DELIVERABLE # 3

Cement Rate List in Pakistan:

Ordinary Portland cement is the essential component of building a structure. Before you buy see cement
price of all companies in Pakistan 2021. Without cement you can’t make concrete. There are over dozen
companies manufacturing cement in Pakistan. With growth in development of housing colonies and
commercial markets cement industry is rising in the country. Hence increasing per year production and
sales as well.

Cement Price in Pakistan:

Cement Company Price per 50KG Bag

DG Cement Rs. 580

Lucky Cement Rs. 530

 Maple Leaf Cement Rs. 570

Bestway Cement Rs. 520

Fauji Cement Rs. 520

Kohat Cement Rs. 510

Attock Cement Rs. 510

Note: All Cement Companies Prices are taken from market on daily basis, these may change station to
station. Popular brands of cement companies are DG, Maple Leaf, Best way and Kohat. Available packing
in 50KG bag. Cement prices have been reduced in Budget 2020 .

Cost of Sales:
The major cost of production for cement manufacturing is the energy cost which constitutes 68.77% of
the total cost of production. The energy cost is further divided into heat energy and power energy which
constitutes 44.12% and 24.65% respectively of the total cost of production. As a matter of fact, the
international prices of coal and oil have increased manifold during the year under review which have
badly affected the cost of production both in Pakistan and abroad. The international prices of coal were
approximately US$ 80 per ton by end of last year which has now increased to US$ 210 per ton by the
year ended June 30, 2008. The prices of furnace oil have also increased tremendously which have also
affected the cost of production. Except loose cement sales, the cement is packed either in paper bags or
polypropylene bags. The increase in the prices of paper and the polypropylene in the international
markets have also increased the cost of cement bags substantially. Similarly, the other cost factors have
been increased either because of inflation, oil prices and depreciation of Pak Rupee for imported items.
The Company has taken various measures to mitigate the impact of increase in cost of production.
Resultantly, the production cost per ton of the Company was only increased by 18.89%. 1.4 Gross Profit
The Company achieved a gross profit rate of 25.73% for the year ended June 30, 2008 compared to
29.35%.
Impact of WTO on Cement Industry in Pakistan:

Impact of WTO on cement industry in Pakistan: The Ministry of Commerce has initiated World Trade
Organization (WTO) dispute settlement proceedings to fight South African anti-dumping duties on
cement from Pakistan. The basis of Pakistan's argument is that the injury determination mechanism
followed by South African authorities (ITAC) is flawed and does not reflect true analysis of the situation.

The Pakistan challenge has raised the issue that the South African authorities used an extended period
of investigation of four years for causation analysis and didn't properly examine the evidence in the light
of trends over that period. In addition, Pakistan considers that South Africa failed to examine the
relationship between the alleged dumping and the worsening of the condition of the domestic industry
especially by failing to consider the effects of the decartelization of the domestic cement producers. It
also accuses South Africa of not properly examining the entire product under investigation and instead
limiting its injury analysis to bagged cement and disregarded sales by the domestic industry of the bulk
cement. Finally, the challenge has pointed out that the South African authorities didn't provide a fair
opportunity to Pakistani cement exporters to defend their case, denying access to the trade statistics.

In May 2015 South Africa imposed various rates of duties on Pakistani cement exports ranging from 15 –
68% plus anti-dumping duty on the import of Pakistani cement. Since March 2015 Pakistan has been
pursuing the matter on a legal and diplomatic basis.
The Pakistan government is working on two options to challenge South African anti-dumping duties on
Pakistani exports of cement. The first step will be to hold bilateral consultations with the South African
government to resolve the anti-dumping duties favourably. Failing that, then the Pakistan government
has the option to take the issue to the Geneva-based World Trade Organisation (WTO), according to an
official from the Pakistan National Tariff Commission (NTC).

