The industry comprises of 29 companies with the production capacity of 44.09 million tons. There are four foreign companies, three armed forces companies, and 16 private companies listed on the stock exchanges. The Pakistani cement industry is divided in two sectors, namely the Southern and Northern region. The northern region has the bulk of the units and the division ratio stands at 75-25. The north with its production capacity of 35.18 million tons, while the south with 8.89 million tons, compete for the domestic market of over 19 million tons.

There 16 companies listed in the Karachi Stock Exchanges 100 index. The Northern sector contributes for more than 80% of the sales of the country’s cement sector. The

sector is also dominant over the southern sector with respect to our exports, and almost 98% of our exports is contributed by the northern sector. The northern region has an edge over the southern mainly because the transportation charges for the sector are very low as the units are located very close to the queries and limestone mines close to the queries and limestone mines.

Due to political instability and lack of allocation of funds for public sector development program, cement industry of Pakistan was in the recession phase had registered an average growth rate of 2.96% for the period from 1990 to 2002.

For the period from 2003 to 2007 cement industry of Pakistan had registered an average growth rate of 20%.

The boost in cement sector is because of the rising construction activity in the country, reconstruction activity in Afghanistan and increasing development expenditure by the government

APCMA is the apex body of the cement manufacturers of Pakistan. It is registered body under section 3 of the Trade Organization Ordinance 2007 wide license no 14, dated April 26, 2008 issued by Ministry of Commence. It was incorporated on14th of September 1992 under section 32 of the Companies Ordinance 1984.

There are 4 major players in the cement industry of Pakistan: Lucky Cement, D.G Khan Cement, Best Way Cement and Askari Cement.

Significance :

Pakistan cement factories continue to make significant progress in cement exports. The cement sector is contributing above Rs 30 billion to the national exchequer in the form of taxes

and accounts for almost 3% of Pakistan’s export Now Pakistan is ranked 5th in the world’s cement exports after a huge increase of 47 percent in

exports during last fiscal year. According to the Global cement report, China maintained first position with 26 million tonnes in exports, while Japan got second position by exporting 12.6 million tonnes of cement. Third largest cement exporter in world is Thailand with around 12 million tonnes, followed by Turkey which exported 11.6 million tonnes of cement. Pakistan now at 5th position has left Germany behind by exporting 11 million tonnes of cement during last fiscal year. Germany now stands at 6th position with 9 million tones exports. Pakistan is rich in deposits of limestone, clay and gypsum, which constitutes the basic raw materials of manufacturing cement. Cement industry is indeed a highly important segment of industrial sector that plays a pivotal role in the socio-economic development. Since cement is a specialized product, requiring sophisticated infrastructure and production location, mostly of the cement industries in Pakistan are located near/within mountainous regions that are rich in clay, iron and mineral capacity. Cement industries in Pakistan are currently operating at their maximum capacity due to the boom in commercial and industrial construction within Pakistan. 

The main factors behind increase in demand of cement were: 60 percent higher Public Sector Development Projects (PSDP) allocation, seven percent GDP growth, increasing number of real estate development projects for commercial and residential use, developing export market, expected construction of mega dams, reduction in excise duty by Rs 10 per bag and declining interest rate scenario.

The cement sector is contributing above Rs 30 billion to the national exchequer in the form of taxes. Cement industry is also serving the nation by providing job opportunities and presently more than 150,000 persons are employed directly or indirectly by the industry.

This sector has invested about Rs 100 billion in capacity expansion over the last four years. Overall cement plants of Pakistan operated at 80 percent capacity utilization as compared with 81 percent utilization in the same month of last year.

The cement industry of Pakistan entered the export markets a few years back, and has established its reputation as a good quality product. The latest information is that India will import more cement from Pakistan. So far 130,000 tonnes cement has been exported to the neighboring country.

Currently, the export demand is expected to be from new inductee India along with other countries like Gulf Cooperation Council (GCC) countries, due to rising oil prices-led economic growth.

