We take immense pleasure in submitting you the detailed report for the course analysis of Pakistani industries which entails a detailed analysis of the cement industry in Pakistan Complying with all your requirements, we wish that you will find the report complete in content and framework. However, if you require any help in interpreting the report, we are eager to assist you. Yours sincerely, Farah Arif Ramal Shakoor Uzair Yousuf Zehra Hasan EXECUTIVE SUMMARY The report gives comprehensively the synopsis of the Pakistan Cement Industry.
At first a detailed introduction has been provided giving insight into the development of the cement industry over the years. The main facts regarding the cement industry have been mentioned such as the total demand, production, capacity utilization, the industry sales etc. Also, the performance of the top four companies of the industry have been looked into and basis of these four companies the industry performance has been evaluated. The report gives a full-fledged insight on the raw materials required, utilities used, types of processes of manufacturing cement, the types of cement produced and other information is also mentioned.
Pakistani cement industry produces four major types of cement, names of all these and their details is also available in the report. Different analysis has been applied on the industry. The Porter’s five forces analysis and the SWOT analysis are the two main analytical tools implemented. Also, the current highlights regarding the happenings of the cement sector are included. The report is concluded with the future prospects, the crisis the industry is facing and relevant recommendations. INDUSTRY OVERVIEW
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The cement industry in Pakistan has come a long way since independence when the country had less than half a million tons per annum production competence. Privatization and successful price decontrol in 1991-92 heralded a new era in which the industry had reached a level where surplus production was achieved after meeting local demand in 1997. Due to this affirmative progress many investors were attracted due to cheap and abundant availability of raw materials and increasing local demand for cement consumption also encouraged investment for further expansion of production capacity of their respective units.
CURRENT SCENARIO Currently the cement sector is utilizing only fifty per cent of its installed production capacity of 45 million tones approximately since the local consumption of cement is stagnant for the last several years. Cement sales have been stagnant at 22 million tons per year for the last three years against production capacity of over 43 million tons. The low national demand has caused the industry to be unable to absorb the total installed capacity. This is forcing Manufacturers to dispose of their product at loss in the domestic market.
So there is a need to explore foreign markets to utilize their full capacity. As of the last quarter of FY 12 only two cement mills that are located near sea port are exporting cement and earning profit of PRs. 4 billion while the remaining mills that are unable to export through sea have booked loss of over PRs 10 billion during last fiscal. The Cement sector of Pakistan is regrettably showing a decline from last few years, which was growing showing an increasing trend from last few decades.
Many facet, variables and things have contributed to this decline in growth. A realistic view on to the cement sector could have given many other impressions but the local view on the cement sector’s performance shows that, it has suffered a lot. Keeping this in mind, we can analyze that economic situation might exasperate which will affect the production and exports negatively. The analysis of this sector from various contexts through thorough research, to some extent verified and helped us to sort out the causes which are listed down.
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These causes are high cost of energy, heavy taxation, high freight charge, low spending upon PSDP, fluctuating interest rates, declining international market share political instability, law and order situation, economic constraints to retrieve back to original situation and international market competitiveness. Looking into all major causes, recommendations are given in way forward which is to the best of our understanding and capacity for the Cement Sector. ANALYSIS OF THE TRENDS IN PRODUCTION CAPACITY, LOCAL DISPATCHES, EXPORTS, AND TOTAL DISPATCHES: Production Capacity:
Now we’ll be analyzing the performance of the cement sector from 1990-2012 based on the data available. Starting from 1990, the production capacity (Millions of Tones) were 8. 89 which did not grow till 1993, while in 1994 grew by 1. 77% to 9. 48, then by 12. 43% in 1995 and stayed constant in 1996. In 1997 and 1998, we can see that there’s a sharp increase in the production capacity and production increased by 22. 91% and 24. 18% respectively. No solid data is available to explain the reason why it grew so sharply.
