COMPANY PROFILE

Lafarge Surma Cement Ltd. (LSC) was incorporated on 11 November 1997 as a private limited company in Bangladesh under the Companies Act 1994 having its registered office in Dhaka. On 20 January 2003 Lafarge Surma Cement Ltd. was made into a public limited company. The Company is listed in Dhaka and Chittagong Stock Exchange. Today, Lafarge Surma Cement Ltd. has more than 10,000 shareholders.

In November 2000, the two Governments of India and Bangladesh signed a historic agreement through exchange of letters in order to support this unique cross border project and till date it is the only cross-border industrial project between the two countries. Since Bangladesh does not have any commercial deposit of limestone, the agreement provides for uninterrupted supply of limestone to the cement plant at Chhatak in Bangladesh by a 17 km long belt conveyor from the quarry located in the state of Meghalaya. The company in Bangladesh, Lafarge Surma Cement Ltd. wholly owns a subsidiary company Lafarge Umiam Mining Private Ltd. (LUMPL) being registered in India, which operates its quarry at Nongtrai in Meghalaya.

The project with an investment of USD 280 million, which is one of the largest foreign investments in Bangladesh, has been financed by Lafarge of France, world leader in building materials, Cementos Molins of Spain, leading Bangladeshi business houses together with International Finance Corporation (IFC – The World Bank Group), the Asian Development Bank (ADB), German Development Bank

(DEG), European Investment Bank (EIB), and the Netherlands Development Finance Company (FMO).

Lafarge Group, with 176 years of experience, holds world’s top-ranking position in Cement, Aggregates, Concrete and Gypsum. It operates in 78 countries with around 78,000 employees. Lafarge is named as one of the 100 Most Sustainable Companies in the World. Cementos Molins of Spain, with 75 years of experience, also operates in Mexico, Argentina, Uruguay, and Tunisia.

Now, after two years of production operations, the Company is producing world class clinker and cement which is a demonstration of the sophisticated and state-of-the-art machineries and processes of the Company’s plant at Chhatak. The Company is already meeting about 8% of the total market need for cement and 10% of total clinker requirements of Bangladesh market whereas the Company continues to enjoy strong growth rates. By supplying clinker to other cement producers in the market, the Company contributes some USD50~60 million per annum worth of foreign currency savings for the country. The Company contributes around BDT 1 (one) billion per annum as government revenue to the national exchequer of Bangladesh. About 5,000 people depend on business directly or indirectly for their livelihood. The Company believes that cement is an essential material that addresses vital needs of the construction sector. The Company is very much optimistic to meet the growing needs for housing and infrastructure in the construction sector of Bangladesh.

History

The history of Lafarge Surma Cement makes an interesting corporate saga worth writing a book. Throughout the 80s, the country demanded massive infrastructure development. The construction and real estate business were booming and the imported cement was not feasible due to varied reasons - interrupted supply, poor quality, insufficient quantity, higher price, etc.

During early 90s, a Bangladeshi visionary masterminded to set up a cement company at the North East side of Bangladesh for some strategic reasons - sourcing of raw materials from Meghalaya, access to the river (Surma), and prevailing road and railway transport network for logistic issues. After this visionary conducted the techno-economic feasibility study, he started the formalities for project development in both Bangladesh and in India, registered the project with BOI, and started the process of land acquisition and environmental clearance in Bangladesh. At this juncture, this mastermind passed away in 1995 and his predecessor decided to bring a joint venture partner in the cement project to ensure that the partner brings, apart from the required financing, the required knowledge, know-how and the technology of cement production which was rarely available in Bangladesh. In the process, now world's number one cement manufacturer Lafarge of France came in to the project as a majority shareholder and took over the management of the project in terms of designing, financing, construction and operations of the project. In 2002, another multinational cement producer Cementos Molins of Spain joined Lafarge Surma Cement as an equal equity partner.

World Wide

Lafarge Surma Cement Ltd. (LSCL) is an integrated cement manufacturing company in Bangladesh. Lafarge Group of France, one of the world leaders in building materials is the majority shareholder of LSCL. World leader in building materials, Lafarge holds top-ranking positions in each of its business lines. With a diversified and balanced geographic portfolio and 76,000 employees in 78 countries, Lafarge is at the heart of global growth supporting developing economies and responding to the tremendous need for housing and infrastructure in emerging countries.

In an environment that proved to be challenging for the building materials sector, Lafarge teams focused on reinforcing the solidity of the Group. They continued to implement their capacity increase program in emerging countries with 12 million tonnes started up in Africa, Middle East and Asia. They also pursued their non-strategic assets divestment program, securing 550 million euros of disposals during the year, exceeding the original target of 500 million euros. Meanwhile, they managed to strengthen their asset base in some growing markets, such as Central Europe and Brazil, through no cash operations such as partnerships and asset swap. Finally, they proved their ability to reduce their costs and limit their investments. The steps that they took in 2010 favorably position the Group to benefit from growth in 2011.They also remained focused on their safety and performance

objectives. They were ranked sixth in the “Carbon Disclosure Project” and entered the global “Dow Jones Sustainability” in 2010 in recognition of their sustainable development action. With first signs of recovery materializing at the end of the year, they enter 2011 with more optimism. For the first time since 2008, volumes increased in the last quarter of 2010, providing a strong indication for their business.

Business

Lafarge Surma Cement Ltd. is a majority owned subsidiary of Lafarge Group of France. The Lafarge Group is a global market leader in construction materials. With Euro 5.4 Billion in revenue, it is one of the largest manufacturers of cement by shipped volume. Lafarge is the largest producer of cement and among the top three producers of aggregates, concrete and gypsum in the world. Lafarge is traded on the Paris Stock Exchange and has a market cap of Euro 13.7 Billion. Through a wholly owned subsidiary, Surma Holding, Lafarge owns majority (59%) shares of Lafarge Surma Cement Ltd. The other institutional shareholders are IFC, ADB, Sinha Fashions and Islam Cement.

Lafarge Surma Cement Ltd was incorporated in Bangladesh in 1997. The production facilities are located in Chattak in the Sunamganj district in Northeast Bangladesh bordering the Indian state of Meghalaya. The production facilities consist of a dry process cement plant with a 1.5 million metric ton (MMT) capacity and a clinker production line of about 1.2MMT capacity. Lafarge Surma Cement Ltd also operates two subsidiaries in the Indian state of Meghalaya. Among these two, partially owned (75%) Lum Mawshun (LMMPL) holds the mining rights with two local partners, and wholly-owned Lafarge Umiam Mining (LUMPL) carries out the mining operations. Limestone and shale are mined at the quarry and transported across the international border by a 17 kilometer long conveyor belt. The project has a 30 MW captive power plant that ensures uninterrupted energy supply.

Lafarge Surma Cement Ltd markets its cement under the brand name of Supercrete. It produces general purpose cement that can be used with different kinds aggregates for various purposes. This product passes all local quality standards. The company markets its product in 50KG bags. Because of a perception of higher quality of Lafarge products, a 50KG bag of cement receives a BDT.15.00–BDT.30.00 premium on average over cement produced by local competitors.

Shareholders & Investors

The Company is fortunate to have a blend of both international and local shareholders. The international shareholders of Lafarge Surma Cement Ltd. bring in technological and management expertise while the local partners provide deep insights of the economy of Bangladesh. The shareholders believe that growth and innovation must add value, not only for the Company, but also for customers, whom the Company serves through modern and well-located production facilities as well as innovative and reliable products. 

Composition of the Shareholders  

Surma Holdings B.V. 

Surma holding B.V. was incorporated in the Netherlands, which owns 58.87% of Lafarge Surma Cement Ltd. Lafarge Group of France and Cementos Molins of Spain each owns 50% share of Surma Holding B.V. 

LafargeGroup 

One of the major sponsors, Lafarge Group holds world’s top-ranking position in Cement, Aggregates & Concrete and Gypsum, with about 78,000 employees in 78 countries. Lafarge was founded in France in 1833. Through the years since its

inception, it has been growing steadily to take lead in the production of different kinds of construction materials and has established itself as the world leader in construction material business. In 2010, for the sixth consecutive year, Lafarge has been listed as one of the 100 most sustainable companies in the world. 

CementosMolins 

Another major sponsor, Cementos Molins, based in Barcelona, Spain, is a renowned cement company founded in 1928. With over 75 years of experience in manufacturing cement, Cementos Molins has industrial operations also in Mexico, Argentina, Uruguay and Tunisia. Besides Lafarge and Cementos Molins as major sponsors, the equity partners are Asian Development Bank (ADB), International Finance Corporation (IFC) and Islam Group and Sinha Group from Bangladesh. The financiers to the project include Asian Development Bank (ADB), International Finance Corporation (IFC), German Development Bank (DEG), European Investment Bank (EIB), the Netherlands Development Finance Company (FMO) and local Standard Chartered Bank and AB Bank Limited. In addition to that Citibank N.A., HSBC, Commercial Bank of Ceylon PLC, Uttara Bank Limited, The Trust Bank Limited, Eastern Bank Limited have participated in working capital management of the Company.

PRODUCT

MarketAccording to the long-term industry forecasts made by global authorities, high spending on infrastructure projects and growing demand for housing units will fuel the Bangladeshi cement industry. Cement is already an astonishing $1.2 billion industry in Bangladesh, growing steadily at 1.5 to 2 times the GDP growth. The per capita cement consumption now is only 75 kg in Bangladesh (as compared to that of the developed countries where it is a staggering 1,000 kg). This means the cement industry possesses a great opportunity for growth in terms of volume, revenue and employment generation, contributing significantly to economic growth in Bangladesh. Despite having more than 30 active players inclusive of both locals and multinationals, the market is dominated by only a few. Two-thirds of the cement consumption is skewed towards Independent Home Builders (IHB) with high Pucca concentration in the major cities. Real Estate and Government's development expenditure would stand next to the IHBs on consumption. The capital, Dhaka would consist of almost half of the total industry consumption. As cement is still technically an engineer's product for its various applications, it is not understood well enough by most of the end users. There are many misconceptions in the market regarding cement quality, strength, color, etc. The most common myth is that the strength of a construction is directly related to the strength of a cement product. The fact is that the strength of a construction will depend on a number of factors like the mix design, engineering design, the load distribution, the

quality and the standard of the material used etc. Therefore, Supercrete puts a lot of emphasis on educating the consumer group through various meets, seminars, workshops etc. for better usage and understanding about the quality and the parameters of construction. Supercrete is multi-purpose cement that works well for any construction (depending on the mix design) from foundation to plastering.

