Page No.

Acknowledgement

Abstract

Past of Cement Industry of Pakistan

Overview

Growth Pattern of Cement Industry of Pakistan

Contribution to National Economy by Cement Sector

What Is Going in Related Sector

Government Attitude toward Sector

Financial Analysis of Four Companies

10

Major Economical Changes

15

Present of Cement Industry of Pakistan

SWOT

Analysis

17

Major Contribution in Economical Growth of Pakistan

22

Major Decisions in Budget 2008-2009

25

Effect on Sector Due to Changes in Interest Rate

International Trend

26
26

Future of Cement Industry of Pakistan

Industry Future

29

Future Course of action for Cement Industry and Government

30

Concluding SWOT analysis

31

International Trend

32

Strength of Sector which Attract Investors

33

Resources condition of the sector

34

Current Duty Rate & Subsidies Provided By Government

36

References

37

Acknowledgement
We wish to thank Al-Mighty Allah, who enabled us to successfully research and pen this project,
Special thanks to Mr. Numair, project in charge for his continual support and guidance enabling
us to be on the right track.
Extra special thanks to Mr. Khurrum Mehmood who rendered his support throughout this project
for proof reading, formatting and information gathering. Lastly, we would like to appreciate
the patience of our parents and family members for bearing up with us throughout this
activity both time and money wise

Abstract:
Review of literature is on the overall setup and performance of Pakistans Cement Industry.
Review depicts past and present practices employed by cement manufacturers and support
rendered by the Government.
Efforts are made to cover most of the issues having impact on the economy mostly on macro
level. Influences on balance of payments, GDP share etc are addressed in present as well as
future predictions are made. SWOT analysis of the sector is conducted for better understanding
of the strategies employed by the sector. Financial information of various manufactures is quoted
where appropriate to support the research and recommendations.
While doing the project we gather the data on following points of Pakistan Cement Industry.
Past
Financial statements of any four companies from same sector
Growth pattern
Govt attitude toward sector
What is going on related sector
Share in import & export (share in balance of payment)
Major economical changes (2003 onward)
Present
SWOT analysis
International trend of sector
Contribution of sector in economic growth of Pakistan (employment, export, tax)
Major decision about sector in budget 2008-2009
Effect on sector due to change in interest rate
Help or affect on sector due to change in related sector
Future
Future course of action for govt and industry
International situation of that sector
Current duties rate and subsidy provided by govt
Conclusion of SWOT analysis (logical conclusion)
Resources condition of that sector. Raw material, labor skilled, unskilled), Overhead (electricity,
gas)
What are strength of sector that can attract foreign investor

CEMENT INDUSTRY OF PAKISTAN

Overview:
At the time of independence in 1947, only one or two units were producing grey cement
in the country. During the decade of 1948-58, the number of cement units increased to
six. During the Ayub era the economy started to grow and the construction activities
underwent a boom. To meet the growing demand of cement new units were set up.
During the decade of 1958-68, the number of cement units increased from 6 to 9.
During the following period of Zulfiqar Ali Bhutto all the industrial units, including cement
industry, were nationalized, therefore, no new unit was set up during 1971-77. During
the period of General Zia-ul-Haq, 1977-88, denationalization of industrial units boosted
the investments. Housing and construction industries picked
up
and the demand for cement increased. Thus, the number of
cement units increased from 9 to 23 and finally 24.
The cement industry in Pakistan has become a long way since
independence when country had less than half a million tones
per
annum production capacity. By now it has exceeded 10 million
tones per annum as a result of establishment of new
manufacturing facilities and expansion by existing units. Privatization and effective price
decontrol in 1991-92 heralded a new era in which the industry has reached a level
where surplus production after meeting local demand is expected in 1997.
The cement industry is needed a highly important segment of industrial sector that plays
a pivotal role in the socio-economic development. Through the cement industry in
Pakistan has witnessed its lows and high in recent past, it has recovered during the last
couple of years and is buoyant once again.
There are total number of units are 23, from which 4 units are in the public sector while
the remaining 19 units are owned by the private sector. Two of the four units in the
public sector had to close down their operations due to stiff competition and heavy cost
of production. The cement plants are located in every province of Pakistan.

The province-wise distribution of cement plant is as under.

Providence

Units

Punjab
Sindh
NWFP
Baluchistan
Total

8
8
6
1
23

Capacity
(MillionTons)
7.488
3.851
4.945
0.758
17.040

Three additional cement plants with installed capacity of over 2.1 million tons are in the
final stage of completion despite the available excess capacity in this sector. The
following table shows installation of new cement factories and expansion of the existing
facilities during the current decade.
The industry is divided into two broad regions, the northern region and the southern
region. The northern region has over 87 percent share in total cement dispatches while
the units based in the southern region contributes 13 percent to the annual cement
sales.

Name
of
company
Northern Region
Askari cement
Askari cement
Bestway cement
D.G Khan cement
Fauji cement
Lucky cement
Maple
Leaf
cement
Pioneer cement
Sub-Total
Southern Region
Essa cement
Total

New/ Expansion

Year
Commission

of

New
Capacity
Created(Tons)

Expansion
New
New
Expansion
New
New
Expansion

1964
1996
1988
1988
1997
1996
1998

945,000
630,000
1,039,500
1,039,500
945,000
1,260,000
1,039,500

New

1994

630,000
7,528,500

Expansion

1988

315,000
7,843,500

Growth Pattern of Cement Industry of Pakistan

Cement is one of major industries of Pakistan. Pakistan is rich in cement raw material.
Currently many cement plant are operating in private sector. The last few years have
been a golden period for cement manufacturers, when the government increased
spending on infrastructure development. High commercial activity and rising demand for
housing on account of higher per capita income has kept cement off take growth in
double digits.
During the financial year-07, cement sales registered a growth of 31 percent to 17.53
million tonnes as against 13.5 million tonnes sold last year. The cement sales during
July-February-08 showed an increase, both in domestic
and regional markets to 18.17 million tonnes. The domestic
sales registered an increase of 7.2 percent to 14.4 million
tonnes in the current period as compared to 13.5 million
tonnes last year whereas exports stood at 3.7 million
tonnes as against 1.8 million tonnes in the corresponding
period last year, showing an increase of 110 percent.
Pakistan cement industry has a huge potential for export of cement to neighboring
countries like India, U.A.E, Afghanistan, Iraq and Russian states. These has been a
robust growth of cement demand seen both in domestic and exports market during the
fiscal year ended June 30, 2007. The industry achieved an overall growth of 32% with
domestic demand of cement increased by 24.95% where as exports increased by
111.86%. The overall growth achieved by cement factories for the year under review
was 111.29% consisting of domestic and exports markets at 71.02% and 335.12%
respectively.