The International Trade Administration Commission of South Africa (ITAC) imposed provisional anti-
dumping duties of 14.3 – 77.2% on Portland Cement originating in or imported from Pakistan from 15
May 2015 for six months. The duty was imposed on bagged cement.
IMPACT of WTO on Cement Industry in Other Countries:

According to local media, Lucky Cement, the major supplier to South Africa with a 55% market share,
seems to have had sales volumes little affected by the anit-dumping measure due to its low duty.
However, Attock Pakistan, the second largest supplier with a 35% market share, has been the worst hit
due to its high anti-dumping duty. Pakistani cement exporters are exploring other markets in southern
10(2) economic impact of WTO on cement industry in other countries
Belgium: The European cement association Cembureau has called for the European Union (EU) to
continue to permit the free allocation of carbon credits under the EU Emissions Trading System (ETS)
until it completes the roll-out of Carbon Border Adjustment Mechanisms (CBAM) in 2030 at the earliest.
It said that this would provide indirect cost compensation and mitigate the risk of the relocation of
industries. It would additionally incentivise emissions reduction by EU suppliers, ensure a smooth
implementation of CBAM in the event of challenge to CBAM by the World Trade Organisation (WTO)
and mitigate distortions on the EU internal market, according to the association. It gave the example of
cement producers competing with other building materials producers as a way in which an overlap
period can limit the disruptive impact of CBAM on European value chains.

EU:

Cembureau has welcomed the European Commission (EC)’s proposal for consultations on setting up a
carbon border adjustment mechanism (CBAM) for imported goods including cement, and set out a
number of ‘design principles’ that it says ‘should apply’. According to Cembureau, a CBAM ought to be:
complementary to EU emissions trading scheme (ETS) free allowances (in the initial phase) and World
Trade Organisation (WTO) compatible, based on importers’ verified emissions, including indirect
emissions, applicable to all ETS sectors and capable of providing a CO2 charge exemption for EU
exporters.

Ghana:

The Cement Manufacturers Association of Ghana (CMAG) and representatives of other industries
including steel and food have petitioned the Ghana International Trade Commission to protect them
from ‘unfair’ trade practices. They have asked the government to follow World Trade Organisation
(WTO) rules and match export rebates with additional tariffs, according to the Ghanaian Times
newspaper. CMAG secretary said that the local cement industry had a production capacity of 11.6Mt/yr
and that this was enough to meet local demand.

Philippines:
The Department of Trade and Industry has notified the World Trade Organisation (WTO) that it is
starting a preliminary in to vestigation to examine whether increased imports of cement is causing or
threatening to cause serious injury to the local industry. The cement covered by the investigation is
classified under AHTN Codes 2523.2990 and 2523.9000, according to the Manila Bulletin newspaper.
The investigation will look at 2013 - 2017. The ministry has cited the Safeguards Measures Act as part of
its 10(3) Under WTO countries agreed to reduce tariffs up to 40% in five phases and the first was to be
implemented on 1st January 1995. Pakistan responded to liberalize its foreign trade by rationalizing
tariffs and eliminating quotas in compliance with WTO regulations. Although WTO does not recommend
(only encourage) any economic reform other than trade liberalization. But after the East Asian miracle in
the form of success of market based economies like Korea, Taiwan, Japan and Hong Kong, many
developing countries adopted trade liberalization program and tried to transform their economies from
economic controls to market oriented policies.

Following the same path, Pakistan initiated a comprehensive program of economic reforms in 1980s.
Since then tariff rates were rationalized, state owned production units were privatized, deregulated and
denationalized and state trading was reduced to minimum level. Economy was opened for foreign
investment and financial markets were also liberalized2.

Keeping in view the importance of foreign trade, the purpose of this study is to analyze the impacts of
trade reforms in response to WTO and other economic reforms on export competitiveness of Pakistan in
the world market, because the export competitiveness is the key to gain advantages of free trade.
Economic theory of comparative advantage advocates that countries should opt for free and liberal
trade, restrictions on trade lead to inefficiency. Despite the fact that trade was never free and
restrictions continued in one or another way. A major breakthrough in Multilateral Trading System
occurred on the creation of General Agreement on Tariff and Trade (GATT) from negotiations to
establish International Trade Organization (ITO) in Havana in 1948. GATT played vital role to induce
countries to lower and bind tariffs over time. But GATT could not prove itself as an effective institution
to oversee and supervise international trade. It led to creation of World Trade Organization (WTO) on
January 1st, 1995 as a result of Uruguay Round that started in 1986. It replaced GATT.
Key Issues & Their Solutions

the economy that impact your industry human resource issues in your industry hurdles in
marketing in your industry
The cement industry of the country can be divided into two separate regions; North & South Zone.