From 1999 to 2005, production capacity experienced fluctuations which were not so effective. And 2007 again shows a sharp increase in production capacity of 46%, this was due to the subsidies and tax relief given by the government. This growth then started decreasing in 2011, which shows a negative growth of 6. 53% due to unstable economic conditions. Local Dispatches: Local dispatches (Millions of tons) shows how many tons of cement been dispatched from the factories to local retailers or how many orders, in terms of tones has been completed and sent to local dealers.
So, from 1990 to 1995, the data shows a stable increase from 3% – 6%. A sharp increase was experienced in 1996, due to the economy, which was developing and constructions and roads were getting built. From 1997 to 2002, again it shows an average increment of 2. 7%. And in 2003 as Musharraf’s government took over and started undertaking the development decisions, the dispatches increased to 11% and went as high as 23% in 2007. And due to bad economic conditions and low development, it shows negative growth of 6. 64% in 2011. However, increased by a million ton in 2012. Exports:
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Now we will look at the exports (Millions of Tones) of the cement sector. The data available to us, of exports is from 2002 to 2012. In 2002, cement sector exported . 107 million tons of cement. The next year, in 2003, it increased by 342. 53%, then by 137% in 2004 and kept increasing till 2010 where it shows a negative growth in the exports of 3. 03% and again the next year shows a negative growth of 11. 47% and since then its declining and right now it’s at a -4. 38%. Total Dispatches: “Total dispatches” is the summation of the local dispatches and the total exports.
It shows the overall performance of the cement sector keeping in mind the total production and dispatches. From 1990 to 2002, it’s same as local dispatches, but in 2003 shows a 15. 21% increase as exports started and reached to a massive 30% increment in 2007 and its still increasing. Right now, it stands at 3. 43%. The Government has been providing freight subsidy on many items, for cement sector, in fact, it was announced in last fiscal year at the rate of 35 per cent for export consignments via sea only but Freight subsidy approved by ECC is regretfully withheld.
The cement manufacturers have not yet received any payment from State Bank of Pakistan neither any approval letter from TDAP. As of date, cement industry has filed claims for freight subsidy of over PRs 270 million to TDAP. There is a lot of potential to increase exports through sea. Cement manufacturers could get export orders by sea, provided the issue of high inland freight cost from the northern region is addressed. The government’s fulfillment of its pledge of freight subsidy would enable all the cement manufacturing units to export their surplus capacity and earn substantial foreign exchange for the country.
Also, the domestic demand has increased after a tough FY11 when the country was hit by the Great Floods of 2010, FY12 saw local cement retention prices going up, lending some price-based support to local cement manufacturers. In addition, post-flood rebuilding activity and greater shelter and residential building in some parts of the country also brought about a volumetric growth in local sales – an eight percent year-on-year improvement in 9MFY12 at 17. 4 million tons. CONTRIBUTION OF THE SECTOR TO THE NATIONAL ECONOMY CREATIONOF EMPLOYMENT The industry employee approximately three percent of the total workforce of the country.
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The workforce includes a diverse range of management, technical and labor force. It employees a large number of engineers, daily-wage workers, high profile executives providing them with impressive compensation packages that encompass a wide range of fringe benefits including accommodation, education and medical facilities, Therefore, boosting the existing employment opportunities in the economy. TAX REVENUE The cement sector alone contributes PRs. 30 billion to the FBR tax collections in form of both direct and indirect taxes. FOREIGN EXCHANGE AND INVESTMENTS
The industry results in substantial investing activities. Over the past four years PRs. Four billion have been invested in the cement sector in Pakistan by foreign companies. Four international companies have initiated their cement manufacturing units in Pakistan. Moreover the exports result in significant foreign exchange earning COMPLEMENTING INDUSTRIES The two major industries associated with the sector are Construction industry and the logistics industry. The construction needs to be increased by 6. 25 million residential units in the country so that the population can have
proper shelter to live under. The most significant input of the industry is the cement, which is produced in enough quantity to meet the local demand. Furthermore, the logistics and transportation companies find substantial business with the cement industry. MARKET LEADERS’ STATS 1. Lucky Cement It is sponsored by the well-known Yunus Brothers Group – one of the largest export houses of Pakistan”. Lucky Cement came into existence in 1996. It has an annual production capacity of 7. 75 million tons. Also, LCL is Pakistan’s largest exporter of loose cement.
