My Undergraduate Work On Cement Industry

Department of Economics
Term Paper on : Cement Industry In Bangladesh.
Submitted By:
Md. Mominul Islam
Roll No: 092554
Reg. No: 080696
Department of Economics
Jagannath University, Dhaka.
Date of Submission: 20 April, 2014.

Acknowledgement
The term paper is the outcome of Cement industry in Bangladesh . The secondary data
are generally used in this term paper were collected from different sources of data.
However, it is my great pleasure to convey my deep respect and indebtedness to my
teacher Shamima Sultana, Assistant professor, Department of Economics, for her
cordial guidance, pragmatic suggestions and continuous encouragement and inspirations
of my term paper work, which enabled me to complete my dissertation work successfully.
I am highly indebted to her invaluable advice and intellectual guidance throughout this
term paper. During the study period she was very much available and provided me with
the right directions in a very timely manner.
I would like to offer my heartfelt thanks, gratitude, deep respect and indebtedness to
Tareq Muhammad Shamsul Arefin, Associate professor, Department of Economics for his
thoughtful suggestions and inspirations during preparing my term paper.
Again, I am thankful to my course teacher Assistant Prof. Shamima Sultana for providing
me with the basic idea of my research. Last but not least, I would like to express my
thanks to my parents who inspired and supported me to make my work successfully.
Md. Mominul Islam

Jagannath University, 2014
2
Abstract
The cement industry of Bangladesh is a rapidly developing sector of the economy. Over
the years, the amount of construction projects have followed an increasing trend as the
urban growth rate has boosted all across the country in places like Chittagong, Bogra,
Mongla and others in addition to the expanding capital city, Dhaka.
Currently, domestic production is unable to meet the complete demand for cement.
Approximately 60% of the demand is met by the local cement industry while the rest is
imported. According to the Bangla pedia, per capita consumption of cement in the
country (68 kg) is fairly low compared to India(89 kg), Indonesia (127kg), Malaysia (582
kg) and Thailand (642 kg Cement has not traditionally been a major product for the
country due to low availability of required natural resources to produce it. In addition to
that, inless developed regions cement was not a required raw material for construction of
buildings. Over the years, however, cement emerged as asubstitute to traditional
construction materials and by the mid-1980s, with an increase in hefty infrastructure
projects, accelerated rate of urbanization and increased construction of multistoried
buildings, there was a sharp increasein its demand. One intriguing aspect of this industry
is the reliance on the import of clinker.Except Lafarge Surma Cement Ltd., a
multinational cement manufacturing company, all cement manufacturers go through the
expensive of importing clinker which involves high freight cost, import duties and other
handling charges. Hence, this is a scope for other companies to minimize costs by
producing the raw material locally and increasing their competitive performance.
The price structure of various players in the industry are very close to one another. The
factories which would be using captive power (which is cheaper and more reliable than
grid power) and backed by uninterrupted clinker supply at competitive price, are likely to
be more cost efficient to emerge as the market leader. Currently, the standard price of one
bag of cement produced by the multinational cement companies ranges within BDT 420
to BDT 450 per bag. On the other hand, price of one bag of cement produced by the local
companies‟ ranges within the price bracket of BDT 380 to BDT 400.
Heidelberg, Holcim and Lafarge are Currently the leaders among multinational cement
manufacturers and Shah and Meghna are the leading domestic manufacturers. Shah
cement is the market leader with close to 14.20% of the market share, followed by
Heidelberg with about 9.30% of the market share. During the 2013, many small local
manufacturers like Premier, Seven Circle, Crown, Fresh and King cement increased their
sales drastically riding on their benefits of economies of scale, backward linkage and
aggressive marketing effort.
Local manufacturers seek to seize large market by reaching mass people through
economies of scale while multinationals cater the needs of specific group of customers by
charging high price through superior brand value and quality. Currently, multinational
cement companies are facing intensive competition with local companies. Local
manufacturers have been pursuing more innovative and aggressive business strategy
compared to multi nationals. In addition, another basic trend in cement industry is smaller
companies are shutting down and the bigger companies are becoming bigger.
3
Table of Contents
Serial No Subjects Pa
ge
No
Chapter -01 Introduction 10
1.1 Statement of Bangladesh Cement Industry 10
1.2 Objective of the Study 10
Primary Objective
Secondary Objectives
1.3 Methodology of the Study 12
Type of study
Sources and Methods of Data collection
1.4 Literature Review 12
1.5 Limitations of the Work 14
Chapter- Analysis and Discussion 15

02
2.1 Overview of Global Cement 15
2.2 Historical Background of Cement 15
4
2.3 Outlook of Global Cement industries 17
2.4 Top 75 global cement companies 17
2.5 The top 10 cement companies 2013 20
2.6 Global Cement: Capacity maps 22
Chapter-03 Overview of Bangladesh Cement Industry 28
3.1.0 The cement manufacturing process 29
3.1.1 Name and Description of cement industry in Bangladesh 30
3.1.2 Fuel of Cement industry 35
3.1.3 Raw materials collection of Cement manufacturing 35
3.1.4 Cement Production Line 36
3.1.5 Flow Diagram of the Cement Manufacturing Process 37
3.1.6 Development of Cement industry in Bangladesh 38
3.1.7 Industrial Characteristics 39
3.1.8 Seasonality and Cyclicality of the Industry 39
3.1.9 Cement Industry – Regional in Nature 39
3.2 Cost and pricing Structure 39
3.2.1 Cost Elements 39
3.2.2 Power and fuel costs 40
3.2.3 Raw material costs 40
3.2.4 Transportation cost 41
5
3.2.5 Pricing Structure 41
3.2.6 Product and Technologies 42
3.2.7 Ordinary Portland Cement (OPC) and Portland Composite 42

Cement (PCC)
3.2.8 Technology 42
3.2.9 Efficiency and performance analysis 43
3.3 Performance Indicatiors 44
3.3.1 Market objective 44
3.3.2 Comperative Advanced 45
3.3.3 Demand and Supply 46
3.3.4 Competitive Scenario 47
3.3.5 Situation Analysis 47
3.3.6 Competitiveness Analyzed from Different Purspective 48
Chapter- 04 Major Findings 49
4.1.1 Industry Demand & Production 49
4.1.2 Relation between cement consumption growth rate and GDP 50

growth rate
4.1.3 Major Producers of the Industry 50
4.1.4 Major Consumers of the Industry 51
4.1.5 Numbers of Multinational Cement Companies Run in 52

Bangladesh
6
4.1.6 Local Cement Companies, there Market area and Market Share 52
4.1.7 Supply chain of cement product 55
4.1.8 Marketing Strategies Cement industry 55
4.1.9 Export of Cement : Size of Export is 260 K MT/ Year 56
4.2 List of Cement exporters form Bangladesh 56
4.2.1 Duty Structure of the Industry 57
4.2.2 Steady Growth Margin 58
4.2.3 Dominance by Local Companies 58
4.2.4 Industry Survivors: Large Companies 58
4.2.5 Seasonal demand of the product 59
4.2.6 Weaknesses of cement industry 59
4.2.7 Industry Opportunities & Threats 59
4.2.8 Future outlook of Bangladesh cement industry 60
4.2.9 Finding from Global Cement Industry 61
4.3 Global trends 61
4.3.1 Major Players 62
4.3.2 Top 10 cement producing countries 63
4.3.3 Strong Future Growth of Developing Asian countries 63
4.3.4 Future outlook 63
Chapter- 05 65
5.1 Conclusion 65
5.2 Recommendations 66
7
References 67
List of Tables
Table 1: Global cement companies 1 - 75 ranked by capacity……………………….... 18

Table 2 : Overview of Bangladesh Cement industry……………………………………29
Table 3 : List of Cement Industries in Bangladesh……………………………………...30
Table 4: Fuel of Cement Industry……………………………………………………….35
Table 5: Market seize derivation………………………………………………………..38
Table 6: Seasonality of Cement Industry………………………………………………..39
Table 7: Cost elements and % of cost of sales…………………………………………..40
Table 8 : Cost derivation of Clinker (on an average)……………………………………40
Table 9 :Raw Materials of cement industry……………………………………………..41
Table 10: Portland Composite Cement (PCC)…………………………………………..42
Table 11: Ordinary Portland Cement (OPC)…………………………………………….42
Table 12 : Standardization-Bangladesh is maintaining………………………………….43
Table 13 :Thermal efficiencies of kilns technologies…………………………………………...43
Table 14: Macro economics Performance analysis of cement Industy………………….46
Table 15: Industrial Demand & Production……………………………………………..49
Table 16 : Cement Consumption and GDP Growth rate………………………………..50

Table 17 : Major Producers of the Cement Industry…………………………………….50
Table 18: Major Consumers of the Cement industry …………………………………...52
Table 19: Multinational cement companies and there market share…………………….52
Table 20: Local Cement Companies, there Market area and Market Share…………….52
Table 21 : Current duty structure of raw materials……………………………………...57
Table 22: Industrial opportunities and Threats………………………………….………59
Table 23: Industrial outlook 2014……………………………………………………….61
8
Table 24 : Top 10 cement producing countries in 2011 and 2012 ranked by
production………………………………………………………………………………..63
Table 25 : Economical growth by region (%)…………………………………………. 64
List of Figures
Figure 1 : Map of Chinese Provinces, Municipalities, Autonomous Regions and Special
Administrative Zones. Colour-coded by cement production capacity according to Global
Cement Directory 2013. …………………………………………………………..…..
( 23)
Figure 2: Map of India. States colour-coded by integrated cement production capacity
according to Global Cement Directory 2013. ……………………………………….…
(24)
Figure 3: Map of United States (excl. Alaska and Hawaii). Colour-coded by integrated
cement production capacity according to Global Cement Directory 2013. Hawaii and
Alaska have no integrated cement production capacity ……………………………….
(25)
Figure- 4: Map of Brazilian states. Colour-coded by integrated cement production
capacity according to Global Cement Directory 2013. …………………………….…..
(26)
Figure 5: Colour-coded map of Europe showing integrated cement production capacity
according to Global Cement Directory 2013……………………………………….….
(27)
Figure 6: Cement production line. ……………………………………………………
(36)
Figure 7: Flow Diagram of Cement manufacturing process…………………………..
(37)
Figure 8: Cement consumption per capita……………………………………………..

(51)
Figure 9: Area wish consumption of cement. …………………………………………(54)
Figure 10: Future outlook of Bangladesh Cement Industry. ………………………......

(60)
9
Chapter -01: Introduction
1.1 Statement of Bangladesh Cement Industry
Gradual substitution of traditional building structures or patterns by modern high-rise
ones has pushed up the use of cement. A faster growth in demand for cement has been
observed only since mid-1980s, especially with implementation of large infrastructure
projects, increased pace of urbanization, construction of apartment buildings and
multistoried shopping complexes in urban areas and a shift in the taste of rural people for
modern houses.
Bangladesh cement industry has developed to the early-fifties but its growth in real sense
started only about a decade. The country has been experiencing an upsurge in cement
consumption for the last five years. Government gave permission for establishing cement
industries in Bangladesh in FY1995. Initially the cement industry took place without the
proper analysis of the demand and supply of cement in the country. Within the span of the
two to three years, industry attained expanded capacity of the product with stable growth
rate of consumption.
Cement industry is regional in nature. Cement, being a bulk commodity, is a freight

intensive industry and transporting it over long distances can prove to be uneconomical.
It‟s also seasonal in nature, during Monsoon industry suffers from low demand It is
expected that cement companies will enjoy a good growth of margin over the next 3 years
Cement consumption has steadily been rising.. Because, in next couple of years when
large capacities are expected to come on-stream, pass through of input cost will be easier
and clinker (main raw material of cement) price is expected to remain stable at $53-$58.
There were mainly four dominant players in the cement industry in the year 1998 that
produced their own cement to meet the demand of their customers. These companies were:
Meghna Cement (owned by Bashundhara group),Eastern Cement (currently known as Seven
Horse) ,Chatok Cement Chittagong Cement (taken over by Heidelberg where the local brand
is called Ruby).
10
After a decade, currently 123 companies are listed as cement manufacturers in the country.
Among them 63 have actual production capacity while 32 are in operation. The current
installed capacity of the industry is 20.0 mn MT. This installed capacity has been calculated
under two conditions (a). all factories are in operation (b) production is at its peak season
Though the installed capacity is 20.0 mn MT, currently the acutal capacity is about 13.96 mn
MT due to supply constraints for power and clinkers.
Today many local cement manufacturer companies are exporting cement to India and other
countries in the world. Leading cement manufacturers are now going for expansion. It is
expected that if the ongoing expansion plans complete within FY2014, the total production
capacity of the industry will rise by 75%. Cement industry expects the consumption to rise by
35% (it will be much higher if Government projects come on stream).
1.2 Objective of the Study

I have developed some objectives regarding this term paper. Followings are the
objectives of the study:
Primary Objective:
1. To fulfill the partial requirement of the BSS hon’s in the Department of Economics
at Jagannath University.
2. To gather knowledge about Bangladesh Cement industry.
Secondary Objectives: To attain the broad objective following specific objective were
pursued.
1. To know about the History of the origin Cement industry
2. To learn basic knowledge about the cement industry in the world.
3. To know about types of modern cement
4. Industrial characteristics of Bangladesh cement industry.
5. To inform about number of top ranking and export oriented Bangladeshi cement
industry.
6. To learn Demand- Supply condition of Bangladeshi cement industry
7. To gather knowledge about main raw materials, Cost and price structure of cement
industry
8. To inform about efficiency and performance analysis of Bangladesh cement industry
9. To know about the major producers and consumers of BD cement industry.
10. To know about the supply chain of BD cement industry.
11. to learn about the weakness and opportunity of BD cement industry
12. To know briefly about the over all scenario of global cement industry.
11
1.3 Methodology of the Study:
Type of study
The study is mainly a qualitative research, which involves analyzing of some important
information of cement industry especially of Bangladesh cement industry.
This report has been prepared mainly on the basis of experience gathered through
learning from different journal and article about cement industry, published in different
time. I have also get information from website of different cement industry. Here I have
presented my experience and finding using different tables, which are presented in the
discussion and analytical part of this paper.
Sources and Methods of Data collection:
The Methodology of the study is to collect data, processing the data in a very systemic
form so that it can be possible to predict something about company base analysis. Data is
collected from secondary level. It is true that primary data collection is much more
difficult due to time constraints and the information is sometimes confidential to the
company itself.
The Relevant Information and data for this paper has been collected form secondary
sources. The secondary sources of information are reports, article, websites and different
manuals.
Data collected form secondary sources have been processed manually and qualitative
approach in general and quantitative approach in some cases has been used throughout
the study.
1.4 Literature Review:

There are only few study has been done on the basis of over all scenario of cement
industry in Bangladesh. Among them -Research Report: Cement sector of Bangladesh
(April 05, 2011) by Zebon nahar’s study is mostly touched all of the sector of cement
industry in Bangladesh. Her study is basically mixed with theoretical and analytical
12
based. In the theoretical part she mostly shown the over all scenario of cement industry,
Major consumers and producers of this industry and the opportunity and weakness of this
industry. In the analytical part she has mostly shown the market size of cement industry
in Bangladesh, Cost elements, Market share of major companies both of local and
multinational cement companies, industries demand and production size of the cement
industry in Bangladesh. She end up her study with the following
The cement industry is likely to maintain its current growth momentum and continue
growing at around 20% to 25% in the medium to long term. Government initiatives in the
infrastructure sector and the housing sector are likely to be the main growth drivers.
Our cement consumption per year was only 65kg in FY2009 whereas, in India its 135 kg
and in Pakistan its 130kg. So there is a lot of opportunity to grow in this industry.
If the import duty structure of various cement products, e.g. finished cement, semi-
finished cement and basic raw materials for cement (25%, 12% and 7% respectively)
continues i.e. import duties is on favor of the local manufacturers and the construction
sector remains booming with smooth power supply than nothing to be surprised that
cement industry will be the most evolving industry in the next three to five years.
The importance of the housing sector in cement demand can be gauged from the fact that
it consumes almost 60%-65% of the country's cement. If housing sector growth wanes, it
would impact the growth in consumption of cement, leading to demand supply mismatch.
In January 2004 a study has been done Sponsored by the U.S. Environmental Protection
Agency on Energy Efficiency Improvement Opportunities for Cement Making. In that
study it is shown that as now a days most of the cement industry produce their
commodity on energy based and as day by day the energy crisis is become a great
problem so the opposite substitute need to search for cement production. In that study
they shown several alternation option for energy need in cement industry.
In 2008 Ahmed Intiaz has done a work on Pakistan cement industries perspective in his
study named by : Analysis of Cement industries Financial Eassy. The main purpose of
that study was evaluating the performance of cement industries in Pakistan. And found
many financial performance indicator which are very relevant to our countries cement
industry that are shown in my work.
In literature the use of accounting ratio is common ( International business research 2008;
M. Suyanto 2000-2004) and ( Muhammad Shehzad Moin, 2008). Moreover, accounting
ratio could remove gap size of industries. In this paper financial ratios for measuring
cement industries performance has been shown.
Monitory administration theories offer different indexs for measuring industries

performance, one of them is accounting ratio. It has tried to shown in my work.
13
Besides the work that mention above,many more work on financial performance and on
efficiency has been done around the world. In Bangladesh analysis of financial
performance on Holcim cement has been done in may 2013 by
Md. Faisal Reza. His study helped me to know about the financial
performance of any cement industry running in Bangladesh, and I have also try to
analysis over all scenario of cement industry in Bangladesh in this paper.
1.5 Limitations of the Work:

The report has certain limitations, which must be mentioned for the sake of
understandability and achieving transparency. As most of data were taken from the web
sites, though the cross check was conducted; still the depth of reliability varies as by the
nature of web sites. Most of the data used in this paper are government published data,
so the verification of this data was not possible. Lastly for the limited knowledge of the
human being some error can be possible.
The report has been conducted within a limited time frame. Due to time constraints, the
study has been focused on some descriptive issues of world cement industry and more
specially of Bangladesh cement industry based on secondary information. A macro scope
analysis (aggregate analysis) has been made here for the unavailability of appropriate
data in some cases.
For more accurate analysis, future detail studies are required.
14
Chapter- 02: Analysis and Discussion
2.1 Overview of Global Cement Industry
2.2 Historical Background of Cement

Throughout history, cementing materials have played a vital role. They were used widely
in the ancient world. The Egyptians used calcined gypsum as a cement. The Greeks and
Romans used lime made by heating limestone and added sand to make mortar, with
coarser stones for concrete.
The Romans found that a cement could be made which set under water and this was used
for the construction of harbours. The cement was made by adding crushed volcanic ash to
lime and was later called a "pozzolanic" cement, named after the village of Pozzuoli near
Vesuvius.
In places such as Britain, where volcanic ash was scarce, crushed brick or tile was used
instead. The Romans were therefore probably the first to manipulate the properties of
cementitious materials for specific applications and situations.
Hadrian's Wall, England, a few miles east of Housesteads.
Marcus Vitruvius Pollio, a

Roman architect and
engineer in the 1st century
BC wrote his "Ten books
of Architecture" - a
revealing historical insight
into ancient technology.
Writing about concrete
floors, for example:
"First I shall begin with

the concrete flooring,
15
which is the most important of the polished finishings, observing that great pains and the
utmost precaution must be taken to ensure its durability".
"On this, lay the nucleus, consisting of pounded tile mixed with lime in the proportions of
three parts to one, and forming a layer not less than six digits thick."
And on pozzolana:
"There is also a kind of powder from which natural causes produces astonishing results.
This substance, when mixed with lime and rubble, not only lends strength to buildings of
other kinds, but even when piers are constructed of it in the sea, they set hard under
water."
His "Ten books of Architecture" are a real historical gem bringing together history and
technology. Anyone wishing to follow his instructions might first need to find a thousand
or so slaves to dig, saw, pound and polish...
After the Romans, there was a general loss in building skills in Europe, particularly with
regard to cement. Mortars hardened mainly by carbonation of lime, a slow process. The
use of pozzolana was rediscovered in the late Middle Ages.
The great mediaeval cathedrals, such as Durham, Lincoln and Rochester in England and
Chartres and Rheims in France, were clearly built by highly skilled masons. Despite this,
it would probably be fair to say they did not have the technology to manipulate the
properties of cementitious materials in the way the Romans had done a thousand years
earlier.
The Renaissance and Age of Enlightenment brought new ways of thinking, which for
better or worse, led to the industrial revolution. In eighteenth century Britain, the interests
of industry and empire coincided, with the need to build lighthouses on exposed rocks to
prevent shipping losses. The constant loss of merchant ships and warships drove cement
technology forwards.
Smeaton, building the third Eddystone lighthouse (1759) off the coast of Cornwall in
Southwestern England, found that a mix of lime, clay and crushed slag from iron-making
produced a mortar which hardened under water. Joseph Aspdin took out a patent in 1824
for "Portland Cement," a material he produced by firing finely-ground clay and limestone
until the limestone was calcined. He called it Portland Cement because the concrete made
from it looked like Portland stone, a widely-used building stone in England.
While Aspdin is usually regarded as the inventor of Portland cement, Aspdin's cement
was not produced at a high-enough temperature to be the real forerunner of modern
Portland Cement. Nevertheless, his was a major innovation and subsequent progress
could be viewed as mere development.
A ship carrying barrels of Aspdin's cement sank off the Isle of Sheppey in Kent, England,
and the barrels of set cement, minus the wooden staves, were later incorporated into a
pub in Sheerness and are still there now.
A few years later, in 1845, Isaac Johnson made the first modern Portland Cement by
firing a mixture of chalk and clay at much higher temperatures, similar to those used
today. At these temperatures (1400C-1500C), clinkering occurs and minerals form which
are very reactive and more strongly cementitious.
16
While Johnson used the same materials to make Portland cement as we use now, three
important developments in the manufacturing process lead to modern Portland cement:
- Development of rotary kilns
- Addition of gypsum to control setting
- Use of ball mills to grind clinker and raw materials
Rotary kilns gradually replaced the original vertical shaft kilns used for making lime
from the 1890s. Rotary kilns heat the clinker mainly by radiative heat transfer and this is
more efficient at higher temperatures, enabling higher burning temperatures to be
achieved. Also, because the clinker is constantly moving within the kiln, a fairly uniform
clinkering temperature is achieved in the hottest part of the kiln, the burning zone.
The two other principal technical developments, gypsum addition to control setting and
the use of ball mills to grind the clinker, were also introduced at around the end of the
19th century.
About ninety-nine percent of all cement used today is Portland cement. The name
Portland cement is not a brand name. This name was given to the cement by Joseph
Aspdin of Leeds, England who obtained a patent for his product in 1824. The concrete
made from the cement resembled the color of the natural limestone quarried on the Isle of
Portland in the English Channel. The balance of cement used today consists of masonry
cement, which is fifty percent Portland cement and fifty percent ground lime rock.
The first cement manufactured in the United States was produced in 1871 by David
Saylor of Coplay, Pennsylvania.
It takes approximately 3,400 lbs. of raw materials to make one ton (2,000 lbs.) of
Portland cement. The mixture of materials is finely ground in a raw mill. The resultant
raw mix is burned in a rotary kiln at temperatures around 4482 degrees Celsius to form
clinker. The clinker nodules are then ground with about 3 % gypsum to produce cement
with a fineness typically of less than 90 micrometers.
2.3 Outlook of Global Cement industries

To coincide with the release of the Global Cement Directory 2014, Global Cement
Magazine has taken a closer look at cement companies around the world, comparing
capacities to analyse the development of the global cement market. Through this analysis
we have identified the top 75 global cement companies. We comment on their place in the
cement industry in different world regions and outlooks for the future.
The close relationship between cement consumption and per-capita income means that a
country's cement consumption is an excellent indicator of its growth and progress.
Regional development depends upon several factors, which include demand, raw material
reserves, market access and economic conditions. As such, the global cement industry has
undergone major changes in recent years, particularly since the start of the economic
crisis in 2008. Emerging markets such as India and China now represent approximately
90% of the world-wide cement market. Economically-advanced nations such as Europe
and the Americas account for most of the remainder, despite on-going financial
difficulties.
17
2.4 Top 75 global cement companies
Global Cement Magazine has compiled the top 75 global cement producers, ranked
according to installed production capacity, with data collected from the Global Cement
Directory 2013 and individual company websites (where available). The two sets of data
are presented in separate tables due to the differences between sources; for example,
Italcementi claims a cement production capacity of 68Mt/yr on its website, while
research collected for publication of the Global Cement Directory 2014 states a
production capacity of 80Mt/yr.
Such significant differences can be attributed to variations in counting methods. For the
Top 75 global cement companies of 2013, we have counted Ordinary Portland Cement
(OPC) capacity, not clinker capacity. We have also counted the number of individual
cement plants, not individual kiln lines. The cement production capacity of shared-
ownership plants have been attributed to the majority shareholding company, rather than
individually accounting for each company's share. Our counting methods may differ
significantly from many companies when assessing their own capacities, and may also be
different from that employed in The Top 20 Global Cement Companies of 2012.1 It
should also be noted that several companies have not updated their websites with the
latest information regarding production capacity or plant information for several years.
Language barriers also produced significant challenges and in some cases completely
prevented the collection of production capacity and plant numbers from individual
websites. Finally, due to the current unsettled global economy, many companies have
been rapidly buying and selling new plants and subsidiaries, producing significant
changes in their production capacities and plant numbers over short periods of time.
These alterations take time to be reflected in the current version of the Global Cement
Directory and / or the individual company websites.
Table 1: Global cement companies 1 - 75 ranked by capacity.
Source: The Global Cement Directory 2013 and work conducted towards publication of
the Global Cement Directory 2014
Rank Company/Group Country Capacity No. of
(Mt/yr) plants
1 Anhui Conch China 217 26
2 Lafarge France 205 134
3 Holcim Switzerland 174 117
4 CNBM China 128 80
5 HeidelbergCement Germany 90 100
6 Italcementi Italy 80 60
7 Cemex Mexico 76 55
8 Taiwan Cement Corp Taiwan 64 6
9 China Resources China 59 17
10 Sinoma China 53 4
11 UltraTech India 49 23
12 Taiheiyo Japan 43 11
18
13 Tianrui China 42 11
14 Eurocement Russia 40 30
15 Jidong Development China 37 9
16 Shanshui China 36 21
17 Buzzi Italy 36 32
18 Cimpor Portugal 35 36
19 Votorantim Brazil 35 25
20 Siam Thailand 31 6
21 Jiangsu Jinfeng China 31 7
22 Jaypee India 27 17
23 Vicat France 25 15
24 Yatai Group China 22 6
25 VICEM Vietnam 22 9
26 BBMG Corp China 21 18
27 Dangote Nigeria 20 4
28 Titan Greece 20 13
29 Fars and Khuzestan Cement Co Iran 18 10
30 India Cements Ltd India 15 9
31 Oyak Cement Turkey 15 5
32 Madras Cement Ltd India 14 8
33 JK Cement India 14 8
34 Shree Cement India 14 6
35 Southern Province Cement Saudi 12 3
Arabia
36 Mitsubishi Materials Japan 12 5
37 Sumitomo Osaka Japan 12 4
38 Cementos Argos Colombia 12 15
39 CRH Ireland 12 12
40 Cementir Holding Italy 12 10
41 Dalmia Bharat India 11 4
42 Tehran Cement Co Iran 10 6
43 Mengxi Cement Co Mongolia 10 6
44 Arabian Cement Co Egypt 10 9
45 Ghadir Investment Iran 10 5
46 UBE Industries Japan 10 5
47 InterCement Brazil 9 6
48 TPI Polene Thailand 9 1
49 Cementos Portland Valderrivas Spain 8.7 5
50 Limak Group Turkey 8 9
51 Colacem Italy 8 8
52 FNC Venezuela Venezuela 8 6
53 Çimsa Turkey 8 7
54 Loma Negra Argentina 8 7
55 Ash Grove USA 8 9
56 Lucky Cement Ltd Pakistan 7.5 2
19
57 SECIL Portugal 7.4 7
58 Penna Cement India 7 4
59 Yemen Corporation of Marketing Yemen 6.9 5
and Industry
60 Texas Industries Inc USA 6.9 4
61 PPC South 6.8 9
Africa
62 Cementos Moctezuma SA de CV Mexico 6.7 8
63 Birla Corporation Inc India 6.5 4
64 Bestway Cement Pakistan 5.8 3
65 Asia Cement Corp (ACC) Taiwan 5.8 2
66 Uzqurillishmateriallari Uzbekistan 5.7 5
67 Cementos Progreso Guatamala 5.7 3
68 Eagle Materials USA 5.5 6
69 Sibirskiy Cement Holding Russia 5.3 4
70 Ahlia Cement Co Libya 5.3 4
71 PT Semen Indonesia Indonesia 4.8 3
72 Nuh Çimento Sanayi AŞ Turkey 4.4 1
73 Bank Melli Iran Investment Co Iran 4.3 4
(CIDCO)
74 Qatar National Cement Co Qatar 4.2 4
75 Saudi Cement Co Saudi 4.2 2
Arabia
2.5 The top 10 cement companies 2013

