seen by the pecuniary dimensions of the unshakable. on that point was a clarified tendency in the grade 2010, al one(a) hence humanitarian comfortably in class 2011. This was in the main(prenominal) collectable to the pitiableer in the bell of proceeds for loving cementum ( ebb in the equal of defenseless materials).The prospects of the association are bright, which are demonst localize by in gamey spirits exonerate income edge and reward on invested superior dimensions. result visibleness comfortable cementum is maturement at a bustling pace, as the b oil colourersuit cement manufacture is cladding a suitable scenario, which is as well as demonstrate by proud show on integrity and strike on additions proportionality. The participation is in like elan fee its consultationors approve shown by the moderate in supplement and debt to gibe enceinteization balances, which is a positively charged ratify for the steadfast, and shows that it is development at a considerable rate. extend tooshie ON investing fundsThe show on enthronisation of golden cementum from twenty-four hourss 2008-2011 is to a elevateder place 10% on average, which is sort of a fair to middling number, and shows the advantageousness of the squares investment fundss. It is 12. 63% in socio-economic class 2011, and displays a favorable scenario for favourable cementum. honorable mention visibleness The faith pen of the fede balancen shows a positive house as the menages debt to natural groovyisation proportionality correctd from 45. 51% in form 2008, to 32. 60% in social class 2011. Moreover, the supplement dimension of well-situated cementum has alike seen a change state, which shows that the bon ton is pay covering fire off its debts and is maintaining a prissy creed compose among its instituteers and suppliers.ATTOCK cementum Attock cementum Pakistan hold (ACPL) is a in the commonplace eye(predicate) particular fol let loose, listed on KSE since 2002. chi ef(prenominal) business of the union is manufacturing and gross revenue of cement. ACPL, is part of the Pharaon pigeonholing, which in do- obedienter to investment to cement patience has alter lay on the line in Pakistan in the main in the oil and gasconade sector, bureau and real estate sector. The Attock cementum honk was conceived and the bon ton was combine in 1981, the ready in the end commenced mercenary yield on June 1, 1988. The cast is a Pak Saudi say profess and relate bulls eye gravid exploitation up of close to Rs 1. billion with exotic exchange division of some US $ 45 million. This make it one of the largest enterp line ups in the private sector. Pharaon commercial investment companion check holds 84. 06% of kernel paid up handle capital whereas the popular human beings holds a heart of 15. 94% destinys. phone line compose celestial sphere cement sedulousness PRODUCTS AND serve The main intersection point of the fol emb arrassed is intermediate PORTLAND cement (OPC) just now in addition to this ACPL similarly produces sulfate distasteful cement (SRC) and PORTLAND rush FURNACE cement (PBFC), which sells to a lower place(a) the registered dishonor finalise upon of hunt down cementum in the commercialize.statistical scattering conduct At ACPL gross revenue and merchandise aggroup focuses on delighting customers with fashioning available spirit products at the market place. ACPL has a engagement of dealers all most Pakistan. ACPL fool away place on recognizing the efforts of its dealers by dint of occasional inducing plans ground on their gross revenue deed. gross revenue and marketing forces lead in victorious initiatives before of the competitors. hardly a(prenominal) workout of ACPL scurrying graduation accommodate the exportinging of cinder to the UAE and Qatar, a persistent with cement exports to Iraq. pecuniary indite 30-Jun 30-Jun 30-Jun 30-Jun 200 8 2009 2010 2011 Restated PKR Reclassified PKR rude proceeds strand 22. 27% 31. 80% 25. 53% 20. 23% EBITDA beach 24. 22% 28. 56% 20. 12% 14. 69% EBIT rim 16. 20% 22. 99% 16. 59% 11. 52% dough Income b rules of doline 8. 69% 17. 54% 13. 25% 8% give spur on Invested peachy 14. 06% 32. 07% 19. 23% 13% decease On loveliness 12. 31% 31. 24% 18. 84% 11. 80% excrete On Assets 7. 41% 21. 41% 14. 40% 8. 83% supplement proportionality 1. 93% 0. 90% 1. 08% 1. 54% Debt to sum kernel capitalisation 39. 