Presentation on

Strategic Audit of Cement Industry

 NAME ID

Md. Omar Faruq 13302099

Mozumder

Dawlat-A-Elahi Sawrab 13302147

Abu Hashem 13302098

Ziaul Akbar Nishan 13302118

Sadia Afrin Nitu 13302112

Abdul Malek 13302158

Mohammad Jewel 13302129

Sharmin Akter Rima 13302013

Shanjida Afrin 13302127

Strategic Audit of Heidelberg Cement
Bangladesh Limited
Corporate Vision of Heidelberg Cement Bangladesh
Limited

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
Comment: Statement is too big; it should be short and
preferably one sentence; 31 words
Corporate Mission of Heidelberg Cement Bangladesh
Limited

Market Strategy:
Building our growth on a solid base of earnings
Customer Philosophy:
Building customer satisfaction, because their success is our
success
Quality Standard:
Building on quality products to build our reputation
Comment: Statement lacks six components: Customers(1),
Products (2), Markets (3), Technology (4), Public Image (8),
Employees (9); 32words
 
 Internal Environmental Analysis of Heidelberg Cement Bangladesh Limited

Factors Relative Weight Capability Weighted Strengths Weaknesses

(Management) Importance (B) Score (C) (D) (E) (F)
Rating (A) (1-10) (B*C) Highest Highest
(1-10) (D) (A-C)
Organization 7 0.04 4 0.16   3
Structure
Material 10 0.06 7 0.42 5 S2 2
Management
System
Organizational 8 0.05 4 0.2   4 W3
Rewards
Human 9 0.05 9 0.45 4 S3 -1
Resource
Competencies
Measurable 5 0.03 4 0.12   1
and
Communicated
goals and
objectives
Factors Relative Weight (B) Capability Weighted Strengths Weaknesse
Continue…
(Marketing Importanc Score (C) (D) (E) s (F)
) e Rating (1-10) (B*C) Highest Highest
(A) (1-10) (D) (A-C)
Brand 10 0.06 8 0.48 3 S5 2
name
reputation
Logistics 7 0.42 3 0.21   4 W2
Support
Product 9 0.05 6 0.30   3 W4
Pricing
Promotion 8 0.05 4 0.24   3 W5
&
Advertisin
g
Product 10 .06 8.5 0.51 2 1
quality &
customer
services
Factors Relative Weight Capability Weighted Strengths Weaknesses(F
(Finance) Importance (B) Score (C) (D) (E) )
Rating (A) (1- (1-10) (B*C) Highest (D) Highest
10) (A-C)
Capital 8 .05 7 0.34   1
Budgeting
Procedure
Sufficient 10 0.06 9 0.54 1 1
Working
Capital
Good 9 0.05 7 0.35   2
Relationship
with
shareholders,
suppliers and
lenders
Experienced 8 0.48 9 0.43   -1
and well
trained
financial
manager
Dividend 5 0.030 4 0.12   1
Payment
Policy
Factors Relative Weight Capability Weighted Strengths Weaknesses
(Production/ Importance (B) Score (C) (D)   (F)
Operation) Rating (A) (1- (1-10) (B*C) (E) Highest
10) Highest (D) (A-C)
Quality Control 9 0.05 8 0.40   1
Policy &
procedure
Technological 9 0.05 9 0.45 5 S1 -1
Competencies
Strategically 10 0.06 7 0.42   3
location of
facilities,
resources, &
market
Production Cost 7 0.04 3 0.12   4 W1

Reliable & 8 0.05 5 0.24   3

Reasonable
supplies of Raw
materials &
parts
Total 166          
External Environment analysis of Cement Industry

Relative
Weight Score Weighted Opportunity Threat(F)
Environmental importance
(B) (C) Score(D) (E) Largest
factors rating (A)
B=A/130 (1-10) (B*C) Largest(D) (A-C)
(1-10)

Wastages
10 0.08 2 0.16   8 T2
causes pollution

Seasonal
7 0.05 5 0.25   2
variation
 Relative Weighted Threat
Weight Score Opportunity
Technological importance Score (F)
(B) (C) (E)
factors rating (A) (D) Largest
B=A/130 (1-10) Largest(D)
(1-10) (B*C) (A-C)

New product
9 0.07 9 0.63 02  
innovation

R & D activity
8 0.06 7 0.42 05  
in the industry

Increasing
business 8 0.06 8 0. 48 04  
automation
 Relative Threat
Weight Score Weighted Opportunity
importance (F)
Social factors (B) (C) Score(D) (E)
rating (A) Largest
B=A/130 (1-10) (B*C) Largest(D)
(1-10) (A-C)