The contribution to GDP from the cement sector is around 0.9 % and is expected to reach 1.5% given the export forecast made for the next 10 years.

Pakistan is a signatory to the WTO and cannot keep its eyes shut to the realities. What Pakistan

needs to do is to make the best of a given situation and try and develop a strategy to get maximum

benefit from globalization and WTO.

The local industry now cannot be protected with the use of quotas or very high tariffs. The

government needs to build a very strong network of Anti-dumping and countervailing duties to

protect the local industry against the onslaught of unfair foreign competition.

Types of cement

Cements that are used in international market are divided into two main categories on the basis of their properties: hydraulic and non-hydraulic. Different type of cement can be produced used different quantities of gypsum, clinkers and other additives, but only certain types of cement are commonly utilized today because of their costs and binding power.

Non-hydraulic cement

Non hydraulic cement is cement which cannot harden while in contact with water, as compared to hydraulic cement which can. When non-hydraulic cement is utilized in construction, it must be kept

Types of Production Processes1. Dry Process (In Pakistan

most of the industry employs this method)

2. Semi-wet Process3. Wet Process

dry so that it will hold the structure. Due to difficulties related with waiting, it is rarely used in current market.

Hydraulic cement

Hydraulic cement is cement that has an ability to set and harden after being combined with water. Hydraulic cement is made mainly from limestone, certain clay minerals, and gypsum, which are burned together in a high temperature. Hydraulic cement is the main cement utilized in modern day construction.

Only the following types of cements are available in Pakistan cement industries:

1. Ordinary Portland Cement2. Sulphate Resistant Cement3. Blast furnace Slag cement 4. White cement

Ordinary Portland Cement (OPC)Ordinary Portland cement is available in darker shade as well as in light shades in Polypropylene bags of different sizes with different brand names to suit the requirement of users.

It is used in all general constructions especially in major prestigious projects where cement is to meet stringent quality requirements; it can be used in concrete mortars and grouts etc. Ordinary Portland cement is compatible/consumable with admixture/ retarders etc.

Sulphate Resistant Cement (SRC)Sulphate resistant Cement’s best quality is to provide effective and long lasting strength against sulphate attacks and is very suitable for constructions near sea shores as well as for canals linings. It provides very effective protection against alkali attacks.

Slag CementSlag cement, has been incorporated into concrete projects for over a century to improve durability and reduce life cycle costs. Among its measurable benefits in concrete are better workability and finish ability, higher compressive and flexural strengths, and improved resistance to aggressive chemicals.

White Portland Cement

White Portland cement or white ordinary Portland cement (WOPC) is similar to ordinary, gray Portland cement in all respects except for its high degree of whiteness.White Portland cement is also used in combination with inorganic pigments to produce brightly colored concretes and mortars.

Factor conditions:

The factors that come under the factor conditions of the cement industry are raw materials, labour, energy sources, machinery, technology, capacity utilization, investment, infrastructure

(transportation), and energy sources. The climate, soil, mineral resources are all available in good quality but compared to international competitors our products generally don’t meet international standards

Raw materials:

The two main raw materials used in the manufacturing of cement are:

Limestone: It is a very strong rock and is often cut into large blocks and used in the construction of buildings and skyscrapers. Cement is a manufactured product consisting essentially of a mixture of calcium silicates and calcium aluminates. These compounds react with water and in so doing cause the cement to set. The requirement for calcium is supplied by limestone.

Clay: the most essential component of cement is clay. The characteristic that makes it that important an ingredient of cement is its firmness; clay becomes firm and solidifies when heated in a kiln.

The following raw materials are required in the process of making cement:

Limestone Clay Fuel Ash Gypsum Sulphur bauxite

Main Utilities used for Cement ProductionThese include fuel oil, natural gas, coal, electricity and water.

