...DEPARTMENT OF MANAGEMENT Report on Capstone Project “Impact of financial risk on capital structure decision in cement industry of India” Submitted to Lovely Professional University In partial fulfilment of the Requirements for the award of Degree of Master of Business Administration Supervisor: Mr. Rohit Bansal Submitted by: Shalini Sahay 10808654 Khalid Anwar 10805151 Suman Saurabh 10808885 Varun Kakkar 10810014 Gurpreet Singh 10806126 DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY JALANDHAR NEW DELHI GT ROAD PHAGWARA PUNJAB 1 CERTIFICATE This is to certify that the project report titled “Impact of financial risk on capital structure in cement industry of India” carried out by Miss. Shalini sahay has been accomplished under my guidance & supervision as a duly registered MBA student of the Lovely Professional University, Phagwara. This project is being submitted by him/her in the partial fulfilment of the requirements for the award of the Master of Business Administration from Lovely Professional University. Her dissertation represents her original work and is worthy of consideration for the award of the degree of Master of Business Administration. ___________________________________ (Name & Signature of the Faculty Advisor) Date: 2 CERTIFICATE This is to certify that the project report titled “Impact of financial risk on capital structure in cement industry of India” carried out by Mr.Khalid anwar has been accomplished under my guidance &...
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...Overview of cement industry in Bangladesh Size In 2002, there were 70 cement organizations in operation in Bangladesh, though in 2008 therewere 34. This combination is prone to proceed. In Bangladesh, there are around 55 cement assembling organizations, the vast majority of which are in operations either on a substantial or little scale. Atotal of 34, including multinational cement makers, are in business production.Among nearby brands, Shah Cement, Meghna Cement, Crown Cement, Fresh Cement, Premier Cement and Seven Circle Cement are understood over the country.The five multinational cement organizations in operation are Holcim, Heidelberg, Lafarge Surma,Cemex and Emirates. Growth Bangladesh cement industry showcase on the planet. In spite of the late worldwide economic upheavals, the Bangladesh economy proceeds with its enduring walk with development in abundance of 6% in the course of recent years. Right now limit of the business speaks the truth 20 million tons. Top10 players are distant from everyone else controlling more than 70 % of the aggregate business limit. The business is growing at the rate of 20-25% in the late years. Per capita utilization is 65 kg (FY2009) while India and Pakistan, our two neighbors, have per capita utilization of 135kg and 130kg individually. This demonstrates huge degree for development in the Bangladesh cement industry in the long term. The estimating of cement of different players in the business are near to each other. Currently, the...
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...Limited CEMENT – AN OVERVIEW FEBRUARY 2014 CEMENT The Pakistan Credit Rating Agency Limited CEMENT – AN OVERVIEW SECTOR STUDY STUDY CONTENTS Summary Sector Study: Global Cement Industry Pakistan Industry Business Risk Financial Risk Outlook PAGE 1 2 2 4 6 7 February 2014 www.pacra.com SECTOR STUDY The Pakistan Credit Rating Agency Limited CEMENT – AN OVERVIEW (FEBRUARY 2014) SECTOR DYNAMICS Business Risk Outlook Medium Stable to Positive OVERVIEW Pakistan’s cement industry has an oligopolistic structure – top five players (out of a total of 18) controls above 55% share. Geographically production facilities are concentrated in north (83%) of the country, while south has around 17%. During the last decade, the Pakistani cement industry has expanded its production capacity significantly; while gradually making inroads into the exports markets. The cement production capacity of Pakistan stood 44.8mln tons in FY13. Demand dynamics, playing key role in cement manufacturing, kept capacity utilization at ~75%, a behavior observed in past few years. Currently, Pakistan is ranked among the world's top 10 cement exporting countries. Pakistan Cement - Production and Capacity Utilization 50 45 40 35 Mln Tons HIGHLIGHTS FY13 Total Companies No. of listed Companies Share of listed Companies (based on capacity) Cement Production Capacity Utilization Market Capitalization Revenue* Net Income* Cement Sector Loans Share in Banking Loans Cement NPLs Share...
