Bestway Cement Limited is portion of the Bestway Group of the United Kingdom. Bestway Group was founded by Sir Mohammed Anwar Pervez about thirty three old ages ago on what could be best described as one adult male ‘s vision and passion. Since so it has translated into a alone and successful group of concerns spread across the Earth with the aid of committed, professional and industrious direction and staff, together with loyal clients and providers. The Group has a good diversified portfolio incorporating within its creases cement fabrication, planetary banking, sweeping hard currency & A ; carry concern, a twine of retail mercantile establishments, existent estate investing, cultural nutrient and drink import and distribution and milling of rice. Recently the group has embarked upon a big power coevals undertaking in Pakistan therefore farther diversifying its operations and gross base.
The Cement sector of Pakistan which was more or less demoing an increasing tendency from last few decennaries is unluckily presenting a diminution from last few old ages. Many things, variables and facets have contributed to the negative tendency of its growing. A holistic position of cement sector in entirety could hold given many different images but given are localized position to the economic growing of the sector ; we found out that it has suffered a batch. The economic state of affairs besides exacerbated, jointly ensuing in diminution of production and exports. The analysis of this sector from assorted positions through the research and audience of available research verified and to some extent endorsed the causes which were sorted out and listed down in the literature reappraisal. These causes are high cost of energy, heavy revenue enhancement, high cargo charge, low disbursement upon PSDP, fluctuating involvement rates, worsening international market portion political instability, jurisprudence and order state of affairs, economic restraints to recover back to original state of affairs and international market fight. Looking into all major causes, recommendations are given in manner forward which is to the best of our apprehension and capacity for the Bestway Cement Limited.
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Bestway Cement Limited is a portion of Bestway Group which is a London based corporation. Its foundation was laid by Sir Mohammed Anwer Pervez about thirty old ages ago. The group has a well-diversified portfolio and comprises cement fabrication, planetary banking, sweeping hard currency and carry concern, a concatenation of retail mercantile establishments, existent estate investing, cultural nutrient and drink import and distribution and milling of rice.
Bestway group has fortuitously managed to put in alone and successful group of concerns spread across the Earth with the aid of committed, professional and industrious direction and staff, together with loyal clients and providers.
Even in a period of economic lag and energy crisis in the last five old ages, which adversely affected the profitableness of the industry, Bestway was able to enter pretax net incomes even at 60 % capacity use. The company has been amongst the leaders in the recent market roar, runing above 100 % of is installed capacity. ( Bestway Group Company, 2011 )
Bestway is U.K ‘s 2nd largest hard currency and carry operator in footings of turnover with group one-year turnover in surplus of US Dollars 3.6 billion and net incomes in surplus of US Dollars 135 million ; the 2nd largest cement manufacturer in Pakistan and joint proprietor of Pakistan ‘s 3rd largest bank, United Bank Limited. Its rice milling installations are one of the largest of its sort in the state. The group is the largest abroad Pakistani investor with investings in surplus of US Dollars 1 billion and a planetary work force of over 22,000 people spread over four continents. ( Bestway Cement, 2011 )
What is Cement?
“ Cement is a stuff with adhesive and cohesive belongingss that makes it capable of adhering mineral fragment into a compact and stiff mass. The word cement seems to hold been derived from the in-between age English “ cyment ” , and Latin caementum ” . ( APCMA, 2011 ) The latter word “ caementum ” meant rough quarried rock or french friess of marble from which a sort of howitzer was made more than 2000 old ages ago in Italy. Common calcium hydroxide, hydraulic calcium hydroxide, gypsum plaster, “ pozzolana ” , natural and Portland cement are few of the stuff, which are used for cementing intents. These stuffs may be classified into two groups:
Non-hydraulic cement does non hold the ability to put and indurate under H2O but requires C dioxide from air to indurate e.g. non-hydraulic calcium hydroxide and plaster of Paris. Their cementing prosperity arises from the re soaking up of gases that were expelled during their processing. Their merchandises of hydration are non immune to H2O. ( APCMA, 2011 )
Hydraulic cement is defined as cement holding the ability to put and develop strength in air or under H2O and which are indissoluble in H2O after they have set. Such cement harden even in the absence of air and organize a solid merchandise which is stable in H2O and can be safely used in all constructions in contact with H2O. Hydraulic cement includes hydraulic calcium hydroxides, Portland cement ( both basic and blended ) , oil-well cement, white cement, colored cement, high alumnus cement, expensive cement regulated and hydrophobic cement etc. ( APCMA, 2011 )
Branchs of Bestway Cement
Bestway Cement Hattar
Hattar is an country in Haripur in the North West Frontier state where the company established its sister subdivision in 1994. This was an initial investing of US $ 120 million.
Bestway Cement Chakwal-I
Another strategic determination made by the company was in 2004 to set up a set up of 1.8 million metric tons per annum cement works near village Tatral of territory Chakwal, Punjab state, Pakistan. This is the company ‘s 2nd greenfield development undertaking at a cost of US $ 140 million.
To further widen its presence in the cement industry, Bestway decided to offer for 85.9 % of equity of Mushtehkam Cement limited a 0.6 million dozenss per annum capacity works, following an offering by the Privatization Commission, Government of Pakistan.
Bestway Cement Chakwal-I
In May 2006, the group declared programs for puting up of a 2nd 1.8 million dozenss per annum capacity works near their Chakwal operations at a cost of US $ 180 million. This was Bestway ‘s 3rd green field cement works in Pakistan.
Beginning: ( Bestway Cement, 2011 )
“ To Produce High Quality Cement At The Lowest Cost. ”
( Bestway Group Company, 2011 )
Vision statement is an aspirational description of what the company wants to accomplish in the long term. The intent of a vision statement is to function as a usher for the present and future class of action. It would non be incorrect to name a vision statement the model of a company ‘s strategic planning. The vision statement is applicable to an full organisation.
The vision statement of Bestway clearly identifies its long term ends. The company wishes to prolong its place of a market leader in the hereafter. It wants to pave manner for itself so that it can stand at the top of the pyramid and bask the privileges of a market leader. The company wishes to make so by non disregarding the criterion and quality of cement.