AchievementsThe Lafarge Surma Cement plant in Chhatak, Sylhet is an iconic model of engineering advancement. Its17km Long Belt Conveyor (LBC) is a global phenomenon and is a one of its kind cross-border overland single flight conveyor. This state-of-the-art facility still amazes the construction maestros and has set a model example for many projects undergoing worldwide. Supercrete is determined to hold its premium quality through real-time online production report to Lafarge Group's Asia Technical Centre, with the head quarter located in Malaysia. While the dedicated experts in the business are concentrating to provide customers with the best product and services, the high end machinery automatically tests and sends results against strict adherence parameters to ATC every hour. This is free from any human interference or errors. These combined efforts enabled LSC to

Capture a market share of 8% in 2008 from 4.5 % in 2007, within a year of its inception

Obtain the No.1 rank in overall customer satisfaction rating, independently surveyed by Research International, India

Be awarded as the Best Plant in Lafarge Group globally for Clinker to Cement Ratio Improvement

Achieve award for best mine safety from the State of Meghalaya, India.

ProductSupercrete is a premium cement brand made for multi-purpose applications, namely - foundation, beam, column, slab masonry, plastering works, etc. This cement is purely limestone based, free of fly-ash or slag, unlike other cements in the country. Limestone allows better workability and a stronger bond. Supercrete cement is already known for its light color, giving the construction a remarkable, elegant look. Any construction work that used Supercrete is identifiable with bare

eyes. Supercrete is preferred by most customers for another reason - it’s early setting time. A special formulation allows Supercrete to set faster, i.e., the desired strength is achieved earlier with Supercrete than with any other cement in the country, help into reduce the construction duration and hence reducing cost. This cement also demands less water to mix. Supercrete mix is richer and denser allowing a better bonding when used with different types aggregates.. Being a limestone cement, Supercrete production emits less carbon and consumes less energy than other cements, hence is also a more environment friendly choice. By purchasing Supercrete, consumers contribute to a greener world. The company deploys best of the industry to lead various functions of the business, while the customer serving technical team comprises a number of skilled civil engineers who ensure that global expertise is provided to the customers and the service quality is maintained at its true international standard, as always.

Recent developmentsSupercrete comes in 50 kg packs, like other packs in the market. The new Ad star bags are stronger and ensure better storage performance. The company's countrywide supply chain is an enviable marketing and distribution network that comprises regional depots, a group of selective and able distributors and retailers allowing Supercrete to reach anywhere in the country, to anyone asking for a superior product to build his or her dream house.

PromotionDue to its pedigree and well defined communication platform, Supercrete has already made its place in the market. Besides promoting itself, Supercrete also associates to construction related educational programmes at various levels - from universities to engineers at the government level. The company frequently arranges techno-seminars for individual home builders, engineers of various government agencies, retailers, independent masons, and many others. LSC strongly believes that business is a priority but social welfare is a responsibility. This is a key for sustainable development. Thus, it has wide ranging community development activities around its plant at Chhatak and its quarry in Meghalaya. LSC has provided sanitation wares to two hundred (200) families in remote villages near the plant at Chhatak. It also provided arsenic filters to all the project affected families to ensure access to safe drinking water. There is also a qualified physician and a nurse available everyday to provide free medical assistance in a medical clinic at the Community Development Centre at Chhatak. Satellite clinic sessions are also held periodically in remote villages taking health-care services to the doorsteps of the villagers. LSC also set up a school named as "LSC Community Welfare School" which offers free education up to class five. There is also a library at the school complex where school children now get the opportunity to read different kinds of books which are very important for their general knowledge development. Once living as dependent housewives, women at Chhatak now have sufficient opportunities for empowerment through income generating activities on poultry rearing, sewing, kitchen gardening, candle making and even on shop-management, with necessary vocational training and start-up capital provided by LSC. Apart from the above, LSC has always been on the forefront in responding to the needs of the disadvantaged people at the trying times. During the winter, LSC distributed blankets among the affected and disadvantaged people at Chhatak and Kutubpur. It also donated 500 tonnes of cement for the rehabilitation of the Nimtoli victims. LUMPL, the Indian subsidiary of LSC, has also undertaken wide ranging community development activities in the field of healthcare, education, infrastructure development, water supply scheme and development of livelihood in the villages surrounding the mining site in Meghalaya especially at the villages of Nongtrai and Shella.

Brand valueSupercrete's promise is to build a greener and safer Bangladesh. With this objective in mind, Supercrete sets its standards of reliability, confidence, and safety culture throughout its businesses with customers, stakeholders, contractors, vendors along with durable constructions that ensure a secured shelter for a lifetime. Supercrete wants to be a partner of your safe and healthy prosperous life, where only good decisions are taken all the time, and such decisions pay the dividend even for the next generations to come.

Health and Safety

The importance of safety, health and well-being of our employees and business partners can never be overstated; Lafarge Surma Cement Ltd policy on Health & Safety is based on the corresponding policy Lafarge Group and Cementos Molins, and is adapted to the conditions in local context. 

Health & Safety is the number one priority of Company. Ensuring health and safety of the employees and the contractors is always a challenge and they are proud to say that your Company is winning that challenge more and more. Since its inception, for the first time in 2009, your Company achieved a lost time injury (LTI) free year while continuing our production operations. In 2009, they undertook many programmes to continue their improvement in the field of “Safety Behavioral Change” within the Company and among its contractors’ personnel. The month of March 2009 was observed as the “Near-Miss Incident Reporting Awareness Month” to improve reporting of near-miss incidents with an objective of eliminating accidents. The month of June 2009 was observed as the “Safety Month” with a theme of “Improving Our Safety Behavior”. Many posters on core safety issues were posted at the plant, terminal and head office, and different video presentations, quiz competitions, PEP talks and training sessions were conducted to improve the safety awareness of the employees and contractors. Enthusiastic participation by both the Company and contractors’ personnel made the Safety Month a great success. 

Your Company’s ambition is to be a leader in the field of Health and Safety and

with that aim in mind an Annual Health & Safety Plan for 2010 is under implementation. This plan is constructed in line with world class Standards, Advisories and Priorities in such a way, so that a unique visible change can be achieved to make your Business Unit as one of the best Business Units. We are committed to ensure the best possible healthy and safe work environment for the employees and contractors of the Company.

Corporate Social Responsibility:

Lafarge Surma Cement Limited is committed to contribute to sustainable development by ensuring economic competitiveness together with actions to strengthen the society and preserve the environment. As clearly stated in its vision, the Company integrates the responsibility towards the stakeholders in its management and operations.

Your Company makes continuous endeavors to earn the support and trust of all stakeholders, the most important one being the people living near its operation areas. It works in partnership with the local communities to address their concerns and also to help them in their socio-economic development pursuits. The Company wants to be regarded as a good neighbor by the local community and hence, it has in place an effective Community Development Program which envisages appropriate efforts to bring about a "positive change" in the life style of the local people. The program provides opportunities for non formal education of the children, health-care of all Project Affected People, vocational training for women and sports and cultural activities. All these activities have already begun to show

signs of improvement among the people in the vicinity of the cement plant at Chhatak and the quarry in Meghalaya.

The health-care program has given a big relief to the local community. They can now depend on a qualified physician within their periphery to receive treatment for their illnesses. Besides, the physician along with medicines organizes satellite clinics in remote villages along the long belt conveyor to take Medicare to the doorsteps of the villagers. Medicines are given free of cost, while regular advisory sessions are held for women on topics related to nutrition, family planning etc. The Company also organizes eye camps and campaigns on immunization.

Welfare program

Lafarge Surma Cement Limited runs to welfare for the society. They help every corner in Bangladesh. Some Top Newspaper News publish their history of welfare program.

Company Overview:Heidelberg Cement Bangladesh is one the largest producers of quality cement in Bangladesh. Heidelberg Cement Group from Germany, one of the world’s leaders in construction and building material with operations in more than 50 countries, owns 61% shares of the company. In 1998 Heidelberg Cement Group established its presence in Bangladesh by setting up a floating terminal with on board bagging facilities in the port of Chittagong and by distributing the cement to the key markets of Dhaka and Chittagong. In 1999 the group further strengthened its position in Bangladesh and built a green field manufacturing plant near Dhaka namely “Scancement International Limited” with an installed capacity of 0.750 million tons per year. In 2000 Heidelberg Cement group also bought a minority position in Chittagong based company namely “Chittagong Cement Clinker Gridding Co. Limited (CCCGCL)” quickly followed by the acquisition of a in controlling stake. The plant in Chittagong has an installed capacity of 0.7 million ton per year. In 2003, the two companies were amalgamated and the company’s name was changed to Heidelberg Cement Bangladesh Limited.

Corporate Mission:

The Corporate Image: Building worldwide growth by building a better world.

Business Culture: Building on local responsibility for international success

Employee Policy: Building our business on the knowledge of our people

Market Strategy: Building our growth on a solid base of earnings

Customer Philosophy: Building customer satisfaction

Quality Standard: Building on quality products to build reputation

Commitment to Innovation: Building on new technologies determines our future success

Brief History

Chittagong Cement Factory one of the pioneer cement industries in the country was established in 1966 and was placed under control and management of Bangladesh Mineral Oil and Gas Corporation and subsequently of BMEDC. The factory was converted into and incorporated as a private limited company on 30 June 1979. Thereafter the company converted into a public limited company in February 1989 with the shareholding of 51% by Bangladesh Chemical Industries Corporation (BCIC), 34% by General Public and 15% by officers, staff and workers of the company. Under the privatization policy of the Government, BCIC sold and transferred its 51% shares to Local investor’s on 27 June 1993.

HCBL is subsidiary of Heidelberg Cement Group in Germany with a 61% stake in the entity. Heidelberg Cement Group with interests in cement, ready-mixed concrete, aggregates and related activities is one of the leading producers of building materials worldwide with manufacturing bases in over 50 countries.

In 1998, Heidelberg Cement Group started its operations in Bangladesh by setting up a floating terminal in the port of Chittagong and distributing the cement to the key markets of Dhaka and Chittagong. Subsequently it built a green field manufacturing plant “Scan cement International Ltd” and acquired a controlling stake in the formerly state owned Chittagong Cement Clinker Grinding Co Limited (CCCGCL). In 2003, the two companies were amalgamated and the company’s name was changed to HCBL. HCBL currently operates two plants with a total annual capacity of 2 million tons of cement, offering multiple blended cement options like Ordinary Portland Cement (OPC), Portland Composite Cement (PCC) through its two cement brands Scan and Ruby Cement.Heidelberg Cement Bangladesh Ltd, one of the group companies of Heidelberg Cement Group, founded in Germany in 1873, with its core products being cement, ready-mixed concrete, aggregates and related activities, is one of the

leading producers of building materials worldwide. The group employs around 43,000 people in more than 50 countries.

Environmental Policy

Heidelberg Cement Bangladesh Limited Protection of the environment is an integral part of Heidelberg Cement Group’s strategy. As natural resources are the basis of cement, measures for sustainable environmental care are adopted in all our operations. In Bangladesh, our policy is to produce high quality cement, optimize operations to save on natural resources and prevent pollution in order to create a cleaner and safer environment.