According to data gathered from the Global Cement Directory 2013, the top five cement
companies by installed capacity were Anhui Conch (217Mt/yr), Lafarge (205Mt/yr),
Holcim (174Mt/yr), CNBM (128Mt/yr) and HeidelbergCement (90Mt/yr), all of which
possess capacities in excess of 90Mt/yr. With the exception of Anhui Conch all are multi-
national companies with significant export volumes.
Anhui Conch Cement Co Ltd, the number one global cement producing company of
2013, has a production capacity of 217Mt/yr according to the Global Cement Directory
2013 and 209Mt/yr (at the end of 2012) reported on its website. Both are significant
increases on the 180Mt/yr capacity described in the Top 20 global cement companies of
2012 article. Cement and clinker sales for the first six months of 2013 saw a year-on-year
volume increase of 28.3% to 103Mt.
Lafarge is the second largest global cement company of 2013 by cement production
capacity. The Global Cement Directory 2013 reported a capacity of 205Mt/yr in 2013,
compared with 225Mt/yr for 2012 reported in the Top 20 global cement companies of
2012 and 224Mt/yr claimed on its website. Lafarge reported a productive 2012 with sales
totalling Euro15.8bn (a 3.5% increase on 2011), which included cement sales of 141Mt
(down from 145Mt in 2011).
20
Holcim, the third largest global cement producer of 2013, self-reported a cement
production capacity of 218Mt/yr via its website, compared with 174Mt/yr from the
Global Cement Directory 2013, and 217Mt/yr in the Top 20 global cement companies of
2012. The Swiss cement company experienced disappointing results for 2012, including a
year-on-year reduction in cement sales volumes of 5.0% (down to 32.1Mt) for the first
quarter of 2013 and a reduction of 2.5% (down to 36.5Mt) for the second quarter of 2013.
Particularly poor sales were noted in North America and Africa and the Middle East.
CNBM is the fourth largest global cement producer (128Mt/yr) according to the Global
Cement Directory 2013 and the second largest according to it's website (221Mt/yr). By
comparison, in the Top 20 global cement companies of 2012 CNBM was reported as the
third largest global cement producing company with a cement production capacity of
200Mt/yr
HeidelbergCement is ranked at number five of the global cement producers for 2013
with a production capacity of 90Mt/yr according to research conducted towards
production of the Global Cement Directory 2014 and 122Mt/yr stated by its website
(updated April 2013). The rapidly-evolving nature of HeidelbergCement's business in
recent years makes its production capacity of 122Mt/yr likely. HeidelbergCement's
company profile (updated end of 2012) claims ownership of four plants in the Chinese
provinces of Guangdong, Shaanxi and Liaoning in joint ventures with China Century
Cement and Jidong Development Group.
Italcementi, the sixth largest cement producing company of 2013, has a cement
production capacity of 80Mt/yr according to the Global Cement Directory 2013 and
68Mt/yr quoted from its website (dated end of 2012). In 2012, the Top 20 global cement
companies of 2012 reported a production capacity of 74Mt/yr.
Cemex is the seventh largest global cement producer in 2013 with a cement production
capacity of 76Mt/yr (from the Global Cement Directory 2013). It claims a production
capacity of 95Mt/yr on its website. An excellent 2012 was reported by Cemex to feature a
10% year-on-year increase in operating EBITDA to US$2.6bn in spite of a 2% reduction
in net sales (down to US$15.0bn).
Taiwan Cement Corp is ranked the number eight global cement producer of 2013. Its
production capacity is reported as 64Mt/yr in the Global Cement Directory 2013,
compared with the 71Mt/yr claimed on its website and 70Mt/yr quoted from Top 20
global cement companies of 2012. Cement sales volumes have increased year-on-year
from 29.5Mt in 2009 to 49.0Mt in 2012.
China Resources is ranked number nine on the 2013 global cement producers list, with a
cement production capacity of 59Mt/yr from the Global Cement Directory 2013 and
74Mt/yr from its website (announced in June 2013, inclusive of subsidiaries). In 2012,
the China-based company reported a cement production capacity increase of 5.2Mt/yr
which resulted from the construction of six cement grinding lines.
Sinoma is the number 10 global cement producer for 2013 with a cement production
capacity of 53Mt/yr (from the Global Cement Directory 2013) and a capacity of
100Mt/yr claimed on its website (dated end of 2012). Comparably, the Top 20 global
cement companies of 2012 report claimed a cement production capacity of 87Mt/yr. In
contrast with the other Chinese companies, 2012 was a poor year for Sinoma. In its 2012
21
annual report it announced a 60.5% year-on-year decrease in profit of US$257m
compared to US$651m in 2011.
2.6 Global Cement: Capacity maps
Since the publication of the Global Cement Directory 2006 – 2007, Global Cement has
continued to collect data on cement plants throughout the world, each year adding to and
improving the data. To coincide with the release of the Global Cement Directory 2014,
we take a more detailed look at some of the world's most significant cement-producing
countries and regions.
Within largest and most prolific cement producing nations and regions, there are often
large variations in the distributions of population, terrain, wealth and demand. This
creates differences in cement capacity between the various regions of a country. Such
factors can lead to differences between apparently similar neighbouring states, regions
and countries.
Following on from the publication of a cement 'capacity map' for China in the July -
August 2013 issue of Global Cement Magazine, we turn our attention to other major
cement producers: Brazil, India, the USA and Europe. The original Chinese map is
reproduced for the sake of comparison and completeness.
22
China
Many of the largest cement producers in the world are Chinese. The difficulty with
assessing these producers is that much of the information supplied by the companies
cannot be independently verified. As such, the data regarding cement plant numbers,
locations and production capacities in China is necessarily incomplete.
As reported in China: First in cement (Global Cement Magazine, July - August 2013),
China claimed a total cement production of 2.2Bnt in 2012. For comparison, total global
cement production in 2012 was 3.7Bnt (according to the USGS Mineral Programme
Report 2013), which means that China accounted for approximately 60% of global
cement production. Given that China exported 16.6Mt (0.8% of its claimed production
volume) of cement in 2012, China has an apparent cement consumption rate of
approximately 1650kg/capita/yr, which is significantly higher than the standard of
1000kg/capita/yr for rapidly developing countries.
As such it is difficult to believe in the cement consumption rates and production
capacities that China claims. It seems likely that Chinese cement production volumes and
capacities are over-reported by Chinese authorities and that China also continues to
promote construction projects that lack genuine demand. Examples include the infamous
New South China Mall, Dongguan and Thames Town, Shanghai.
Overcapacity in China is such a major concern that in May 2013 the central government
announced that the resolution of the overcapacity problem in the cement industry
(amongst others) as one of the key economic initiatives for 2013. The National
Development and Reform Commission (NDRC) and the Ministry of Industry and
Information Technology (MIIT) jointly issued the 'Determination to Suppress Unchecked
Expansion of Industries with Severe Excess Capacity' plan, which requires the cement
industry to firmly curb unchecked expansion, prohibits any approval of new capacity
projects and stops any project under construction if a suitable license has not been
obtained.
23
Figure 1 : Map of Chinese Provinces, Municipalities, Autonomous Regions and Special
Administrative Zones. Colour-coded by cement production capacity according to Global
Cement Directory 2013.
Despite being the largest producer of cement in the world, China has large variations in
cement capacity within its borders. There is a significant concentration of capacity in its
coastal south east. This region has a high population due to ease of transport along the
coast, relatively flat terrain and a mild climate.S
India
24
Figure 2: Map of India. States colour-coded by integrated cement production capacity
according to Global Cement Directory 2013.
India has the second-largest cement capacity in the world (298Mt/yr) and it also has the
second-highest population after China. Unlike other countries and regions, India has
historically built its cement capacity away from major population centres. This is likely to
be due to well-established freight rail links between major cities combined with the desire
to separate large industry from population centres and the location of limestone reserves.
This mis-match between population and cement capacity is demonstrated by Andhra
Pradesh, the state with the largest cement capacity. It has a cement capacity of 78.3Mt/yr,
26% of national capacity, but contains few major cities. It has a population of 84 million,
just 7% of India's total. Rajasthan (32.2Mt/yr) and Madhya Pradesh (26.8Mt/yr) provide
other examples of this. The opposite is true in states like Uttar Pradesh, Bihar and West
Bengal, all of which have high population densities. The capital New Delhi is surrounded
by Uttar Pradesh and Haryana, a state that has no integrated cement capacity at all.
The most northern and most easterly states have low cement production capacities. The
nine Indian states with zero integrated capacity are all in these regions, which are
generally mountainous and have lower populations.
USA
25
Figure 3: Map of United States (excl. Alaska and Hawaii). Colour-coded by integrated
cement production capacity according to Global Cement Directory 2013. Hawaii and
Alaska have no integrated cement production capacity .
In the United States, like in other developed nations, population density plays a major
role in the location of cement capacity. The east is more densely populated than the west,
especially the north west, and is where European settlers first arrived. Of particular note
is the Lehigh Valley in Pennsylvania, which was the first major cement producing region
in the US in the late 1800s and early 1900s. Today this legacy remains. Pennsylvania has
the highest cement production capacity in the north east (7.5Mt/yr).
The Great Lakes and the Mississippi River system in the Mid-West region also benefitted
cement production and transport in the east. These systems are still involved in ~25% of
all cement transport in the country. Many Mid-West states have cement production
capacities of 2-4Mt/yr. Missouri is the highest in the Mid-West with ~10.2Mt/yr of
cement capacity.
.
Brazil
26
Figure- 4: Map of Brazilian states. Colour-coded by integrated cement production
capacity according to Global Cement Directory 2013
Brazil's cement capacity lies mainly in coastal states, especially in the south and east.
Indeed, the states of the south east coastal strip have ~86% of cement production on just
36% of the country's area. The predisposition to the south east is a legacy of European
settlement by sea and the once-impenetrable and still sparsely-populated Amazon
Rainforest in the north and west.
In 2013 the state with the highest cement capacity is Minas Gerais, which, while inland,
is well-located to supply Brazil's two largest cities, São Paulo and Rio de Janeiro. It has a
capacity of 19.5Mt/yr, 29% of the national total. Neighbouring Bahia and São Paulo both
have capacities of over 6Mt/yr, both also supplying large stretches of the south east coast.
As in other large nations, Brazil also has areas of very low cement production. Three
states, Acre, Amapá and Roraima (as well as the Distrito Federal) have no plants. Another
10 have capacities lower than 1Mt/yr. The largest of these is Amazonas, which has a
capacity of 0.8Mt/yr to cover an area the size of Mongolia.
Europe
27
Figure 5: Colour-coded map of Europe showing integrated cement production capacity
according to Global Cement Directory 2013
Due to being located in a developed region, most of the cement industries in Europe are
well-established and, as such, have seen static or falling capacity in recent years, even
before the current economic crisis. Population, limestone reserves and country area are
the predominant factors that influence how much cement is made in each country. Many
countries are small and those in the EU are able to trade cement with ease. This means
that the apparent capacity of a given country is unlikely to present a fair view of
production, consumption or trade. For example, the Netherlands, a typical high-income
western European country, has the highest population density in Europe but also the
lowest cement production capacities in western Europe.
In general, ex-USSR and Soviet satellite nations in the Balkans and central southern
Europe have lower cement capacities than countries in the west of Europe, although
many of these have major overcapacity.
The region's two countries with the largest cement capacity are Turkey (82.5Mt/yr) and
Russia (80.1Mt/yr). Both are seeing cement demand expand amid infrastructure and
housing projects. In Europe this makes them anomalous. Turkey is growing particularly
rapidly due to its relatively young population.
Outside of these two, the next largest cement capacities are held by Italy (52.7Mt/yr) and
Spain (49.3Mt/yr). Spanish cement production has fallen to around a third of peak levels
and is predicted to decrease again in 2013. Both Spain and Italy have extreme
overcapacities at present as they wrestle with extremely low demand due to the financial
crisis. Exports to north and west Africa offer some respite for these nations as well as for
Greece, Portugal and, to a certain extent, France.
Aside from Montenegro, which has no integrated cement capacity, Scandinavia and the
Baltic are the regions with the lowest cement capacity. Relatively low population
densities, harsher winters and difficult terrain are key factors.
Chapter 03:
28
Overview of Bangladesh Cement industry
Cement industry of Bangladesh placed 40th largest market in the world. Currently
capacity of the industry is about 20 mn tonnes (MT). Top 13 players are alone controlling
over 78% of the total industry capacity. However, the balance capacity still remains quite
fragmented. Per capita consumption remains poor when compared with the world
average; only 65 kg (FY2009) while our neighboring countries, India and Pakistan, have
per capita consumption of 135kg and 130kg respectively. This underlines tremendous
scope for growth in the Bangladesh cement industry in the long term.
Cement, being a bulk commodity, is a freight intensive industry and transporting it over
long distances can prove to be uneconomical. For that reason, industry is regional in
nature. It‟s also seasonal in nature, during Monsoon industry suffers from low demand.
Four major costs are associated with the production of cement as provided:
The pricing of cement of various players in the industry are very close to one another.
The factories which would be using captive power (which is cheaper and more reliable
than grid power) and backed by uninterrupted clinker supply at competitive price, are
likely to be more cost efficient to emerge as the market leader. Currently, the standard
price of one bag of cement produced by the multinational cement companies ranges
within BDT 370 to BDT 390 per bag. On the other hand, price of one bag of cement
produced by the local companies‟ ranges within the price bracket of BDT 340 to BDT
365.
During the 2010, many small local manufacturers like Premier, Seven Circle, Crown,
Fresh and King cement increased their sales drastically riding on their benefits of
economies of scale, backward linkage and aggressive marketing effort. The common
technology which is widely used in our industry from the year 2003 is Portland
Composite Cement (PCC) which is made following European Standard Methods (ESM).
Earlier, Ordinary Portland Cement (OPC) had been used which was made following the
American Standard Method (ASM). PCC gives equal strength and durability like OPC.
The basic difference between them is in the manufacturing technology. Only 65%-80% of
clinker is required to produce PCC while 95% of clinker is required to produce OPC. So,
worldwide PCC has become popular which requires less clinker.
Currently, Heidelberg, Holcim and Lafarge are the leaders among multinational cement
manufacturers and Shah and Meghna are the leading domestic manufacturers. Shah
cement is the market leader with close to 14.20% of the market share, followed by
Heidelberg with about 9.30% of the market share
Cement consumption has steadiliy been rising. It is expected that cement companies will
enjoy a good growth of margin over the next 3 years. Becasuse, in next couple of years
when large capacities are expected to come on-stream, pass through of input cost will be
easier and clinker (main raw material of cement) price is expected to remain stable at
$53-$58.
Multinational cement companies are facing intensive competition with local companies.
Local manufacturers have been pursuing more innovative and agressive business strategy
compared to multinationals. Local manufacturers seek to seize large market by reaching
mass people through economies of scale while multinationals cater the needs of specific
29
group of customers by charging high price through superior brand value and quality. In
addition, another basic trend in cement industry is smaller companies are shutting down
and the bigger companies are becoming bigger.
Leading cement manufacturers are now going for expansion. It is expected that if the
ongoing expansion plans complete within FY2011, the total production capacity of the
industry will rise by 61%. Cement industry expects the consumption to rise by 25% (it
will be much higher if Government projects come on stream). Though it seems that the
industry will run overcapacity but as mentioned earlier, industry is dependent on only 13
companies‟ production. So it reveals that the cement industry will fall short of supply if
the demand increases in line with the big infrastructural projects of Government as
expected in future and this symbolizes the huge growth potential of our cement industry.
Table 2 : Overview of Bangladesh Cement industry
Overview of Cement Industry