Huge
9 0.07 8 0.56 03  
employment

Quality working
7 0.05 4 0.20   3 T8
environment

Less concern on
10 0.08 2 0.16   8 T1
environment
 Relative
Threat
importanc Weight Score Weighted Opportunity
Economic (F)
e rating (B) (C) Score(D) (E)
factors Largest
(A) B=A/130 (1-10) (B*C) Largest(D)
(A-C)
(1-10)

Inflation rates 9 0.07 3 0.21   6 T4

Higher interest
8 0.06 4 0.24   4 T6
rates

Reduction of
7 0.05 5 0.25   2
global prices

Price hike of
9 0.07 3 0.21   6 T3
raw materials
 Relative Threat
Weight Score Weighted Opportunity
Political importance (F)
(B) (C) Score(D) (E)
factors rating (A) Largest
B=A/130 (1-10) (B*C) Largest(D)
(1-10) (A-C)

Govt.
8 0.06 6 0.36 07  
restriction

High tax
amount of
10 0.08 8 0.64 01  
imported
cement

Political
5 0.04 2 0.14   3 T7
clashes
SWOT Analysis (Internal Environment)

Strengths Weakness
 Technological Competencies  High Production Cost
 Sufficient Working Capital  Inappropriate Organizational
 Well Material Management System Rewards
 Human Resource Competencies  Price is expensive than customers
perceived value
 Strong Brand name reputation
 Logistics dependencies on rental
trucks
 Ineffective promotion & advertising
 Single product line
SWOT Analysis (External Environment)

Opportunities Threats
 Increasing Business  Political Clashes
Automation
 Inflation rates
 Increasing demand of
quality product  High Interest rates
 Market Expansion  High cost of raw
materials
 Comparative Financial Ratio Analysis
Ratio 2016 2016-17 2016 2016-17 2016 2016-17 2016-17 Industry
Analysis Average

Particulars Aramit Confidenc Lafsurce Meghna Miceme Premier  

-e -nt

Heidelberg

Liquidity Ratios:
Current 1.2 1.0 1.7 2.5 1.1 1.3 1.1 1.4
Ratio
Quick Ratio 1.1 0.9 1.3 2.2 0.9 1.2 0.8 1.2

Cash Ratio 0.0 0.1 1.0 1.1 0.1 0.5 0.0 0.4
Comments
 The firm is operating with a very fruitful current ratio of 1.7 . it
indicates that if the firm liquidated all of its current assets at the
recorded value, it would only be able to cover of its current
liabilities.
  The quick ratio of 1.3 indicates that the company can cover all of
current liabilities by using all cash-on-hand, liquidating short-
term marketable securities and monetizing accounts receivable.
 The cash ratio is 1.0, which suggests that the firm can only of its
current liabilities with its cash and short-term marketable
securities.
Operating Profitability Ratios
Gross 27.1% 16.9% 25.9% 35.1% 11.3% 18.4% 21.2% 22.3%
Profit
Margin
(GPM)
Operating 19.9% 12.1% 18.4% 26.9% 6.7% 13.3% 14.7% 16.0%
Profit
Margin
(OPM)
Pre Tax 2.5% 15.0% 19.6% 27.5% 1.9% 10.9% 9.5% 12.4%
Profit
Margin
Net Profit 1.9% 13.8% 14.2% 20.8% 1.4% 8.3% 7.4% 9.7%
Margin
(NPM)
Return on 0.8% 7.5% 14.8% 10.6% 1.4% 5.3% 6.4% 6.7%
Total
Assets
(ROA)
Return on 3.2% 14.1% 27.0% 14.5% 8.0% 11.1% 15.9% 13.4%
Equity
Comments
 The ratio reflects pricing decisions and product costs. The 25.9% gross
margin for the company in our example shows that 25.9% of revenues
generated by the firm are used to pay for the cost of goods sold.
 The net profit margin of 14.2% suggests that for every 1 taka of
revenue generated by the firm, 0.142 taka is created for the
shareholders.
 The firm in has an ROA of 14.8%, indicating that for every 1 taka of
company assets, the firm is generating 1.48 taka in net income.
 The ROE 27.5% suggests that for every 1 taka in shareholder’s equity,
the firm is generating 2.75 taka in net income.
Leverage Ratios