The statement does non look to go forth an impact on the readers. It lacks deepness. The vision statement should give a photographic vision of where the top direction wants to see itself in the long term. This peculiar vision statement does non make that. It should be able to state the readers why the company wishes to be tomorrow. It should hold highlighted a few broader ends.
Overall, it is a really weak vision statement. It needs to be earnestly reviewed by the company. This statement does non give a really positive image of the company and does non state where the company wishes to see itself in the hereafter.
i‚· Bestway will systematically bring forth High Quality Cement.
i‚· Bestway will endeavour to be the lowest cost manufacturer.
i‚· It is company ‘s purpose to accomplish 20 % of the market portion of North Zone in the short term and finally 30 % in the longer term.A
i‚· Bestway will go on to supply a high criterion of client service.
i‚· In order to run into future enlargement demands, Bestway will go on its policies of staff preparation and development, advancing from within whenever possible.
i‚· Bestway appreciates it has duty towards the community within which it operates.A It will go on to put aside 2.5 % of the net net income for instruction and charitable intents
( Bestway Cement, 2011 )
A mission statement defines what an organisation is, why it exists, its ground for being. At a lower limit, your mission statement should specify who your primary clients are, place the merchandises and services you produce, and depict the geographical location in which you operate. ( Entrepreneur Media, 2012 ) The mission statement highlights the company ‘s short term ends. These are the ends that revolve around company ‘s clients, providers, and stakeholders. It is more of import to pass on the mission statement to the employees than to clients. The employees have to understand the mission statement and so put a way that would do them accomplish the ends that have been established.
Harmonizing to the mission statement of Bestway Limited it can be understood that Bestway promises to bring forth high quality cement on a consistent footing. It will non compromise on quality whatsoever. It is one of the top precedence of the company to chief high quality criterions. Furthermore, the company promises to make so by following methods which would assist the company in maintaining their production costs low. This is good for the clients as they are traveling to acquire a all right quality finished merchandise at a sensible monetary value. They want to be cost efficient as compared to their rivals. This would besides, profit the stockholders. Low costs would ensue in higher borders in footings of profitableness.
Furthermore, Bestway aims to supply applaudable client service. They do non desire to compromise when it comes to client services. They want to hold efficient work force which would provide to the jobs of the clients.
All of the merchandises being produced by the company are available in different packaging solutions. They are available in standard packaging, in majority, or are made as per the demands of the clients. List of merchandises being offered by Bestway Cement Limited are as follows:
Ordinary Portland Cement
Sulphate Resistant Cement
Quick Setting Cement
Low Alkali Ordinary Portland Cement
Beginning: ( Bestway Cement, 2011 )
Bestway has tapped many international markets which include Central Asia, Sri Lanka, Africa, and Middle Eastern Countries. “ Bestway has remained the individual largest exporter of cement to Afghanistan for past many old ages ; hence it has and continues to play an of import function in the rebuilding and development of that state. ” ( Bestway Cement, 2011 ) A
Bestway cement has become the first Pakistani company to export cement to India on trucks. The company started this venture in April, 2012. Since 2007, Bestway has been on a regular basis exporting cement to India both via land and sea paths. Within a really short span Bestway has become one of the largest exporters of Cement to India besides. The Company positions India as an of import market and is acute to research all possibilities of increasing the presence of its merchandise at that place.
The company has established its name in states like Afghanistan and India, now it looks frontward to tapping other international markets where it would be executable to offer company ‘s merchandises. This measure is taken in order to spread out its operations.
On the export frontage, Bestway has acquired enfranchisement from South African Bureau of Standardisation enabling it to seek export chances to South Africa. ( Business Recorder, 2012 )
Environment, a top Precedence
Bestway ‘s workss are environmentally friendly with emanation criterions that far exceed predominating acceptable criterions, both local and international. ( Bestway Cement, 2011 ) The workss ‘ emanation degrees are 50 micrometers whereas the Government of Pakistan ‘s acceptable criterions are 300 micrometers and international criterions are 100 micrometers per three-dimensional metre of air at NTP ( Bestway Cement, 2011 )
Bestway Cement is driven by high criterions of efficiency and quality. Strict quality control processs are applied to guarantee that these purposes are achieved. The best quality control equipment in Pakistan is in usage at its workss. Apart from the usual equipment, Bestway ‘s research labs are equipped with state-of-the-art X-ray Fluorescent Analyzer and Diffracto meter engineering. ( Bestway Cement, 2011 )
Bestway Group was a innovator in presenting this engineering in Pakistan for the first clip. By virtuousness of this equipment, the Company has been able to systematically bring forth better quality cement than is presently available in the state. Since origin, Bestway has been bring forthing Portland cement of specifications far superior to the Pakistani, Indian, British and American criterions.
A binding stuff used in building and technology, typically made by heating a mixture of limestone and clay until it about fuses and so crunching it to a all right pulverization. When assorted with H2O, the silicates and aluminates in the cement undergo a chemical reaction ; the ensuing hard-boiled mass is so imperviable to H2O. It may besides be assorted with H2O and sums ( crushed rocks, sand and crushed rock ) to organize concrete4. The fabrication of cement starts with the excavation of the natural stuffs. The larger sized stuffs received at the works are crushed ; mix in a proportion and land to procure a unvarying blend for proper reaction. An intimate mixture normally of limestone and clay or other suited stuffs is subjected from powdery signifier to solid in a kiln at a temperature of 1400-1500oC for a certain clip. This merchandise called cinder after chilling is ground with 4-6 % of gypsum or other signifiers of Ca sulfate. The cement is so stored in a tower called silos for cargo in bags or in majority.
Beginning: ( Dgtrdt.gov.pk, 2012 )
The chief natural stuffs required for cement fabrication are:
1. Lime rock
2. Clay ( Shale )
3. Silica sand
4. Iron ore
Beginning: ( Syndicate 4, 2012 )
Requirements of Raw stuff
About 1500-1600 kilogram of natural stuffs is required to bring forth one ton of Portland cement. The mean sum of stuffs required to bring forth one ton of Portland cement are 1.2-1.3 dozenss of calcareous stuff like limestone and marl and 0.3-0.4 ton of clay stuff like shale etc. Besides, 0.05-0.06 dozenss of natural or man-made gypsum is required to fabricate one ton of Portland cement.