Products & Innovation

Portland Composite Cement (PCC)

As part of its relentless pursuit for innovation and constant drive to improve quality, Heidelberg Cement has introduced Portland Composite Cement (PCC) during 2003. Absorbing European Norms in cement producing made Heidelberg Cement Bangladesh Ltd. the pioneer in this sector. Now-a-days all the cement factories of Bangladesh are producing cement as per European Norm. The category Portland Composite Cement (CEM II) is the market leader in Europe.

Cement produced according to the BDS EN

Scan Cement and Ruby Cement are designed to achieve the best characteristics for its customers; this result is achieved by design using clinker and high quality other constituents. PCC has the optimum of: Durability, Long-term strength and workability. Scan Cement and Ruby Cement are produced according to the European norms BDS EN 197-1:2003.

Characteristics of Scan Cement / Ruby Cement:

Higher Strength:Scan Cement and Ruby Cement have higher long-term strength than a standard Portland Cement (OPC). The slag part in the design contributes that the gap in long-term strength with OPC is widening as time progresses.

Higher Durability:The design of Scan Cement and Ruby Cement increases the density of concrete (lower permeability). Smaller voids are the effect of the reaction between the clinker and the slag. This density contributes to the durability and lifetime of the construction.

Better Workability:To improve the quality of plaster and masonry work Limestone is added to the design of Scan Cement and Ruby Cement. This improves strongly the workability of the concrete. Plastering will look smoother, better and more beautiful. The concrete is easier to use.Other Improvements:On top of the above-mentioned improvements Scan Cement and Ruby Cement reduces thermal cracking. Due to the slag in the design less heat is generated which reduces the risk of thermal cracks. Furthermore our brands use less water to achieve the required workability. This contributes to the strength and quality of the construction.

Corporate Social Responsibility

Heidelberg Cement Bangladesh Limited is deeply committed to the people, society and country where it operates. On the way to becoming the top player in our industry we have put a clear focus on customers, employees, social and environmental awareness building, safety and health issues and many more.

HCBL has allocated 50,000 US dollarsOn 9 August 2007, Managing Director, Mr. Jean-Claude Jamar handed over a cheque of Tk. 1 million to the Honorable Chief Advisor, Mr. Fakhruddin Ahmed at the CA's Office.

Food Relief for Flood Affected People

HCBL has started its relief operation for flood-affected people from 8 August 2007.

HCBL sets up Medical Camp.HCBL has set up free mobile Medical Camps with the assistance of Shakti Foundation.

Donation for Land Slide victims at ChittagongHeidelberg Cement donated Tk. 2 lacs to the government for the Land Slide victims at Chittagong.

Mission

1.The Corporate Image:Building worldwide growth by building a better world

2. Business Culture:Building on local responsibility for international success

3. Employee Policy:Building our business on the knowledge of our people

4. Market Strategy:Building our growth on a solid base of earnings

5. Customer Philosophy:Building customer satisfaction, because their success is our success

6. Quality Standard:

Building on quality products to build our reputation

7. Commitment to Environmental Protection:Building on environmental care also makes economic sense

8. Commitment to Innovation:Building on new technologies determines our future success

Products

1. Cement (Scan cement & Ruby cement) 2. Ready-Mixed concrete3. Aggregates

Geographical Spread and Customers:

Heidelberg Cement has divided their business in 6 divisions in Bangladesh. They have two main branches in Dhaka and Chittagong. They have also sales agents in other four divisions. But most of the sales generate from Dhaka and Chittagong divisions. Then Sylhet and sales in other 3 divisions are approximately same. They do not have any physical export of goods. If they sell goods to EPZ area and if they get paid in dollars, this is termed as export. The overall market share of Heidelberg Cement is 13%. The industry saturated. Still they have chance to gather more market share in the industry. They are facing some restriction because they are multinational company.

They have 3 types of customers:

1. Dealers

2. Corporate customers (e.g. developers, contractors)

3. Government projects (e.g. Mohakhali Flyover, Lalon Shah Bridge, Karnafuli Bridge, Banani Bridge)

Except these they have also very few retailers who are very close to them. But usually they do not deal with retailers.

Collection Procedure:

Checks/pay order:

Most of the time, they receive payments through checks. They also receive payments by pay order which is very limited. Generally, they do not allow any other ways of payments. They don’t have any cash transaction.

Collection Points, Concentration Banks, Deposit banks, Lock Box:

There are collection points. The customers pay through the local branches of Dhaka Bank, Dutch Bangla Bank and Mercantile Bank. These banks work as collection points. As these local banks have lots of branches in Bangladesh it helps a lot in collection process. Through the online banking system the money from these local Banks are easily accessible from the principal branch. Then Heidelberg cement collects money from these banks and deposited in the Standard Charted Bank and City N.A bank. 95% of collected money is deposited in Standard Charted Bank and rest of the 5% is deposited in City N.A. bank are. Here Standard Charted Bank and City N.A. bank are used as concentration banks. They transfer the money from the collection bank at the end of the month whether the money is collected at 1st week of the month. Because they have ample money in hand they are lazy to transfer the money at concentration banks. But they are very efficient in collecting the money from customers in due date. Because of having no lockbox system in Bangladesh, they do not use lockbox system. As there group policy they have restriction on depositing money in local banks. The local banks are usually responsible for collecting payments.

Cost:

In standard chartered and City N.A the service charge is little higher than the service charge taken by other banks. Banks are responsible for disbursing payments, handling LC, payment of salary etc. There is very low risk, because they follow some strict laws like:

• They do not give dealership without bank guarantee.• They follow conservative credit policy.• They encourage cash sales.On an average their credit term is of 18-20 days. In government projects their credit term is usually flexible.

Cash Disbursement Procedure:

Suppliers:

There are mainly two groups who receive money from the Heidelberg cement. One is the Raw material suppliers and then another is the suppliers of different utilities. The raw material suppliers are mainly the subsidiary of Heidelberg Group. Generally they take raw materials from Indo Cement; Indonesia, Heidelberg Cement; India and Heidelberg Cement; Japan.

Payment Methods, Disbursement Banks:

They are mainly importing raw materials. So they pay through LC. They do not have any cash payments. They pay through Standard Charted Bank. The Standard Charted Bank works as disbursement bank and processes all the formalities. Sometimes City N.A also works as a disbursement bank.

Authorization:

They follow centralized Disbursement policy. All checks are signed in the Head quarter. Payments are made through mainly finance department. If the payment is less than $6 million, it needs the joint signature of head of finance department and in group B consist of three directors from them any one have to sign. But if payments exceed $6 million it needs joint signature of finance department and Manager Director.

Float:

Although directly they do not take the help of floating, sometimes they try to write check on Wednesday/Thursday. As a result, payments cannot be transferred to suppliers Banks before Sunday. In directly they are taking the advantage of inefficient banking system in Bangladesh.

Credit Policy:

Normally they have a conservative credit policy. They are not willing to flexible their credit policies to increase their sales & revenue. They cannot provide smooth credit policy, because as a MNC they cannot collect payments by pressure. Also they have to maintain some Government rules and regulations. They usually emphasize on quality, as a result they maintain premium price. They have to go by the law. That’s why they are not investing that much in A/R. They are not willing to increase the risk. When collecting payments, they give two warnings after

exceeding the credit limit. If they fail to collect payment despite these, then they realize the bank guarantee.

They provide up to 60 => days of credit limit to Government Projects, 30 days to corporate customers. But they maintain more strict credit policy to the dealers, because of reliability. They give credit to the dealers only if they can give bank guarantee. Only to the renowned developer’s they sale on credit. They have credit term on average of 18-20 days.

Working Capital Needs:

They are very efficient in cash management. That is why they have enough cash to finance working capital. Also they have huge idle money. They cannot deposit all portions of money in banks. As a result, they finance the working capital requirements by internal sources. Sometimes they also take loan from the subsidiaries of Heidelberg group. They took loan from Meghna Energy Limited which is the subsidiary of Heidelberg group too. But at present (2009-2010) they are not taking any short term loan. As they are multinational company they cannot remit money in parent company without the help of dividends. So every year they are having huge retained earnings in their account. With that money they are financing their short term needs. Also with the help of high tech software’s they had become more efficient in managing the business. They are remitting money as technical knowhow fees which is 3% of prior year’s net sales.

Heidelberg group helps a lot to their subsidiary in terms of technology, experience etc. As they are more capable of internal financing in 2008 they don’t have any long-term loans.

Collection Method:

HCBL has some Paper information flow attached to invoice. This attachment contains the Order size, order no, time of delivery and the date of payment. The payment is made to the Collection Bank and the dealers get the receipt from the bank. Because the checks are account payee checks, so they can easily track which customer paid the payment. The company by the time get knows about the payment by ERP software which is connected with Banks. The bank process the payment system and it takes a little time for the company to get notified and deposited because all party are connected through ERP software. Bank processing fees are the cost involved in this Process. If the payment is not made by the dealers they realized the bank guarantee after giving two warnings. Basically Credit policy for Government projects are flexible than the usual customers.

Share Holding Position

Technical Support

The Company has been supporting the end users through its 130 years global experience with local responsibility. There is a technical team consisting of a group of young and energetic technical person lead by a well- experienced concrete technologist.

Heidelberg Cement commitment to innovation on new building technologies determines it’s future success. Based on that mission for the first time in Bangladesh HEIDELBERGCEMENT GROUP introduced an exclusive advisory cell “Hello, Bhalo Basha” with a view to provide house building pros & cons information and construction guidance.

Meghna Cement Mills Ltd is the first manufacturing unit of Bashundhara Group and it is one of the largest cement industries in the country producing nearly 1 million metric tons a year. The Meghna Cement Mills Ltd is an International Standard Organization (ISO 9001: 2008) certified company having accreditation of manufacturing products for both domestic and international markets. The company is listed with both Dhaka and Chittagong Stock Exchanges, the two bourses of the country since 1995 and 1996 respectively. The company markets its product under the registered trade mark "King Brand Cement".

This organization was established in 1992 on the bank of Pashur River and in the industrial zone of Mongla Port on 9.83 acres of land to

produce Portland cement. MCML has an excellent communication facility connecting all parts of the country through river and roads.

The industry enjoys a unique facility in cargo handling both in receiving raw materials and in dispatching finished product through its own 02 nos. of jetties suitable for berthing sea going vessels. At present the production capacity of MCML is approx. 1.0 million MT/annum.

Vision

To significantly contribute to the sustainable development and growth of our country towards its journey for better and prosperous future.

Mission

To be the leader in the cement sector of the country by rendering quality products and services through maintaining high standards in business operations and to bring fullest satisfaction to our valued shareholders, customers and employees.