Basic Stages i n Cement Production

Labor

Since this industry is a highly capital intensive industry, the need for abundant cheap labour is high. The cement industry employs around 150,000 people either directly or indirectly. The skilled to unskilled labour in the industry is approximately 2:3. This unskilled labour is required for loading, unloading, packaging, as drivers etc. Whereas the skilled labour mostly comprises of engineers: chemical, mechanical, mining, electrical etc. and majority of these are graduates from NED or NUST. Apart from sending employees abroad for training, the National Institute of Labour Administration and Training (NILAT) plays a significant role.

Energy sources

Energy cost constitutes about 60-70% of the total manufacturing cost of cement. The cement industry initially used furnace oil as their basic fuel but now most of the companies have either switched to gas or coal. Most of them have made the conversion whereas some are midway between them. According to the data of the APCMA of mid-2007, using furnace oil, the cost of producing cement per tonne was approximately Rs2083 whereas the cost using coal was Rs868 therefore coal has proven to be a good option due to the abundance of coal in the country where it is found in all the four provinces. One problem of using coal as a basic fuel is that the coal extracted in Pakistan has a high sulphur content. Additionally, other alternative fuel sources include scrap tyres and municipal waste. For example Fauji cement, under active management, explored alternative fuel sources and has now installed Pakistan’s first Refuse-Derived Fuel (RDF

MachineryThe machinery used in the manufacturing of cement include limestone crushers, limestone grinding mills, gypsum crushers, gypsum mills, coal mills, coal crushers etc. and these are mainly imported from countries like Germany, Denmark, Italy, Korea and China. However, China is the biggest exporter of machinery to Pakistan whereas others have a smaller share. The Chinese manufacturer, Shanghai Shibang Machinery CO. LTD (SBM) is a professional manufacturer and supplier of such machinery. It is major Chinese supplier to Pakistan. At present, however, the crushing and grinding equipment is the widely used cement production equipment. Even though the imported machinery makes the quality of the Pakistani cement competitive in the World market, it also raises the cost because it is expensive to import.

Capacity utilization

One of the biggest problems faced by the cement industry is the idle capacity of many companies. Overall the cement industry operates at approximately 80% capacity utilization. Even though, it is seen as a huge problem because of the inability of firms to achieve the full benefits of economies of scale, many large plants like Lucky and Fauji enjoyed the excess capacity when international demand increased. This helped them make large profits.

Investment

The very first foreign direct investment in the Pakistan cement sector occurred in 2005. This investment turned into what we now know as Pakland cement. It was the first plant to comply with the European standards and exceeded the Pakistani standards by far.

The cement sector also attracted foreign investment of $41.4 billion in July-August 2007.

Cement sector has attracted above 80 million dollars foreign investment, depicting an upsurge of 577 percent during the first half of current fiscal year, industry sources said.

Government policiesBesides foreign investment made in the cement industry the government allocates a fair share of the budget. In the year 2008 to 2009 almost 4.4% (646 million) of the budget was allocated to development projects.

Taxes

As of 2007, Pakistan has one of the highest tax rates in the south-east region. Along with the 15% sales tax, the industry has to pay the central excise duty. Other countries have comparatively very low tax rates that are often considered to be negligible. In addition the industry also pays paying the provincial levies (Royalty and Excise Duty) on acquiring of raw material for production of cement i.e. limestone and clay.

Transportation

With the rise in demand for exports, the problem being faced by Pakistan is our transportation system

Demand of cement

Exports

At the moment, Pakistan is exporting the following processed and intermediary products:-

Sulphate Resistant Cement (SRC) Ordinary Portland Cement (OPC 42.5 N/R) Clinker ( exported to the milling units of various countries) Slag Cement

The major importers of Pakistani cement are:-

Srilanka Russia Afghanistan ( Major cement importer for Pakistan in 2008)

Iraq United Arab Emirates South Africa India Djibouti Qatar

Reasons for the increased international demand for Pakistani cement:-

India and china is currently facing a shortage in its cement production facilities while Pakistan has abundant production facilities with excess capacity.