Pakistan ‘s cement industry has shown enormous advancement since Independence. In 1947, there were merely four operational cement units in West Pakistan. Demand during the same period was estimated at over a million dozenss. The industry observed a gradual growing in its production over the Ayub Khan ‘s government due to the constitution of five more workss with the capacity of 2.8 million dozenss with four more set up in 1960 ‘s. In these old ages the building industry went through a roar as demand grew because of an spread outing economic system.
Presently many cement workss are runing in private sector. Pakistan Cement Industry has immense potency for export of cement to neighbouring states like India, U.A.E, Afghanistan, Iraq & A ; Russian States.
The Fiscal Year 2010-2011 was non fruit full for the cement industry of Pakistan. Sluggish demand in the local market, increased competition in the international markets and a autumn in net income borders marked the high spots of the fiscal twelvemonth. ( Khan, 2011 ) In add-on to this, broken promises from the authorities, break of distribution channels due to inundations and increase in natural stuff ( coal ) costs farther added to the wretchedness of the cement makers. The demand for cement neither increased nor decreased and remained stagnant in the local market due to inadequate public disbursement and negligible private sector disbursement because of recession that prevails in our economic system.
“ The authorities cut down on its Public Sector Development Program ( PSDP ) by 77 per cent during the fiscal twelvemonth ” . ( Khan, 2011 ) This happened chiefly because the financess allocated by the authorities were non utilised decently. However there is still a beam of hope left. The budget allocated by the authorities of Pakistan for the financial twelvemonth 2012 looks handsome. PSDP has been allocated Rs710 Billion for the twelvemonth.
“ The private sector demand was weak throughout the twelvemonth. This was due to low per capital income and small investor assurance in the economic system. ” ( Khan, 2011 ) The private sector took on really small or no building activity which automatically forced the participants in the industry into terrible monetary value competition. This lead the companies to sell cement bag for every bit low as Rs235. Subsequently on the industries controlled the deterioration state of affairs and monetary values were increased to Rs380 per bag grade. The industry besides had to confront a tough twelvemonth in footings of international market every bit good. The industry exports to different states like Afghanistan, Sri Lanka, India, China, and Africa. In the twelvemonth 2011, the industry faced competition from Middle East. “ The cement exports fell by 11.55 per cent from 10,657,235 M Tonnes to 9,426,112 M Tonnes. ” ( Khan, 2011 )
“ Government did non play its portion in resuscitating the cement industry. If 80 per cent of one of your favourite export industries has suffered immense losingss, so it is obvious that they are in problem. ” ( Khan, 2011 ) The authorities should hold supported one its major exportation industry. The Pakistani Government had promised to pay the cement companies an inland cargo subsidy. This promise was non put into materialisation. Furthermore, the companies had to sell their merchandises in the Pakistani markets at cheaper rates because the cost of transporting the merchandise to Karachi Port was really high. However Government did back up the industry by leting a decrease in the Federal excise Duty and General Gross saless Tax. There were some companies who reported net incomes in the twelvemonth 2011. These were those companies who were located really near to the seaport and did non hold to incur the high costs of transit.
There were natural catastrophes every bit good in the twelvemonth 2011 that hurt the cement industry. “ During the twelvemonth, nature besides seemed to be harsh on the cement industry. There were monolithic inundations which disrupted all the distribution channels and pegged the economic system back. ” ( Khan, 2011 )
Presently, the cement industry does look in bad form but there is some ground to be optimistic. The utmost harm caused by inundations has to be reconstructed. This is bound to increase the local demand of cement. Urbanization is besides a turning tendency in Pakistan and this brings along it the demand for increased building. The development in Afghanistan is on a rise every bit good particularly after a turning GDP. ( Khan, 2011 ) The cement market should look to capitalise on that.
Harmonizing to the Global cement study 2009, China maintained first place with 26 million dozenss in exports, while Japan got 2nd place by exporting 12.6 million dozenss of cement. Third largest cement exporter in universe was Thailand with around 12 million dozenss, followed by Turkey which exported 11.6 million dozenss of cement. Pakistan was at 5th place and had left Germany behind by exporting 11 million dozenss of cement during last financial twelvemonth. Germany stood at 6th place with 9 million dozenss exports.
Cement market experts told that Pakistan secured 5th place because of high demand of cement in nearby states and by capturing new markets such as African states, Qatar & A ; Iraq. Pakistan could accomplish the grade of 13 to 14 million dozenss exports by the terminal of the financial twelvemonth maintaining in position Indian market which has one time once more started importing cement from Pakistan. The export of cement from Pakistan to India showed a crisp diminution after Mumbai onslaughts.
Harmonizing to the All Pakistan Cement Manufacturers Association ( APCMA ) , local despatchs were 19.3 million dozenss ( down 14 percent YoY ) . However exports showed an encouraging addition of 47 per centum ( YoY to 11.3 million dozenss ) during the last financial twelvemonth. ( Cement Pakistan Company, 2009 )
It was expected that the local demand of cement in Pakistan would hold remained on high side due to the Reconstruction activities of devastated places, stores and schools in Swat and Malakand after Military operation. Overall Pakistan cement industry despatchs were likely to turn 7 per centum in July 2009. The growing in cement despatchs was entirely attributable to lifting export volumes as domestic demand remained down on every comparable clip period.
Overall cement workss of Pakistan operated at 80 per centum capacity use as compared with 81 per centum use in the same month of last twelvemonth. Cement exports of Pakistan continue to demo healthy and positive growing tendency and recorded 45 per centum growing on Y-o-Y footing. However, on M-o-M footing, cement exports represented a diminution of 3 per centum. ( Cement Pakistan Company, 2009 )
The twelvemonth under reappraisal had been one of the worst in the history of local cement industry in footings of monetary values and profitableness. The on-going recession coupled with capacity enlargements in the Pakistani cement sector have created the supply oversupply in the state ensuing in free autumn in monetary values due to a terrible monetary value war. The ferocious monetary value war has drastically eroded keeping monetary values on one manus, while on the other manus input monetary values have besides increased in general, peculiarly electricity charges that have increased by 24 % . On the background of worsening monetary values, overall cement volumetric growing registered an addition of 9.3 % to stand at 34.2 million dozenss.