Production Technology

 

There are 4 nos. of grinding mill in MCML having production capacity of 3000 MT/ day and these mills are equipped with high efficiency separator to segregate fine particle from the coarse one. The dimension of each of the 02 (two) mills is 3m diameter x 9m length (production capacity 30 TPH) while the each of the rest 02 is 3m diameter x 11m length (production capacity 40 TPH).

Production and Packaging

There are 4 nos. of cement silo for cement storing purpose in MCML, where the capacity of each of the first 02 silo is 3500 MT while the capacity of each of the rest 02 is 5000 MT. Cement is extracted from the cement silo through extraction system which consists of roots blower, inlet box, pneumatic shut off valve, flow control valve etc. which are controlled from the control room of the pack house. There are 2 nos. of roto packer having packing capacity of 100 MT / Hr. and 110 MT / Hr. respectively. These packers are the equipments of modern technology where weighing system of the delivered cement sack is fully electronic based to ensure proper weight of every sack of cement.

Mainly paper made cement sacks are preferred for filling purpose although small percentage of poly sack are also used based on the consumers’ demand. It may be mentioned here that, the paper sacks are manufactured by the Sack plant of BG.

Delivery Control System:

There exists 02 modes of cement delivery system i.e. road delivery and vessel delivery available in this plant. To prevent bag bursting while loading in vessel one spiral chute has been designed with the barge loader.

To ensure smooth delivery of cement sacks 19 nos. ten wheeler and 16 nos. six wheeler company delivery trucks are being used.

Raw material unloading & Storing:

There exists a modern equipped jetty facility in this organization where the sea going vessel can berth easily. There exists 02 nos. of hydraulic crane of modern technology of German origin having unloading capacity of 250 MT/Hr each of which contribute a lot to faster unloading.

Here it needs to mention that there exists a clinker shed having storing capacity of 35000 MT and for easy and faster conveying there exists a substantial numbers of  belt conveyors which has been designed technically and which lengths about 02 kilometers. Besides the two nos. of hydraulic crane there also exists 02 nos. of mechanically driven crane namely Fransiab Crane which are mainly engaged for limestone unloading.

PRODUCT

MCML has got a unique facility to produce different type of cements and depending on the customer demand and choice different kinds of cement are produced. Presently 02 (Two) types of cement are being manufactured by Meghna Cement Mills Ltd. which are Ordinary Portland Cement (OPC CEM-1 52.5N) and Composite Cement (CEM II B-M (S-V-L) 42.5N & CEM II A-M (S-V-L) 42.5N).Portland Composite Cement (PCC): Ingredients used in PCC

Clinker 65-79%

Slag Fly Ash Limestone 21-35%

Gypsum 0-05%

Ordinary Portland cement (OPC): Ingredients used in OPC

Clinker 95-100%Gypsum 0-05%

Process of Production:

In the area of MCML have 06 processing plant and 03 packaging plants. At first all kinds of raw-materials like — clinker, gypsum, limestone, hard rock, fly-ash etc. through in the processing plant. After processing and mixing the raw-materials they get cement. After preparing, cement through to packaging house. This is known as BICL. Here prepared cement is packed by packaging machine, which called HAVER-Roto Packer Machine. We know that MCML have 03 packaging plants. But 03 packaging plants is not run all time, all time work 02 packaging plants and other is stop. When the production pressure is high this time all packaging plants is worked.

Labours:

MCML have three categories of labours.

Labours Number of labours Average salary

Permanent 350 7000/= Tk per month

Casual 250 3500/= Tk per month

Daily 200 100/= Tk daily

MCML also have the facility of overtime and bonus. MCML give over-time salary two-times per day for its labors and gives 02 occasional bonuses like Eid-ul-feter and Eid-ul-azha. It also give 0.5% yearly interest for the labors. MCML have a trade-union for the labors.MCML have 100 senior and junior officers. Which average salary is up to 12000/= taka per month.

Foundations Which Made by Using ‘King Brand Cement’:

Many foundations or architectural work in ‘Bangladesh’ which is made by using MCML produced ‘King Brand Cement’. Foundations which are made by using MCML produced ‘King Brand Cement’ is — ‘Basundahara City’, ‘Subastu NajarVely’, ‘Boro Pukuria Coila Khoni’, ‘Sahid Jiaur Rahman Medical College Hospital’ and ‘Rupsha Bridge’ etc.

MCML’s own jetty on the bank of ‘ Possur ’.

Social Responsibility

In response to the rapidly changing global trends MCML endeavors to focus on developing intangible assets basing maximize corporate value of the Group. Their aims and objectives are to serve the people with maximum satisfaction; ultimately which will denote vital role for economical development of Bangladesh. As a result, multi professional groups are being sustained peacefully along with happiness. In this respect political stability will be required.

In today’s knowledge based World, competitiveness is determined by the possession of intelligent employees, the most valuable intangible assets. Keeping this in mind they have adopted suitable Management Policy and to culture the growth of Human Resources, those who are playing vital role in economical development of Bangladesh. As a result they have to grow bigger, stronger and better every day for serving people and the country.

Bangladesh being one of the densely populated countries in the world, our standard of life, communication, industrial and agricultural growth etc. has not been remarkably developed. As such employment opportunity has not been satisfactorily improved. Bashundhara Group is playing significant role by creating employment opportunity for hundreds of young generation through Industrialization.

The main objective is efficient customer services, ensure quality product. As a result these products also reached to their doorstep within short time.

On the basis of priority MCML also produces various types of quality cement as per customer’s desire want and needs. MCML are able to produce any type of quality cement and maintain proper standardization, using modern equipment for laboratory testing which ensure the quality.

Since inception they are actively contributing to the national as well as global economy by way of effective utilization of human resource using raw materials, producing and marking high quality product at most competitively prices and creating employment opportunities.

MCML mark all endeavors to utilize their financial resources efficiently and the right opportunities arise, they also invest in fruitful areas with strong market position and high growth potential for realization of a better future. MCML

continue efforts to improve performance and increase contribution towards socio economic development of this beloved earth.

Meghna Cement Mills Ltd. do lot of charity activities for the betterment of people as well as society. MCML is running/patronizing a Madrasha cum School for about 250 nos. Under privileged students of Apa Bari, Digraj, Mongla, Bagerhat area. In case of natural disaster like Cidor/Aila, MCML bestowed significant volume of warm clothes, medicine, dry food, removing saline water from pond and financial assistances. On the different national memorable day like Victory Day, 21st February, Independent Day, May Day etc. MCML donated sewing machine, financial assistance to freedom fighter and others through Thana & District administration. Cement sacks and cash payment are also bestowed for construction of different Mosque, School, Mondir, Madrasha etc.  

Meghna Cement Mills Limited-at a Look

01. ‘Meghna Cement Mills Limited’ is a sister concern of ‘Basundhara Group’.02. Mr. Ahmaed Akbar Sobhan, Director of MCML.03. MCML has placed 1995 and went to production January 15, 1996.04. Production capacity of MCML is 1.5 million MT cement per year.05. The product of MCML is being marketed under the trademark of ‘King Brand Cement‘.06. MCML has a large number of labors and officers.07. Head office of MCML is:    Basundhara City, 13/Ka/1, Panthapath, Dhaka-1215.Phone:8158025-34,8119006.Fax:88-02-9128319,8158615.Email/WebAddress:www.basundharagroup.com

Confidence Cement Limited (CCL) is the first private sector cement manufacturing company in Bangladesh established in early 90's with having 4,80,000 M/T annual production capacity at Chittagong, 16 K.M away from chittagong port, besides Dhaka Chittagong highway. CCL is the first ISO-9002 certified cement manufacturing in Bangladesh. It has a unique management system in quality Assurance, Marketing, Sales, and Procurements. It manufactures ordinary Portland cement. Our company aims to be the number one cement manufacturing company in Bangladesh, through continuous development and by producing high & consistent quality cement to meet all customers requirement at all time. To achieve these objectives CCL uses modern machineries, calibrated testing equipment's, computerized packing & raw materials mixing devices in its production process. Additionally the company frequently arranges internal & external training program for the staff of all level to develop the potentiality and skill of its human resources. CCL is always keen to keep the customers satisfied by proving the best possible service.

Recommended Mixing Proportion

Different kinds of works require different strength for mortars & concretes: to use for construction works. Generally, mixing design very for mortars and concretes to suit different purposes. The following are the common proportions used with ordinary cement for mortars and concretes in comparison with CCL cements for particular desirable strength and satisfactory concrete workability :

ITEMS

CONCRETE

ITEMS

MOTTAR

Ordinary Cement

CCL Cement

Ordinary Cement

CCL Cement

C:S:CA C:S:CA C:S C:SHeavy Foundation,

Concrete Roads1.0:4.0:8.0 1.0:5.0:10.0 Masonry 1.0:5.0~6.0 1.0:8.0

Massive Works, Dams. 1.0:3.0:6.0 1.0:4.0:8.0 Plaster :

Columns 1.0:2.0:4.0 1.0:2.5:5.0 External 1.0:6.0 1.0:8.0

For R.C.C: Internal 1.0:4.0 1.0:6.0

Slabs, Beams, Walls               1.0:2.0:4.0 1.0:2.5:5.0 Ceiling 1.0:4.0 1.0:6.0

Water Tanks                             1.0:1.5:3.0 1.0:2.0:4.0 Tile Work

1.0:4.0 1.0:6.0

Pipes 1.0:1.5:3.0 1.0:2.0:4.0 Pointing 1.0:2.0~3.0 1.0:2.5~3.5

Chemical Properties

Physical Properties

Valued Clients List

Product

M.I. Cement Factory Ltd.

Cement is the latest addition in the list of export commodities in Bangladesh. Our country started exporting cement from January 2003. Crown Cement of  M.I. Cement Factory Ltd. takes the pride of part of it. Earlier, apart from some production of state-owned Chhatak Cement Factory, the country was dependant on its import. In this context, local investors took the initiative for setting up cement factories and starts producing cement in 1992. The production in eight private factories stood 34 lakh tons in 1997, So far, about 100 Factories got government's approval of which 56 factories are on production with a production capacity of 1.30 crore metric tons against a domestic demand of 60 lakh tons in a year.

Goals :

Provide highest standard products and secure customers satisfaction.

Secure strongest competitive production through creative product and operational excellence.

Have highest entrepreneurs’ skills. Create a team of employees of highest professional

skills. For conversation of natural resources to engage in

research and innovation to use alternative raw materials where possible.

Extension of facilities to customers MICFL has taken steps to supply to customers cement in bulk through its bulk carries and also in form of ready mixed concrete direct to construction site corporate nature in management.

PRODUCT

M. I. Cement is basically a grinding mill that imports raw materials and manufacturers the final products.It started in 2000 with a production capacity of 180,000 MT annually. The product having high standard quality found its great acceptability to customers, ranging from individual builders to contractors or corporate organization. Soon the management of

MICFL took the expansion program and set up its 2nd unit with another 240,000 MT per year’s production capacity in 2002.