Fiscal Year 2012 The company declared the financial year as the best performing year in the history of the company. Furthermore, the company as a result of its’ diversification strategy acquired 75. 81% shareholding in the ICI Pakistan limited. The main highlights are as follows: 2. Attock Cement The Attock Cement was incorporated in 1981 and started production on June 1, 1988. The Pharaon Commercial Investment Company Limited holds 84. 06% of total paid up share capital whereas the general public holds a total of 15. 94% shares of Attock cement. Fiscal Year 2012
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The Company performed remarkably well in the last fiscal year and achieved a capacity utilization of above 100%. Also, the company sold its entire production capacity both in local and export markets. It focuses on cost leadership. As a result of this strategy, the company achieved overall profit after tax of Rs. 753 million (i. e. 110% of the last year’s PAT).
The main highlights are as follows: 3. D. G. Khan Cement D. G. Khan Cement Company Limited (DGKCC) is a unit of the Nishat group. It was established in 1978 and commercial production started in April 1986. It is listed on all the Stock Exchanges of Pakistan.
Fiscal Year 2012 During the year sales of D. G Khan increased at a remarkable rate, this was mainly because of better prices in international market and devaluation of Pak Rupee against US dollar. There is an increase in Cost of sales, which is mainly constituted, of fuel and energy cost 61%. The main highlights of are as follows: 4. Maple Leaf Cement Maple Leaf Cement is a part of Kohinoor Maple Leaf Group (KMLG).
It is one of the pioneers of cement industry in Pakistan. Total annual clinker capacity of the company is recorded at 3,360,000 tons. Fiscal Year 2012
The increase in sales was due to improved production and lower overhead costs resulting in increase in retention levels. In the year 2011-12, energy crisis worsened due to heavy load shedding of gas and electricity that adversely affected production costs. The higher diesel prices negatively affected freight charges and impacted operating margins. The main highlights are as follows: CEMENT MANUFACTURING PROCESS 1. Quarrying: In cement production 2 types of materials are necessary, 1st rich in calcium or calcareous materials such as limestone, chalk, etc. 2nd is rich in silica or argillaceous materials such as clay.
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Quality check starts from the quarry to ensure optimization in the utilization of resources. Limestone and clay are either scraped or blasted from quarry and then transported to the crusher. 2. Crushing: It is responsible for the primary size reduction of quarried materials. They are being crushed from assize of 1 meter to less than 80 mm. 3. Pre-Blending: The crushed material is than passed on-line analyzer to determine the pile composition. Then a stacker is used to create different piles of materials to reduce variation in material beds. 4. Raw Grinding & Blending:
A belt conveyor shifts the pre-blended piles into individual bins where a weighing feeder distributes it according to the type of clinker to be processed. Than raw mill equipment fines the material. The powdered raw material is then transported to a continuous blending storage where variations are further reduced by mixing using aeration. 5. Burning & Clinker Cooling: The homogenized raw mix is transported to pre-heater, heat exchange equipment comprising of series of cyclones where heat transfer between the raw mixes feed and counter current hot gases from the kiln take place. Calcinations partially take place in the preheated.
Raw material is fed directly from the preheated to the rotary kiln. Inclination and rotation of the kiln causes the raw feed to make its way to the kiln counter current to the burner flame. The heat of the kiln breaks the chemical components and brings the raw mix into a semi-molten state. At this point, raw materials form compounds that produce the cementitous properties. After the burning section of the kiln, the materials turn into solid nodules known as clinker and discharge into the clinker cooler. Clinkerization occurs between 1350-1400 °C wherein fine coal, pulverized by coal milling, is often used as heating fuel.