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...STAMFORD UNIVERSITY BANGLADESH Assignment On: Capital Structure Analysis of Lafarge Surma Cement Limited Course Title: Finance Theory Course Code: FIN -608 Submit To Mohammad Salahuddin Chowdhury, ACA Assistant Professor, Dept. of Finance, University of Dhaka Submit By Md. Jahidul Islam; ID: MBA-05014570 Jabun Nahar; ID: MBA 05014443 Rajib Kumar Saha; ID: MBA 05014533 Date of submission 17th April 2013 Letter of Transmittal April 17, 2013 Mohammad Salahuddin Chowdhury, ACA Assistant Professor, Dept. of Finance, University of Dhaka Subject: Submission of Assignment titled “Capital Structure Analysis of Lafarge Surma Cement Limited”. Dear Sir, This is informing you that I have done this assignment on “Capital Structure Analysis of Lafarge Surma Cement Limited”. It is a great pleasure for me to present you such type of assignment. To prepare this assignment I collect essential data. I learnt a lot of unknown issues of direct Marketing, while preparing this assignment. This assignment was a challenging experiences for us a theoretical as well as practical. I tried my best to make the assignment a sound one as per your valuable counseling and proper guidance. I express our gratitude to you for giving us the opportunity to making this assignment. I would be obliged if you kindly call me for any explanation or any query about the assignment as and when deemed necessary. Within the time limit, I have tried my best to compile the pertinent information as comprehensively...
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...FINAL PAPER Economics for Business Case Study: Oligopoly in Indonesian Cement Industry BRIEF CONTENTS CHAPTER I: PREFACE..…………………………………………………………………..….. 2 1.1. Background ...………………………………………………………………………….. 2 1.2 Identification Problem……………………………………………………....................... 3 CHAPTER II: BASIC CONCEPT AND CHARACTERISTIC …………….............................. 4 2.1 Basic Concept of Oligopoly ……………………………………….................................. 4 2.2 Models of Oligopoly Competition ......…………………………….................................. 4 2.2 The Advantages and Disadvantages of Oligopoly Competition ....................................... 5 CHAPTER III: ANALYSIS .......................................................…………….............................. 6 3.1 Oligopoly of Indonesian Cement Industry ….................................................................... 6 3.2 Competition in Indonesian Cement Industry …................................................................ 9 3.3 Pricing Strategy in Oligopoly ......................................................................................... 10 3.4 Government Policy .......................................................................................................... 11 CHAPTER IV: CONCLUSION AND RECOMMENDATION .………….............................. 13 4.1 Conclusion ….................................................................................................................. 13 4.2 Recommendation ….............
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...Saudi Cement Company: “Survival is the name of the game in a very competitive industry” Dr. Salem M. AL-Ghamdi King Fahd University of petroleum and minerals Dhahran, Saudi Arabia Abstract This is a case study on a Saudi Arabian company known in the cement industry. Saudi Cement Company (SCC) is a Saudi joint company established in 1955. The company is listed in the Saudi stock market. The information was collected through a structured questionnaire and from secondary data. The case write-up fits a case study in a strategic management undergraduate and graduate course. Information was organized to provide insights on how the company evolves overtime with an emphasis on strategic issues such as vision and mission, internal analysis via company’s current operation, External analysis using Porter five force model and major strategic issues Keywords: Strategy and policy, Saudi cement industry, Porter five force model, vision and mission, SWOT analysis. COMPANY BACKGROUND Saudi Cement Company (SCC) is a Saudi Joint Company established in 1955. The principal object of the company is to produce cement and cement products and to invest in the cement fields. SCC operates two cement plants in the Hofuf Plant and Ain Dar Plant in the Eastern Province of Saudi Arabia, located about 36 km apart and are both at an approximately equal distance of around 120-130km from King Abdulaziz Port at Dammam. Below is a brief history of the Company: ...
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...Analysis of Indian Cement Industry 1 • Industry Structure • Regional Scenario • Demand Dynamics • Cost Structure • Ready Mix Concrete (RMC) • Demand • Key Demand Drivers • Supply • Operating Rates • Prices • Profitability • Player Profiles 2 :3 : 13 : 55 : 75 : 86 : 99 : 102 : 132 : 143 : 154 : 161 : 168 Industry Structure 3 Porter five force analysis Industry structure •As of March 2011, the installed cement capacity of large plants in India stands at approximately 284 million tonnes. •This is accounted by around 172 large cement plants. In addition to large cement plants, around 365 mini cement plants account for approximately 11 million tonnes of cement capacity in India. •The industry can be broadly classified into pan-India, regional and marginal players. Pan-India players include large players like Holcim group companies- ACC and Ambuja and Aditya Birla group company- UltraTech Cement (including Samruddhi Cement) . •Companies of both these groups are adding capacities through either greenfield or brownfield expansions. Industry structure •Players whose presence is restricted to one or two regions, with a stronghold in the markets of their respective operations are included in the category of regional players. Key examples of players included in this segment are Jaiprakash Associates (North and Central), Lafarge (concentrated in the East), India Cement (South), Shree Cement •(North), Binani Cement (North), Kesoram Industries (South), OCL (East)...