Presently the MICFL is producing two types of cement depending on customers such as customers’ choice viz. Ordinary Portland Cement and Composite Portland Cement.

Ordinary Portland cement Type-IFor general construction work, in concrete where no special protection such as sulphate or acidic attack from soil and water not anticipating, this type of cement is used. It is marketing in brand name:“Crown Cement”, Standard mark:BDS-EN-197-1:1993 CEM-I42.5 N

Composite Portland cementMICFL introduced from 2005 this standard of cement matching with the specific demand of construction such as foundation, floor, brick-laying, plastering and concrete work also. Trade mark,“Crown Cement” standard:BDS EN: 197-1:1993 CEM-II/A or B42.5 N

Raw Material’s

PROCUREMENT

Like the most of the cement mills in the country, MICFL is also grinding mill and almost all the raw materials are imported. It imports mainly from Thailand, Indonesia, Korea, Japan and India. At first the management representatives visited such countries and manufacturers of raw materials to ensure desired quality conforming to produce quality cement. For producing composite cement MICFL imports slag from Japan for an additive with clinker. After arrival it tests the raw materials through some known trading houses who have been tested to be bonafide and dependable.

Test Report

Mordant Technology

DISTRIBUTOR

HEALTH & SAFETY

M. I. Cement Factory cares for keeping the environment free from pollution. So it takes appropriate measures for preservation and protection of environment. For this end in view it keeps its desired mechanical devices and gives due emphasis for well congenial health condition within the factory for its employees. For financial security against any mishappening it brings its employees under of Group Insurance facility.

Aramit Cement Limited

Aramit Cement Limited was incorporated on 19thAugust 1995 as a public limited company by shares and established with technical collaboration of a Chinese company for producing Ordinary Portland Cement from the very beginning of its commercial production that started on 10thNovember 1999. The company has been maintaining the quality of the product for which it has own the confidence of the customers and also attained the high status international ISO 9002 Certificate. Company's products carrying brand name Camel has already become highly popular among the consumers.

It also exporting a considerable quantity of OPC - 43 N Grade Cement and Portland Slag Cement for the last few years.Existing capacity of the plant is 700 metric tons per day which is going to be enhanced by 1000 metric tons per day production capacity through setting up of another expansion unit for which erection works have been started.

Product List

OPC - 43N grade Cement

Production capacity

Particulars 2009 2008 2007 2006 2005Installed Capacity(in metric tons) 210000 210000 210000 210000 210000Actual Production (in metric tons) 162445 136731 127581 138248 119383Capacity utilization (in %) 77 65 61 66 57

KEY OPERATING AND FINANCIAL DATA OF LAST FIVE YEARS HAVE BEEN PRESENTED BELOW IN SUMMARIZED FORM

Particulars 2009Taka

2008Taka

2007Taka

2006Taka

2005Taka

Net sales 843,836,356 762,612,203 597,500,927 561,102750 457,558,571Cost of Goods Sold

649,068,944 704,071,625 524,552,513 513,291,541 456,947,748

Gross Profit / (loss)

194,767,412 58,540,578 72,948,414 (47,811,209) 610,823

Operating Expenses

31,675,069 26,851,617 18,245,968 14,515,969 12,478,917

Trading Profit / (loss)

163,092,343 31,688.961 54,702,446 (33,295,240) (11,868,094)

Financial Expenses

61,977,153 24,454,370 25,924,996 19,496,976 14,881,458

Other Income/ (charges) - operating (net)

7,702,760 5,385,612 3,345,580 (1,908,901) 108,554

Contribution @ 5% to WPP & WF

5,440,897 607,585 1,606,152 785,358 -

Net - operating (loss)

- - - - -

Profit / (loss) before income tax

103,377,053 12,012,618 30,516,878 (14,921,807) (26,640,998)

Provision for income tax

42,691,800 9,600,000 16,500,000 7,950,000 -

Profit / (loss) after income tax

60,685,253 2,421,618 14,016,878 (6,971,807) (26,640,998)

Transferred from Tax holiday reserve

31,000,000

Dividend distribution tax

- - - -

Profit / (loss) - 14,016,878 (6,971,807) (26,640,998)

Portland Cement - 42.5N Portland Composite Cement - 42.5N Portland Slag Cement

after income tax & dividend distribution taxDividend 16,800,000 - 6,000,000 - -(Loss) balance to date

(99,155,037)

(174,040,290)

(167,452,908)

(184,469,786)

(191,441,593)

Total Fixed Assets

349,982,716 347,658,121 318,143,881 315,084,118 309,376,576

Total Current Assets

368,889,041 306,178,916 200,542,971 150,168,808 118,037,786

Total Current liabilites

540,917,308 518,342,101 422,423,826 343,833,723 274,693,852

Total deferred Liabilities

111,109,486 112,535,226 3,984,767 3,305,295 2,796,806

Total long term Liabilities

- 71,731,167 105,583,693 144,365,297

Current ratio 0.68 0.59 0.47 0.44 0.43Shareholders' equity

66,844,963 22,959,710 20,547,092 12,530,214 5,558,407

Earning/ (loss) per share (basic)

43.35 1.72 10.01 4.98 (19.03)

Dividend per share (on 800,000 shares of General Public & Institutional Shareholders other than Sponsor Shareholders)

12.00 - 7.50 - -

Quoted price per share (year end) DSE & CSE

565.25 & 571.25

177.50 & 154.00

150.75 & 154.00

73.25 & 76.00

40.00 & 40.00

C

Holcim Bangladesh Ltd

The history of Holcim is too big to be told. So, we are describing it as much as possible. We divided the whole lifetime of the company into two parts. One is INTRODUCTION PERIOD and the other is EXPANTION PERIOD. Within ninety years Holcim has grown from humble beginnings in a Swiss village to become one of the world’s leading cement companies. The development through the years of 1912-2001 is briefly stated below.

INTRODUCTION PERIOD (1912-1970)

1912 Holcim was founded in 1912 in the village of Holderbank, Canton Aargau. From an early stage it became clear that the domestic market could offer only limited opportunities for expansion.

1920 By the early 1920’s the company began investing in cement businesses in other European countries. This trend was quickly followed by investments in Egypt, Lebanon and South Africa.

1945 In the years following 1945, and particularly in the Fifties and Sixties, a network of holdings began to develop in North and Latin America.

1970 In the 1970’s, ventures in the emerging markets of the Asia-Pacific began.

EXPANSION PERIOD (1980-2001)

1980 In the 1980’s, Holcim continued to expand into new markets, including Eastern Europe. A greater focus on aggregates and ready-mixed concrete production strengthened the company’s position as a vertically integrated market leader.

1990 A strong focus on core business activities in cement, concrete and aggregates characterized Holcim activities during the 1990’s. Continuing professional development programs for employees, coupled with a best practices policy, ensured challenges were met with creative solutions and company performance was enhanced. Entry into new markets, particularly within Asia, expanded opportunities for the Group.

2000 The name of the Group was changed from “Holder bank Financier Glaris Ltd” to “Holcim Ltd.” in May 2001. Today, the international presence of Holcim consists of a balanced mix of companies in industrialized and emerging markets.

2001 The company began its operations in Bangladesh in 2001 by acquiring the Hyundai cement factory in Meghnaghat in Dhaka.

Mission Statement of the company

The Holcim Group is one of the largest cement companies in the world. Their vision is to provide foundations for society's future. Their mission is to be the world's most respected and attractive company in the industry -creating value for all their stakeholders.

Their goals are to:

Continually set the highest standards of customer satisfaction in the industry.

Secure the strongest competitive position in the markets.Partner with suppliers to deliver value-for-cost procurement for the Group and their customers.Be recognized as an employer of first choice.Empower the employees and integrate them fully into the global network.Selectively grow their worldwide presence of companies.Demonstrate their commitment to sustainable development.Be acknowledged as a valued and trusted partner in their community.Be the most recommended stock in the industry.

Product Profile

Holcim group makes cement and cement related products. In Bangladesh the company focuses on the cement business. The product that I focused on is cement. Before discussing anything else, first of all we must know what cement is.

Cement is a building material made by grinding calcined limestone and clay to a fine powder. It acts as the binding agent when mixed with sand, gravel or crushed stone and water to make concrete.

The main raw materials of cement are Clinker and Gypsum. Clinker is gathered by burning limestone. Both of them create Ordinary Portland Cement (OPC). To get other types of cement various types of materials have to be added to it and their concentration varies according to cement type. There are standards for the concentration of various materials in cement. One is EUROPEAN STANDARD

and the other is AMERICAN STANDARD (ASTM). The standards are given below –

Figure: International Standard Of Cement Document.

Holcim Bangladesh Ltd. mainly concentrates on the Portland cement (C-150 in ASTM) and Portland Fly Ash Cement (C-595 IP ev. MS, A, MH).

Portland cement (C-150 in ASTM) includes only clinkers and gypsum and may be some minor additional materials.Portland Fly Ash Cement (C-595 IP ev. MS, A, MH) includes clinkers, gypsum, fly ash and may be some minor additional materials.

Holcim (Bangladesh) Ltd offers four types of cement:

Holcim Black Holcim Red Holcim Strong Structure Holcim Blue

Packaging strategy:

They will try to an increased product depth. They should try delivering different quantities, something that has never been tried before. Holcim starts producing 75Kg bag along with the present 50Kg bag. There are customers with a high demand. For a buyer buying 100 bags of Holcim, it is more convenient and reasonable to buy 75Kg bags instead of 50Kg bags. It will reduce the consumer’s cost along with Holcim’s too. Holcim will have to deal with less wastage of bag materials while packaging. It is also beneficial for the corporate organizations as their need and demand for cements is very high.

Marketing Strategy:

At present the company is in a growth stage in the product life cycle as the sales of company in the past years suggest. After its introduction in Bangladesh in 2001 the company is still experiencing high fluctuating market. Holcim is now in a “question mark” stage in the BCG Growth-Share Matrix. At this point the company must give attention to its market strategy as the strategy it uses will determine its future in the cement industry of Bangladesh. For its new marketing plan that we are proposing the company should use the Market Penetration Strategy as it will be dealing with its existing products and existing market. Here the price will be high, but closer to the competitor’s price. This will have a psychological effect on the consumers as they tend to think that more the price, better the product. The company will be highly benefited from it with increasing market share.

After a while when the company has a very huge market share, may be the company can afford to reduce the price by even a bigger amount and be the market leader. But the price should be still high from others.

Present Product Life cycle

Time

Sal

es i

n u

nit

sExpected Product life

cycle

Time

Sal

es i

n u

nit

sAs the expected product life cycle suggests, Holcim is looking for high growth rate in cement market. With better efforts and increasing sales in result, Holcim will be hopefully the market leader.