The clinker cooler cools the hot granular mass of clinker by quenching air into it bringing the temperature down to 100 °C. So air becomes hot and clinker cold. This hot air is then utilized as combustion air for the firing system of the kiln. Conveyors transport then the cooled clinker to the clinker storage silo. 6. Finish Grinding: From the clinker silo, clinker is transferred to the clinker bin. It passes through the weighing feeder, which regulates its flow in proportion with the additive materials. At this stage, gypsum is added to the clinker and then fed to the finish grinding mills.
Gypsum serves as a retarder in the too rapid setting or hardening of cement. Either the mixture of clinker and gypsum for Type-1 cement or the mixture of clinker, gypsum and pozzolan material for Type-P cement is pulverized in a closed circuit system in the finish mills to the desired fineness, usually about 87% minimum passing 325 mesh sieves. Cement is now piped to cement silos. 7. Packing & Distribution The cement from the cement silos are packed into bags by rotary packers or loaded as bulk and are distributed either by land using forwarder trucks and bulk trucks or by sea using barges or bulk ships. RAW MATERIAL Requirements:
About 1500-1600 kg of raw materials is required to produce one ton of Portland cement. The average amount of materials required to produce one ton of Portland cement are 1. 2-1. 3 tons of chalky material like limestone and marl and 0. 3-0. 4 ton of clay material like shale etc. Besides, 0. 05-0. 06 tons of natural or synthetic gypsum is required to manufacture one ton of Portland cement. Main Utilities used in Cement Production: 1. Fuel oil, natural gas & Coal 2. Electricity 3. Water Raw Materials: Lime Stone & Gypsum Cement is mainly comprised of Limestone with 75% to 80% composition. Gypsum acts as a retarding agent.
It slows down the hardening process giving the constructor enough time to use it. In a survey conducted by the Geological Survey of Pakistan, the country possesses large reserves of Limestone and the annual production is estimated at 8,698,573 metric tones2 Limestone is present in large amounts in the areas of Salt Range, Potwar Plateau, Margalla Hills and Zinda Pir (Attock).
The country contains 4,850 million tons of Gypsum and the annual production is calculated at 384,513 metric tons. The Gypsum deposits in the area of Dadukhel in Mianwali amount to 53 million tons. The areas of Rakhi-Munh, Khewra, Safed Koh-Rodo and Suleman Range of D.
G. Khan are rich in Gypsum deposits. Clay Only 15% to 20% of cement comprise of clay. Iron Ore: It is added in small quantities and it helps to strengthen the cement. Fuel Used mainly for power generation. Initially the companies was relying on WAPDA for power supply but now companies have their own electricity generation plants that meet up to 50% of the total electricity requirements. With the increase of furnace oil prices the companies are adopting coal as a cost efficient and environmental friendly fuel for kiln firing. The cement manufacturing process is an energy consuming process.
Electrical energy is considerably consumed in the grinding of raw materials and clinker. Cost of thermal and electrical energy accounts for the major cost of cement production. Production of one ton of clinker requires the combustion of about 80-90 liters of heavy oil or 80-100 cubic meters of natural gas or 150-180 kilograms of coal. An average electric energy consumption for one ton of cement is 100-105 kwh, but this consumption decreases from equipment efficiency. A specific fuel consumption of 680- 700 kcal/kg of clinker is being achieved in dry process kilns as against 1400-1500 kcal/kg of clinker in the earlier wet kilns.
Various stages of production are reflected in the functional diagram given on the next page. PRODUCTION PROCESS 1. Dry process (Mostly used in Pakistan) 2. Semi wet process 3. Wet process COSTS INVOLVED An exhaustive analysis of inflationary trends in Pakistan interestingly reveals that ex-factory prices of cement per bag have not increased in proportion to other construction industry inputs in the last 10 years, which has rendered the balance sheets of most cement companies impaired and the industry has been recording huge financial losses. During the financial year 2010-2011, 11 cement units suffered loss before taxation aggregating to Rs.