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...Executive Summary Cement industry of Bangladesh is in its growth stage. The industry is developing day by day. Lafarge Surma Cement Limited is one of the major producers of quality cement in Bangladesh. As per the course requirement we are told to conduct the fundamental analysis of Lafarge Surma Cement Limited. The company is a listed company and its shares are traded in the capital market. We have collected the annual reports of last couple of years and from the data we have prepared the proforma income statement, free cash flow and then ultimately the valuation of the company’s share. We have shown the market strategy of the company. They prefer differentiation that is high price for high quality. The industry life cycle indicates that Cement industry is in its growth stage. We have shown the competitive forces along with Michael Porter’s five force model. Competitive advantage and disadvantages are described there. Then the ratio analysis gives us the performance of the company. Then the prospective analysis gives us the intrinsic value of the company’s share, which is 16.79 Tk. whereas on 31 December, 2012 the market price was around 32 Tk. We have confirmed our valuation with the help of Sensitivity, Scenario and Simulation analysis. After the valuation we have found that the share is priced higher than the intrinsic value. That means the share is Overpriced. Holders of the share should sell the share or should take a short position of Lafarge surma’s’s share. Analysis...
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...2nd chapter- Historical and Modern perspective of the Indian cement industry and it’s Evolution in the Modern era:- Introduction: Cement is an important Raw material in the construction industry. The industry is nearing 100 years of its existence in India, having started the first manufacturing Unit in 1914. It has evolved over the years in capacity, manufacturing scale, technology, environment protection, sustainability and in logistics. The industry has many opportunities to explore and many challenges to meet and overcome. Many changes, innovations are taking place in Manufacturing, Marketing, Logistics, location of units, industry structure, Process and Practices. The Historical perspective shows that given the right economic environment and the support, the cement Industry can attract good investment and capacity additions. The industry has learnt to deal with many environmental and sustainable issues and emerged as a responsible and mature Industry. The cement Industry has a great potential as the Indian per capita consumption (130 Kg) which is low and is set to increase over the many years and thereby the demand for this product will always be strong. The government and the private sector supported by the economic liberalization have rolled out enormous investments in infrastructure development and commercial/ industrial development. The increasing purchasing power of the vast middle class / double incomes of the nuclear families supported...
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...around the world, have been a focus of many research studies to widen its commercial scope”(, 2012, ). Since algae are freely available, the use of algae in any industry could help reduce cost and increase profitability. One of the recent research studies was composed by a team from the School of Architecture and the Built Environment of Singapore Polytechnic. The team was focused on the use of algae in the construction industry. Algae from the catchment areas of water bodies are known for its binding ability. The team used this binding ability of algae for the development of a bio-based binding structure. The team’s hypothesis was that by adding the wet algae to conventional cement, the mixture could be used in the construction industry. Not only would the use of algae reduce the cost of construction but also reduce the toxic alkaline components of the conventional cement, which causes lung and skin disorders. The team determined that combining 40% of the wet algae with 60% of the conventional cement would be enough algae to reduce costs while still providing enough conventional cement to support the structure. The research conducted their testing in a laboratory setup. The results of the research and hypothesis testing determined that the algae-cement mix is capable of withstanding the pressure of non bearing structures. This includes drain sections and wall...
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... The shift primarily from agrarian to service economy took place in India which also has a huge impact in boosting the developing economy. India is emerging as a service provider to global market, its developed I.T talent and English speaking skill has helped it to grow worldwide. India is moving from an emerging market to an emerged market. The GDP growth of India over the years has shown the development of India’s different sectors like agriculture, construction & service growth. CEMENT INDUSTRY - OVERVIEW The cement industry across the world is getting concentrated and some of the western countries are closing down the production unit of cement because of its harmful effect to the environment. Cement producing countries of world The real estate boom across the globe including India has lead to rise in demand of cement. However, the cement industry across the world is getting concentrated. China is largest producer of cement and India is second largest producer of cement in...