Total Production capacity (mn MT) 20
Industry average utilization rate 70%
Actual capacity excluding obstacles (mn MT) 13.96
Local consumption (mn MT) 13.93
Per capita consumption (FY2010) 84.5 Kg
Total factories registered 123
Factories started operation 63
Currently plants in operation 32
Factories exporting cement to India 8
Size of export in FY2010 (K MT/year) 260
Construction % of GDP 10%
Construction sector growth in FY2010 (according to BBS) 8%
Industry consumption growth in FY2010 32%
Expected industry growth rate in next 5 years 25% / year
Largest 13 cement companies hold (market share) 78%
Source: BCMA & IDLC research
3.1.0 The cement manufacturing process:

The cement manufacturing process consists of 4 basic steps: (BREF 2012)
1) Collecting raw materials
2) Preparation of raw mixture
3) Pyroprocessing (clinkering)
4) Cement manufacturing, grinding and packing of final product
Methods for completing the basic steps of cement manufacturing and the associated
emissions and energy consumption will vary depending on the equipment and processes
used in a particular plant. (BREF 2012; Valderrama, Granados et al. 2012) Various
technological advances have been made in kiln, heating, and cooling technologies over
the past decades, but a cement plant can have a lifetime of around 50 years, meaning that
the technology used at present can vary greatly. (Kellenberger, Althaus et al. 2007) A
30
description of best available techniques and commonly used technologies is provided in
this section.
Collecting of raw materials includes mining and procuring limestone, calcareous marl,
chalk, sand, clay and other materials. The raw mixture is ground in a mill, whose specific
energy consumption varies depending on type. (BREF 2012) Examples of mills include
ball mills, tube mills, and vertical and horizontal roller mills.
Solid fuels must also be ground and prepared for kiln feeding. In Europe, the most
common fossil fuels used in cement manufacturing are petcoke and coal, but waste fuels
are also frequently used. During pyro processing, or clinkering, the raw meal is fed into a
rotary kiln. There are six types of kiln technologies used in Europe today: dry process
kilns with precalcination and preheating (PHPC), dry process kilns with preheating (PH),
dry long process kilns (DL), semi dry kilns, semi wet kilns, and wet process kilns. In a
dry kiln, raw meal is fed into the kiln as a fine, dry dust. Preheating is the process by
which exhaust gas warms the raw meal before it enters the kiln and precalcination is a
process where secondary fuel burning occurs in a special combustion chamber between
the preheater and the rotary kiln. After precalcination,
The raw meal is approximately 80% calcinated. This is the most efficient system because
preheating and precalcination make use of waste heat from the exhaust to complete
partially complete the chemical reactions necessary to make clinker. 5-6 cyclones are
ideal for optimal heat exchange (BREF 2012). The standard for modern plants is a
suspension preheater consisting of towered cyclones through which hot exhaust gas and
raw material are fed (Oss and Padovani 2002). The process heat constitutes about 80% of
the energy required in the manufacture process (Capros, Mantzos et al. 2008). The Table
2 shows the thermal energy requirements of the different kiln types, according to the
European Commission’s Best Available Techniques for the cement and lime industry and
the IEA.
3.1.1 Name and Description of cement industry in Bangladesh
Title Ahad Cement Factory Limited

Description Cement Manufacturers company in bangladesh
Title Ahad Cement Factory Ltd.

Title Al-Haj Mostafa Hakim Cement Industries Ltd.

Title Alam & Co. (Pvt.) Ltd.

Cement Manufacturers company in bangladesh
Desciption
Title Aramit Cement Ltd.
31
Basundhara Cement Trading Co. Ltd. (King Bra

Title
Cement) (Head Office)
Basundhara Cement Trading Co. Ltd. (King Bra

Title
Cement) (Sales Office)
Title Bengal Tiger Cement Inds. Ltd.

Title Cemex Cement BD. Ltd

Title Confidence Cement Limited

Crown Cement
Title
Title Dansun General Trading

Description for transport information,booking etc
Title Eastern Cement Industries Ltd.

Title Emech Corporation Ltd.

Title Emirates Cement Bangladesh Ltd..

Title Estern Cement Industries Ltd.

Title G. M. Steel Agency

Title GemCon Cement Ltd.

itle Holcim (Bangladesh) Ltd.
Title Homaloy Cement
32
Title Karim Cement Ltd.

We provide services in airport, seaport and landports, custom clear
Description
logistic services
Title Khan Enterprise

Title Khan Sons (Pvt.) Ltd.

itle Lafarge Surma Cement Ltd (LSC)
Title Lafarge Surma Cement Ltd.

Title Levatus (Bangladesh) Ltd.

Title M. I. Cement Factory Ltd.

Title M.I. Cement Factory Ltd.

Title Madina Cement Industries Ltd.
Title Madina Trading Corporation (Pvt.) Ltd.

Description Cement Clinker Manufacturers & Distributors company in banglad
Title Magna Group

Title Meghna Cement Mills Ltd.

Title Meghna Cement Mills Ltd. (Corporate Office)

Title Mir Cement

Title Mirpur Trading Corporation
Title Modern Cement Limited

Title MTC Cement Industries Ltd.

33
Title Musky Enterprise Ltd.
Title Nitol Cement Iindustries Ltd.

Title Nitol Cement Industries Ltd.

Title Ok Cement
Title Olymipic Cement

Title Olympic Cement Ltd.

Description Cement Distributor in bangladesh
Title Optimum Trading & Engg. Ltd.
Export, import, indenting, C & F, Custom clearing, freight forwardi
Description
service, international freight forward
Title Pacific Cement Industries (BD) Ltd.

Title R & A Traders

Description Die Casting house
Title Rabbani Trading Corporation

Description Cement Clinker Manufacturers & Distributors company in banglad
Title Rainbow Associates Limited

Description Cement Distributor in banglades
Title Royal Cement Ltd.
Title Russel Group of Companies
Cement, Trading, C&F, clearing & forwarding, transport, carrying,
Description
clearing
Title S. Co. Cement Ltd.

Title Scancem Bangladesh Ltd.

Title Sena Kalyan Sangstha (SKS)
Title Seven Circle Bangladesh Ltd.

34
Title Seven Star Supplier
Title Shah Ali Cement Traders

Description Iron, Pig Iron & Steel Products shop
Title Shah Cement Industries Ltd.
Title Shuvro Group Of Companies

Mohammad Nafizullah
Distributor of Scan, Lafarge, Cemex & Anwar Cement.Distributor o
Description
Steel Ltd.
itle Siam Bangla Industries Ltd.
Title Siambangla Industries Ltd.

Title Sino Bangla Industries Ltd.
Title Snowcem (Bangladesh) Ltd.

Title Sonali Traders

Title Taiheiyo Cement

itle The Cement Joint
Description Cement Distributor
Title The Cement Joint Shuvro Enterprise

Title The DhakaTarding Corp.

Title The Siam Cement Co. Ltd.

Title Unique Cement Industries Ltd.

Table 3 : List of Cement Industries in Bangladesh
35
3.1.2 Fuel of Cement industry:
There are mainly three categories fuel are used in modern industry that have again many
categories. Three categories are fossil fuel category, fossil fuel wastes categories and
biomass categories each categories have again many sub categories that are given below
Table 4: Fuel of Cement Industry

Fossil fuel Fossil fuel wastes Biomass
Coal + anthracite + waste Waste oil Dried sewage sludge
coal
Petcoke Tires Wood, non-impregnated
saw dust paper, carton
Heavy fuel Plastics Paper, carton
Diesel fuel Solvents Animal meal
Natural gas Impregnated saw dust Animal bone meal
Shale Mixed industrial waste Animal fat
Lignite Other fossil based wastes Agricultureal, organic,
diaper waste, charcoal
Other biomass
Form above categories fossil fuel categories fuel are mainly used in many modern cement
industry. Other two categories are also used in many cement industry around the world.
3.1.3 Raw materials collection of Cement manufacturing :

The most common raw rock types used in cement production are: Limestone ( Supplies
the bulk of the lime), Clay, marl or shale( supplies the bulk of the silica, alumina and
ferric oxide), Other supplementary materials such as sand, pulverised fuel ash ( PFA), or
ironstone to achieve the desired bulk comositon.
Quarry management is an art. Most quarries will probably have "good material" from
which cement can easily be made. They may also have some material that is not as good;
this might be harder to grind,
or be of less convenient
composition.
Limestone blocks being taken
away for crushing.
(Picture courtesy Castle
Cement.)
If the 'good stuff' is all used up
first, it may be difficult to make
cement out of what is left.
36
Careful selection on a day-to-day basis is needed to make the best use of all the materials
available.
Raw materials are extracted from the quarry, then crushed and ground as necessary to
provide a fine material for blending. Most of the material is usually ground finer than 90
microns - the fineness is often expressed in terms of the percentage retained on a 90
micron sieve.
Once the the raw materials are ground fine enough, they are blended in the proportions
required to produce clinker of the desired composition.
The blended raw materials are stored in a silo before being fed into the kiln. The silo
stores several days' supply of material to provide a buffer against any glitches in the
supply of raw material from the quarry.
Technically, a cement producer can have almost complete control over clinker
composition by blending raw materials of different compositions to produce the desired
result. In practice, however, clinker composition is largely determined by the
compositions of the locally-available raw materials which make up the bulk of the raw
meal.
Supplementary materials are used to adjust the composition of the raw meal but cost and
availability are likely to determine the extent to which they are used. Transport costs in
particular become significant in view of the large quantities of materials used in making
cement.
3.1.4 Cement Production Line
Figure 6: Cement production line
Cement production line consists of raw material grinding, blending, pre-calcining, clinker
burning and cement grinding.
37
Cement production line consists of raw material grinding, blending, pre-calcining, clinker
burning and cement grinding.
The equipment we use in this whole production line includes vibrating feeder, jaw
crusher, impact crusher, cement ball mill, lifer, preheating system, cement rotary kiln and
packing machine and so on. All the necessary equipment in this line can be provided by
our factory. We have cement production line experts to design specific solutions for your
preferences.
3.1.5 Flow Diagram of the Cement Manufacturing Process
Figure 7: Flow Diagram of Cement manufacturing process
Cement making plant is used in cement raw materials crushing plant.