5. 681 billion while 7 cement units, of which 2 are located in close proximity to the sea port, earned profit of Rs. 5. 982 billion. At the end of fiscal year, industry debts to financial instituions have risen to a massive Rs. 125. 3 billion and cement units located in the North are particularly challenged and are unable to service their debts. According to the data compiled by All Pakistan Cement Manufacturers Association (APCAM), the price of bricks has gone up by Rs,2800 per 1000 bricks in just six months of the current fiscal, while it increased only by Rs. 2400 in the 10 year period from 2000 to 2010.
The current price of 1000 bricks is Rs. 7000 which was Rs. 4200 in the year 2010-11. While the price of the same number of bricks was Rs. 1800 in the year 2000 and reached Rs. 4200 by the year 2010. Similarly, steel prices have increased by Rs. 6000 per tonne in just four years since 2007-2008 and prices witnessed increase of Rs. 30,000 in just one year from Rs. 40,000 per tonne to Rs. 70,000 from 2006-07 to 2007-08. Prior to this massive increase, steel prices increased on average by Rs 3,000 in the seven year period from 2000 to 2006. In addition to this, provincial tax on mining has been at the rate of Rs.
33 per tonne for the last three years, which was rs. 18 in the financial year of 2008-09. This almost doubled in just one year. There was an increase of Rs. 15 in just one year in year 2009-10. The mentioning of input cost increase in packing prices would not be out of place here as it has witnessed the increase of Rs. 7. 54 per bag in the last 4. 6 years, while it had the increase of only Rs. 3. 11 in eight years from 2000-01 to 2007-08. Currently one bag costs Rs. 20. 65 and the price of one bag was Rs. 13. 11 in the year 2007-08, while it was just Rs. 10 in the year 2000-01. This means price of bag doubled in 10 years.
In contrast to the above, ex-factory price of a 50 kilogrammes cement bag was Rs. 179 in the year 2000-01 and now it stands at Rs. 370 by this financial year. Despite rapid increases in input costs, cement prices increased only by Rs. 139 per one bag. The compounded annual growth rate of cement prices was 6. 28 percent in the last 10 years, which is well below the inflation rate. Besides all this, devaluation of the rupee against the dollar has played very negative role for the cement industry by dint of its heavy impact on almost everything. In the year 2000-01 one dollar was costing Rs.
63 and now it is at Rs. 102. There was a devaluation of Rs. 5 in eight years but gained pace and the rupee got devalued about Rs. 23 in last five years. Cost To Make & Sell (As Of June 30, 2006): The following table shows the determinants of fixed and variable costs for a cement industry. PRICING Cement companies showed strong growth in fiscal 2011-12 with almost all of them returning to profitability. The top reason for high profits was a significant increase in cement prices, which strongly supported balance sheets of the companies, but it did not translate into overall growth of the construction industry.
According to a report issued by Topline Securities, a 26% jump in cement prices mainly propelled profits of cement companies to Rs16 billion ($168 million) in FY12, a whopping increase of roughly seven times. If you see the figures for FY12 compared to FY11, you will find strong growth, but people did not receive any benefit, particularly due to persistently high inflation. Similarly, the significant increase in profits did not correspond with lacklustre sales of cement or weak growth in the construction industry.
With just 4% increase in total sales, anything significant cannot be expected in the construction industry, he added. Out of 10 cement companies, which have announced their full-year results, only one posted losses in FY12. A year earlier, almost 50% of the companies were in the red. The turnaround in FY12 and better outlook led the cement sector post a 119% return so far this calendar year. The 10 companies, which unveiled their results, represented 76% of stock market capitalisation. These did not include Javedan Cement as it did not operate during FY12.