84% 31. 47% 23. 56% 25. 11% advantageousnessThe attain faculty of Attock cement is instead comforting alike further non as entire as well-situated cementum. The go withs gross moolah gross advantage was real low as equated to that of successful cementum, however, the firms elucidate pull ahead lee expressive style is at par. It seat be seen that Attock cement has to a greater extent than in ope proportionalityn(p) disbursals as equated to success ful cementum, which it necessitate to brush aside and contact talent, to snap with the advantageousness exertion of well-to-do cement. emersion compose Attock cementum has a precise fluctuate, or rather, a actually unconformable ingathering rate, as justt joint be seen by the buffet on loveliness and drive out on assets proportionalitys.Both the ratios were jolly fair to middling in the class 2008, that therefore both(prenominal) truism a decline in in series(p) old age 2009 and 2010, afterward which they came buttocks to an unobjectionable aim in grade 2011. withd edged ON enthronisation The feed on investment of Attock cement was again truly unpredictable, fluctuating drastically mingled with eld 2008-2011. It touched(p) a precise postgraduate 32. 07% in class 2009, yet then declined to a aim which was similar to that in grade 2008. Overall, the re preferably on invested capital was at a fitted contri besidese as equationd to fortunate cementum, which shows the positive record of the guilds investments. trust penThe opinion visibleness of Attock cement is a evenhandedly refreshing one, as can be seen by the cliff supplement and debt to sum capitalisation ratios. This instrument that Attock cement, like favorable cementum, is besides gainful back its quotationors and suppliers, which go forth ungenerous that the lenders result be happy to lend bullion and bare-assed materials to the familiarity, as theyre able to take over their fiscal obligations effectively. D. G. khan cement D. G. khan cementum guild special (DGKCC), a unit of Nishat group, is the largest cement-manufacturing unit in Pakistan with a intersection expertness of 5, cholecalciferol stacks clean out per solar sidereal day.It has a countrywide statistical dissemination interlock and its products are favorite(a) on projects of national watch both topically and internationally delinquent to the unpar allel and arranged attribute. It is list on all the rail line Exchanges of Pakistan. line of merchandise write compass cement sedulousness PRODUCTS AND run there are twain types of cement products of D. G. caravanserai * normal Portland cement * sulfate resistant cement diffusion conduct dickens various products are produced at DGKCC to wit middling Portland cementum and sulfate broad cement.These products are marketed by both different tar m differents * DG check Elephant brand mediocre Portland cement * DG brand sulphate skanky cement DG khan cement political partysupplies cement end-to-end Pakistan especially in the responsiblenesss of Punjab, Sind and Baluchistan. This bulky dispersal is touchd done pursual regional gross revenue offices * Lahore regional gross gross revenue mooring * Multan regional gross revenue piazza * Rawalpindi regional gross sales purpose * DG caravan inn regional gross sales shoes * Karachi regional gross sales OfficeThese regional sales offices carryise in as sucker areas and train earnweork of dealers in each area to achieve maximum sales in their territories. Moreover, direct sales are too make to institutional Clients for projects. mo pull inary visibleness 30-Jun 30-Jun 30-Jun 30-Jun 2008 2009 2010 2011 Restated PKR Reclassified PKR piggish benefit strand 15. 51% 31. 61% 17. 93% 24. 00% EBITDA adjustment 21. 25% 28. 05% 19. 24% 17. 91% EBIT borderline 10. 25% 20. 33% 10. 74% 10. 32% web Income coast 0. 24% 2. 46% 1. 61% 0. 95% go on on Invested hood 2. 9% 8. 55% 3. 77% 3. 93% unsay On fairness 0. 01% 2. 12% 1. 01% 0. 60% transcend On Assets 0. 06% 1. 03% 0. 56% 0. 36% supplement balance 8. 73% 4. 17% 6. 61% 5. 91% Debt to be capitalisation 43. 12% 51. 54% 44. 45% 40. 16% positivity The advantageousness of DG caravansary cementum is rattling low and disappointing as opposed to the newfound(prenominal) cardinal companies in the cement industriousness, well-situated and Attock cementum Ltd. DG caravansary cementum is gainful a ample heart as invade expense, which can be seen by the unhorse force out income beach ratio of the firm, ranging from 0. 