North Zone includes provinces of Punjab, Khyber Pakhtunkhwa, Azad Kashmir, Gilgit-Baltistan and

parts of Balochistan while South Zone includes provinces of Sindh and Balochistan. There are 19

and 5 cement units in the North and South Region, respectively. Players in the North Zone represent

around four fifth of the total rated capacity.

Both North and South zones have their separate demand-supply dynamics. Players operating in

the South Market have the opportunity to tap a number of export markets thus providing greater

room for revenue diversification. However, with a number of key export markets (Nigeria, Tanzania,

Mozambique, Iraq, Ethiopia and DR Congo) for South players undergoing local capacity expansion,

reliance on imports may reduce affecting dispatches, going forward. Export of South players has

already been impacted due to anti-dumping duty imposed by South Africa in FY15.

Given the stronger local demand in North Zone, reliance on exports is lower; export potential for

players in the North Zone is limited mainly to Afghanistan where influx of cheaper Iranian cement

and limited construction activity due to withdrawal of allied forces has contributed to decline in

exports.

financing easily available.

The cement manufacturing units started incurring losses after the implementation of new taxes as the
government increased the duty taxes by 33 per cent on the sector from the budget 2019-20. The freight
cost is increased to Rs 75 per bag from Rs 50 per bag from cement manufacturing units to the end user
after implementation of axel load policy introduced in November 2019. However, due to economic
contraction, the industry did not pass on the added cost into the prices for revival of the economic
activity in the country.

According to the seven cement companies Attock Cement, Bestway Cement, DG Khan Cement, Fauji
Cement, Kohat Cement, Lucky Cement and Maple Leaf Cement have declared losses in the third quarter
of the ongoing fiscal year. The five north-based plants incurred gross loss in the third quarter and are
unable to recover the production cost.

In the third quarter, the units posted losses as Bestway Cement Rs 441 million, DG Khan Cement Rs
1.003 billion, Fauji Cement Rs 210 million, Kohat Cement Rs 381 million, Maple Leaf Cement Rs 1.281
billion.

However, the Attock Cement and Lucky Cement earned a profit of Rs 353 million and 999 million,
respectively, which is 37 and 64 per cent lower than Rs 559 million and Rs 2.793 billion earned
respectively in the corresponding period of the last fiscal year.

During this period, cement export to India was suspended which also added to the losses of the
industry. Earlier, Pakistan was monthly exporting on average 75,000 tons of cement to India.

The PTI government has failed to maintain the economic growth which also affected the cement
industry adversely. However, the decision of increase in production capacity was backfired due to poor
economic policies of the government which resulted in the increase of the cement industry debts from
Rs 62 billion in June 2014 to Rs 180 billion in June 2019.

Now the industry is expecting that commencement of work on mega projects and housing schemes
announced by the government will bode well for the cement manufacturers and other construction
industry.

political parties/bureaucracy

Further, the government only facilitates the builders and property dealers by reducing duties and taxes
on land transfers under the Prime Minister Construction Industry Relief Package while nothing was
announced for the other construction sectors including cement manufactures.

However, the cement industry has welcomed the package as they believed that resumption of the
construction industry will ultimately increase the cement consumption, create employment and
generate economic activities in the country. If the same situation of losses prevails, the industry might
suffer closure due to debts and gross losses.

import/export of finished product/raw material/human resources/financing

One of the important factors which affected cement industry of Pakistan badly is less expenditure of
government on Public Sector Development Projects. Because in Pakistan the major demand drive of
cement at domestic level are Public Sector Development Projects. When government decreases its
expenditures on PSDP then cement industry suffers. The majority of the cement plants of the
country are situated in the northern side Pakistan. The cement companies of this region can export
their cement to Afghanistan and other Central Asian countries. The northern part of the country
does not have easy access to the sea port, so this is the market which can be utilized easily for
cement exports (Feldman & Cheng-Yi, 1985). In future, it is expected that cement industry of Pakistan
will increase its exports to this market because Afghanistan and other countries of Central Asian
countries are landlocked countries and they cannot import cement from other countries except
Pakistan at low and competitive