Kohat Cement saw its profit grow 26-fold, followed by DG Khan Cement, up 24-fold. Most of the companies, which had operational issues due to high cost of production and high leverage, switched from losses to profits in FY12. One of the turnaround stories for cement manufacturers was a sharp rise in domestic demand, which led to a 26% improvement in cement prices in the local market and a handsome 33% increase in revenues to Rs123 billion. Local sales rose by 9% to 24 million tons, but total sales including exports stood higher by only 4% to 32. 6 million tons.
Despite energy cost (higher oil prices and gas cess), the cement manufacturers remained comfortable with the gross margin, which increased by 7 percentage points to 30% during FY12. However, a 17% increase in financial charges to Rs8. 7 billion amid rupee depreciation and higher borrowing slightly diluted the bottomline. PRODUCT MIX: Cement industry currently in Pakistan is operating at optimum capacity due to the boom in commercial and industrial constructions and activities. Although a large number of cement varieties are produced in different countries of the world, Pakistan has been producing following types of cement.
Ordinary Portland Cement Ordinary Portland Cement (OPC) that is used in all common designs, especially in major and famous tasks where cement is needed to fulfill strict great quality specifications. It can also be used in concrete mortars and grouts, etc. it is the most commonly used cement around the world in buildings work. Ordinary Portland cement has easy workability and lower warm of moisture. The company preserves their technological conventional of great quality parameter at advanced level and with great durability at all ages. Sulphate Resistant Cement
Sulphate Resisting Portland Cement is a type of Portland cement whose quantity of tricalcium alumiante is less than 5%. This type of cement is mostly used in conditions where damage to the concrete from sulphate attack is common, especially in places where the concrete is in contact with ground water, soil, exposed to seacoast and sea water. However, it can also be used for general purposes in place of Portland Pozzolana Cement, Slag Cement and Ordinary Portland Cement. Clinker Portland cement clinker is made by heating in a rotary kiln at high temperature a homogeneous mixture of raw materials.
The products of the chemical reaction aggregate together as molten minerals at the sintering temperature Clinker is provided to the clients with the company’s own crushing models. Clinker is easily managed by common nutrient managing equipment and is saved for several months without limiting on the quality. Clinker is the main item in the cement production process where limestone, clay and sand are grinded and warmed, before the gypsum is included to generate the ultimate product of cement. Block Cement By the characteristics of product, Block Cement is just like the Sulphate
Resistant Cement, with a considerably deeper shade and some low establishing time to meet the requirements of the market and for the development of prevents. Block Cement also preserves C3A level within the specified restricts of 3. 5%. White Cement White Portland Cement is special cement, different from Ordinary Portland Cement. It is white of shade, instead of dull grey one. This kind of cement is regularly selected by designers for use in white, off-white or shaded concretes that will be revealed, within or outside structures, to the public’s look.
Low Alkali Cement This is a wide range of ordinary Portland cement in which the complete alkali material of cement has been managed to stay below 0. 6%. With this decreased amount of alkali material the risk of alakie of cement attacking the active silica contents of combination is removed. Generally we do not have effective combination of this type in Pakistan but on each large scale-concreting venture, analyze of alkali combination response must be conducted for the utmost protection of the venture. CAPACITY UTILIZATION OF INSTALLED UNITS:
The industry comprises of 29 firms (19 units in the north and 10 units in the south), with the installed production capacity of 44. 09 million tons. The north with installed production capacity of 35. 18 million tons (80 percent) while the south with installed production capacity of 8. 89 million tons (20 percent), compete for the domestic market of over 19 million tons. 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 around 80 percent share in total cement dispatches while the units based in the southern region contributes 20 percent to the annual cement sales. After 2002-3, most of the concrete producers extended their functions, and improved manufacturing. This industry has spent about $1. 5 billion dollars in potential development over the last 6 years. The operating capacity of cement in 1991 was 7 million tons, which improved to become 18 million tons by 2005-06 and by end of 2007 increased to above 37 million tons, and currently the development potential is 44.