India has also significantly decreased its imports of Pakistani cement following the Mumbai attacks. However, it has resumed position in recent years. Better relations with India have led India to import more Pakistani cement – thus increasing the figure for total

demand. India has also let go of the custom duty (of 12.5%) that it had placed on Portland cement imports. Also, Pakistan has

increased the number of trains which carrying its cement to the Waghah border.

Increase in the demand of Pakistani cement in Asia, Middle East, Africa and India, afgahnistan Due to Pakistan having all the necessary raw materials needed to produce cement,

countries view Pakistani cement to be of good quality and find it to be a safer option as compared to the cement of other countries.

The decline and ultimate shutdown of major production facilities and units in European areas due to stringent regulations circling around environmental health and pollution monitoring.

“Last year local consumption was 23 Million M. Tons while exports were 10 million M. Tons. So there is surplus capacity in Pakistan at the moment and this surplus may exist for the next couple of years. India is second largest producers and consumers of cement in the world and has capacity somewhere around 250 million M. Tons.”

-Lucky Cement

Pakistani cement is perceived in the world as high quality cement. Quality of limestone available in Pakistan is the best in the world. Also, we export high quality Ordinary Portland Cement (Grade 42.5 N/R), Sulphate Resistant Cement (SRC), Slag Cement and White Portland Cement from Pakistan. The top quality Pakistani cement not only meets but also surpasses several international standards like: We export cement which is certified to meet quality & standards of many countries including South Africa, India & Srilanka. Our plants maintain Uniformity, Strict Quality Control, ISO 14001 & ISO 9001 certified and rely on SGS reports for their high quality.

Pakistan is the supreme choice of most of the cement importers as Pakistan is highly abundant in the raw materials required and had been bestowed with highly impressive cement production facilities.

Improved access to the neighboring markets

Recently, India offers itself as a deserving candidate for the importer of Pakistani cement as the Indian custom duty on Portland cement imports (duty of 12.5%) has been put to rest in 2007. India intends to import more cement from Pakistan in order to breakeven and stabilize the demand vs. supply gap that resides in the Indian economy. Also, India has successfully registered various Pakistani cement manufacturers as this is a pre-requisite to smooth the process of the import of cement. To top it all, Pakistan has rapidly increased the number of trains carrying cement from Pakistan to the Wagah border.

China is importing huge amounts of Pakistani cement as in the month of May; china was devastated by a wrecking earthquake of the magnitude of 7.8 on the Richter scale. Thus cement is needed in large quantities to facilitate the rebuilding of the wrecked and devastated regions of china.

Increased demand for Pakistani cement by South Africa and Srilanka as South Africa imported cement to build the football stadiums for the football world-cup of 2010 and Srilanka intend to import cement from Pakistan as it is co-hosting the cricket world cup of 2011.

Causes of increased domestic demand for Pakistani cement

The construction of large dams in the country

Four large dams are currently being produced in Pakistan for which an extremely high

amount of cement will be required. 3.7 million tons of cement is required for the

building of the Skardu-Katzarah dam itself.

The reconstruction process occurring after and due to the recent floods.

Related and Supporting Industries

Mining Industry

Currently small scale development of around 52 minerals is in process. The major production is of coal, rock salt and other industrial and construction minerals. The current contribution of mineral sector to the GDB is about 0.5% and likely to increase significantly on account of expected development and commercial exploitation of Saindak & Reco Diq copper and gold deposits (world largest gold mine), Duddar zinc lead, Thar coal and gemstone deposits.

Therefore, the competitiveness resulting from the growing mining industry can be exploited by the Cement Industry in Pakistan to attain cost effective and high quality inputs for its continuous

production process. Moreover, coal has become an important resource for the cement industry in Pakistan. It is interesting to know that Sindh has one of the largest good quality lignite deposits in the world. According to the Geological Survey of Pakistan, Pakistan is estimated to have a total of 185 billion tons of coal reserves. Out of this 184 billion tons are in Sindh. These coal reserves located both in Thar and Balochistan must be exploited, since currently coal is being imported in Pakistan.