Marketing Tactics

Uncontrollable Factors:

Product strategy

The company must assure quality in all the levels of production and distribution. The company has to concentrate on the Total Quality Management (TQM) all the way from production to the distribution in the hands of the consumers. But the company must not overlook the fact of cost regarding TQM. The company will have to meet the best quality possible at all levels that is covered by the present cost with skilled employees. As skilled employers are hard to find in our country, Holcim can train the employees so that production capacity of each worker may increase. Company must also keep an eye on its profit scale while doing all these things. In the short run profit may seem to decline, but in the long run this training may prove to be fruitful.

They will try to increase the product depth and offer variety of products to the customers of the company. It will attract more and more new customers towards the company.

Pricing Strategy:

Most customers are highly sensitive about price of the product they use. They tend to think that if the price is more the product will be better. But if the price is too high then the customers cannot afford it. So, the price has to be high but it has to be closer to the competitors. If this high price can gain the trust of the consumer the company can afford to lower the price with increase in sales volume. The company should have a long-term plan to reduce cost and then reduce price later. So, they have to use a psychological pricing approach for every product with a little bit reduction.

Promotion Strategy:

Holcim’s Public Relation activities are none. So, a lot of potential buyers are not even familiar with Holcim’s name. So, it can increase Public Relation Activities through sponsoring various events, issuing massages for public interest.

Holcim can send its representatives in different corporate organization’s office to let them know about the quality of Holcim and benefits of buying Holcim. They will inform the corporate organizations that the new packaging is mainly for them.

To persuade the consumers Holcim can appoint different people from construction related businesses (like brick, sand, rod etc) as Premium Dealer. This will help Holcim and also the people getting appointed. Those people can pass on information about the quality of Holcim while they are selling their usual products. Holcim will have new premium dealers and those dealers will also act as a media to the consumers.

Distribution strategy:

Holcim’ main strength is its Premium Dealers. So, to increase its Premium Dealer in different areas; especially in Rajshahi and Khulna. Number of Premium Dealers in that region is 3 and 1 respectively, but the market demand is too big for these 4 premium dealers to control. So, increase in premium dealer in these two areas is a must for the company.

Holcim can initiate a contractual agreement with retailers. They should proposing an association of retailers, which will do the work of District Dealers (can be useful in certain places like Rajshahi). This will reduce the retail price, which will be beneficial for the consumers as well as to Holcim.

Opportunities for Holcim to have more sales

Rajhshahi, Biggest Target Potential Market Khulna, second largest potential market Dhaka, potential profit increase

Push and Pull Strategy:

Holcim

Premium Dealer

District Dealer

Retailer

Consumer Consumer

Retailer

Retailer’s Association

Premium Dealer

Holcim

Retailer Retailer

Existing Market Channel for personal

house builders

Proposed Market Channel for personal

house builders

UNCONTROLLABLE FACTORS:

The uncontrollable factors of Holcim refer to the competitors, raw material price, transportation cost, political situation of the country and economic decisions taken by government.

Competitors:

The main competitors of Holcim are Shah Cement and Scan Cement. The prices of Holcim’s competitors are much lower than Holcim.

Raw materials price:

Holcim imports its raw materials from abroad. So, a change in the exchange rate can affect Holcim very much.

Transportation cost:

Holcim uses different transportation companies for the delivery of its goods. So, Holcim has to come up with the transportation charge it faces in the market.

Political situation of the country:

In Bangladesh the political situation is very unstable. Strikes hamper production and result sometimes even in a loss for the company.

Economic decisions taken by government:

Government may take different steps like tax rate change etc. for betterment of the country. This will affect Holcim like all others.

Profile of the Target Market

Holcim Bangladesh Ltd. Mainly targets the customers who are very much brand loyal. Holcim prefers to work with them because they believe in the company and they will always support the company. Holcim also prefers those customers who pay their dues on time. Most of the buyers of our country are not that much regular when it comes to paying bills. So, the company prefers to deal with this sentient customer.

7%Corporate organizations

93%Personal House Builders

Percent

For the cement business in Bangladesh Holcim customers are two types. The first is corporate organizations like real estate companies, big construction firms, government construction departments etc. And the second is personal house builders. Majority of Holcim’s customer is in the personal house builder market.

93%

7%

All the reasons for choosing the personal house builders are given below –

Cash payment Brand loyalty Respond to marketing mix quicker than corporate organizations More in number compare to the corporate organizations

Figure: percentage of sale of all Division

1% 2%14%

13%

12%58%

Sales in defferent regions

BarisalSylhetChittagongKhulnaRajshahiDhaka

External Influences on the Purchase of Holcim

Culture is perhaps the most pervasive influence on the consumer behavior. Culture is the distinctive way of life of a people, their complete design for living, thinking. Cultural factors play a very important role for purchasing any kind of product. Without mix and match with the culture a product will not be abed to survive in the market.

Relevant cultural values

The important values that affect the purchase of Holcim cement are:

Status: Status is one of the cultural values that effect the purchasing of Holcim. As its price is very high and the quality is high so we can understand that Holcim cement user where belonging to.

Brand awareness: As cement is not use frequently for the general people. So it is must that give the Holcim name in a way that whenever consumer thinking about buying cement first name has to be in mind is Holcim cement.

Nonverbal Communication:The Holcim does not follow proper strategy in our country. The company has a little communication activities through there distribution. The company usually uses two colors. Red and black. Red is a symbol of chemical factor and black reflect the strong. So, after comical mixing its make a strong construction.

Purchase of Holcim:Affection is import for cement purchase. It is the knowledge about a particular product. 53% people buy Holcim cement for its brand image which is the highest and 8% people buy Holcim cement for its status which is the lowest.

Advice when buy cement:For the high involvement product advice is often taken. Advice is usually taken from the expert, engineer, salesman and any known person who have the knowledge about cement. Form our survey 63% respondent take advice from the engineer which is the highest and 8% respondent take advice from the sales man which is the lowest.

Brand Image and Product Positioning

Brand Image:Brand image is a very important factor in market. If image is good then sales must increase, but if it is negative then it will be opposite.

Product Positioning Positioning is the act of designing of the company’s offering and image to occupy a distinctive in the mind of the target market.

When some one thinks about Holcim, They know that it possesses a high quality and high price. And always serves the world class Pizza. Anywhere in the world customer can get the same quality and same taste. Holcim target consumer is upper class people. They are always looking high quality product and high quality service. And Holcim always provides it. Consumer believes it, because Holcim creates their position in consumers mind.

Perceptual Map:

Brand Equity:

Brand Equity is the value consumers assign to a brand above and beyond the functional characteristic of the productBrand Equity is nearly synonymous with the reputation on Holcim.

7.4 Brand Personality

This is characteristic that Holcim imbibes in it and which helps the consumers identify them with the following characteristic of Holcim

TraditionalStatusHigh Performance.

Motivating customer-Holcim vs competitors

The scenario of the market:

Holcim started its journey in the year 1912 and in Bangladesh 2001. That time it was only the cigarette company in the market. After that so many new brands come into the market. And as a result, competitor in the cement industry is increasing day by day. There are so many low status brands exist in the market but he leader are the Holcim and star. Holcim is one more step ahead than star. Holcim produce more solidification product, and long durable construction but other may take it as opportunity.

Motives in the case of buying

The basic motive to buy cement varies man to man. Some people buy for its brand loyalty, some for price, some for availability and some for style and quality. When we ask question to the people that, the most of the cement

are giving the same products but why people purchase Holcim , answer is they prefer the quality, some prefer the brand loyalty, some prefer the availability, some prefer the price and some prefer the enhance personality.

Facts & Figures

No of Plants in Bangladesh 3Total capacity in (MT/Year) 1.300.000Market Share approx. (Whole Bangladesh) 8.0%Market Share approx. (in Dhaka) 17.0%

Shun Shing Group has been devoting sustained attention and activities toward international cement trading & raw materials trading for more than a decade. Utilizing Shun Shing Group's far-reaching knowledge and experience in this sector at the international level as well as in the Bangladesh market, Shun Shing Group established Seven Circle (Bangladesh) Limited (SCBL), a 100% owned company in Bangladesh.

SEVEN RINGS, Group's own registered brand has been the market leader in Bangladesh Cement Industry for over a decade. Imported from Indonesia, Thailand and China, superior quality cement has been supplied under SEVEN RINGS brand and it dominating the Bangladesh cement market since 1990.

From February 2001 SCBL started production and distribution of SEVEN RINGS CEMENT in Bangladesh market from it’s state of the art factory in Kaliganj, near Dhaka, Bangladesh with production capacity 600,000 MT per annum.In 2008 new mil has been installed to produce another 600000 MT per annum making total capacity 1.2 Mil Tons per annum.

To strengthen its position in the Industry, SCBL has established a Building Materials & Service Company to provide exclusive customer services to corporations, private homebuilders, engineers, consultants and all other builders. SCBL’s future products and services include 1) Bulk Cement 2) Ready mix concrete 3) Pre-cast & Pre-stressed concrete. 4) Various building materials & construction management services, and 5) Refurbishment/ strengthening of the old

buildings.

Related Companies

Seven Circle Bangladesh Ltd. Shun Shing Logistics Ltd. Biroute Ltd. Shun Shing Maritime Ltd. Shun Shing Holdings Ltd. Shun Shing Power Ltd. Shun Shing Trading Ltd.

Products

Specification and Composition:

BDS EN 197-1:2003, CEM-I, 52.5 NASTM C150 Type -I

Clinker: 95-100%Gypsum: 0-5%

Bag Plant

In 2002 the Group has established WPP cement Bag Manufacturing plant having annual capacity of 45 million pcs.

The bags are supplying to –

SCBL:20 million PCs/ annum for captive use, 44% Other cement industries: 25 million PCs, 54%

Cement & Clinker

Group is involved in export of Grey Cement, Grey Clinker, White Cement, White Cement Clinker, Special Cement, Dry Mortar, SRC Cement and SRC Clinker. The Group is also involved in cement production and marketing of the Group's own prestigious Brand Seven Rings which is regarded as one of the Heighest Quality cement in Bangladesh.

Akij Cement

AKIJ Cement has established a foot hole in the cement market. Encouraged by consumer’s response and confidence AKIJ Cement is in the process of expanding its capacity by many folds. Once completed however, this factory will be quite incomparable.

From unloading the raw materials at the jetty to loading the finished product onto boats, all the stages are to be automated and computer controlled.

Two fix swing cranes will unload the clinker and gypsum and put them on a belt conveyer to be put into storage. These are then loaded into the ‘bins’ and measured by two belt scales before entry to the ball mill grinder. This allows the ratio of clinker and gypsum to be controlled. From there the ground cement goes to the vortex separators by the means of a bucket elevator and chain conveyer. The vortex separator separates coarse and fine cement by using high pressure. The fine cement is the finished product whereas the coarse cement needs to be ground again. The fine cement is stored in silos and intricately controlled conditions. This cement goes to the packing machine by a screw conveyer and from there to the jetty by a belt conveyer.

