Вы находитесь на странице: 1из 9

CEMENT SECTOR REPORT

RESEARCH & INNOVATION LAB


ROYAL CAPITAL LIMITED

Cement Sector Report

CEMENT SECTOR OF BANGLADESH


Bangladeshs economic growth is reflected by an acceleration in urban development, with the
construction of houses, apartment blocks, road infrastructures and public facilities. The countrys
increasing urbanization has stimulated the building materials sector and has generated considerable
needs for cement.
Since the eighties and early nineties the country experienced the establishment of cement industries in
the private sector. Before that, the country had to import almost 95 per cent of the construction materials
including cement from outside of the country. The country experienced huge demand for construction
materials including the cement at the beginning of the 21st century.
Currently, there are more than 125 companies
incorporated as cement manufacturers in Bangladesh
among these, 45 cement manufacturers are in
operation, including 5 multinationals, along with 63
grinding plants all over the country, created a
domestic market of more than 18 million metric tons
a year. Many of these cement factories are fairly
small as 85 per cent of total market share is held by
top ten manufacturers. The Bangladesh cement
industry enjoys the participation of the top four
global cement producers: Lafarge, Holcim, Cemex
and HeidelbergCement. The cement sector of
Bangladesh has been considered as the 40th largest
market in the world.

Out of total production, 73 per cent cement is


consumed in Dhaka & Chittagong divisions and
the rest in other divisions. The Governmental
projects through ADP consume around 43 per
cent of the total cement production. Around 85
per cent of cement is transported by road and the
remainder by barge. Moreover every month on
an average 15,000-20,000 MT of cement is
being exported by the industry.

REVENUE
PEAK
NOVEMBER APRIL

RESEARCH & INNOVATION LAB (RIL)

FALL
MAY - OCTOBER

KNOW BEFORE YOU INVEST

Page 1

Cement Sector Report


COUNTRY

TOP

10

CEMENT
MANUFAC
-TURERS
HOLD

85% OF
TOTAL
MARKET
SHARE

PER-CAPITA
CONSUMPTION

Bangladesh

105 kg

India

217 kg

Malaysia

570 kg

S. Korea

705 kg

China

1700 kg

Pakistan

265 kg

Sri Lanka

310 kg

World Avg.

Above 500 kg

The total installed capacity of cement production of the industries of the


country is about 33-35 million metric tons per year and the effective capacity is
around 25-27 million metric tons per year Most of the cement manufacturing
plants in Bangladesh operate at 60-65 per cent efficiency. On the other hand the
current annual demand for cement in the country is around 18-20 million
metric tons indicating the country has a surplus cement production capacity.
Though there is over-capacity in the sector, the market demand is almost equal
to the effective capacity during peak season. Peak season is considered during
the winter season while demand for cement goes slow during the rainy seasons.
Revenue peaks from November to April while it falls from May to October in
each calendar year. Local cement manufacturing companies needed to import
almost all the raw materials for cement manufacturing from outside of the
country, including clinker, gypsum, fly ash and iron slag etc. Bangladesh
remained as the largest importer of clinker globally in FY 2014. Due to lower
requirement of clinker, the core material, Portland Composite Cement (PCC),
is widely produced around 95 per cent, substituting Ordinary Portland Cement
(OPC) which is 5 per cent of current availability in the industry.

Though in the short run the cement sectors


capacity is underutilized but it has been
forecasted that the entire capacity might fall short
of supply if the demand increases in line with the
expected big infrastructural public projects of the
country to be implemented in the future.

RESEARCH & INNOVATION LAB (RIL)

KNOW BEFORE YOU INVEST

Page 2

Cement Sector Report

CEMENT SECTOR IN DHAKA STOCK EXCHANGE


Monthly Average Sector Capitalization to Average Market Capitalization:
C E M E N T S E C T O R C A P. T O M A R K E T C A P.
6.33%
6.10%

6.10%
5.96%
5.72%

6.03%

5.97%

5.72%

5.70%
5.33%
4.99%
4.83%

JANU

FEB

MAR

APR

MAY

JUNE

JULY

AUG

SEP

OCT

NOV

DEC

Individual Company's Accumulated Share in Sector Capitalization:


INDIVIDUAL COMPANY'S SHARE IN SECTOR CAPITALIZATION
AVERAGE OF JANUARY'15 - DECEMBER'15
MICEMENT
6.08%

PREMIERCEM
4.16%

ARAMITCEM CONFIDCEM
0.63%
2.21%
HEIDELBCEM
17.11%

MEGHNACEM
1.34%

LAFSURCEML
68.47%

RESEARCH & INNOVATION LAB (RIL)

KNOW BEFORE YOU INVEST

Page 3

Cement Sector Report


Individual Company's Month-wise Share in Sector Capitalization:
STOCK

AVERAGE

JANU

FEB

MAR

APR

MAY

JUNE

JULY

AUG

SEP

OCT

NOV

DEC

ARAMITCEM

0.63%

0.61%

0.59%

0.55%

0.46%

0.49%

0.45%

0.56%

0.62%

0.76%

0.78%

0.79%

0.88%

CONFIDCEM

2.21%

2.28%

2.32%

2.32%

2.09%

2.16%

1.98%

1.95%

2.07%

2.12%

2.30%

2.41%

2.57%

HEIDELBCEM

17.11%

13.68%

14.49%

14.64%

14.73%

15.42%

16.05%

17.88%

17.26%

18.69%

20.18%

21.46%

20.80%

LAFSURCEML

68.47%

72.81%

72.41%

72.38%

72.31%

70.91%

71.14%

69.21%

69.00%

66.46%

63.02%

61.87%

60.17%

MEGHNACEM

1.34%

1.35%

1.37%

1.35%

1.24%

1.26%

1.29%

1.28%

1.24%

1.37%

1.41%

1.38%

1.56%

MICEMENT

6.08%

5.29%

5.14%

5.16%

5.64%

6.24%

5.87%

5.75%

5.85%

6.12%

6.73%

6.63%

8.54%

PREMIERCEM

4.16%

3.99%

3.69%

3.62%

3.52%

3.52%

3.22%

3.36%

3.96%

4.48%

5.58%

5.46%

5.48%

Please note that,


Gray color indicates Market Capitalization above average and no color indicates Market Capitalization below average.

Cement Sector Return:

Cement Sector Risk:

RETURN
17.26%
12.75%
10.88%

RISK
4.08%

7.79%

2.78%

4.50%
0.42% 1.09%

0.88%

1.98%

1.80%
JANU
-0.12%

MAR APR
-3.04%
-4.13%
-6.57%

-2.88%

FEB

-4.95%

MAY JUNE JULY


-0.02%

AUG SEP OCT NOV DEC


-2.57%
-0.47%
-3.78%
-5.73% -6.06%

1.43%
0.79%

0.89%

1.98%

2.40% 2.30% 2.26%


1.53%

1.42%

0.87%

1.01%
0.80%

0.76% 0.74%

0.75%
0.64% 0.51% 0.68%
0.54%
0.67%

-11.17%
-17.65%
-18.97%-18.05%
CEMENT

JANU

FEB

MAR

APR

MAY JUNE JULY AUG

MARKET

RESEARCH & INNOVATION LAB (RIL)

CEMENT

KNOW BEFORE YOU INVEST

SEP

OCT

MARKET

Page 4

NOV

DEC

Cement Sector Report


Cement Sector Return to Risk:
RETURN TO RISK
8.96
7.09
5.51

4.23

3.94
2.00

1.16
-0.07
JANU

FEB
-2.89

-3.65

0.56
MAR
-1.09
-6.67

APR

MAY

JUNE

JULY

AUG

-12.88

-7.90

CEMENT

OCT

NOV
-2.55

-0.91

-0.03
-7.36

SEP

DEC
-2.47

-7.81
-9.09
-8.37

-7.85

MARKET

Cement Sector Liquidity:


LIQUIDITY

ARAMITCEM, 1.21%

MICEMENT, 1.25%
PREMIERCEM, 1.11%

HEIDELBCEM, 0.15% MEGHNACEM,


0.34%
CONFIDCEM, 0.16%

RESEARCH & INNOVATION LAB (RIL)

SECTOR, 0.35%
LAFSURCEML, 0.22%

Cement sector holds 4.83%


share of DSE market
capitalization which has
been in downtrend since
July. Reason behind the
trend is 35.63% fall the price
of LAFSURCEML over the
period holding 68.47% of
sector capitalization. Due to
seasonality of the sector,
most of the stocks performs
better in the first half of
calendar year. Sector return
remains in negative zone
with higher volatility than
that of the market resulting
underperformed relative to
the market. MICEMENT is
the most liquid stock in the
sector whereas liquidity of
PREMIERCEM and
ARAMITCEM is above the
sector average.