Coal is found in all the four provinces of Pakistan. At present most of the cementcompanies have switched to coal or gas as their basic fuel; the process has been completed in thelast 6 to 7 years. According to the data of the All Pakistan Cement Manufacturing Association ofMid-2007, the cost of cement production per tonne by furnace oil was around Rs2, 083 whereasthe cost of production per tonne by coal was Rs8, 68, saving Rs1,215 per tonne. Similarly, the saving per bag was Rs60.75, which is a huge difference and aids the competitiveness of the local cement companies in Pakistan.

Construction Industry

The housing and construction sector in Pakistan plays a vital role in enhancing economic growth and reducing unemployment.

Packaging And Transportation

There are different types of packaging that is used. Paper packaging is used for domestic

purposes whereas Standard Packaging Polypropylene bags are used to meet export

requirements so that moisture damage can be prevented.

Spare Parts

Spare parts contribute significantly to smooth operations of cement plants. By performing regular service checks on vital equipment, ensuring staff is trained on preventative maintenance, and providing a steadfast supply of high-quality wear parts, the availability of production lines is ensured. High quality spare parts can help ensure optimum performance and cost effective operations, especially for older legacy control systems.

Firm Strategy, Structure and Rivalry

There are four foreign companies, three armed forces companies and 16 private companies listed in the stock exchanges. . The industry is divided into two broad regions, the northern region and the southern region. The northern region has over 87 percent share in total cement dispatches while the units based in the southern region contributes 13 percent to the annual cement sales. The structure of Cement industry in Pakistan is that it has no any substitute. Which shows that the Cross elasticity of demand is negligible. The increased price of cement is also due to energy resources which are inflating rapidly. Firms are moving from furnace oil to coal as method of energy sources but this coal is also imported. Considerable investment needs to be done in domestic coal mines so that our industry is competitive globally in this one very achievable factor.

Lucky Cement Sponsored by well known “Yunus Brothers Group – one of the largest export houses

of Pakistan”, Lucky Cement Limited is presently a 21,000 Tons PerDay, dry process Cement Plant.Lucky Cement came into existence in 1996 with a daily production capacity of 4200 Tons par day, currently is an omnipotent cement plant of Pakistan, and rated amongst the few best Plants in Asia.With production facilities in Pezu (Production capacity: 13,000 Tons per day) as well as in Karachi (Production capacity: 8000 Tons per day) it has the tendency to

become the hub of cement production in Asia. 1

D.G Khan D.G. Khan Cement Company Limited (DGKCC), a unit

of Nishat group, is the largest cement-manufacturing unit in Pakistan with a production capacity of 5,500 tons clinker per day. It has a countrywide distribution network and its products are preferred on projects of national repute both locally and internationally due to the unparallel and consistent quality. It is list on all the Stock Exchanges of Pakistan.

RivalryThe cement industry of pakistan is said to be an oligopoly due to the number of competitors in the industry. There a few major players who dominate the industry and own most of the market share. Market Share

◦ Askari cement (NZP) 7.6%◦ DG cement 9.8%◦ Lucky cement 12.7%◦ Maple leaf 7.1%◦ Pioneer cement 5.5%

Issues:

Issues and Recommendations

Pertaining To Economic Condition Of Pakistan

The Pakistani currency has been depreciating. This has caused a greater problem to the industries who have taken loans in the foreign exchange currencies.

According to the federal bureau of statistics, Pakistan hit record inflation during 2008. The SBP, in order to control the inflation, tightened the monetary policies by increasing

1http://www.cement.com.pk/cement/pakistan-cement-industry/lucky-cement.html

The biggest problem for Pakistani exporters who are located in North zone is the distance from seaport. They have to incur substantial inland freight to bring down cement from upcountry to Karachi Port. There isn’t any facility at port to handle loose cement. Lucky Cement being the largest has invested in its own silos and infrastructure at port while others can only export bagged cement. Government announced inland freight subsidy for the last quarter of 2008-09 and subsequently cement exporters submitted their claims but not a single rupees has been paid as yet.