Installed Production Capacity
A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A As on October 2012
A Sr. No.
A Name Of UnitA
A Operational CapacityA
A Askari Cement Limited – WahA
A A A 1,050,000
A A 1,102,500
A Al-Abbas Cement Limited – Nooriabad, Dadu
A Askari Cement – NizampurA
A A A 1,500,000
A A 1,575,000
A Attock Cement Pakistan – Hub Chowki, Lasbela
A Bestway Cement Limited – HattarA
A A A 1,170,000
A A 1,228,500
A Bestway Cement Limited – ChakwalA
A A A 3,428,571
A A 3,600,000
A Bestway – Mustehkum Cement Limited – HattarA
A A A 1,035,000
A Cherat Cement Company Limited-NowsheraA
A A A 1,050,000
A A 1,102,500
A Dandot Cement Limited – JehlumA
A A A A A A 480,000
A A A A A 504,000
A Dewan Hattar Cement Limited – HattarA
A Dewan Hattar Cement Limited – Dhabeji
A D.G.Khan Cement Limited – D.G.KhanA
A A A 2,010,000
A A 2,110,500
A D.G.Khan Cement Limited – ChakwalA
A A A 2,010,000
A A 2,110,500
A Fauji Cement Company Limited – Fateh JangA
A A A 3,270,000
A A 3,433,500
A Fecto Cement Limited – SangjaniA
A A A A A A 780,000
A A A A A 819,000
A Flying Cement Limited – LillaA
A A A A A A 1,140,000
A GharibWal Cement Limited – JehlumA
A A A 2,010,000
A A A 2,110,500
A Kohat Cement Company Limited – KohatA
A A A 2,550,000
A A A 2,677,500
A Lafarge Pakistan Cement Company Limited – ChakwalA
A Lucky Cement Limited – PezuA A
A Lucky Cement Limited – Indus Highway, KarachiA A
A A 3,600,000
A Maple Leaf Cement Factory Limited – Daudkhel
A A A 3,210,000
A Pioneer Cement Limited – KhushabA
A A A 1,933,571
A A 2,030,250
A Thatta Cement Limited – Thatta
A A Sum
Beginning: ( APCMA, 2011 )
Attock Cement Pakistan Limited
Attock Cement Pakistan Limited ( ACPL ) is a public limited company, listed on the Karachi Stock Exchange since June 2002. Main concern of the company is fabricating and gross revenues of cement. ACPL is portion of the Phara on Group, which in add-on to investing in cement industry has diversified bets in Pakistan chiefly in the oil and gas sector, power and existent estate sector. ( Falcon Cement, 2011-2012 )
ACPL ‘s undertaking was conceived in 1981. The undertaking is a Pak-Saudi venture and has involved an initial capital spending of around Rs.1.5 billion with a foreign exchange constituent ofA around US $ 45 million. ACPL ‘s fabrication works is located in Tehsil Hub, District Lasbela, Baluchistan, at a distance of about 45 kilometres north west of Karachi.
ACPL has attained ISO 9001:2000 and ISO 14000 enfranchisements from Lloyds Register Quality Assurance ( LRQA ) in 2002 and 2006. ACPL is doing significant part to the state ‘s economic system and deposited over Rs.2,646 million ( US $ 31.5 million ) in the signifier ofA Excise Duty, Gross saless Tax, Royalty and Income Tax during the twelvemonth 2008-2009. ( Falcon Cement, 2011-2012 )
The cement is being manufactured and marketed under the “ FALCON ” trade name. It portrays the symbol of the highest criterion and genuinely the market leader.
The company wishes to be a Prime Minister and reputable cement fabricating company dedicated to go industry leader by bring forthing quality merchandises, supplying first-class services, heightening client satisfaction and maximising stockholder ‘s value through professionalism and dedicated squad work.
Corporate Social Responsibility
We define Corporate Social Responsibility ( CSR ) as our committedness to work as spouses with all our stakeholders to efficaciously better the quality of life of the members of our work force, their households and the local communities around our installations. ( Falcon Cement ( Attock Cement Pakistan Ltd. ) , 2011-2012 )
The Company continued to strongly back up the upheaval of the local community, as they are an built-in portion of it. Basic instruction installations, medical intervention and handiness ofA clean imbibing H2O to the multitudes are the few top precedences of the Company. Soon, the company is successfully running a school in Sakran where kids of workers and nearby small towns are acquiring free instruction. Furthermore, with the cooperation of local disposal, we are be aftering to upgrade the bing school in Hub, holding all required installations. Feeling the dire demand for handiness of medical installations for the deserving, the Company on a regular basis arranges free medical cantonments for the vicinity where intervention and medicine is provided free of cost. Additionally, the Company embarked upon and awareness plan on Hepatitis ‘B ‘ & As ; ‘C ‘ for the local occupants of nearby Goths. The Company provides conveyance in exigency and fiscal aid to the downtrodden nearby villagers on a regular footing.
The Company presently operates a Primary degree school that imparts instruction to kids of both works employees and besides those from neighbouring small towns. The Company has besides signed a Memorandum of Understanding with The Citizen Foundation ( TCF ) a non-profit organisation for the building of TCF primary and secondary school located near to mill premises, which is close propinquity to the surrounding small towns. The entire cost of this undertaking would be around Rs. 40 million. This school would consist of 2 units primary part and 2 units secondary part. The construction of the primary school edifice has been completed and the advancement of the undertaking is on path as per the agenda.
The analysis of the Income Statement
Analysis of the Income Statement
Net gross revenues
Cost of gross revenues
Gross net income
Other operating disbursals
Other runing income
Operating net income
Net income before revenue enhancement
Net income after revenue enhancement
Datas from the income statement of the Attock Cement has been taken for three old ages i.e. 2011, 2010 and 2009. A tendency analysis has been conducted to analyse the part of different caputs in the entire gross revenues for the three old ages chosen. The entire gross revenues for the company have increased from 2009 to 2012 overall but from 2010 to 2011, the entire gross revenues of the company have dipped. The cost of gross revenues has increased from 2009 to 2010, but dipped to a great extent from 2009 to 2010. The distribution costs overall have been increasing for the company over all the three old ages. The administrative disbursals nevertheless have decreased which is a good mark and means that the company is runing expeditiously. The operating income for the company has increased and there was a lessening in the finance cost. The net incomes per portion has increased over the three old ages. Overall, there was an addition in the revenue enhancement degrees for the company but from 2009 to 2010 there was a lessening in the revenue enhancement degrees. The net income after revenue enhancement nevertheless decreased from 17 % to 13 % .