The factory is equipped with air filters in order to minimize pollution and recycle any cement that is suspended in the air. The entire production process is computer controlled and there are sensors to monitor various factors at regular intervals. The level of automation reduces dependence on staff and risk of human error. The software controlling the machines allows engineers to view progress on a computer stimulated model of the factory. It also reports problems and permits fine control of every stage.

The laboratory is not only involved in quality control but also on improving the cement to being the best brand available. As well as equipment to determine chemical properties of the product, there is apparatus to measure physical factors both before and after the cement has set.

Akij Cement has leapt dozens of places to become the country’s fifth largest cement manufacturer after it became the first company to produce harmful fly-ash-free building material. Set up in 2002, Akij Cement has been languishing as a low-ranked cement maker before it poured billions of taka in October 2009 to set up the country’s first Vertical Roller Mill technology in its Narayanganj factory.

“After an investment of Tk4.50 billion in the plant, we now have the capacity to produce 4,200 tons of cement every day. But due to energy crisis we can produce only 2,200 tons of cement a day. The amount is nearly four times of our initial production but still makes Akij Cement the country’s fifth largest cement maker. The success of the company, part of the tobacco-beverage giant Akij Group, lies in its ability to produce the harmful fly-ash free cement – thanks to installation of the costly VRM technology. Of the 41 plants producing cement in the country, we are

the only company that does not use fly-ash to produce cement. Fly-ash lowers the quality of cement and weakens a building. Akij Cement has received huge response from clients. We are even failing to meet the demand, which has outpaced supply by three-folds,” -said Payar Ahmed Tushar, the Akij Cement brand manager.

He said most Bangladeshi cement companies produce composite cement, which contains 65 to 79 per cent clinker and the rest additives like-fly ash, slug and limestone cent. Gypsum accounts for up to five per cent.

Akij Composite Cement is the only brand in Bangladesh that contains 72-79 per cent clinker, a 7-14 per cent up from the mandatory standards set by the government.

The company imports 48-53 grade clinker from Thailand, Indonesia and Japan. Brand image of Akij Group – whose interests include jute, food and beverages, particle board, textile, paper, printing, computer, healthcare and tobacco – has helped the cement venture make an “easy foray” into the market.

Akij Cement has employed 720 people directly and 1,200 indirectly and has plans to increase the capacity to 100,000 bags from the existing 82,000 bags a day to meet rising demand.

The company’s initial target is to utilize the existing capacity and get a maximum output, but the existing low pressure of gas and nagging power crisis are holding back its potential. Although they are running three shifts a day, their production has declined due to energy crisis. Also they get power supply for only 10-12 hours a day. If it had adequate power and gas supply, it would be able to meet the demand.

The company has installed a captive power plant with a capacity of 6.76 megawatt. It is also setting up another 10MVA, 33/11KV capacity power plant to ride out the energy crisis.

All industrial units have been suffering due to the current energy crunch. The recent weeklong strike by vessel workers has also affected the sector.

Currently, 41 cement players are active in the country to produce 52 brands. Of the brands, only nine operate nationwide, seven in some parts of the country and the rest 36 cater to areas where they are set up.

Among the brands only six are Portland cement producers who use 95 per cent clinker and the rest are composite brand makers mostly using the government-fixed 65 per cent clinker.

At present, the country’s annual cement production capacity is 2.11 million tones, which is nearly twice the consumption of around 1.15 million tones. According to Tushar, Shah Cement is the market leader with a production capacity of 120,000 bags a day, followed by Heidelberg, Lafarge, Holcim and Akij Cement.

Although the market is highly saturated, major companies are planning expansion to cut production cost and increase their share in the market as they are running at 60 per cent of their capacity.

Cement demand has clocked double digit growth last year after the construction sector posted an impressive growth of eight per cent, according to the Bangladesh Bureau of Statistics.

The demand would soar in the coming years as billions of dollars of remittance have fueled a construction boom across the length and breadth of the country.

Premier Cement Mills Limited is one of the leading innovative cement manufacturers in Bangladesh. It manufactures EUROPEAN standard product using the best raw materials and technical excellence for ensuring dependability and superiority of cement. The products provide strength and durability to buildings of high dimensions, roads, bridges, infrastructure that speeds the lines of commerce, and for housing that provides comfort and security to families across Bangladesh, India,Myanmar,etc.

The name Premier Cement is known as one of the topmost brands in Bangladesh.

Its associated companies adhere to the same demanding standards as they provide to Government, Builders, and Manufacturers of construction materials such as Ready Mix Concrete, Block, Pipe, and other pre-stressed concrete units. Premier Cement enjoys a sustaining reputation and good history in Bangladesh. It has the experience to excel on one of the top positions in the market consistently. 

Premier Cement Mills Limited was incorporated on 14 October 2001 but they started their production commercially on 12th March 2004. Currently, the company runs with an annual production capacity of 9 Lacs tons (75,000 tons per Month). Their products are all around us, providing strength and durability to buildings of soaring dimensions, in infrastructure that speeds the lines of commerce and for housing that provides comfort and security to families across Bangladesh.

History of Premier Cement Mills Limited

The company started off as a group of top ranking businessmen of the country set together who decided to establish a cement factory, when the sanctioned capacity of cement manufacturing plant was nearly double the demand of the country.

Company Profile:

The team consists of three leading group of companies in Bangladesh. Short profiles of each of these companies are given below.

T.K Group of Industries:

It is one of the top five leading business houses in Bangladesh, having business in sectors of edible oil, petroleum, chemical, steel, paper, board mill, garments, leather, consumer items, commodity trading, etc. TK are the pioneer to enter the cement manufacturing, soon after Bangladesh Government opened up Cement Industry to the Private Sector.

Seacom Group:It is one of the pioneers in shipping industry in Bangladesh which has diversified itself in the businesses of Shipping, Logistics, Trading, Fishing, etc. With time, the house not only served the cement industry but it also gained wide experience in shipping both inland and ocean going for clinker trading.

Jahangir & Others: It is one of the top Trading and Distribution houses of the country. The company has sales and distribution network all around the country. It consists of those who not only engaged themselves in cement trading from the inception of Bangladesh but also gained reputation in the meantime as cement manufacturers of the country.

The Board of Directors consists of members from each of the above three groups. The Company, Premier Cement Mills Limited was incorporated on 14th October, 2001 and commercially started their production on the 12thof March, 2004. Today, with an annual production capacity of 1.6 million tons, 450 employees in operation nationwide, Premier Cement Mills Limited is one of the leading cement producers in Bangladesh. Within the span of the first 5 months, the company has achieved the ISO 9000-2001 certification from TUV, with highly skilled employees.

Vision

“Working towards the development of the society through Sustainable Growth and High Quality Performance.”

Mission

“Provide satisfaction to customers, an enjoyable working environment for the employees & to create value for the stakeholders.”

Goals & Objectives

Premier Cement Mills Ltd has very basic, well specified goals and objectives outlined for the company which is mentioned below.

To improve comprehensively in their current success areas. To improve their brand image. To satisfy their customers. To be among the top 5 cement companies of Bangladesh. To earn profits. To capture their target market share.

Product /Services Offerings Products

Premier Cement consistently delivers quality products to its customers. Their automated manufacturing facilities and fully equipped laboratory with dedicated team ensures quality for each batch of production. Premier Cement adheres to the European Standards. The Cement gets its unique characteristics by using the high quality clinker, slag and lime stones. It provides the extreme of workability, durability and long-term strength. Premier Cement is produced according to the European norms EN 197-1:2000. From the beginning of their operation, the company has been consistently ensuring the following features for their products:

Exceptional Strength: At Premier Cement the chemical composition and grinding fineness are closely monitored to ensure the Bangladeshi BDSEN, American ASTM, European EN, and Indian BIS standards are surpassed and the customers get cement of strength.

Ideal setting time: In order to allow sufficient time for application, cement must have a quick initial settings time. The final settings should not take too long once it is in a place. At Premier Cement Mills Ltd, the ideal initial and final setting times are maintained.

Currently Premier Cement is manufacturing the following types of cement:

Ordinary Portland cement: Ordinary Portland cement Type-II is the most common type of cement in general used around the world as it is a basic ingredient of concrete, mortar, stucco and most non-specialty grout. It is a fine powder produced by grinding Portland cement clinker (95%) and a limited amount of Gypsum which controls the setting time. It conforms to the Bangladesh Standard BDS EN 197-1:2003 CEM-I 42.5 N, European Standard EN 197 type CEM I, and American Standard ASTM C 150 Type I mark.

Portland Composite cement:“Premier Cement” standard: BDS EN 197-1:2003 CEM II/AM or BM 42.5N which is Portland composite cement. It is the most common type of cement used in Bangladesh which consists of Clinker, Slag, PFA, Gypsum, and Limestone.

Portland composite cement plays a vital role in European market. It is made by inter grinding or blending clinker and Gypsum with one or more of the mineral components which are given below:

A latent hydraulic component: e.g. Ground Granulated Blast Furnace Slag, Pulverized Fuel Ash (PFA) A pozzolanic component: e.g. natural pozzolana, Fly Ash (Class F) Inert components: e.g Limestone and sand which usually do not have any real participation in the chemical hydration process and is produced by grinding or blending of the constituents.

Production Capacity:

Premier Cement produces a total of 4000 tons of cement per day. Two ball mills are used for producing these cements in a day. Each of these ball mills has a capacity of producing 2000 tons each. Like other foreign and local cement companies of the country, each packet of Premier Cement weighs 50 kg.

RawMaterialNow days it is tough to arrange sourcing of raw materials for cement industries. But Premier Cement has fixed sources of clinker from Thailand, China, Indonesia, Malaysia and Natural Gypsum from Thailand and Oman, which give more consistence of raw material. Slag comes from Japan and India, PFA (Pulverized Fly Ash) and Limestone from India. These raw materials are carried by dedicated transportation.

Ocean Going TransportA dedicated ocean going Mother Vessel having 38000 DWT carries raw materials

from abroad to Chittagong Outer Anchor and then dedicated Lighter Vessels take to Factory Jetty.

Own Raw material unloading facility Premier Cement has the largest private jetty on the bank of the river Shitalakshya, installed with two cranes of total 500tph unloading capacity, Pneumatic Fly Ash unloading unit of capacity 70tph and Barge loading capacity of 90tph. The company also has their investment in India for Fly Ash loading unit.

Raw material testing facility Premier Cement has modern & art laboratory where all testing facilities are available of both chemical & physical properties of all cement & cement-type material. The incoming raw material is inspected & through also trail test by the company’s mini ball mill before unloading the incoming raw material.

Storage facility Premier Cement has the capacity to keep their raw material at their shed & silo.