interest rates. The increase in the interest rates made the industries pay more interest against the long term loans that they had borrowed at lower interest rates. Federal Excise Duty and GST over Cement industry should be reduced. Pertaining To Factor Conditions

The high fuel price is the most prevalent problem faced by the manufacturing firms. . Nowadays about70% cost constitutes the energy cost

The demand for coal is a derived demand which is rising with the rise in demand for cement and in order to meet this demand, the manufacturers cannot rely solely on imported coal since it becomes very expensive. Solution to the problem would be that the government invests in coal reserves in Thar and Balochistan so as to meet the growing coal demand.

Another solution to the above problem is the use of Alternative fuels. The raw material is almost free of cost but the production cost is significantly high. It requires painstaking separation of the calorific rich content, additional comminuting, foreign matter release, homogenizing, storage, transport and feeding in the cement plant. 2Government offers no disposal fees for getting rid of the waste. The MSW in Pakistan is considered property of Municipal Authorities which intend to generate some revenue by selling it off to interested third parties. Hence, action needs to be taken to ensure that companies using MSW as a source of fuel achieve benefit for doing the environment and society a favour.

Transportation cost is very high, from North Zone to Karachi port. The cement industry should enter into trade agreements with the transporters to receive discount.

Proper infrastructure is necessary for the transportation of cement. Government of Pakistan should provide infrastructure to the cement industry to setup new factories.

Because of high interest rates and inflation, this sector is not very feasible for investors. This proves to be an problem for smaller companies who cannot invest in new machinery and continue to use the obsolete ones which ultimately results in a high total cost.

Cement industry is the second most heavily taxed industries of Pakistan. Government needs to revise its policies in order for them to be favourable to not only this sector but also the supporting sectors so that they can reach their full potential and contribute to the overall economy.

The issue of not operating at full capacity raises high concerns for many plant owners. In order to avoid this, the companies need to explore new markets for export or be ready to lower prices in the local market.

Pertaining To Demand Conditions

2 www.pakistancement.com

Facilities at Pakistan’s ports are not enough. Charges at Pakistani ports are much higher as compare to port charges in other countries. 19 cement plants are located in North & 10 plants are in South zone. Due to financial crisis four plants in south has shut down their operations.  Inland freight is so high for North plants for sea exports. Additionally our nearest Gulf & Middle East countries have installed their own capacity for their domestic needs. These are the reasons for drop in sea exports. 

Amongst the many problems faced by the cement industry, keeping in view the demand conditions the most grave problem that exists is the increase in freight charges.

In addition to this, the personnel also claimed that the other dilemma that the cement companies of Pakistan face is the problem of transporting cement to various countries and nations. This problem of logistics and the increasing costs of freight charges and the storage costs of cement at the port makes it almost impossible for these Pakistani cement to gain access and export cement to far-off countries.

Shortage of plastic bags in the country. Most of the importers of Pakistani cement want the cement to be packed in good quality plastic bags as paper bags are more prone to spoilage. However, in Pakistan only two companies are producing paper bags for the cement companies and due to this many of the cement companies are still not able to access the plastic and international markets do not accept cement in paper bags.

While transporting cement, weather conditions can impact cement quality. While transporting cement within country normally transporter covers the cement with tarpaulin/ plastic cover to save it from Rain/ unfavorable weather situation.

Export rebates and trade exhibitions should be encouraged as to help Pakistani cement receive international business; also this will help improve the perception of Pakistani cement in the international arena.

Shortage of Electricity or power break down is a major constraint as the frequent restoring to load shedding is causing an adverse effect on the trade and industry.

Pertaining To Related And Supporting Industries

Mining Industry The future energy supply to the cement manufacturing plants is one of the main core

issues today. Initially energy was generated with furnace oil, but lately there has been a rapid switch towards the usage of coal for energy generation purposes.