Cost OF GOODS SOLD
Natural stuffs consumed
Packing stuffs consumed
Cement packaging and burden charges
Wages, rewards and benefits
Electricity and H2O
Shops and spares consumed
Repairs and care
Vehicle running and care
Traveling and amusement
Printing and letter paper
( Reversal of ) / proviso for slow moving and obsolete
shops, spares and loose tools
Attention deficit disorders: Opening work-in-process
Less: Shutting work-in-process
Cost of goods manufactured
Attention deficit disorders: Opening stock of finished goods
Less: Closing stock of finished goods
Statement of Cost of Goods Sold
Analysis of Cost of Goods Sold
We have taken 3 old ages data from fiscal statements of cost of goods sold of Attock cement to hold an thought about the cost efficiency of the whole system. Year 2010 has proven to be the most hard one in footings of cost as the costs incurred in this twelvemonth was high as compared to the other 2 old ages. Year 2009 information shows decreased costs and hence the overall efficiency of the patterns of an organisation. In twelvemonth 2011 the costs were slightly controlled but they were still high due to predominating economic conditions of the state, political crisis, energy crisis etc. If we look at the constituents of the COGS, we see that highest cost was incurred in instance of fuel and electricity & A ; H2O. This is due to the deficiency of handiness of oil and increasing monetary values of such resources like electricity and oil. This led to increase in overall costs of the procedure. The cost of natural stuffs, packing stuffs has increased over the period of 3 old ages demoing that overall due to rising prices, monetary values of supplies have increased. Wages, rewards have decreased in 2011 as compared to 2010 chiefly due to put away of employees that has led to decrease in labour costs. The disbursal on packaging has increased over period of 3 old ages which shows that now clients are more cognizant of the merchandise attributes that is why organisations has to work more on doing their merchandises more appealing to their clients. The shop and spares consumed is demoing an increasing tendency but has decreased in 2011which indicates that gross revenues have decreased in 2011. Repair & A ; care every bit good as depreciation has decreased over the period of 3 old ages demoing that the machines or equipment the company is utilizing has remained productive and no major dislocations or failures have occurred. The overall inclination of depreciation on rental plus is diminishing. The gap work in procedure is increasing from twelvemonth 2009 to 2011 demoing that there is an overall addition in tendency of volume. The overall costs of goods manufactured have increased but in 2011 it has somewhat decreased as compared to the twelvemonth 2010. The gap finished goods have shown increasing tendency that indicates that there is an addition in gross revenues which shows the efficient operations of the company in bring forthing the merchandises. The costs of goods sold have increased over 3 twelvemonth ‘s period but it has somewhat reduced in twelvemonth 2011 screening somewhat a better cost related activities public presentation.
Bestway Cement Limited
Net Gross saless
Cost of goods sold
Gross Net income
Selling and Distribution Cost
Operating Net income
( 229,490,785.0 )
( 396,632,200.0 )
Other Operating Expense
Workers ‘ Net income Engagement Fund
Net income For The Year Before Taxation
( 419,135,339.0 )
( 230,686,768.0 )
Net income After Tax
Analysis of the Income Statement
Income statements show the Gross saless, the CGS, the Operating Net income and the Net income before and after Tax for the company at the terminal of each twelvemonth for the 3 old ages. As we can see from the tabular array above, there is an increasing tendency for the gross revenues of the company each twelvemonth which makes us ponder and possibly believe that the company is non badly hit by the energy crisis.
On the other manus the Distribution and Administration Costss have besides increased proportionally. It is seen that in the twelvemonth 2011 there is a drastic addition in the Administrative costs. This implies that the company has increased it labour force to manage the administrative affairs in the company.
Finance cost has besides about doubled in the twelvemonth 2011. This clearly tells us that the company has taken heavy loans to either spread out themselves or to ease the current apparatus.
The company incurred the Other Operating Expenses merely in the twelvemonth 2011, despite that the company managed to do net incomes in this financial twelvemonth. Bestway Limited non merely covered the losingss it made in the twelvemonth 2010 but besides showed a net income in the twelvemonth 2011.
Net income before Taxation was negative in twelvemonth 2010, and so it about tripled in the twelvemonth 2011 because in that the company made a net income.
Dewan Cement Limited
Dewan Cement Limited ( the Company / DCL ) once known as Pakland Cement Limited was incorporated in Pakistan as a populace limited Company in March, 1980. Its portions are quoted on the Karachi and Lahore Stock Exchanges since June, 1989. The registered office of the Company is situated at 7th Floor, Block A, Finance and Trade Centre, Shahrahe- Faisal, Karachi.
The chief activity of the Company is industry and sale of cement. The company exports its merchandise to Afghanistan. The entire figure of employees working in Dewan Cement Company ranges to approximately 211 employees. Dewan Cement Ltd. is the 2nd largest manufacturer of Cement in South zone in Pakistan, and its immediate focal point is to be the leader in south zone. Dewan Cement Ltd. manufactures high quality cement utilizing dry procedure suspension pre-heater with precalcination engineering. The rated capacity of Dewan Cement Ltd. is 787,500 dozenss per twelvemonth. Cement Plant is located at Dhabeji. The company is widening its production by duplicating its capacity through put ining another line, which is under building.
There are two mills of Dewan Cement Limited that are located as follows:
Factory – South Unit ( Line-I & A ; II ) ; Deh Dhando, Dhabeji ; District, Malir, Karachi.
Factory – North Unit ( Line-I & A ; II ) ; Kalimpur Near Hattar ; District, Haripur N.W.F.P.
Company is engaged in fabrication and gross revenues of following types of cement merchandise
South Unit ( Line-I & A ; II )
Sulphate Resistant Cement- ( SRC )
Ordinary Portland Cement- ( OPC )
Slag Cement- ( Slag )
North Unit ( Line-I & A ; II )
Ordinary Portland Cement- ( OPC )
The installed and utilised capacities of the mills for cement and cinder merchandise were as follows including Line II for cinder of South Unit that commenced during the twelvemonth, holding 900,000 dozenss capacity. Since it was under use merely for nine months, hence for comparing purposes the consequences have been taken as 720,000 dozenss installed and utilize capacity of cinder and cement has been reflected individually in following pages.