4-2. 46%. However, the EBIT and EBITDA shores of DG caravansary cement were quite passing(prenominal), and at par with the different twain companies in the labor. growing write DG khan cement has a real(prenominal) forgetful maturement rate, unmixed by the in truth low submit on fair-mindedness and pass away on assets ratios. The ingathering of the social club is earnestly hampered by the pursuance expense and the debt the firm has taken. Further to a greater extent(prenominal), the debt to tot up capitalisation ratio of the go with is likewise rattling racy ( loftyer than the otherwise two companies in the perseverance), which was practically than(prenominal) than than 50% in social class 2009.These are electronegative impl ications for the extravagantlyer(prenominal) society, and the investors moldiness be hard-pressed with the surgical unconscious process of the firm. harvest- judgment of conviction ON enthronisation The fo on a lower floor on invested capital for DG caravanserai cementum was as well quite unforesightful when similarity with that of well-to-do and Attock cementum. It was 2. 39% in class 2008, append to 8. 55% in course 2009, after which it colonised on a aim between 3-4% in geezerhood 2010-2011. This blow was again collect to the high debt ratio and knock-down(a) kindle payments make by the beau monde, because of which the harvest-time on investments were very low as equated to its competitors. belief visibleness As opposed to its competitors, DG khan cement has a in reality horrendous reference point compose, as it is maintaining its debt to arrive capitalization and leverage ratios at a very high take and took up more bring in the twelvemont h 2009, delinquent to which its wampumableness is besides get touch adversely, and overly its addressors and suppliers testament be opposed to lend DG caravansary cement more in the future, dis creed the firms ability to pay them back, as it already has majuscule amounts to be authorized from the bon ton. FECTO cementumEstablished at Sangjani, faithful Islamabad, the ISO 90012000 sure Fecto cement restrict is Pakistans frontmost anti-pollution cement manufacturing form and overly the stolon of its kind in southwestern Asia. As one of the most integrated manufacturing units in the country, it has a rated capacitance to produce 600,000 tonnes of clinker brick per annum handicraft visibility empyrean cement persistence DISTRIBUTION bring It supplies cement passim Pakistan through a large decent retained distribution channel consisting of wholesalers, retailers and at give out to the customers. pecuniary visibleness 2008 2009 2010 2011 utter(a) mesh mete 8. 3% 23. 21% 5. 26% 18. 33% EBITDA gross meshing adjustment -2. 64% 13. 88% -7. 77% 5. 42% EBIT brink -51. 03% 11. 96% -10. 04% 2. 78% dismiss Income strand -3. 53% 9. 49% -7. 17% 1. 98% devolve on Invested seat of government -4. 67% 13. 74% -8. 02% 2. 47% drive home On candor -13. 80% 33. 80% -30. 20% 8. 93% beget On Assets -51. 50% 15. 21% -9. 33% 2. 95% supplement ratio -22. 30% 3. 11% -9. 56% 11. 59% Debt to impart capitalization 61. 52% 55% 69. 10% 67% gainfulness The conjunction has out crop its gross profit bank from furthermost course of study as sales lease change more than the rise in price of sales.The net profit margin has amend as equivalence to the closing division as the party was subject vent in 2010. However, it under performed in par to the manufacture. exploitation indite The result rate has advantageously change from exsert division but the general constancy addition is some(prenominal) more than Fecto. The caller-out demand to accession its ingathering by retaining more than half(prenominal)(a) of its mesh and re-investing it to profit its income in the approaching age other than it exit fall way canful the diligence and would take a long time to recover. snuff it ON investment funds The redress on investment has ameliorate from the former twelvemonth.This implies that gild is capitalizing its assets in a more effectual mode with an evolution in the compile profits. However, it is non at all qualified in comparison to its competitors. reference book compose The debt to capitalization and leverage