Experts recommend that the Government of Pakistan should invest in the coal reserves of Thar and Balochistan in order to accommodate the future coal demand and to cut down on

their dependency on imports. Lucky Cement has already signed a Memorandum of

Understanding with Oracle Coal Fields, in the year 2010, to purchase coal extracted from Thar Coal.

The foreign exchange, which is otherwise so heavily spent on coal imports, could be used to explore alternative fuel sources such as scrap tyres and municipal waste to lower the cost of energy generation in the cement manufacturing plants. It is forecasted that alternative fuel sources could account for 25% of the energy consumed by the cement manufacturing plants in Pakistan. For instance, Fauji Cement is already actively exploring alternative fuels. It has successfully launched the country’s first RDF (refuse derived fuel) system. Fauji Cement is pioneering the substitution of conventional fuel with scrap tyres

and RDF in Pakistan.3

Construction Industry Although Pakistan’s construction industry contributes significantly towards the GDP and

employs about 9% of the total labor force, unfortunately, it is one of the most neglected sectors of the country. The industry is characterized as more of a labor intensive one, with moderately less use of mechanization. Therefore as compared to other industries in Pakistan, such as manufacturing, the construction industry is considered “backward” because of its relative lack of use of the latest advances in technology, management styles, and procedures. Furthermore, construction projects in Pakistan generally run over time and over cost schedules, do not necessarily meet expectations, and often require remedial works due to construction defects. 4

In order to overcome these issues, necessary measures must be taken to promote investment in Research and Development activities in the construction industry. Moreover, Quality Control and Materials Testing Laboratories must be established to ensure high quality construction projects. This could gather appreciation and attract foreign investment in this particular sector of the economy.

Spare Parts Industry Cement manufactures spend a considerable amount on procurement.5 They can reduce

their procurement spending by improving their sourcing of spares and equipment.

Packaging and transportation Industry Pakistani cement companies export cement in paper bags because they are cheap as

compared to plastic bags. Currently, four ply paper sack bags are being used for packaging purposes.

Companies face trouble because these paper bags are easily torn and lead to considerable wastage.

Exporting cement in paper bags is against the International standards and companies are forced to export cement in plastic bags. New Propylene bags, which are more durable, have been developed but their relatively high cost is a de-motivating factor in promoting its usage.

Pertaining To Firm Strategy, Structure, And Rivalry Pakistan’s cement industry’s capacity utilization is just 76%, yet it is the 5th largest

exporter of cement. It can easily become 2nd or 3rd if the energy cost in controlled.

Cement plants are capital intensive and hence require a lot of energy. If Pakistan is able to tap alternative energy sources, it can not only become a major competitor of cement export but domestically, the prices will also fall and increase development.

Since cement is a specialized product, requiring sophisticated infrastructure and production location. So, most of the cement industries in Pakistan are located near/within mountainous

3 Cement Pakistan Company-www.cement.com.pk APCMA4 http://enpub.fulton.asu.edu/cement/cbm_CI/CBMI_Separate_Articles/Article-54.pdf5 Complete process of obtaining goods and services from preparation and processing of a requisition through to receipt and approval of the invoice for payment.

regions that are rich in clay, iron and mineral capacity. Structure of Cement industry in Pakistan is as such that there is not much substitutability to buyers. Which shows that the Cross elasticity of demand is negligible.

The Competition commission of Pakistan should keep a strict eye on fair trade practices because cartelization unnecessarily exploits consumers. Consumers are forced to purchase at a higher rate which brings the price to an unaffordable range for many people.

Pertaining To Human Resource Shortage of qualified and skilled manpower at all levels is an important issue. Availability

of qualified and skilled manpower should be given priority by government. The training facilities should be developed at fast track.

Another issue is lack of training facilities for the development of required human resources. Proper workshops that are held under the supervision of experts so that the practical knowledge is properly imparted to the labor. Human resource policies of clients, contractors and consultants need improvement.

Inadequate research and development. Foreign and local experts should be hired to do the research and development.

Limit use of IT in industry. Better machinery and management should be used to become cost efficient and become competitive.