They have two production workss with an accumulated installed capacity of 10,000 dozenss.
1. Hattar Unit: Plant with two production lines is situated in Hattar near Pakistan ‘s capital Islamabad we are bring forthing 3500 dozenss TPD of finest quality Ordinary Portland cement conforms to BS 12/1996 ( 42.5 Grades ) . Besides providing local demand, cement is chiefly being exported to Afghanistan and India. The company plans to export to other states as good. ( AliBaba, 2011 )
2. Karachi Unit of measurement: This works besides has two production lines with entire capacity of 6500 dozenss TPD. In this works we manufacture Ordinary Portland Cement, Sulphate Resisting Cement and Blast Furnace Slag Cement. All exports through sea to states above mentioned is done from this works besides providing local market. Karachi unit helps us to be most competitory as we are most near to port so any other cement mill. ( AliBaba, 2011 )
Analysis of INCOME STATEMENT
The income statement for the 3 old ages is as follows:
Net Employee turnover
Cost of gross revenues
Cost of gross revenues to Gross saless
Gross net income
Gross Net income to Gross saless
Other operating disbursals
Other runing Income
Operating ( loss ) /Profit
Loss/Profit before revenue enhancement
Loss/Profit After Tax
Loss/Profit after revenue enhancement to Gross saless
Loss per portion – Basic and diluted
The net turnover for the twelvemonth was Rs. 4,598,002,000, of this the cost of gross revenues was Rs 4,706,326,000 which was greater than the gross revenues made. The cost of gross revenues was 102.4 % of gross revenues made. Hence the gross net income which is calculated by deducting gross revenues from CGS. This turns out to be a net loss of Rs. 108,324,000. The gross net income to gross revenues is besides a negative value as the gross net income was negative. This value is -2.4 % .
The costs that have been incurred include distribution costs, administrative costs, and other runing disbursal. These are Rs. 94,741,000, Rs. 246,815,000, Rs. 88,325,000, Rs. 281,025,000. This consequences in a net operating loss of Rs. -257,180,000. While finance costs which may include involvement disbursal are Rs. 325,142,000. As a consequence of these disbursals the net operating loss becomes Rs. 582,322,000.
The revenue enhancement discount on this loss is Rs. 83,185,000. This consequences in a loss after revenue enhancement of Rs. 499,137,000. As a consequence of this the loss to gross revenues ratio turns out to be -10.86 % and this besides consequences in a negative loss per portion of -1.39.
The net turnover for the twelvemonth was Rs. 5,682,571,000 of this the cost of gross revenues was Rs 5,249,197,000 which was greater than the gross revenues made. The cost of gross revenues was 92.4 % of gross revenues made. Hence the gross net income which is calculated by deducting gross revenues from CGS. This turns out to be a net net income of Rs. 433,374,000. The gross net income to gross revenues is a positive value as the gross net income was positive. This value is 7.6 % .
The costs that have been incurred include distribution costs, administrative costs, and other runing disbursal and other runing income. These are Rs. 192,475,000, Rs. 157,534,000, Rs. -27,609,000, Rs. 30,945,000. This consequences in a net operating net income of Rs. 86,701,000. While finance costs which may include involvement disbursal are Rs. 463,191,000. As a consequence of these disbursals the net operating loss becomes Rs. 376,490,000.
The revenue enhancement discount on this loss is Rs. 213,282,000. This consequences in a loss after revenue enhancement of Rs. 163,298,000. As a consequence of this the loss to gross revenues ratio turns out to be -2.87 % and this besides consequences in a negative loss per portion of -0.49.
The net turnover for the twelvemonth was Rs. 3,494,784,000 of this the cost of gross revenues was Rs 3,800,662,000 which was greater than the gross revenues made. The cost of gross revenues was 108.8 % of gross revenues made. Hence the gross net income which is calculated by deducting gross revenues from CGS. This turns out to be a net loss of Rs. 305,878,000. The gross net income to gross revenues is besides a negative value as the gross net income was negative. This value is 8.8 % .
The costs that have been incurred include distribution costs, administrative costs, and other runing disbursal and other runing income. These are Rs.120,332,000 Rs.180,579,000, Rs. -4,589,000, Rs. 3,046,000. This consequences in a net operating loss of Rs. 608,332,000. While finance costs which may include involvement disbursal are Rs. 11,153,000. As a consequence of these disbursals the net operating loss becomes Rs. 619,485,000.
The revenue enhancement discount on this loss is Rs. 3,279,000. This consequences in a loss after revenue enhancement of Rs. 622,724,000. As a consequence of this the loss to gross revenues ratio turns out to be -17.82 % and this besides consequences in a negative loss per portion of -2.74.
Analysis OF COST OF GOODS SOLD
The three twelvemonth Cost information is provided below:
Entire volume produced cement ( Ton )
Entire volume produced ( Kg )
Entire Gross saless of Cement
Entire Cost of Cement Sold ( 000 ‘s )
Entire Cost in Rs.
Average Unit Cost per ton
Average Unit Cost per kilogram
Average Unit Price per ton
Average Unit Price per kilogram
In order to obtain the mean unit cost and mean unit monetary value for each twelvemonth the undermentioned stairss have been taken.
The entire volume of cement produced in dozenss
The value of dozenss has been multiplied by 1000 to acquire the value for volume of cements produced in kilo gms.
After that the entire gross revenues have been extracted from the fiscal statements.
The entire cost of cement has been taken from the cost of goods sold statement.
Gross saless divided by volume gives us the gross revenues per unit
Cost divided by volume gives us the cost per unit
The mean unit cost per kg is 2.97, while the mean unit monetary value is 2.88 per kgs. There is an apparent addition in cost compared to the monetary value which means there is loss involved in selling.
The mean unit cost per kg is 4.03, while the mean unit monetary value is 4.36 per kgs. In this instance, the cost compared to the monetary value is low. This is an indicant of a positive profitableness.