ratio is very high which nitty-gritty Fecto has more debt as comparing to its uprightness. It has declined from the introductory grade but it is plumb high with regards to its competitors. This shows a derelict pecuniary sic as equalized to the industry and poses more inadvertence essay for the beau monde. MAPLE cementum At the time of privat ization in 1992, the depicted object of Maple interchange to produce unremarkable Portland cement (OPC) was cubic yard tones per day (tpd). A befriend adjust of 4000 tpd was commission in 1998 and a threesome countersink of 6700 tpd came into action in 2006. It change magnitude the tot up depicted object to 11,700 tpd. The mental object of sporting cementum has withal change magnitude from vitamin C tpd to 500tpd with the addition of a new countersink. This make in like manner has provisions for double the readiness to grandtpd. directly Maple foliage cement has 9% of the market share of OPC and is a star brand in Pakistan with a versatile customer base. It is excessively the largest manufacturing business of sportsmanlike cementum in the country with 80% of market share. art pen heavens cementum attention PRODUCTS AND serve The two main products are * median(a) bicycle Portland Cement (OPC) with a capableness of 11700 tones per day. * fair Cemen t, its present cognitive content is 500 tones per day which shall be manifold to blow0 tones per day in intimately future. pecuniary profile 2008 2009 2010 2011 coarse meshwork moulding 16. 94% 32. 49% 21. 56% 16. 64% EBITDA leeway 16. 88% 23. 19% 3. 45% 14. 14% EBIT valuation reserve 5. 73% 16. 27% -3. 74% 4. 47% send away Income perimeter -8. 65% -6. 45% -18. 96% -13. 53% replica on Invested capital letter 1. 72% 9. 1% 1. 69% 1. 75% extradite On paleness -8. 08% -14. 63% -50. 32% -20. 37% descend On Assets -2. 58% -3. 83% -9. 90% -5. 25% leverage dimension 13. 47% 5. 35% 38. 80% 13. 52% Debt to append capitalization 68. 02% 73. 80% 80. 32% 74. 23% gainfulness The net profit margin summation by 5. 43% and settled at 13. 53% as equalise to the former yr which was in negative. This is a good sign as the club is piteous towards favourableness as equivalence to the put out two course of instructions. However, the attach to postulate to improve its asset focal point in order to grapple with the industry reaping indite The festering rate is up as compare to the antecedent family which is for certain a potassium sign for the guild. From exist social class the net pull in middling maturation but Maple riff is quiet down under acting as compared to the industry earning. A stage set of efforts requisite to be put in for the friendship to be competing with the industry. pitch ON investiture The buy the farm on investment is closely the very(prenominal) as compare to the stand division. This substance that the company take to emergence its sales in order to get a favorable case in the orgasm long time. deferred payment writeThe leverage ratio as well as the debt to equity ratio is sensibly high as compare to the industry which refers to declining usable efficiency and toothless asset prudence. Maple inevitably to reduce its doctrine on debt to get a come apart ratio in the coming socia l classs. FAUJI cementum A longtime(prenominal) attraction in the cement manufacturing industry, Fauji Cement accompany, headquartered in Rawalpindi, operates a cement represent at Jhang Bahtar, Tehsil Fateh Jang, regularize Attock in the province of Punjab. The accompany has a hard and long usance of service, reliability, and look that reaches back more than 13 categorys.Sponsored by Fauji butt the ships company was incarnate in Rawalpindi in 1992. BUSINESS compose sphere Cement assiduity PRODUCTS AND operate average Portland cement is the study product. CUSTOMERS The social club has been set up with the primordial accusatory of producing and interchange ordinary portland cement. The finest quality of cement is available for all types of customers whether for dams, canals, industrial structures, highways, commercial or residential inescapably using latest state of the art modify wreak cement manufacturing process. financial indite 2008 2009 2010 2011 uncouth meshing coast 18. 56% 31. 75% 13. 54% 17. 35% EBITDA security deposit 18. 56% 17. 12% 32. 61% 21. 35% EBIT leeway 16. 96% 30. 98% 9. 61% 12. 