Limestone crushing: limestone is the main raw material for cement making, but since
natural limestone is usually big, we use cement limestone crusher to crush them into
small particles.
Bauxite crushing: bauxite is the additive. For making cement raw materials, bauxite is
crushed by cement equipment into powder. Then bauxite particles and limestone particles
together are ground into raw powder by raw mill.
Coal crushing: coal powder is used to be processed into cement clinker. Raw coal is
crushed by cement plant then ground by cement coal mill.
38
Gypsum crushing: gypsum powder made by gypsum crusher and gypsum mill is put into
cement clinker together with coal powder, and then the cement raw material enters into
the cement mill for fine grinding.
3.1.6 Development of Cement industry in Bangladesh:
Development of cement industry in Bangladesh dates back to the early-fifties but its
growth in real sense started only about a decade.The country has been experiencing an
upsurge in cement consumption for the last five years.
Government gave permission for establishing cement industries in Bangladesh in
FY1995. Initially the cement industry took place without the proper analysis of the
demand and supply of cement in the country. Within the span of the two to three years,
industry attained expanded capacity of the product with stable growth rate of
consumption.
There were mainly four dominant players in the cement industry in the year 1998 that
produced their own cement to meet the demand of their customers. These companies
were:
 Meghna Cement (owned by Bashundhara group)
 Eastern Cement (currently known as Seven Horse)
 Chatok Cement
 Chittagong Cement (taken over by Heidelberg where the local brand is called Ruby)
After a decade, currently 123 companies are listed as cement manufacturers in the
country. Among them 63 have actual production capacity while 32 are in operation. The
current installed capacity of the industry is 20.0 mn MT. This installed capacity has been
calculated under two conditions below:
1. all factories are in operation
2. production is at its peak season
Though the installed capacity is 20.0 mn MT, currently the acutal capacity is about 13.96
mn MT due to supply constraints for power and clinkers.
Table 5: Market seize derivation
Market size derivation

Total demand (mn MT) 13.93
Standard Price per beg (BDT) 350
Total Market size (BDT mn) 97,510
Total Market size (USD bn) 1.35
Source: BCMA & IDLC research
39
3.1.7 Industrial Characteristics
3.1.8 Seasonality and Cyclicality of the Industry
Table 6: Seasonality of Cement Industry

Peak Season January to April/ May
and October to December
Dull/off Season (depends on June to September
monsoon)
Bangladesh cement industry is known for its seasonality which can be as high as 50%.
Cement demand declines during the monsoons due to a slowdown in construction
activities. On the other hand, though the yearly capacity of the industry is saturated with
overcapacity, market demand gets matched or cross the effective capacity during the first
5 to 6 months of the year.
In addition, the cement industry, like most capital-intensive commodity industries, is
cyclical in nature with respect to supply. Given the high gestation period of 24-30
months, there is a time lag between capacity build-up and cement demand. Cement
demand is closely linked to the growth of the construction sector. Hence, when the
construction sector is strong, demand increases. As a result, the profitability rises, leading
to capacity additions by existing players and the entry of new players. However, since it
takes 2 -2.5 years to build a cement plant, it is likely that before completion, demand
could decrease or stagnate, or the capacity additions could exceed demand. This can lead
to a fall in cement prices, and the industry could face a downturn, leading to reducing
operating rates or shutting down capacities.
3.1.9 Cement Industry – Regional in Nature

Cement is a high-volume, low-value commodity. Transporting over long distances adds
to the cost, resulting in lower margins to the players. This makes cement a regional
commodity where lower distribution cost makes it remunerative to producers. Cement
consumption varies region wise because the demand-supply balance, per capita income
and level of industrial development differ in each region. In our country Dhaka,
Chittagong and Mongla account for 91% of total consumption.
3.2 COST AND PRICING STRUCTURE

3.2.1 Cost Elements
40
There are a number of cost elements which are taken into consideration for price fixations
of cement bags. Four major costs are associated with the production of cement as
provided:
1. Power and fuel costs
2. Raw material costs
3. Transportation costs
4. Other expenses
Table 7: Cost elements and % of cost of sales

Cost elements % of cost of sales
1) Power and fuel costs 10%
2) Raw material costs 75%
3)Transportation costs 5%
4)Other expenses 10%
Source: IDLC Research
3.2.2 Power and fuel costs

Cement industry is power-intensive with power and fuel costs constituting approximately
7%-10% of the cost of sale of cement, and hence has a major impact on the operating
expenditure of the manufacturers. 30 KW to 35 KW electricity is needed for producing
per MT cement. Though a large portion of the power requirement is met through national
grid, increasingly large companies are opting for captive power plants to reduce costs and
to have continuous power supply. Currently, 17-18 cement manufacturers got captive
power plants.
3.2.3 Raw material costs

The second major component in the production of cement is raw material costs. Main raw
material of production is clinker which accounts 70-75% of the COGS.
Bangladesh does not have its own supply of limestone and cannot produce clinkers
domestically. Except Lafarge, all other cement manufacturers of Bangladesh import
clinkers. But currently, even Lafarge is also dependent on imported clinker due to the
unavilability of Limestone. About 10-15 million tonnes of clinker is imported annually
from Thailand, Indonesia, Malaysia,China,Philippines and also in small quantity from
India by railway. The price of clinker increased to $73 a tonne in 2009 from $55-63 a
tonne in 2008. But at the end of 2009, the price began to decline, lowest price was $42
per tonne.
At present, standard price of clinker in international market is $52 to $58 per tonne. As
clinker makes about 60%-70% by monetary value of the total raw material of cement, the
reduction in the price will certainly help the cement producers to get cost advantage.
Table 8 : Cost derivation of Clinker (on an average)
CNF (cost & freight) cost in CTG $ 53.00

Vat on landing at CTG BDT 350 or $5 /ton
41
Total cost of Clinker (landing at CTG) $ 58.00
Vat on landing at Dhaka BDT 840 or $12 /ton
Total cost of Clinker (landing at Dhaka) $ 65.00
Apart from clinker, other raw materials used by the cement industry are fly ash, ironslag
and gypsum.
3.2.4 Transportation cost

The weight/ price ratio of cement effects transportation cost significantly. Location of a
cement plant and the cost to transport the cement to its distribution terminals, determines
the plant‟s competitive position and price it may charge.
Although in a minimal percentage but rising loading restriction imposed on vehicles
crossing over the Jamuna Bridge and priority movement of vehicles carrying food grain
are also causing setbacks for the industry by increasing transportation cost.
Other expenses
Other expenses include employee costs, administration expenses, others. These account
for 5-10% of the cost of sales.
3.2.5 Pricing Structure

The pricing of cement of various players in the industry are very close to one another.
Due to the presence of homogeneous products in the market, price war is a sensitive issue
in this industry which exists from time to time in the cement market. Cement prices have
been on an upward trajectory since 2007 in line with steady increase in clinker costs.
However, the large capacity expansions are expected to weigh down on price realizations
by cement companies due to increasing availability of product.
Moreover, cement prices, like all commodity prices, are influenced by demand-supply
dynamics. Seasonal factors like weak demand during monsoon in most areas also put
pressure on prices. As the freight cost accounts for a substantial proportion of sales price,
the ruling market price of cement becomes different in different regions.
Currently, the standard price of one bag of cement produced by the multinational cement
companies ranges within BDT 370 to BDT 390 per bag. On the other hand, price of one
bag of cement produced by the local companies‟ ranges within the price bracket of BDT
340 to BDT 365.
Additional capacity utilization of the existing units as well as commissioning of new
producing units is likely to bring down the sales price, unless there is an equivalent rise in
demand. But if the demand does not rise proportionately to absorb the additional supply,
the units would have to lower price to induce more sale to maintain the required level of
revenue income. The quality of cement, brand image, export potential, price of cement in
international market, anti- dumping position of cement manufacturer, future tariff policy
etc. will have an impact on price of cement in future.
The factories which would be using captive power, which is cheaper and more reliable
than grid power and backed by uninterrupted clinker supply at competitive price are
likely to be more cost efficient to emerge as the market leader.
42
Hence, average price of cement is expected to increase by BDT 5.0 - BDT 10.0 per bag
over the next 3 years. Price may not increase in line with increasing demand as the cost of
sales may dip due to stable clinker price and increasing supply of product.
Table 9 :Raw Materials of cement industry

Key raw material Clinker
Additives Gypsum and Fly ash
Major Exporters of Clinker Thailand, Indonesia, Malaysia,
China, Philippines and India
3.2.6 PRODUCT AND TECHNOLOGY

3.2.7 Ordinary Portland Cement (OPC) and Portland Composite Cement (PCC)
Till 2002, only one type of cement was available in Bangladesh was Ordinary Portland
Cement (OPC) which is made following the American Standard Method (ASM). From
the year 2003, various types of cements became available in Bangladesh which helped
the cement industry to provide differentiated and improved products to the customers.
The cement which is widely used from the year 2003 is the Portland Composite Cement
(PCC) which is made following European Standard Methods (ESM). Holcim (Black
Cement) was the first company to launch this type of cement in the market. Currently
ratio of production of PPC and OCC is 95:5.
PCC gives equal strength and durability like OPC. The basic difference between them is
in the manufacturing technology. Only 65%-80% of clinker is required to produce PCC
while 95% of clinker is required to produce OPC. So, worldwide PCC has become
popular which requires less clinker.
Table 10: Portland Composite Cement (PCC)

Ingredients used in PCC Ratio
Clinker 65-80%
Slag 21-35%
Fly Ash 15-23%
Limestone 13-18%
Gypsum 0-5%
Table 11: Ordinary Portland Cement (OPC)

Ingredients used in OPC Ratio
Clinker 95-100%
Gypsum 0-5%
Source: www.cemweek.com
3.2.8 Technology
The manufacture of cement is a two-phase process. Firstly, Clinker is produced. Most
common methodology of producing clinker is to mix up calcareous minerals such as
chalk, limestone containing silica and alumina and heat upto 1450 degree C. After
cooling it, clinker is formed.
43
Secondly, the clinker is ground with calcium sulphates and with industrial processes
wastes such as blast furnace slag, limestone and fly ash to produce Portland cement.
Two basic types of clinker production processes exist, depending on the way the raw
materials are prepared before entering the kiln system:
Wet method (use in Bangladesh)
Dry method
In the wet method, water is added to form wet thick slurry and dry process is based on
drying the bulk materials to form a dry powdered meal. The choice of process depends on
moisture content of the available raw material. When wet raw materials (moisture content
over 20%) are available, the wet process can be preferred. However, in Europe, today‟s
new cement plants are all based on the dry process as the wet process requires
approximately 56% to 66% more energy. For dry processes, current state-of-the-art
technologies are kiln systems with multistage cyclone preheaters and precalciners.
Each step in manufacture of portland cement is checked by frequent chemical and

physical tests in plant laboratories. The finished product is also analyzed and tested to
ensure that it complies with all specifications.
Table 12 : Standardization-Bangladesh is maintaining

Standardization BSTI (Bangladesh Standardization
Authority) has been adopted the European
Norms and titled as BDS EN 197-1:2003
Main constituents a) Clinker
b) Slag
c) Fly ash
d) limestone
e) Gypsum
Source: www.cembureau.be
While clinker is the main component in all types of cements, the kind and the amount of
the other constituents determine the type of cement. For example, Portland cement
consists of 95% clinker, whereas Portland composite cement contains of only 65%
clinker. All cement types also contain up to 5% of calcium sulphates. In our country
recently, the availability of PCC is 95% against 5% of OPC.
3.2.9 Efficiency and performance analysis:
Table 13 :Thermal efficiencies of kilns technologies:

Process Specific thermal Process Specific thermal
energy (MJ/ton energy (MJ/ton
clinker) (BREF clinker)
2012) (IEAWBCSD
2009
Dry process, 3000 - <4000 Dry process kilns with 3620
multistage preheating and
(3-6 stages) cyclone precalcining
44
preheater and
precalcining kilns
Dry process kilns with 3100 - 4200 Dry process kilns with 3710
cyclone preheaters preheating
Dry process long kilns Up to 5000 Dry process long kilns 3740
Semi-dry/semi-wet 3300 - 5400 Semi-dry/semi-wet 3950
process process
Wet process long kilns 5000 - 6400 Wet process long kilns 5070
The semi-dry, semi-wet, and wet processes are older technologies, so a plant will switch
to a dry process during an upgrade or an expansion. Wet technologies are sometimes
necessary if the raw materials available in the area have a high moisture content. This is
the case for a few producers in Belgium and Denmark. In the wet process, raw materials
are ground with water to form a pumpable slurry. In the semi-dry process, this wet slurry
is dewatered to form filter cakes which are extruded into pellets, then fed into a preheater
or directly in to the rotary kiln. In the semi dry process, the dry meal is palletized with
water and fed into a grate preheater. (BREF 2012)
After raw meal is pyro-processed, the clinker must be cooled to ensure proper hydraulic
properties. By blowing air over the clinker, heat can be transferred to the air which will
be used for combustion in the main rotary kiln and precalciner. The two types of coolers
are rotary and grate coolers, the most thermally efficient being the third generation grate
coolers which emerged during the 2000s. (BREF 2012; Valderrama, Granados et al.
2012)
Once clinker has been produced and cooled, it is then ground with additives containing
calcium sulfate, usually gypsum (CaSO4·H2O). (Oss and Padovani 2002) The resulting
product is cement.
3.3 Performance Indicatiors :

For macro-economic sector research, the Analyst is expected to understand the relation
and impact of each of the following economic indicators on the corresponding sector.
Macroeconomic Performance Indicators | * Production of cement reflects strong positive

correlation with the allocation and implementation of ADP of that particular fiscal. *
Remittance Flow: Signals the liquidity condition of the household individuals who
attribute a significant portion of the total cement consumption. Household development
directly relates to the remittance inflows especially at the rural and suburban areas. *
Exchange rate: Most of the raw materials are imported; any significant change would
affect the cost of goods sold and, thus, the profitability. * Inflation: Would limit the
purchasing power of the consumers and thus thwart housing developments. * Clinker
Price: Any volatility of clinker.
45
3.3.1 Market objective:
First marketing objective is to consistently market different types of high quality
cement products. To provide consistently products in the market, it isnecessary to make sure that
some stock of the product is always available in the warehouses so that in case of any
big market order, the order can be fulfilled without any problem. This consistency can
only be achieved when the production process is totally interrupted and in case of any
problem, the backup is always available. The raw material for the production of
cement should always be available; there must not be interruption at any time. This objective
can become an opportunity when there is a sudden increase in the demand of cement in the
local market
This objective can be converted in to threat if the transportation problem is not solved and
the company hasn’t enough trucks to deliver their products to the location where there is need
of a heavy demand. The oil prices will also play an important role in the transportation
charges. S e c o n d o b j e c t i v e i s t o c o m p e t e t h e m a r k e t w i t h q u a l i t y
p r o d u c t s a n d efficient process. To provide the quality products, it is necessary to use
the best and the latest technologies in the production process of the product. The
process can be made efficient by optimum usage of resources available and by
decreasing the unnecessary expenditures which lead to the higher production cost of
the product.When the product is of high quality and is made through efficient
process then it will be of low price with good quality. This will be the main strength
of product if we can provide the high quality product with comparatively low
price. This objective will convert the weakness of Cemex of high productioncost of
products into strength, when the process will be efficient and use that technology which is
less expensive and having a good quality. These both objectives are consistent with the
organization’s goal andmission.
3.3.2 Comperative Advanced :