77 million tons. Cement manufacturing potential in the northern is 35. 82 million tons (80%) while in the south it is only 8. 95 million tons (20%).
Analysis of Cement Production Capacity and Dispatches (Operational Units) – APCMA THE TWO ZONES The industry comprises of 29 firms (19 units in the North and 10 units in the South), with the production capacity of 44. 09 million tons. The North’s with production capacity of 35. 29 million tons (80%) while the south with production capacity of 8. 8 million tons (20%); compete for the domestic market of over 19 million tons.
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. Northern Zone It consists of 19 units, with installed production capacity of 35. 29 million tons. The North makes 80 % of country’s cement. 1) Askari Cement Ltd 2) Bestway Cement-I 3) Cherat Cement 4) Dandot Cement Limited 5) Dewan Cement Limited 6) D. G. Khan Cement (KK) 7) D. G. Khan Cement-II 8) Fauji Cement Company 9) Flying Cement Limited 10) Fecto Cement 11) Gharibwal Cement Ltd 12) Kohat Cement Company Limited
13) Lucky Cement (Karachi) 14) Maple Leaf Cement 15) Mustehkam Cement 16) Pakistan Cement 17) Pioneer Cement 18) Bestway Cement Chakwal 19) Askari Cement Ltd. (Nazimpur) Southern Zone: It consists of 10 units. Installed production capacity of this region is 8. 8 million. The Southern Zone produces 20% of country’s cement. 1) A. C. Rohri Cement Limited 2) Al-Abbas Cement Limited 3) Attock Cement 4) Dadabhoy Cement Limited 5) Javedan Cement Limited 6) Pakistan Slag Cement Limited 7) Thatta Cement Limited 8) Zeal Pak Cement Limited 9) Lucky Cement (pezu) 10) Bestway Cement (Chakwal) AVAILABILTY OF RAW MATERIALS
Locally Available Raw Materials and their Price Structure Lime Stone & Gypsum: Lime stone and gypsum are the primary contents of cement. Almost 80% of cement production uses limestone of various types and gypsum as a retarding agent. The country possesses large reserves of limestone which is produced about 33. 1 million tons annually. (Federal Bureau of Statistics).
1. 5 tons of limestone is needed to produce 1 ton of cement so most of the cement factories are located close to a source of limestone. Although limestone is widespread but following areas have its more concentrated deposits: In Baluchistan: Harnal and Loralal
In Sindh: Mango Pir, MarliHills, CapeMonze, RaniPir. Most of the reserves of limestone are located in Sindh making the area preferable for cement production. In N. W. F. P: Kohat, Nowshera,Pezu and Mughal Kot. In Punjab: Salt Range, Margalla Hills, Zindapir. Gypsum is produced about 384,513 metric tons annually. It slows down the draying process of cement. More concentrated deposits of gypsum are found in the areas of Suleman range, Rakhi-Munh, Khewra, Safed Koh-Rodo and of D. G. Khan, Dadukhel in Mianwali which amount to 53 million tons. Clay:
It is another important content of cement which contributes about 15%-18% to cement production. Iron Ore: Although the addition of iron ore is negligible in cement production but it increases the quality of cement. Fuel: It is used primarily for power generation. Originally companies were depending on WAPDA for power generation but now they have built their own electricity generation plants that meet the total requirement of electricity production up to 50%. Cement manufacturing process is an energy consuming process. Cost of thermal and electrical energy accounts for the major portion of total cement production cost.
Electrical energy is primarily used for grinding raw material, average electrical energy consumption for one ton of cement is 100-105 KMH but because of equipment efficiency this consumption reduces. “Pakistan has huge coal resources estimated at over 186 billion tones. The major users of coal are the cement sector and brick kilns; about 48pc of total coal was consumed by cement companies, during FY2012, while 41pc was utilized by brink kiln industry”. Moreover, as stated by the Coal and Energy Development Department Government of Sindh, out of the 186 billion tons of coal reserves, as