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...India Cement Industry 4Q09 India: Cement covers the overview of the cement industry in India, risk factors, concern, cost structure, business characteristics, significant consolidations and market share of major cement producers. It also covers the demand cycle, demand drivers, cement consumption, installed capacity, production, demand-supply dynamics, regional disparity, exports, prices, Union Budget FY2007, market outlook, plus the profile, comparative matrix and SWOT analysis of the industry leading players: ACC Limited, UltraTech Cement Limited, Gujarat Ambuja Cements Limited, Grasim Industries Limited and India Cements Limited India is the second largest producer of cement in the world next to China. The cement industry contributes approximately 6% of the overall global production. This position has been achieved because of India’s sustained growth at an average rate of 8.1% per year between 1981 and 2008. The installed capacity of the industry was 198 million tonnes per annum in 2008. Meanwhile, domestic consumption and exports stood at 173 million tonnes and 6 million tonnes respectively in 2008. The cement consumption, on a conservative basis, is likely to go up to 225 million tonnes by 2010-2011. Outlook Key Positives | Key Negatives | Real estate & housing boom:Cement demand has picked up in the last few years owing to strong surge witnessed in the real estate and construction industry. Apart from this on going demand for housing has augured well for the cement...
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...The Indian cement industry is the 2nd largest market after China. It had a total capacity of about 300 m tons (MT) as of financial year ended 2010-11. Consolidation has taken place with the top three players alone controlling almost 35% of the capacity. However, the balance capacity still remains quite fragmented. Despite the fact that the Indian cement industry has grown at a commendable rate in the last decade, registering a growth of nearly 9% to 10%, the per capita consumption still remains substantially poor when compared with the world average. While China registered the highest per capita cement consumption in 2010 of about 1,380 kg, India stood much lower at 230 kg. This underlines the tremendous scope for growth in the Indian 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. This has resulted in cement being largely a regional play with the industry divided into five main regions viz. north, south, west, east and the central region. With capacity addition taking place at a faster rate as compared to demand, prices have remained southbound, especially in the last one year. Nevertheless, considering the government’s thrust on infrastructure, long-term demand remains intact. Given the high potential for growth, quite a few foreign transnational companies have displayed their interest in the Indian markets. Already, while companies like Lafarge, Heidelberg...
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...Only 4 cement plants were inherited in 1947 and were controlled by India • High oil and electricity prices were reason for fall of cement industry • Low demand was due to economic crises of 90s • Cement industry was producing cement below capacity at loss in 98-99 • 3 new units were set up in 65-66 SLIDE 4 • Average demand for cement increased at 7.2% per year in 70s and declined in 80s to 6.8% per year • In 90s demand increased to 7.49 millions per ton which gave hope of its future growth but due to economic crises and bad management of economy it only touched 9.91 millions by 2000. SLIDE 5 • Lower demand statistics depressed cement industry • In past there was less difference between new and old manufacturers but now in modern times and due to modern techniques new players and old players differ drastically which will effect future performance. SLIDE 6 • In our analysis we are focusing on two main players of cement industry • Maple leaf cement Ltd and Pioneer Cement Ltd SLIDE 7 • Maple leaf is subsidiary of Kohinoor Maple Leaf Group (KMLG) which is ranked in the top companies. • Maple leaf Cement is one of the pioneers of Cement industry in Pakistan, • It was established in 1956 by West Pakistan dev. Corp. with plant of capacity of about 300,000 tons clinker per year • It exports cement in both local and foreign markets. SLIDE 9 • It deals with Sulphate resistant cement (This...
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...Letter of Transmittal September 25, 2012 The Supervisor Roushan Ara Sultana Assistant Professor Faculty of Business Administration University of Science & Technology Chittagong (USTC) Subject: Submission of BBA Internship Report on “Analysis of the Cement Industries of Bangladesh in respect to Royal Cement Limited.” Dear Madam, It is indeed, a great pleasure for me to be able to submit my internship report on “Analysis of the Cement Industries of Bangladesh in respect to Royal Cement Limited” I expect this report to fulfill the requirements of my internship program (BBA) at Royal Cement Limited. I have given my best effort in preparing this report and top makes it a worthy one. In order to prepare this report I have gathered some practical knowledge about Royal Cement Limited, which will assist me to incorporate my professional life and will enrich my real of knowledge. My each aspect of the topic is tried to cover as required and as per direction. I would like to take this opportunity to thank you for all the help that you extended throughout the writing of this report. I fervently hope that you will find this report worth reading. If you have any queries regarding this report, you are welcome to contact me. Sincerely Yours Pappu Kumar Banik Roll No: - 697, Reg. No: - 671 (BBA) 23rd Batch Faculty of Business Administration University of Science and Technology Chittagong (USTC) Page | 1 University of Science and Technology Chittagong Acknowledgements First of all,...
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