The mean unit cost per kg is 4.02, while the mean unit monetary value is 3.77 per kgs. There is a seeable addition in cost compared to the monetary value which means there is loss involved in selling
Baqar Jafri ( 2007 ) , points out that war in Afghanistan and other external factors have created an increased demand in regional constructional activities in the last five old ages. These factors have helped cement export of Pakistan to increase to a nice degree gaining foreign exchange. Hence, it helped the budget shortage in Pakistan to ease up.
In 2007/08 building increased due to the development disbursement in wellness, instruction and substructure sector. As a consequence the budget earmarked a record 520 billion rupees for the public sector. From 2003 to 2007 cement industry of Pakistan had registered an mean growing rate of 20pc. Cement export is expected to make 6.6 million dozenss in fiscal twelvemonth 2008 in the visible radiation of turning regional demand for building.
Harmonizing to Baqir, Orascom Telecom, a taking nomadic telecommunications company with assorted international operations, has been acute to put in the cement industry recognizing its enormous growing potency. This will take the industry to a degree up. On the other manus, there is high export of cement to Middle-Eastern states. There is besides a turning demand for cement in India and Afghanistan.
Housing sector has been looked upon as stimulator of economic growing since there is a big estimated spread of 5.38 million lodging units against one-year add-on of 300,000 units in the state, many revenue enhancement freedom and inducements are provided to promote new building activities in the state. This will excite growing of cement industry.A If negative factors are looked into, we find that hiking in price reduction rate will impair cement sector ‘s growing
Business Recorder ( 2012 ) gives a elaborate mentality of the company till October – 2012. The article references that company has performed enormously during this fiscal twelvemonth as comparisons to the old twelvemonth where it had incurred losingss. During the FY12, the company was able to run 66 per centum of its capacity and the gross revenues besides grew by 33.4 per centum. This public presentation can be attributed to the decrease in the fiscal charges, which went down by 23 per centum ensuing in a net income for the company.
Furthermore, in the FY12 the company was able to accomplish the highest net incomes per portion since 2008, which stood at Rs. 5.29. Despite operating in a really competitory industry Bestway was able to keep its market portion and prolong its place as one of the first exporters of the state.
Mirza Rohail.B ( 2008 ) explains growing of cement industry as justly considered to be a barometer for economic activity. In 1947, Pakistan inherited four cement that had a entire capacity of 0.5 million dozenss. There was some enlargement in this sector around 1956-66 but it could non transport on with this development due to state ‘s economic state of affairs. Ever since Pakistan is importing cement till the mid 90 ‘s. The industry was privatized in 1990 which led to puting up of new workss.
Cement industry is a really of import section of industrial sector and has the chief function in the socio-economic development. Cement fabrication requires high-tech machinery and substructure. Most of the industries are situated in cragged part that is rich in clay, Fe and mineral capacity. Soon cement industry is working in its full capacity since there is a roar in commercial and industrial building within Pakistan.A
The statistics of All Pakistan Cement Manufacturers Association besides showed that cement exports had mounted to over 6 million dozenss in 7 months as compared to 3.62 million dozenss of same period of last financial twelvemonth, picturing an addition of 2.38 million dozenss. Cement exports during January 2009 went up by 30 % to 0.81 million dozenss as compared to 0.623 million dozenss in January 2008.
Mirza rohail has supported his stance for cement industry demoing statistics, that there are 29 cement makers that are playing a critical function in the edifice up the state ‘s economic system andA part towards growing and prosperity. After 2002-3, most of the cement makers expanded their operations, and increased production. This sector has invested aboutA $ 1.5 billion in capacity enlargement over the lastA six old ages.
In international market the operating capacity of cement export in 1991 was 7 million dozenss, which increased to go 18 million dozenss by 2005-06 and by terminal of 2007 rose to above 37 million tones, and presently the production capacityA is 44.07 million metric tons. Cement production capacity in the North is 35.18 million dozenss ( 80 per centum ) while in the South it is merely 8.89 million dozenss ( 20 per centum ) .
The cement industry of Pakistan entered the export markets a few old ages back, and has established its repute as a good quality merchandise. Deregulation after accession of Pakistan to WTO is expected to open the window of competition from cheaper markets. A The recent acquisition of Chakwal Cement by an Egyptian giant, Orascom may be a beginning of such an entry in Pakistan by multinationals.
Harmonizing to Sana Abdullah ( 2012 ) the recent rejoinder of profitableness of Pakistan ‘s cement sector is chiefly due to monetary value taking growing in domestic market, with small alteration due to exports. Indeed, Pakistan ‘s exports dipped by 3.5 % in the first seven months of the current financial twelvemonth ( which will stop on 30 June 2012 ) . Exports were down by 19.5 % year-on-year through sea ports, with a lowering of demand in the Middle East to fault.
IGI Securities is of the sentiment that the chances for increased cement exports to the Middle East will non better in the following two old ages due to a supply oversupply in the Middle Eastern cement markets. We anticipate a diminution in exports of around 5 % to 9Mt in the full 2012 financial twelvemonth.
Additionally, there is a anticipation in Pakistan about the remotion of Saudi Arabia ‘s cement import prohibition. This will profit Pakistan ‘s cement export. However, IGI Securities is of the sentiment that Pakistan will non be able to stop up Saudi Arabia ‘s supply spread. Alternatively it is likely that the adjacent UAE and Turkey, which have an estimated 50Mt/yr of extra cement capacity between them will profit.
While demand picked up in the 4th one-fourth of 2011 in the UAE, this is non believed to be adequate to absorb the Emirates ‘ overcapacity, installed in 2009, which could easy provide the 4-5Mt/yr defecit in Saudi Arabia. In any instance, it is likely that increasing Diesel costs already render Pakistan ‘s cement an unattractive chance for the Saudi Arabian market.
ICR newsroom ( 2012 ) published in its article Pakistan ‘s cement makers and exporters exported 545,125t of cement and earned US $ 46.197m in the first month of current FY12-13, Internet Explorer July 2012, compared to 612,500t at US $ 52.064m in June 2012.