Proximity and access to large reserves of high quality limestone, We have access to large
reserves of limestone for both our grey and white cement operations, which we believe
are sufficient to sustain our operations well into the future. Based on independent
geological surveys of different mines during 2008 to 2010, we believe that our limestone
reserves are sufficient to support our current and planned capacity for approximately
40years for both grey and white cement. (Put in risk - assuming we are able torenew our
existing leases upon their expiry) In addition to allowing us to produce white cement,
which requires high quality limestone, it also provides us with a cost advantage, as we are
not required to purchase sweeteners to improve the quality of limestone. Further,
manufacturing plants are inclose proximity to our limestone reserves, resulting in lower
transportation costs. Finally, mines that supply our white cement plant at Bangladesh
also have a supply of white clay, an important additive necessary for white cement
production.
46
Quality of products and strong brand name
It is believe that brand name and reputation are important to retail purchasers of cement
in Bangladesh. It has built a strong reputation among cement purchasers by consistently
providing high quality products. It believe that there is strong customer awareness of our
brands, Cemex Cement (Titan), for grey cement in our principal market in Bangladesh,
and Cemex White (Sparta), for white cement across Bangladesh. Further, we believe that
our brand name and our reputation for consistently supply inghigh quality products
provide us with a competitive advantage in ensuring that cement dealers carry our
products.
Table 14: Macro economics Performance analysis of cement Industy.
Supply At present, the demand-supply situation is

tightly balanced with the latter being
marginally higher. As the cement industry
is dependent on few companies‟s
production, more expansion will be needed
to meet the large demand of govt
infrastructures.
Demand Housing sector acts as the principal growth
driver for cement. However, recently
industrial and infrastructure sectors have
also emerged as demand drivers.
Barriers to entry High capital costs and long gestation
periods. Access to cheap source of clinker
supplier also acts as a significant entry
barrier.
Bargaining power of suppliers Our cement industry depends on imported
raw materials. Currently international price
of clinker is stable. But any kind of
volatility in its price remained a concern.
Bargaining power of customers End users of the product get benefited if
they are near to the distribution plant of the
company. But when their positioning is at
distance from the distribution plant,
companies used to charge premium.
Moreover, brands used to charge premium
on account of better quality perception also.
Competition Intense competition among players
regarding price due to homogeneous
product.
3.3.3 Demand and Supply
47
When it comes to supply, the main raw material is limestone. Many firms import this from India
while others get local supplies. The interviewees reckon that the local suppliers should be given
better training on producing higher quality limestone and more research and development should be
carried out in this sector so no company has to go for import of limestone. The demand for
cement is somewhat stable, according to the managers andthe growth rate is more or less
average. To improve this condition, theyurge the government to provide subsidies and greater
consistency in the Annual Development Program.
3.3.4 Competitive Scenario
It is generally agreed that the present scenario is extremely competitive.With

multinational companies as well as local companies trying to grab abigger slice of this
growing market with extensive advertising that try to attract, inform and persuade the
viewers – this is one of the most emulousindustries of the country. Naturally, there are
questions asked of fair play.Some companies have complained that a handful of firms are
gaining unfair advantage by avoiding tax. The competitive scenario may be improved by
ensuring proper collection of taxes. We can also see that there is a scope for production of
clinkers locally, which has a growing demand as well. Therefore, investment in this
particular part of the industry will also increase the competitiveness.When it comes to
globalization, most firms mention the high freight costs asa big hindrance for the
development of the industry. It makes imports more expensive (which is a good thing in
case of finished products, but a problem in case of raw materials) and also export of
locally manufactured cementless price-competitive in the international market. Low
global prices of cement also deter firms from vying for export deals. The cement industry
of Bangladesh is one of the fastest growing, intensely competitive sectors of the
economy. With plenty of scope to invest in R&D,and plenty of scope to utilize the advent
of new technology, this is a sector that is bound to get more competitive. While existing
firms suggest that this is a nearly saturated industry and new entrants are not encouraged,
with the increasing urbanization all across the country and an escalating rate
of construction of high rise buildings, this opinion may be questioned. Our group is
extremely grateful to have had this opportunity to explore one of the most vibrant
business sectors of Bangladesh, as it was an insightfullearning experience. Last but not
the least; we would like to thank all thei nterviewees who took valuable time off their
busy schedule to help us out in our survey.
3.3.5 Situation Analysis:
SWOT Internal Factors An examination of the interviews that we took revealed that most
companiesare satisfied with the quality of the finished product. In this intensely
competitive market with over seventy companies are trying to outdo one another, high
quality of product is not just a strength – it is a necessity. In addition to that, each of the
firms assessed has strong financial backup with little or no long term liabilities. Strong
links with the distributors is also one common strength among the firms.Over reliance on
48
limestone may be a weakness for the local firms When it comes to weakness, it is
difficult to get out the actual informationfrom managers as they are reluctant to give such
an internal insight into the company. As we can see, they mentioned “uneven
competition” as aweakness because some of the companies have to pay VAT while others
donot. However, external study suggests that other weaknesses may include:heavy
reliance on limestone-based cement and inadequate investment inresearch and
development which could have improved future competitiveness External FactorsHigh
tax rate on imported cement is an opportunity for local producers. They can better
compete in the market by selling at a lower price. In addition tothat, there are high freight
costs involved with import of cement which canbe avoided by most of the local
manufacturers. However, as mentioned before, most local firms still rely on imported
clinker, which reduces the advantage they had over foreign firms in terms of
cost.Reduction in global prices of cement has become a threat for the industry. Inaddition
to that, high cost of carriage and raw materials make profitmaximizing a big challenge.
Moreover, the slow progress in terms of infrastructural development also poses problems
for some companies. Weakroad linkages result in delayed distribution and in accessibility
of certain regions.
3.3.6 Competitiveness Analyzed from Different Purspective:
Human Resource Early discontinuation of schooling results in deficiency of skilled

workers available.Managers say that while it is easy to find people willing to work, there
is stilla deficiency in the availability of skills required for working in this sector. They
believe that the government should set up more training institutions in order to meet the
local demand for skilled labour. However, the question must be asked – how are such
training institutions expected to succeed? The major problem behind the deficiency in
skills is discontinuation of education at very early stages. While providing a special
training programmay interest them, the government will face a dilemma in terms of
pricing.Charging a cost based price will result in a very low response, while asubsidized
price may generate excessive demand.When it comes to building a co-operative and
sustainable work culture, there aren’t many challenges to be faced. According to the
managers, the employees have a positive attitude and mindset in general. However,
if further improvement is to occur, the workforce will need training on modern
management methods.Access to Finance The cement manufacturers we analyzed have a
fairly easy access to finance mainly because of goodwill. The tough competitiveness in
the banking sector itself creates a an opportunity for the firms to gain better offers and
becomemore accessible to long and short term loans of differing proportions.However, as
we know there are over seventy firms competing within the market, this cannot be true
for all firms. Many small manufacturing companies are operating within the market, and
their access to finance will surely not be as easy as those that have established themselves
as a known brand.
49
Chapter 04: Major Findings:
4.1.1 Industry Demand & Production
Year Consumption(mn Growth rate % Capacity (mn Growth rate %

MT) MT)
2007 7..60 18..50% 11..17 5..20%
2008 8..40 10..53% 11..91 6..63%
2009 8..20 -2..38% 12..20 2..48%
2010 8..54 4..10% 14..44 18..38%
2011 10..57 23..82% 17..35 20..14%
2012 13..93 31..80% 19..95 14..96%
Table 15: Industrial Demand & Production
Considering the „Life cycle of the industry‟, currently cement industry of Bangladesh is
in the growth stage. Sales of cement are increasing due to growing demand for cement in
both the local and foreign markets. The industry realized about 30% and 21% growth in
2009 and 2010 respectively after suppressed demand from previous years. Industry
expected demand growth is 20%-25% for the next three years based on the assumptions
below.
1. Government would be able to materialize its important ADP.
2. According to the UN Population Fund (UNFPA) report 2010, 28% people of our
country live in urban areas where the population growth is 3.2 per thousand. Urbanization
and demand for accommodation are increasing day by day. Thus it is expected that the
real sector will grow steadily with the household users‟ increasing cement consumption
pattern.
3. Private sector may get interested to invest in real estate for getting tax advantages of
their undisclosed funds
4. Good number of large infrastructure construction projects (Padma Bridge, Flyovers,

highways) are on the pipeline.
50
5. There is no “Substitute” for Cement. Steel can be used in construction but in limited
extent due to its high cost.
On the flip side, some caution has to be maintained due to the current demand- supply
gap leading to over capacity and falling margins and prices. Also, given the close
linkages between them, the effect of a slowdown in real estate growth or hike in interest
rates globally or price increase of imported raw materials should also be considered.
4.1.2 Relation between cement consumption growth rate and GDP

growth rate:
By analyzing data from 2008 to 2013 we see that there is only a few relation between this
two growth rate. In 2009 the GDP growth rate was 6.63% and cement consumption
growth rate was 11%, in 2010 the GDP growth rate decrease to 6.43% but cement
consumption growth rate decrease to -2%. After that in 2011 the cement consumption
growth rate raise to 4% but GDP growth rate decrease to 6.19%. In 2012 and 2013 the
cement consumption growth rate raise in large proportion that are 24% and 32%
respectively but GDP growth rate decrease to 5.74 and 5.80 respectively.
Table 16 : Cement Consumption and GDP Growth rate
Year MT (in mn) GR % GDP Growth rate

2008 7.60 - 5.96%
2009 8.40 11% 6.63%
2010 8.20 -2% 6.43%
2011 8.54 4% 6.19%
2012 10.57 24% 5.74%
2013 13.93 32% 5.80%
Cement consumption Growth in last 5 years 83%
So from above table it is clear to us that there is only a few relationship between cement
consumption growth rate and GDP growth rate.
4.1.3 Major Producers of the Industry

The largest 13 cement manufacturers hold 78% of the market share. Heidelberg, Holcim
and Lafarge are the leaders among multinational cement manufacturers and Shah and
Meghna are the leading domestic manufacturers. Shah cement is the market leader with
close to 14.20% of the market share, closely followed by Heidelberg with about 9.30% of
the market share. During the 2010, many small local manufacturers like Premier, Seven
Circle, Crown, Fresh and King cement increased their sales drastically riding on their
benefits of economies of scale, backward linkage and aggressive marketing effort.
Table 17 : Major Producers of the Cement Industry

Major cement companies Market share
Shah cement 14.2%
51
Heidelberg Cement 9.3%
Meghna Cement (MCML-King) 7.4%
Seven Circle BD Ltd. 6.9%
Lafarge Surma Cement Ltd. 6.7%
Holcim BD Ltd. 6.4%
Unique Cement (Fresh) 6.1%
MI Cement (Crown) 4.9%
Premier Cement 4.0%
Akij Cement 3.7%
Royal Cement 3.0%
Mongla Cement (SKS)-Elephant 2.9%
MTC Cement (Tiger) 2.8%
Total market share of largest 13 78.29%
companies
Source: BCMA
4.1.4 Major Consumers of the Industry
In Bangladesh, the main cement consumers are:

1. Individual home makers
2. Real estate developers
3. Govt. organizations, i.e., LGED, RHW etc.
Real estate developers and Govt. projects are the dominant users of cement. During 2007-
2008 public sector construction works were slowed down under caretaker government.
Unwillingness to disclose the source of income contributed to the downward trend in real
estate sector, i.e., building of apartments, flats etc. during that time period.
52
Figure 8: Cement consumption per capita
Table 18: Major Consumers of the Cement industry

Individuals 25%
Real estate developers 35%

Government projects 40%
Source: BCMA
4.1.5 Numbers of Multinational Cement Companies Run in

Bangladesh:
Mainly 5 multinational cement companies run in Bangladesh, they are controlling around
27% market share of our counties.
Name of multinational cement companies and there market share are shown below:
Table 19: Multinational cement companies and there market share

Multinational cement companies Market share
Heidelberg 9.27%
53
Lafarge Surma 6.67%
Holcim 6.45%
Cemex 2.78%
Emirates 1.64%
Total Market Share 27%
Source: BCMA
4.1.6 Local Cement Companies, there Market area and

Market Share:
SL Market Area Name Of Yearly Average Market
No Cement Total consumption/ye Share
Company Consum ar (MT)
ption
(MT)
1 Sylhet area Lafarge Surma 112,538. 76,473.81 6.7%
Cement Ltd. 30
2 Sylhet area Chattak Cement 917,685. 9,378.19 0.8%