Clinker shed capacity : 50,000ton Gypsum shed capacity : 2,000ton PFA Silo capacity : 2,000ton PFA Shed capacity : 1,500ton Slag shed capacity : 8,000ton Limestone storage capacity : 50,000ton

Raw material feeding The company has its own individual raw material feeding system which is fully controlled by computer. Weekly calibration is done by the weigh feeder for finding out any deviation of the feeding proportion of the raw material.

Power facility Premier Cement has its individual 6KV feeder where 24hrs power facility is available. Uninterrupted power supply is very crucial for continuous and smooth operations of the plant. The company has its own gas fired power generation plant

along with Grid supply. The installed generation capacity is 5.34 MW from MWM Duets.

Grinding Premier Cement has two ball mills which have been manufactured by world prominent cement mills manufacturer, viz. FL Smith-Denmark. Each of these ball mills have a capacity unit of 2000TPD.It may be mentioned here that it is the heavy duty mills which produces superior quality of cement.

Lab testing facility Premier Cement emphasizes in delivering quality product to its customers. Here, Quality Control is supported by BUET and its own laboratory consisting of top of the line testing equipments from UK, USA, and India; which are regularly calibrated by BUET. The company has all testing facilities of cement and cement-type materials. At process, Premier Cement has check hourly fineness and residue of product and every 2 hrs setting which is important to control the product water consistency and the time setting. They have test mortar strength of cement, chloride test and cement expansion by autoclave machine.

Packer #2& 3 capacity: 240ton/Hr

Spout: 8 each

Origin: China

Premier Cement has its own PP Bag manufacturing plant which has the capacity of packaging 200,000bags/day. PMCL produces both paper and plastic bags which are delivered to their customers as per the demand of the customers.

Equipment Technology: KRUPP POLYSIUS AG (GERMANY) Haver & Boecker Man Takraf Foroertechnik GMBH SMB International GMBH United Conveyors Corporation (USA)

Some of the other important technologies and machineries that are used are:

Tape Stretching Line Starex-1400S/105, STARLINGER (AUSTRIA)

Printing Machine Flexa 8045, WINDMOLLER & HOLSHER (GERMANY)

AD Convertex, WINDMOLLER & HOLSHER, GERMANY

Slitting Machine Roll slitter, STARLINGER (AUSTRIA)

Hydraulic Sack Press, STARLINGER (AUSTRIA)

High Pressure Grinding Chrome:

Capacity: 2 NOS. gas fired caterpillar reciprocating engine Capacity of engine : 5.8 MW each Plant capacity : 11.6 MW

Operational Philosophies: Operated in 3 shifts Each shift having 4 persons Plant started in grid mode Running in island / parallel mode.

PCM Ltd has its own Power Generated plant. The portfolio of the plant is given below:

Latest technology of STARLINGER from Austria & Germany Total Machines : Seven Total Employees : 200 ( 2 shift and 6 day operation ) Total Production : 2,66,00000 Pcs. Cement Bag Yearly (Approx.) Area of the Factory : 75000 sft (Approx.)

To deliver the lowest possible time by managing a fleet of trucks in the most efficient & profitable manner is the core of Premier Cement’s delver the product to its customer doorstep at logistics.

PMC has 100 cover vans at present; 20 new cover vans will be added soon. Premier Cement has 120 nos. of truck and 20 barges with combination of different Capacity to balance for any eventuality. 4 Bulk carriers and portable silos

Cement storage Premier Cement has 2 concrete cement silos and 1 steel silo. The two concrete cement silos have a storing capacity of 2,000ton whereas the steel silo has a capacity of 1,000ton for storing their finish goods.

Cement packing Premier Cement has 3 roto packers. These are used for packing the finished goods of the company. One of the packer is the world famous HAVER PACKER-German capacity 150ton/Hr and the other 2 packer is WAXI HAVER Roto packer -China origin with a capacity 120ton/Hr. each.

Packer #1 capacity: 150ton/Hr

Spout qty: 10 each

Origin: Hover packer-German

Logistics and Distributions Department

The Logistics and the Distributions Department of Premier Cement is merged together. The Logistics Department of this company is responsible for the management of information to and fro the company, material handling,

arrangement of transportation and the overall distribution and delivery of the goods in an effective way, both in terms of time and cost. The work of the Logistics department is very closely connected to that with the distribution department and this is why, even after so many years, the management of Premier Cement have decided to continue to keep both of these departments together. The distribution department of Premier Cement is responsible for distributing their finished goods throughout the country. Below a diagram is given to show the operation of the Logistics and Distribution departments together in a comprehensive manner.

DistributionBoth inbound and outbound Logistics plays a vital role in Cement Industry in Bangladesh. Premier Cement believes in delivering door-to-door on time.Premier Cement has distribution network through dealers and retailers around Bangladesh, who are served with dedicated covered vans and bulk carriers to ensure the door to door delivery of cement.

ExceptionalStrengthIn Premier Cement the chemical composition and grinding fineness are closely monitored to ensure the Bangladeshi BDS EN, American ASTM, European EN, and Indian BIS standards and actually surpass those standards and thus the customers get Premier Cement of exceptional strength.

Ideal Setting TimeIn order to allow sufficient time for application, cement must have a quick initial setting time. However, once in place the final setting should not take too long. At Premier Cement, ideal initial and final setting times are maintained.

Currently Manufactured Cement Types Ordinary Portland cement: Ordinary Portland cement Type-I is the most common type of cement in general use around the world. It is a basic ingredient of concrete, mortar, stucco and most non-specialty grout cement. It is a fine powder produced by grinding clinker (95%), a limited amount of Gypsum which controls the setting time. It conforms to the Bangladesh Standard BDS EN 197-1:2003 CEM-I 42.5 N, European Standard EN 197 type CEM I, and American Standard ASTM C 150 Type-I mark.

Portland Composite Cement: “Premier Cement” standard: BDS EN 197-1:2003 CEM II/AM or BM 42.5N which is Portland Composite Cement. It is the most common type of cement used in Bangladesh which consists of Clinker, Slag, PFA (Pulverized Fly Ash), Gypsum, and Limestone.

Management Structure

Department Of PCMLTECHNOLOGICAL IMPACT: Premier Cement Mills Ltd.

Just like other cement countries of the country, Premier Cement Mills uses the European Standard Method to manufacture their products. The company has an added advantage over most other cement companies they are one of those companies besides CEMEX and Heidelberg Cement who possess European equipments and uses the European technology to make their products. The specifications of the equipment technologies used by PCM have been discussed above.

The IT department of PCM is responsible for organizing and managing the various software and programs used by the employees of the company. All the employees of PCM (referring to the Dhaka and the Chittagong branch) are well acquainted with the basic computer skills, however most of the employees of the corporate office of PCM are trained to use and apply sophisticated and modern software required for their work areas. Like other companies, Premier Cement is also enlisted on the online yellow pages of Bangladesh. The company has their own website and the address is www.premiercement.com. However, a new and a better website is under construction now which will be launched very soon.

PRICING: Premier Cement Mills Ltd.

Premier Cement Mills Ltd is a large company who gives great importance and time to the price factor of their products. The company follows a very simple but a well defined pricing strategy for deciding the price of their products. As the cost of producing each bag of cement is known, the company then adds a price tag to their product by following the market leader of the Cement industry. As a result, the price of their product is fixed by following the market leader of the cement companies as their benchmark in each of the regions.

The price of Premier Cement varies from region to region. For an example, the market leader of cement in Dhaka is Shah Cement. Thus the price of the product of Premier Cement in Dhaka is fixed depending on the price of Shah Cement in Dhaka. On the other hand, currently Ruby Cement is the marker leader in Cox’s

Bazar. Thus the price of Premier Cement products in Cox’s Bazar is fixed as per the price of Ruby Cement products in Cox’s Bazar. This strategy does result to a varying price of the same product from one region to another but however, there is never a gap of more than Taka 10 within the country. Although this is the core strategy of the final stage of price fixation of the company, however there are also some other important components taken into account while the price of the products are fixed. Currently, the standard price of one cement bag produced by the multinational cement companies ranges within the price of taka 370 to taka 390 per bag. On the other hand, the price of a cement bag produced by the local companies ranges within the price bracket of Tk.340 to Tk.365. At present, the price of Premier Cement in Dhaka is taka 355 per bag.

Although Premier Cement follows a clearly defined pricing strategy for fixing the price of their products, however the components mentioned above in addition to other controllable and uncontrollable elements (like inflation rate, chance in exchange rate and the tax and/or VAT imposed by government) do create situations where the price of the company’s product has to undergo changes from time to time. As mentioned earlier, the market demand and supply plays a prevailing role in the price fixation of the products of Premier Cement. Similarly the change in the price of the raw materials of cement also compels the company to alter their prices accordingly from time to time.

CUSTOMERS: Premier Cement Mills Ltd.

Just like other big cement companies, Premier Cement Mills also caters to the same customers with their products and services. As seen above, these customers are players in the distribution network whom the company attracts by implementing their marketing activities and then eventually reaching them through their distribution networks. 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

Responsibility

Leaflets: From June, 2007 Premier Cement has started leaflet distribution in order grab a brand image to the customers. Another intention behind distributing the leaflet was to inform the customers about the ongoing promotional offer which can help to boost the overall sales of the company as well. Leaflet is one of the best ways to communicate directly with the customer. According to Shaun parker it is a fantastic way to build brand recognition over a period of time1. It might not bring instant reaction from the target group but leaflet will create the brand recognition which might cause a future purchase.

Sponsorship:

EXPORT AND IMPORT: Premier Cement

Premier Cement started their export activities from the year 2009.The company is recently exports their products to Nepal and the eastern side of India. In India, most of the commercialization activities take place in the northern side of the country which makes the carrying cost of cement more expensive and time consuming to the eastern side of the country. This is why, it is much easier to export cement from Bangladesh to the eastern side of India. There a growing demand of the company’s products in many African countries but due to shortage of logistic support, the company is being unable to export their product to these countries.

Out of the total production capacity of 4000MT/day, 200MT is being produced for export purpose only. For export purpose, the Portland Pozzolana Cement is produced which is similar to the Portland Composite Cement only with some difference in the composition the overall cement. The company makes different cement for export purpose because the climate, temperature, location and type of buildings built varies greatly from one country to another which automatically changes the requirements of the cement type from country to country. The 200 MT cement that is produced per day for export are stored in one of the silos unless orders come and the products are exported to neighboring countries by using the company’s own mother vessels. 10% of the cement produced from the total production quantity is exported per month. . The export margin of Premier Cement Mills Ltd is $76/ tone.

Just like most other cement companies of Bangladesh, Premier Cement imports their raw materials such as clinker from Indonesia, Malaysia and China. The company imports the gypsum, fly ash and limestone from India.

Some Certification That Achieve