Pakistan was ranked 5th in the world to export cement to the neighboring countries. Rs.30 Billion
is added to national income as a tax collection from cement industry (Rashid Amjad, 2012). In
addition, Rs.100 Billion was invested in cement industry for expansion purposes during the last
few years in Pakistan. The annual demand of cement consumption in Pakistan is calculated by
construction industry at 7% due to quick urbanization(Branger & Quirion, 2015). The huge backlog
of 6.30 million housing units exits in Pakistan as described by this industry. The construction
sector in Pakistan is playing vital role in revival of economy and jobs creations to contribute
around 8% jobs out of total employed labour force

the production of cement. The mountains of northern parts of the country are rich in raw
materials like iron, clay, gypsum and minerals used in cement production. The cement firms in this
area are closed to the areas where these inputs are easily available and accessible. Currently 26
cement companies are the listed members of stock exchanges. Four multinational companies are
also the part of the cement industry of Pakistan and three companies are owned by the armed
forces of Pakistan. There are 16 private companies which are being operated under cement
industry of Pakistan. The cement industry of Pakistan comprises of two regions called zones which
are classified on the basis of their geographical conditions

The pandemic's full effect on the sector is currently difficult to predict because the long-term impact of
the outbreak on the global economy remains unclear. However, in the short-term, direct effects on the
cement industry are becoming clearer.

Effect on demand: In 2020, global cement demand is expected to shrink 3 percent year-on-year when
including China, and 6.4 percent year-on-year when excluding China.7 Overall, the pandemic's impact
will be unevenly distributed, with some countries more resilient than others.

Utilization rate: Before the pandemic, the industry was not operating at full capacity; with the global
economic slowdown, plants are expected to see further drops in utilization rates. The global average
utilization rate, which refers to producers' actual output over potential output based on fully utilized
production capacity, could fall as low as 60 percent for 2020 according to projections, from about 70
percent annually over the past five years.8 While companies are likely to finish committed expansions
that were delayed due to lockdowns, whether they start new projects beyond 2021 will depend on the
pace of economic recovery.

Stock prices and foreign exchange risks: Over the last 12 months, share prices of major cement
producers have fluctuated by an average 47 percent between their 52-week high and 52-week low.9
Fluctuations in foreign exchange rates have further eroded profit margins of cement companies in some
emerging markets, and increased these companies’ energy costs and cost of servicing debts in hard
currencies.

Human Resource Requirement Pakistan:

 Planning future assements
 Controlling risk
 Employment and resume application
 Pay roll information
 Participation in benefit programs
 Award and recognition or diciplinary documents
 Performance evaluation
 Strategic Allianeces
 Apllying strategies
 Work safety

People who need job in this industry:

Labor: To done laboring task

Civil engineers: design and material recreation as per clients need.

HR managers: To mangage the resources

Customer relationship officer: to maintain clients satisfaction

Acoounts manager: to manage accounts

Sales Manager: to manage sales

Plant operator to operate and cope with machinery and plants

Guards: to guard the resources

Institute to train:
ERP training

Plant operational trainig

Mining training

Sales Training

RAW mtaterial propotional training

Blending training
Crushing training

Plant process

Productivity increment training

HUMAN RESOURCE SITUATION :

Lucky Cement Ltd produces 25000 tons of cement per day with about 4000 employees working in this
industry. This industry plays an important role in a sustained economic growth of the country.
Sponsored by well known “Yunus Brothers Group” – one of the largest export houses of Pakistan, Lucky
Cement Limited currently has the capacity of producing 25,000 tons per day of dry process Cement.
Lucky Cement came into existence in 1996 with a daily production capacity of 4,200 tons per day,
currently is an omnipotent cement plant of Pakistan, and rated amongst the few best plants in Asia.

Lucky Cement Limited is managed by the team of professionals, who are committed and dedicated to
fulfill the mission and vision of the organization. Two production plants and five marketing offices are
managed by the staff strength of then 1800 permanent employees throughout Pakistan.

Cement Research and Development Institute (CR&DI) was established in 1983 by the State Cement
Corporation of Pakistan (SCCP) under the administrative control of Ministry of Industries & Production.
The institute started well providing testing services to the Kalabagh Dam project and to 14 cement
factories. However, with the passage of years it lurked into dormancy. In 2005, TUSDEC (Technology
Upgradation and Skill Development Company) was entrusted the task of rejuvenating the institute,
reactivating its laboratory and testing facilities. CR&DI consequently relaunched its operations on 16
January 2006.

Training Services :
CR&DI offers training courses for testing to the following ASTM standards:

 Heat of Hydration
 Air Content of Cement
 Admixture vs Setting Time
 Slag Activity Index
 Autoclave Expansion
 Alkalis/Chlorides Determination.