KNOW BEFORE YOU INVEST

Page 5

Cement Sector Report

FUNDAMENTAL CHARACTERISTICS
Management and Shareholding:
Mkt.
Category

Co. Com.
Op.

Year
End

ARAMIT CEMENT

1999

31-Dec

CONFIDENCE
CEMENT

1991

HEIDELBERG
CEMENT BD.

LAFARGE SURMA
CEMENT

Stock

Shareholding (%)

Major Products

Management

Dir.

Govt.

Inst.

Fore.

Pub.

Ordinary Portland Cement (OPC) and Portland


Composite Cement (PCC)

42.83

0.00

25.75

0.00

31.42

Chairman S. M. Jamal Ahmed,


MD Rukhmila Zaman

31-Dec

Ordinary Cement and CCL Cement

23.47

0.00

29.10

0.00

47.43

Chairman - Engr. Rezaul Karim,


MD - Ln. Rupam Kishore Barua

1974

31-Dec

Ordinary Portland Cement (OPC) and Portland


Composite Cement (PCC)

60.67

0.00

23.43

0.00

15.90

Chairman - Dr. Albert Scheuer,


MD - Jose Marcelino Ugarte

1997

31-Dec

Clinker, Portland Limestone Cement (PLC)


and Portland Composite Cement (PCC)

64.64

0.00

12.67

0.00

22.69

Chairman - Thomas Gerard Farrell,


CEO - Tarek Samir Ahmed Elba

MEGHNA CEMENT

1996

31-Dec

Ordinary Portland Cement (OPC) and Portland


Composite Cement (PCC)

50.12

0.00

10.42

0.00

39.46

Chairman - Ahmed Akbar Sobhan,


MD - Sayem Sobhan

M.I. CEMENT
FACTORY

2000

30-Jun

Ordinary Portland Cement (OPC) and Portland


Composite Cement (PCC)

67.08

0.00

0.00

0.00

32.92

Chairman - Md. Jahangir Alam,


MD - Al-haj Md. Khabiruddin Molla

PREMIER CEMENT

2004

30-Jun

Ordinary Portland Cement (OPC) and Portland


Composite Cement (PCC)

88.62

0.00

7.74

0.00

3.64

Chairman - Mohammad Mustafa Haider ,


MD - Mohammed Amirul Haque

SGR

ROA

ROE

NPM

ARAMITCEM

-3.66%

0.88%

3.81%

CONFIDCEM

4.44%

5.00%

HEIDELBCEM

-13.80%

11.29%

LAFSURCEML

13.66%

MEGHNACEM

8.61%

2.49%

MICEMENT

4.06%

PREMIERCEM

5.83%

Financial Health:
Stock

EPS (Cu)

EPS (F)

NOCFPS
(A)

0.51

0.37

0.47

-11.8

83.53

86.35

196.08%

339.00

64.41

5.32

3.98

7.00

-2.12

17.12

17.17

46.99%

11.23%

115.46

20.88

14.97

28.92

29.99

26.77

22.09

24.34%

11.41

2.43

1.48

3.23

3.07

31.07

38.26

12.94%

2.69%

36.1

4.48

3.76

5.32

6.48

24.11

6.38%

11.97%

8.44%

38.22

4.54

0.98

4.78

0.81

4.11%

12.20%

5.05%

31.45

3.83

0.81

4.02

3.73

14.45%

NAVPS

EPS

(A & R)

(A & R)

2.44%

15.49

8.37%

6.58%

16.83%
23.21%

RESEARCH & INNOVATION LAB (RIL)

PE
(A)

PE (Cu)

P Cap
(mn)