74
Total 1,030,22 85,852.00 7.5%

4.04
1 Dhaka area Scan Cement 785,538. 65,461.50 5.7%
00
2 Dhaka area Shah cement 1,948,18 162,349.08 14.2%
9.00
3 Dhaka area MI Cement 673,055. 56,087.98 4.9%
(Crown) 80
4 Dhaka area Premier Cement 547,020. 45,585.00 4.0%
00
5 Dhaka area Holcim BD Ltd. 887,636. 73,969.67 6.4%
00
6 Dhaka area Seven Circle BD 953,254. 79,437.89 6.9%
Ltd. 62
7 Dhaka area Unique Cement 844,563. 70,380.29 6.1%
(Fresh) 44
8 Dhaka area Cemex Cement 382,125. 31,843.75 2.8%
00
9 Dhaka area Anwar Cement 192,900. 16,075.00 1.4%
00
10 Dhaka area MTC Cement 385,310. 32,109.25 2.8%
(Tiger) 95
11 Dhaka area Eastern Cement 138,335. 11,527.92 1.0%
(Shat Ghora) 00
54
12 Dhaka area Mir Cement 141,350. 11,779.17 1.0%
00
13 Dhaka area Akij Cement 502,583. 41,881.97 3.7%
65
14 Dhaka area Metro Cement 136,435. 11,369.58 1.0%
00
15 Dhaka area Emirates Cement 225,887. 18,823.92 1.6%
00
Total 8,744,18 728,681.96 63.5%
3.46
1 Chittagong Area Scan Cement 496,109. 41,342.42 3.6%
(Ruby) 00
2 Chittagong Area Aramit Cement 103,630. 8,635.83 0.8%
00
3 Chittagong Area Dimond Cement 209,800. 17,483.33 1.5%
00
4 Chittagong Area Mostafa Hakim 53,950.0 4,495.83 0.4%
0
5 Chittagong Area Royal Cement 417,790. 34,815.83 3.0%
00
6 Chittagong Area NGS Cement 87,530.0 7,294.17 0.6%
0
7 Chittagong Area S. Alam 54,160.0 4,513.33 0.4%
0
8 Chittagong Area Confidence 230,290. 19,190.83 1.7%
00
Total 1,653,25 137,771.58 12.0%
9.00
1 Mongla Area Meghna Cement 1,021,91 85,159.78 7.4%
(MCML-King) 7.30
2 Mongla Area Mongla Cement 397,280. 33,106.67 2.9%
(SKS)-Elephant 00
3 Mongla Area Dubai Bangla 246,730. 20,560.83 1.8%
Cement (5 Ring) 00
4 Mongla Area Nowapara 158,738. 13,228.22 1.2%
Cement 60
5 Mongla Area Olympic Cement 311,540. 25,961.67 2.3%
(Anchor) 00
Total 2,136,20 178,017.16 15.5%
5.90
1 Rajshahi Area Aman Cement 203,625. 203,625.00 16,968.75
00
Total 203,625. 16,968.75 1.5%

00
TOTAL 13,767,4 1,376,749.74 100%
55
97.40
Table 20: Local Cement Companies, there Market area and Market Share
Figure 9: Area wish consumption of cement
4.1.7 Supply chain of cement product
The big cement companies of Bangladesh (referring to the top 15-20 companies) cater
their products and services to a similar line of customers. The customers of the companies
are also the players of the distribution network of the company. The categories of
customers are as follows:
Distributors
Dealers
Retailers
Industrial Personal/ Personals
Large Contractor
Real Estate & Developers
Home owners
Clients and customers in export areas
4.1.8 Marketing Strategies Cement industry
Promotion involves disseminating information about a product, product line, band and
56
company. It is one of the four key aspects of the marketing mix As the market is
becoming more and more complicated, creative and attractive promotional strategies are
considered as the key to stay in the scenario. The specification of these four variables
creates a promotional mix or promotional plan. A promotional mix specifies how much
attention to pay to each of the four subcategories, and how much money to budget for
each. A promotional plan can have a wide range of objectives, including: sales increases,
new product acceptance, creation of brand equity, positioning, competitive retaliations, or
creation of a corporate image. This is another sector where the cement companies
compete greatly with another. Both electronics and print media are used by the companies
to promote their products and services to the customers. Some common promotional tools
that are used by almost all the top cement companies of Bangladesh are as follows:
News paper advertising
Promotional Campaigns
Wall paintings
Signboards and light boxs
Customized Accessories
Events
Sponsorships
Television
Internet
Radio
Magazine
4.1.9 EXPORT OF CEMENT: SIZE OF EXPORT IS 260 K MT/YEAR

Cement industry started export from FY2007. Currently, companies exporting cement to
north-eastern states of India are as below:
 Shah Cement
 Holcim Bangladesh Limited
 Seven Circle
 Unique Cement
 MI Cement
 Confidence Cement
 Premier Cement
 Aramit
All these companies are exporting in very low quantity to the neighboring countries
(India and Myanmar) which are easily accessible through water transportation such as
ships and mother vessels. Transportation cost is major concern to export cement. Thus
exporting this product to countries which are reachable through connecting water bodies
is much more feasible in terms of cost and accessibility.
High duty charge is one of the main stumbling-block of cement export. Cement
manufacturers in our country produce cement by importing clinker from China and
Indonesia (mainly) at a high rate of shipping cost and duties which make the present cost
structure impracticable to tap the export potentials for cement. If the government make
57
the duty structure more industry-friendly by exempting some duties on exportable cement
and granting cash incentives, cement exporting to Sri Lanka,Nepal,Bhutan and the
Middle Eastern (ME) countries will be feasible in future.
4.2 List of Cement exporters form Bangladesh
Bashundhara Group Lafarge Surma Cement Ltd.

Bashundhara City Tower, Level-11, House # 35, Road # 24,
13/Kha/1 Pranthapath Gulshan-1, Dhaka-1212
Dhaka, Bangladesh Phone : 88-02-8812026
Phone : 88-02-8119006 Ext 4251807 Fax : 88-02-8825413
Fax : 88-02-8111594 Email: masud.almehmud@bd.lafarge.com
E-mail : bgc@bdcom.com Website : www.lafarge-bd.com
Chittagong Cement Clinker Grinding Co. Meghna Cement Mills Ltd.

Ltd. Sena Kallyan Bhaban (14th Flr),
Chittagong, Bangladesh 195 Motijheel C/A,
Phone : 88-031-740902-3, 740955 Dhaka, Bangladesh
Fax : 88-031-740904
Akij Cement (Akij Group)

Confidence Cement Ltd. 73, Dilkusha C/A,
Ispahani Bldg (4th Flr), Sk Majib Dhaka - 1000
Road, Agrabad, Chittagong, Bangladesh Phone : 88-02-9563008-9, 7169017-18
Phone : 88-031-711471-3 Fax : 88-02-9564519
Fax : 88-031-711474 Email : sals@akijonline.com, info@Akij.net
Mongla Cement Factory Bangladesh Cement Manufacturers

Sena Kallyan Bhaban, 195 Motijheel C/A, Association
Dhaka 1000, Bangladesh C/o. Bashundara Group
Phone : 88-02-9553017, 9560051 Bashundara City
Fax : 88-02-9565820 13/Ka/1, Panthpath
E-mail: info@senakalyan.com Dhaka 1205
Fax: 880-2-9556459
Holcim Cement (BD) Co. Ltd.
House # 38, Road # 14, Gulshan Dhaka,
Bangladesh
Phone : 88-02-9881002-3, 8812485
Fax : 88-02-9886394
E-mail : info-bgd@holcim.com
4.2.1 Duty structure of the industry
58
Favorable Government policy in the form of tariff protection and low price of clinker in
the international market have lead to mushroom growth of clinker crushing units in the
country. Government has imposed a supplementary duty of 7% on import of clinker and
25% on import of cement which is in favour of local manufacturers for the further growth
of the industry.
Table 21 : Current duty structure of raw materials
Current duty structure of raw

materials
Clinker BDT 350/ton
Slag 12% on invoice
value
Fly ash 25% on invoice
value
Gypsium 12% on invoice
value
Limestone 12% on invoice
value
Source: BCMA
4.2.2 Steady Growth Margins

In next couple of years when large capacities are expected to come on-stream, pass
through of input cost will be easier. Moreover, clinker (main raw material of cement)
price is expected to remain stable at $53-$58. Therefore, its been expected that cement
companies will enjoy a good growth of margin over the next 3 years.
4.2.3 Dominance by Local Companies

Currently, multinational cement companies are facing intensive competition with local
companies. Lafarge, Cemex, Holcim and Heidelberg are among the top ten cement
companies in the world, but together they make up only around 27% of the Bangladesh
market.
Scancement of Heidelberg Group is the biggest among the foreign companies, but its
market share is around 9.3% despite it has been in Bangladesh for nearly a decade.
Holcim's market share is around 6.4% despite it bought three plants in quick succession
more than half a decade back as it planned to emerge as the top player in the country.
Lafarge and Cemex, the world's first and the second largest cement companies, have been
struggling to survive in the industry.
Local companies are grabbing the top slot of the industry by operating in economy of
scale and with deft marketing strategy. For example, Shah cement , a subsidiary of the
country's biggest conglomerate Abul Khaer Group is now in the top of the industry
beating Heidelberg and Holcim by deploying a fleet of trucks in the main growth areas
and building the best marketing network in the country.
59
Local companies are investing in backward linkages (captive power plants), have built
big plants to reduce cost of production and have a fleet of trucks to carry the products
right to the doorsteps of consumers. Quality-wise also, the local companies have made
rapid strides.
Multinationals bear high overhead costs regarding salary, infrastructure, quality control
etc. On the other hand, local companies are more focused to keep the overhead costs low.
Multinationals are only concentrating in providing high quality products. But local
comapanies are concetrating in offering quality product with additional benefits like
home delivery system, rebate, gifts etc.
Local manufacturers have been pursuing more innovative and agressive business strategy
compared to multinationals. Local manufacturers seek to seize large market by reaching
mass people through economies of scale while multinationals cater the needs of specific
group of customers by charging high price through superior brand value and quality.
4.2.4 Industry Survivors: Large Companies

During last five years almost 32 cement companies have been shut down due to
inadequcy of raw materials. Its too difficult to the small manufacturers to survive in the
industry due to the shortage of raw materials since small companies face difficulties to
arange the raw materials in competitive price. Currently, the basic trend in cement
industry is smaller companies are shutting down and the bigger companies are becoming
bigger. Only 10-15 companies are holding 80% of market share.
4.2.5 Seasonal demand of the product

The other important factor which has an effect on the changing price of the product is that
of the seasonal demand of the product in the market. There are mainly three dominant
seasons in terms of demand of cement in the cement industry. They are as follows:
Peak Season: January to April/ May

Dull Season: June to September
Off Season: October to December
4.2.6 Weaknesses of Cement industry

cement industry heavily relies on weather. About two-thirds of cement production
takes place between May andOctober. Cement producers often use the winter months to
produce and stockpile cement, to meet demand
cost of transport the cost of transporting cement is high and this keeps cement from
being profitable over longdistances. In other words, shipping cement costs more than the
profit from selling it.
Politic changes
Political instability
Competition against major players
Rising costs of basic inputs
Global recession
60
The country imports most of its clinker from abroad and with the increasing value of the
US$ against local currency, the price of cement is rocketing up along with most
construction materials.”
4.2.7 Industry Opportunities & Threats:

Table 22: Industrial opportunities and Threats
Opportunities Threats
Strong economy Construction sector dwindling
Construction sector growth Energy price and supply
Govt. support on local International pricing of raw
manufacturing rather than importing materials
Growing urbanization Growing usage of steel materials for
construction
4.2.8 Future outlook of Bangladesh cement industry
Considering the „Life cycle of the industry‟, currently cement industry of Bangladesh is
in the growth stage. Sales of cement are increasing due to an enormous demand for
cement in both the local and foreign markets. The industry realized about 30% and 21%
growth in 2009 and 2010 respectively after suppressed demand from previous years.
61
Figure 10: Future outlook of Bangladesh Cement Industry
Industry expected demand growth is 20%-25% for the next three years based on the
assumptions below.
1. Government would be able to materialize its important ADP of building big
infrastructure projects.
2. According to the UN Population Fund (UNFPA) report 2010, 28% people of our
country live in urban areas where the population growth is 3.2 per thousand. Urbanization
and demand for accommodation is increasing day by day. Thus it is expected that the real
sector will grow steadily with the household users‟ increasing cement consumption
pattern.
3. Private sector may get interested to invest in real estate for getting tax advantages of
their undeclared funds
4. Good number of large infrastructure construction projects (Padma Bridge, Flyovers,

highways) are on the pipeline.
5. There is no “Substitute” for Cement. Steel can be used in construction but in limited
extent due to its high cost.
On the flip side, some caution has to be maintained due to the current demand- supply
gap leading to over capacity and falling margins and prices. Also, given the close
linkages between them, the effect of a slowdown in real estate growth or hike in interest
rates globally or price increase of imported raw materials should also be considered.
62
Table 23: Industrial outlook 2014 In Million
Year 2010 2014 Growth rate

Total installed 19.95 32.06 61%
capacity (mn MT)
Actual capacity (mn 13.96 22.44 61%
MT)
Total Demand (mn 13.93 17.41 25%
MT)
Supply-Demand 100% 129%
Ratio
4.2.9 Finding from Global Cement Industry:

4.3 Global trends
The global cement industry was severely disrupted by the 2008 financial crisis. The
USGS Mineral Programme Reports of 2007-2013 show that while global cement
production (2.60Bnt in 2007 and 3.70Bnt in 2012) has continued to grow in the time
since, this trend can be attributed primarily to the massive expansion of the Chinese
market, with an increase of 800Mt cement production since 2007. Modest cement
production growth rates have been experienced by Brazil, Egypt, India, Iran, Saudi
Arabia, and Vietnam, while production volumes have either flat-lined or dropped
drastically for the US, Japan and Western Europe since their peaks in 2007. The only
European countries to show signs of recovery to date are Russia and Turkey. Spain is
perhaps the most dramatic example shown in Figure 2; like many European countries, it
initially took some time for the impact of the 2008 recession to hit, but when it did the
effects on many industries, including construction, were catastrophic.
The global economy grew by 3.2% in 2012 according to the IMF, down from 3.7% in
2011 and 5.2% in 2010. As in 2011, the growth of advanced (1.6% in 2011, 1.2% in
2012) and emerging and developing (6.4% in 2011, 5.1% in 2012) economies remain in
stark contrast with each other. Interestingly, the Eurozone and the United States possess
markedly different growth rates; increased private demand in the US afforded growth of
2.2% in 2012, while European nations contracted by 0.6% in the same time period. The
World Economic Outlook Database April 2013 predicted a continuation of these trends
for 2013, with steady growth in the US (1.9%), negative growth in the Eurozone (-0.3%)
and strong growth (5.3%) in emerging and developing economies. The cement industry
would be expected to closely reflect these trends given its close link with the economy
overall.
The European cement association Cembureau announced that the situation was worse
than expected in Europe for the first quarter of 2013. "The latest actual annual GDP data
revealed the weakest macroeconomic picture in the EU since the onset of the economic
crisis in 2008," it said. Minor improvements were reported for quarter two of 2013;
dramatic year-on-year increases in cement production volumes in France, Germany and
Italy (14.3%, 13.2% and 10.0% respectively, compared with quarter two of 2012) were
63
offset by flat production elsewhere and production losses in Spain (a 2.0% reduction from
2012).
In contrast, and again in line with the global economy predictions made by the IMF, the
Portland Cement Association (PCA) states that the American and Canadian cement
industries are on target to reach 4% year-on-year growth in cement production in 2013,
primarily by improvements in the residential construction market industry.
Similarly, the National Bureau of Statistics of China reported that steady development
(including a year-on-year GDP growth rate of 7.6%) was maintained for the first six
months of 2013. In line with the 'Determination to Suppress Unchecked Expansion of
Industries with Severe Excess Capacity' plan, the latest phase-out list (which details out-
dated, non energy-efficient and environmentally damaging cement plants, of which 527
were named in 2013) published by the Ministry of Industry and Technology (MIIT)
includes cement capacity of 92.8Mt/yr at plants that were due to be closed by the end of
2013.
IMF predictions on the global economy have so far in 2013 been reflected in the global
cement industry. Reports by the major multinational cement producing companies reflect
the same trends of growth in cement sales being limited to emerging markets in Asia and
the Middle East. Sales to mature markets (Europe, North America) have remained flat or
declined due to the poor global economy and increasing prices of raw materials and fuels.
4.3.1 Major Players
World production of cement is 2.6 billion tons/year (FY2010). The world production of
cement is dominated by China (1,400 mn MT), followed by India (260 mn MT), United
States, Japan and Russia. Other countries featuring prominently on the global cement
space include Spain, South Korea, Italy, Iran, Turkey, and Brazil. Significant capacity
expansions in China, India, Saudi Arabia, UAE, Turkey, Egypt, and Brazil are underway
and planned for the next few years. China and India, together account for more than 50%
of the total cement produced and consumed in the world. Developed markets including
the US, Western Europe and Japan are mature and currently facing declining demand due
to the global economic crisis.
The largest global players are Lafarge (France), Holcim (Switzerland) and Cemex (USA).
In terms of cement production, Bangladesh ranks about 40th in the world.
According to Global Industry Analysts, Inc., global demand for cement is forecasted to
rise 4.1% per year and reach to 3.5 billion metric tons in 2013. Gains will be fueled by
rising investments in
infrastructure among the developing countries of the world, driven by economic growth
and increasing per capita income levels.
4.3.2 Top 10 cement producing countries:
Table 24 : Top 10 cement producing countries in 2011 and 2012 ranked by production.
Rank Country 2011 Cement production 2012 Cement production
(Mt) (Mt)
1 China 2100 2150
2 India 240 250
3 USA (inc. Puerto 68.6 74.0
64
Rico)
4 Brazil 64.1 70.0
5 Iran 61.0 65.0
6 Vietnam 59.0 65.0
7 Turkey 63.4 60.0
8 Russia 55.6 60.0
9 Japan 51.3 52.0
10 Saudi Arabia 48.4 43.0
Source: USGS Mineral Programme Reports 2012 and 2013.
4.3.3 Strong Future Growth of Developing Asian countries

A number of developing countries in the Asia/Pacific region is attaining strong gains in
cement consumption. China, which accounts for nearly half of world cement demand, is
facing a slowing rate of growth as construction spending is decelerating. Other fast-
growing markets for cement in the region like Philippines, Thailand and Vietnam, all are
enjoying stable growth rates of exceeding 6% per year. In the developing nations of Latin
America, Eastern Europe and the Africa/Mideast region, however, advances in cement
demand has slowed down considerably from the robust gains seen during the 2003-2008
period. Increases in cement demand in the developed areas of the US, Western Europe
and Japan is lagging the average global pace of growth.
Basically, by nature, global demand of cement is rotating according to the growth of the
construction sector in each region. High demand for cement had been observed in Europe
and America during FY1960-70. After FY1970, cement demand shifted to India,
Malaysia, Hongkong, Singapore and Korea. High Demand for cement continued in these
areas till FY1990. From FY2000, developing countries of Asian regions like Bangladesh,
Pakistan, Nepal and Burma are now enjoying high growth rate of cement consumption.
This trend is expected to continue till FY2035.
4.3.4 Future outlook
The future of the cement industry looks very bright for emerging and developing
economies. In the World Economic Outlook Database April 2013 the IMF predicted
strong economic growth rates for advanced and emerging economies (5.3% and 5.7% for
2013 and 2014 respectively), which were revised slightly downwards in the World
Economic Outlook Database October 2013 to 4.5% (in 2013) and 5.1% (in 2014).
Nonetheless, significant economic growth in this region will no doubt be reflected in the
continued expansion throughout the construction industry.
The story for advanced economies is quite different; economic growth rates of 1.2% (for
2013) and 2.2% (for 2014) were predicted in World Economic Outlook Database April
2013, which were also revised downwards to 2.0% for 2014 in the latest World Economic
Outlook Database October 2013 report. This is consistent with continued slow recovery
from the 2008 financial crisis. The disparity in growth rates between the United States
and Eurozone is forecast to reduce slightly by 2014 from a peak difference of 2.8% in
2011, to a difference of 1.6% in 2014.
65
Environmental initiatives such as CO2 emission and air pollution (dust and heavy metals)
reductions and the use of green fuels will continue to be at the forefront of the cement
industry. The Cement Sustainability Initiative (CSI) reports the successful decoupling of
CO2 emissions with cement production volumes for the 24 participating companies. CO2
emissions from cement production by these companies have fallen from 17% from
756kg/t in 1990 to 629kg/t in 2011 (a data delay is employed by the CSI to ensure
company privacy). The European cement association Cembureau has launched a roadmap
towards an 80% reduction in CO2 emissions from the cement sector by 2050. Advances
in green developments, including carbon capture and storage technologies, waste heat
power generation and low-carbon cement products, will continue to be hot topics in years
to come.
The large multinational corporations have mixed expectations for the future. Lafarge and
HeidelbergCement both remain confident of continued growth, while others, including
Holcim, Lafarge and Cemex have reined in expectations due to the reduction in cement
volume sales in the first half of 2013. Growth in sales volumes are expected to be limited
to Asia, North America and Latin America. Wisely, many cement companies are using the
time afforded by slower demand to increase their focus on cost-cutting initiatives and
implement environmental policies that will be essential in future.
It is more important than ever that global cement producers continue to develop for an
ever-changing global market. This may be easier for the large multi-nationals companies,
who when faced with falling demand in advanced economies can increase their exports.
However, for smaller cement producers situated in economically advanced countries who
typically sell most of their cement on the domestic market, 2014 may be the year to begin
scaling up exports.
Table 25: Economical growth by region (%).

Region 2011 2012 2013 2014
Global 3.2 3.7 2.9 3.6
Emerging and developing 6.4 5.1 4.5 5.1
Advanced 1.6 1.2 1.2 2.0
United States 1.8 2.2 1.6 2.6
Eurozone 1.4 -0.6 -0.4 1.0
Source: IMF World Economic Outlook Databases
Chapter 05
5.1 Conclusion :
The cement industry is likely to maintain its current growth momentum and continue
growing at around 20% to 25% in the medium to long term. Government initiatives in the
infrastructure sector and the housing sector are likely to be the main growth drivers.
Our cement consumption per year was only 65kg in FY2009 whereas, in India its 135 kg
and in Pakistan its 130kg. So there is a lot of opportunity to grow in this industry.
66
If the import duty structure of various cement products, e.g. finished cement, semi-
finished cement and basic raw materials for cement (25%, 12% and 7% respectively)
continues i.e. import duties is on favor of the local manufacturers and the construction
sector remains booming with smooth power supply than nothing to be surprised that
cement industry will be the most evolving industry in the next three to five years.
The importance of the housing sector in cement demand can be gauged from the fact that
it consumes almost 60%-65% of the country's cement. If housing sector growth wanes, it
would impact the growth in consumption of cement, leading to demand supply mismatch.
5.2 Recommandations:
The findings and solutions section of the report shows that the production, sale and
investment of the cement company increased day by day due to some barriers like
increase price of raw material, low price of cement in the world.
These industries also develop some other manufacturing company like “Shoven bag
manufacturing company, Miracles, Sino Bangla”. This company make woven bags by
importing raw materials .It supplies the bag in local and foreign market. Bangladesh is set
to export cement bag for the first time to India diversifying the country’s export basket. It
also try to export South American countries like Brazil and Paru.
67
Cement sector of Bangladesh has huge growing possibilities. The sector has grown day
by day with huge prosperity. Some actions will take to increase its success like-
 Bangladesh government takes initiatives like tax and tariff free import of raw
material.
 Provide subsidiary and easy loan for the sector.
 All company should huge marketing strategies for domestics and foreign
investment.
 The continuous remittance flow need to ensure. Because the development of
Housing sector is directly related with remittance flow. And if the housing secctor
developed, cement industry will ultimately developed.
 The stable exchange rate need to ensure for developing this sectro. Because most
of the raw materials are imported, any significant change would affect the
profitibility of this industry.
 Inflation rate should be stable. High inflation rate would reduce the purchasing
power of the consumers and it would ultimately reduce the growth of cement
industry.
 Any change of Raw materials price in world market affecet the growth of this
market.
 Transportation cost is most important for this industry. As the final goods of
cement industry is heavy weighted so regional based industry should be
established.
 Above all, political stability need to ensure for continuing the growth trend of this
industry.
If all requirement are fulfilled then the cement industry will play a major role for
earnings foreign remittance with the help of increasing growth and performance and
also make strong economy for our loving motherland.
References
1. Lechtenberg, M., 'Top 20 global cement companies,' Global Cement Magazine
December 2012, PRo Publications International Ltd, Epsom, UK.
2. The Global Cement Directory 2014 is published at the end of 2013. See
www.GlobalCement.com/
3. Raw materials collection of Cement manufacturing
4. NAHAR ZEBUN Date:( April 05, 2011) Research Report: Cement Sector
of Bangladesh
68
5. http://www.sinojawcrusher.com/companyproducts/Cement-production-
line.html
(Vitruvius, "The Ten Books of Architecture," Dover Publications, 1960.)
6. Petar Edgwards, Global Cement Megazine. (Monday 09 December 2013)

7. Sarah Lasselle (Sectoral Model of the Cement Industry Using Input-Output
Analysis)
8. A STUDY ON THE PROGRESS OF INDIAN CEMENT INDU
http://www.eajournals.org/wp-content/uploads/A-STUDY-ON-THE-PROGRESS-
OFINDIAN.pdf
10. Economic analysis of the European cement industry

http://halshs.archivesouvertes.fr/docs/00/91/56/46/PDF/Boyer_Ponssard_131209.
pdf
11. Analysis of Financial Performance of HOLCIM cement Ban

http://www.sb.iub.edu.bd/internship/Spring2013/0830050.pdf
12. Shimon Arnold (WP-2012-002 Technical Productivity Analysis for
Cement Industry at Firm Leve http://www.igidr.ac.in/pdf/publication/WP-2012
13.Sectoral Model of the Cement Industry -Using Input-Output Analysis
14.Energy and Resources Efficiency in the Cement Industry
15. Islam Rakibul (2011-12) Sustaiable cement industry with energy efficiency
16 A critical review on energy use and savings in the cement ind.
(Energy Efficiency Improvement Opportunities for Cement Making)
http://www.climatevision.gov/sectors/cement/pdfs/final_lbnl.pdf
69
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Department of Economics

Term Paper on : Cement Industry In Bangladesh.

Date of Submission: 20 April, 2014.

Md. Mominul Islam

Chapter -01 Introduction 10

1.1 Statement of Bangladesh Cement Industry 10

1.2 Objective of the Study 10

1.3 Methodology of the Study 12

Sources and Methods of Data collection

1.4 Literature Review 12

1.5 Limitations of the Work 14

Chapter- Analysis and Discussion 15

2.1 Overview of Global Cement 15

2.2 Historical Background of Cement 15

2.4 Top 75 global cement companies 17

2.5 The top 10 cement companies 2013 20

2.6 Global Cement: Capacity maps 22

Chapter-03 Overview of Bangladesh Cement Industry 28

3.1.0 The cement manufacturing process 29

3.1.1 Name and Description of cement industry in Bangladesh 30

3.1.2 Fuel of Cement industry 35

3.1.3 Raw materials collection of Cement manufacturing 35

3.1.4 Cement Production Line 36

3.1.5 Flow Diagram of the Cement Manufacturing Process 37

3.1.6 Development of Cement industry in Bangladesh 38

3.1.7 Industrial Characteristics 39

3.1.8 Seasonality and Cyclicality of the Industry 39

3.1.9 Cement Industry – Regional in Nature 39

3.2 Cost and pricing Structure 39

3.2.1 Cost Elements 39

3.2.2 Power and fuel costs 40

3.2.3 Raw material costs 40

3.2.4 Transportation cost 41

3.2.6 Product and Technologies 42

3.2.7 Ordinary Portland Cement (OPC) and Portland Composite 42

3.2.9 Efficiency and performance analysis 43

3.3 Performance Indicatiors 44

3.3.1 Market objective 44

3.3.2 Comperative Advanced 45

3.3.3 Demand and Supply 46

3.3.4 Competitive Scenario 47

3.3.5 Situation Analysis 47

3.3.6 Competitiveness Analyzed from Different Purspective 48

Chapter- 04 Major Findings 49

4.1.1 Industry Demand & Production 49

4.1.2 Relation between cement consumption growth rate and GDP 50

4.1.3 Major Producers of the Industry 50

4.1.4 Major Consumers of the Industry 51

4.1.5 Numbers of Multinational Cement Companies Run in 52

4.1.7 Supply chain of cement product 55

4.1.8 Marketing Strategies Cement industry 55

4.1.9 Export of Cement : Size of Export is 260 K MT/ Year 56

4.2 List of Cement exporters form Bangladesh 56

4.2.1 Duty Structure of the Industry 57

4.2.2 Steady Growth Margin 58

4.2.3 Dominance by Local Companies 58

4.2.4 Industry Survivors: Large Companies 58

4.2.5 Seasonal demand of the product 59

4.2.6 Weaknesses of cement industry 59

4.2.7 Industry Opportunities & Threats 59

4.2.8 Future outlook of Bangladesh cement industry 60

4.2.9 Finding from Global Cement Industry 61

4.3 Global trends 61