This reflects a autumn of 11 per cent and 11.27 per cent in footings of measure and value in dollar, severally, on a MoM footing, harmonizing to informations released by the authorities ‘s Federal Bureau of Statistics. Furthermore, if compared with July 2011 information of 740,592t cement atA a value of US $ 39.074m, cement exports recorded a autumn of 26.39 per cent in footings of measure but showed a growing of 18.23. The mean export monetary value of cement is somewhat down to US $ 84.75/t in July.
A spokesman for the All-Pakistan Cement Manufacturers ‘ Association ( APCMA ) in a statement said that exports to Afghanistan and India suffered a crisp bead. Exports to Afghanistan were down by 10.37 per cent to 455,897t, while exports to India slipped by 12.77 per cent to 54,233t.
Exports by crunching workss in the southern zone edged down by 17.84 per cent in July 2012 compared with the matching month last twelvemonth. Cement exports by crunching workss located in northern zone declined by 7.02 per cent, “ chiefly because of high cargo cost for export by sea, ” APCMA stated.
Sana Abdullah ( 2011 ) investigated the addition in Diesel, electricity and coal monetary values and how it has severely hit the cement industry, All Pakistan Cement Manufacturers ‘ Association ( APCMA ) said in a statement on Wednesday.
Overall exports fell during the twelvemonth but exports to Afghanistan – the largest finish for local cement – increased by 17 per cent to 3.78 million dozenss from 3.24 million dozenss.
Local gross revenues have besides picked up since March as demand increased in the northern portion of the state following development disbursement by the provincial authorities, said IGI Securities senior research analyst Sana Abdullah.
Cement monetary values could edge up farther to Rs425 to Rs430 per bag by the terminal of June due to lifting input costs, said Abdullah. Monetary values are presently vibrating around Rs395 per bag in the North and Rs370 per bag in the South. Cement monetary values have shot up by about 40 per cent in this fiscal twelvemonth.
Pak Tribune ( 2012 ) explains that the cement industry faced immense losingss in the fiscal twelvemonth 2011. As compared to other building industries the cement industry ‘s ex-factory monetary values have non risen since a decennary. Due to this, most of the companies are sing immense losingss and their systems are going impaired. “ During the last fiscal twelvemonth 2010-2011, 11 cement units suffered loss before revenue enhancement aggregating to Rs 5.681 billion while seven cement units, of which two are located near Karachi in close propinquity to the sea port, earned net income of Rs 5.982 billion ” . ( Pakistan News Service, 2009 ) This clearly shows that those units which were located near the seaport exported their production and hence registered net incomes. On the other manus units which were located far off from the seaport had to incur immense transit costs and decided to sell their production in the local market at low monetary values. As a consequence the units incurred losingss.
Harmonizing to the writer the monetary values of inputs have besides gone up over the old ages. This has increased the overall production cost of cement. Due to a slow rate of building in the economic system the companies are unable to bear down the monetary values from the consumers and are forced to maintain the monetary values low. The writer besides highlighted the devaluation of Pakistani currency and its inauspicious consequence on the economic system. The writer references that there was a devaluation of Rs. 5 in eight old ages get downing from 2000-01 to 2007-08.
( Business Recorder, 2011 ) The intelligence mentioned in this article shed visible radiation on the first half of cement industry in the twelvemonth financial twelvemonth 2012. The industry has shown some impressive Numberss in this half as compared to financial twelvemonth 2011. The net incomes are chiefly attributed to the increased monetary values charged from the consumers. Harmonizing to the article the cement industry reported a net income of Rs 5.2 billion as opposed to a loss of 1.6 billion during the same period in the last financial twelvemonth.
“ ” Net gross revenues of the sector posted a healthy growing of 33 per centum YoY to Rs 70 billion during July-December of financial twelvemonth 2011-2012 as compared to Rs 53 billion in matching period of last financial twelvemonth, ” revealed InvestCap in a research study on cement sector. ”
As per the article DG Khan Cement posted tremendous growing in first half and its net incomes with a leap of 566 per centum YoY increased to Rs 1.28 billion. Bestway Cement, stood 3rd in row with 14 per centum part to sector net incomes, besides saw a turnaround in the net net income compared to losingss in same period of last twelvemonth, followed by Kohat Cement and Attock Cement with 11 per centum and 10 per centum portion in sector ‘s net incomes against minus 4 per centum and 8 per centum last twelvemonth severally.
( Syndicate 4, 2012 ) Harmonizing to this study, there are a entire figure of 20 nine cement companies in Pakistan. Twenty six cement companies are listed on the stock exchange. Out of these listed companies four of them are foreign companies. For the endurance and growing of such an industry in our state there are a few pre necessities. Constitution of a proper substructure and contributing location are the most of import 1s. Most of the cement industries established in our state are located in cragged countries where they have an entree to clay, Fe, and mineral capacity.
Furthermore, the study sheds light on the type of market that exists in Pakistan. “ The cement industry in Pakistan has acquired a form of oligopoly. ” Meaning, there are a few major participants in the market which decide on the pricing scheme of the merchandise. The disadvantage of such a system is that they can make a monopolistic competition in the market and bear down really high monetary values from the consumers. However that has non happened yet in the Pakistani market because of really low demand of cement due to really less or no building. There is besides a bright side to this oligopolistic competition. The companies can mount force per unit area on the authorities and inquire them to give subsidies on the inland transit system.
The study farther references the industry ‘s unhappiness with the revenue enhancements levied on the industry. This consequences in increased cost of production of the merchandise. Besides, the lifting cost of energy is another beginning of concern for the industry.
Harmonizing to the study, the national installed capacity of the cement industry is 44 million dozenss. The capacity use fluctuates from 70 – 75 % . This shows that the capacity of the workss remain unutilized most of the clip.
“ Lime and gypsum are the two major inputs in the fabrication of cement. Pakistan is blessed with mineral wealth. In a study conducted by the Geological Survey of Pakistan, the state possesses big militias of Limestone and the one-year production is estimated at 8,698,573 metric tones ” . ( B. , 2008 ) The writer in this digest highlights the challenges faced by the Pakistan Cement Industry. The most evident challenge faced by this industry is the lifting rising prices and the increasing involvement rates. It is a immense disadvantage for non merely the local investors who wish to spread out their concerns but besides for the foreign investors. Another challenge is the immense revenue enhancements levied on the cement industry. The authorities should take this affair earnestly and cut down the revenue enhancements on this indus