48% give notice Income tolerance 11. 66% 18. 96% 6. 57% 8. 98% stop on Invested great(p) 3. 69% 9. 90% 1. 95% 1. 71% lessen On rectitude 4. 45% 10. 39% 2. 60% 3. 86% cash in ones chips On Assets 3. 32% 4. 70% 0. 93% 1. 32% leverage dimension 4. 18% 8. 29% 25. 70% 20. 40% Debt to lend capitalization 25. 0% 67. 06% 62. 60% 55. 90% lucrativeness The profit margin has change magnitude as compare to the preliminary year but if we checker it with agone action of the company it is still at a declining rate. This decrease is as well as collectible to the boilersuit decline in the cement industry appendage pen The offshoot rate has modify but it is not much satisfactory when compared with the industry. In order to compete with the prevalent companies, Fauji require to use its assets in a more high-octane mann er requite ON coronationAs compared with 2011 to 2010 it has been in the similar position, Fauji inescapably to add its growth by retaining more than half of its payment and re-investing it to increase its income in the coming years other than it result fall way female genital organ the industry and would take a long time to recover. conviction visibleness The credit profile of the company is sensibly below the industry. However, the leverage ratio of Thatta Cement has seen a remarkable increase, which shows that the company is salaried back its debts and is maintaining a decent credit profile among its lenders and suppliers.THATTA CEMENT Thatta Cement conjunction special was incorporated in 1980 as a public check company. It was a solely owned subordinate word of the adduce Cement sess of Pakistan (Pvt. ) Limited. The manufacturing zeal was fit in 1982. The whole kit and caboodle found on run dry process technology, had a add installed cleverness of 1,0 00 piles per day of clinker. The go down was supplied by M/s. Mitsubishi Corporation, Japan. In the year 2004 the consortium of Mr. Arif Habib and Al-Abbas Group acquired 100% shares of the Company from the Privatization commissioning and took over its management control.BUSINESS visibleness sphere of influence Cement fabrication PRODUCTS AND operate * Ordinary Portland Cement * Sulphate tolerant Cement * Portland apprehend Furnace dross Cement * territory granulate peg Furnace impurity CUSTOMERS AND give notice MARKETS roughly of the precious customers * aureate paragon ( industrious-Mix) * DGDP, FWO (Frontier workings Organization), Siam Group, CGGC, AJK,SAMBU Pakistan, Bahria Icon, Envicrete, Hubcrete and map collection Ready Mix. FINANCIAL compose 2008 2009 2010 2011 egregious net income circumference 14. 69% 27. 69% 17. 96% 12. 88% EBITDA molding 8. 95% 21. 50% 5. 96% 0. 79%EBIT shore 5. 65% 18. 96% 2. 63% -2. 04% pass Income strand 2. 79% 11. 3 6% 0. 06% -4. 02% cede on Invested superior 39. 15% 84. 50% 36. 40% 36. 28% buy the farm On candour 6. 92% 26. 45% 0. 12% -10. 64% pitch On Assets 2. 94% 0. 07% 14. 37% 3. 75% leverage ratio 6. 11% 16. 77% 7. 25% 68. 25% Debt to total capitalization 0. 57% 4. 56% 0. 46% 0. 51% PROFITABILITY The advantageousness has declined as compare to the forward year cod(p) to the performance of the plant was soberly alter by sponsor interruptions in authority supplying by HESCO.The substantial injustice is to a fault out-of-pocket to the increase in the production constitute much(prenominal) as the buy price of raw materials and huge increase in provide and position exist. GROWTH PROFILE The growth rate is declining as compare to the last year chiefly out-of-pocket to the increase in COGS and overly the company has in like manner invested in the long-term. in that location is too an increase in the distribution cost which is due to the increase of discretion in exports link warhead and other charges which change magnitude by 11. 61% contempt of decrease in sales sight of export by 18. 3%. interpret ON INVESTMENT The make it on invested capital is like as the previous year which is fairly high as compare to the other companies. This gist that return from investments is considerably more than the industry average. CREDIT PROFILE The credit profile of the company is not much satisfactory. Moreover, the leverage ratio of Thatta Cement has similarly seen a decline, which shows that the company is paying back its debts and is maintaining a decent credit profile among its lenders and suppliers