DE

CUR

101.30

2.00

48.13%

450.00

1,790.20

0.48

66.00%

181.99%

565.00

5,959.00

0.02

64.13%

41.15%

11,613.70

1,641.80

0.13

117.92%

21.54

33.48%

225.00

587.20

3.05

77.00%

18.95

21.12

66.08%

1,485.00

1,233.90

0.82

68.63%

20.13

23.8

52.22%

1,054.50

1,609.60

1.71

41.00%

KNOW BEFORE YOU INVEST

Payout

RS (mn)

Page 6

Cement Sector Report


Dividend History:
Stock

2014

2013

2012

2011

2010

ARAMITCEM

10.00%

10.00%

10.00%

10%B

10%B

CONFIDCEM

25.00%

27.50%

20.00%

20%, 20%B

25%, 15%B

HEIDELBCEM

380.00%

380.00%

50.00%

45%

43%

LAFSURCEML

10.00%

MEGHNACEM

15.00%

15.00%

25.00%

25%

25%

MICEMENT

30.00%

40.00%

35%, 10%B

15%, 35%B

n/a

PREMIERCEM

30.00%

40.00%

n/a

n/a

n/a

Please note that,


LAFSURCEML paid 5% interim dividend on May 31, 2015. MICEMENT and PREMIERCEM paid
25% and 20% dividends respectively on June 30, 2015.

Fundamental Review:
Stock

Fundamental Review

ARAMITCEM

Long history of business, focusing on Chittagong region, one of the top ten cement manufacturers
in Chittagong, exporting, 22% of total production, its "Camel Brand" cement to Tripura, India,
and abating fundamental strength.

CONFIDCEM

First private sector cement manufacturing company in Bangladesh, moderate fundamentals,


especially high NAVPS and low debt equity ratio, with long history of business.

HEIDELBCEM

Strong fundamentals, especially high ROE, NPM and NAVPS, and very low debt equity ratio,
with long history of business, member of HeidelbergCement Group, Germany, reputed brands
Ruby Cement and Scan Cement, and experienced management team.

LAFSURCEML

One of the largest foreign investments in Bangladesh, strong fundamentals, especially high SGR,
ROE and NPM, with long history of business, member of Lafarge Group, and experienced
management team.

MEGHNACEM

Very low NPM indicating the company following cost leadership strategy but highest debt equity
ratio and low ROA indicating abating fundamental strength, reputed brand "King Brand",
member of Bashundhara Group, and experienced management team.

MICEMENT

Pioneer and the largest cement exporter in Bangladesh, consistent growth in EPS and
comparatively high NAVPS, reputed brands "Crown Cement", and experienced management
team.

PREMIERCEM

Consistent growth in NAVPS and NOCFPS but high debt equity ratio and abating EPS,
manufacture European Standard Cement, export to India and Myanmar and experienced
management team.

RESEARCH & INNOVATION LAB (RIL)

KNOW BEFORE YOU INVEST

Page 7

Cement Sector Report


Concluding Remark:
In stiff competition, the companies with a lower production capacity and low level of
affiliation are likely to remain satisfied with the local market. But the companies with
huge production capacity, multinational origin, and internal and external political linkage
are likely to grab big contracts like Padma Bridge, Metro Lane etc.

Acronyms:
SGR: Sustainable Growth Rate

Cu: Current

NOCFPS: Net Operating Cash Flow Per


Share

Co. Com. Op.: Commencement of


Commercial Operation

NPM: Net Profit Margin

Dir.: Directors

RS: Reserve & Surplus

Govt.: Government

DE: Debt-Equity

Inst.: Institutions

A & R: Audited & Restated

Fore.: Foreign

P Cap: Paid-up Capital

Pub.: Public

CUR: Capacity Utilization Rate

Disclaimer
All data and information contained herein are collected from Annual Reports of the listed cement companies, The Financial Express, The Daily Star, The
Daily Bonik Barta and RILs own storage and resources. RIL cannot ensure the accuracy of the data and information except for its own resources. Moreover,
this publication is produced by Research and Innovation Lab at Royal Capital Limited RCL) solely for the information of Clients of RCL. Clients are
expected to make their own investment decisions using any information contained herein. The contained info in the report do not be interpreted as an offer to
sell, or a solicitation of any offer to buy any investment. Projections of potential risk is based on published information but does not guarantee of any actual
risk or return to be materialized.

RESEARCH & INNOVATION LAB (RIL)

KNOW BEFORE YOU INVEST

Page 8

Похожие интересы