Total 271.2% 59.8% 0.0% 3.4% 367.0% 84.4% 114.1% 150.0%

Debt to
Equity

Debt to 0.8% 0.0% 0.0% 0.0% 1.7% 0.0% 3.4% 1.5%

Total
Assets
Comments:
A high number of debt to asset ratio means the
firm is using a larger amount of financial
leverage, which increases its financial risk in the
form of fixed interest payments. This firm debt to
asset ratio is 0% which means they don’t use
debt for creating asset.
Balanced Scorecard

of Heidelberg Cement
Bangladesh Limited
Four perspectives Area of objectives Measure or Target Time expectation Primary
responsibility
  Timely Delivery 5-10 day Half –Yearly Marketing distribution
  Product Quality Increased inspection Half-yearly Quality management
Customer perspective Performance and Market campaign & Half-yearly Sales department
services Customer survey
Product cost Reduced by 1% Half-yearly Finance department
  Business processes Increased cycle time by Half-yearly Operation management
  20%
Internal business Coordinated action Participative Culture Yearly Management
perspective department
Key resources and Acquire new Yearly Board of directors
capabilities technology
  Human capital Seminars & Training Yearly HRM
Innovation and assessment
learning perspective Information technology IT connect with Supply Yearly Information technology
chain
Organizational capital Friendly Culture & Yearly Board of directors
Participative
Leadership
  Profitability & Growth Increased by 1% Yearly Finance department
  Improved sales Increased by 15% Half-yearly Sales department
  Increased market share Increased by 10% Yearly Marketing department
Financial perspective Reduced operating decreased by 4% Yearly Operation management
expenses
Value Chain of Cement
industry fgg
 Firm Infrastructure
 Widely respected Board of Director who promote firm reputation
Human Resource Management
 Effective orientation & training programs to maximize employees productivity
 Attract & recruit talented graduates
Support Activities

Technological Development
 Customer oriented product development
 Effective use of automated technology
Procurement
 Sustainable relationship with suppliers
 Purchase good quality components to enhance product image

Inbound Operations Outbound Marketing & Service

Logistics  Low defect Logistics Sales  Rapid
 Locally rates to  Strong  Strong brand response
ary Activities

purchase improve control over reputation to

most quality distribution  Value based customer
materials in  Effective use channels pricing service
 
 
 

bulk of quality  Responsive  Creative requests.

Primary Activities
Inbound: Outbound:
In terms of input, huge tons of It is a product which is very high in
limestone is required to produce on volume and the sensitivity too is very
ton of cement. Most of firm uses own high. Warehousing is very important
vehicles for transporting raw materials component in this business and the
like lime stone, coal, gypsum and fly cost involved is not small. There is an
ash. The raw materials required to ample scope of practicing JIT (Just in
manufacture cement are limestone Time) in cement warehousing
and clay. Rocks extracted from the operations. The finished cement is
quarry are routed to the nearby either loaded directly onto trucks or
cement plant on a conveyor belt. . railway cars in bulk for distribution to
The use of mobile equipment customers or packaged in special
(forklifts, trucks, mechanical loaders, cement packaging bags and delivered
power shovels, etc.) is a major part of on standard pallets.
cement plant operations.
Primary Activities

Service: Marketing & Sales:

Service increases the value of the Marketing is a comprehensive term and it
entire product to the final consumer. includes all resources and set of
Especially in cement like product activities necessary to direct and
being commodity quality doesn’t facilitate the flow of goods and services
matter much what matters is product from producer to consumer in the
process of distribution.
as per specification and after sales
services. Competitors too are very  Focus on brand name
sharp in the cement industry the only  Effective differentiation
way to differentiate and set a bench
mark is the after sales services.
 Effective public relations
 Price differentiation
  
 Strong distribution network
 
Primary Activities

Operations: Crushing
Minging & pre
 The entire plant is operated from blending
central control room where the process
operating personnel closely monitor,
the plant operation on visual display Cement Raw
storage,Packing material
unit. The computerized process control & bulk loading grindi
system with field instrumentation
ensures the steady and smooth
operations of the plant. • Flow chart of
the cement production process are
Blending
following: Cement
milling
& kiln
feed
Pre
heating &
kiln
cooling
Support Activities

 Procurement:  Firm Infrastructure:

 The procurement is value addition  Over 23% of the production cost of
to purchase. Procurement includes cement is power. It needs to keep
power costs to the minimum. So
all the things discussed further in
cement industry focused efforts on
the section. The procurement
improving efficiency at kilns to get
process in cement industry is more output for less power. Most of
systematic as it is process industry the firm sourced a cheaper and higher
every stage in the process requires quality coal from South
approval from the authority. Africa/Australia and better furnace oil
from the Middle East. Most of the firms
 Raw materials are located where power supply and
 Energy transportation facilities are available.
  
Technology Development:  hi
 Improving quality of blended cement
through innovative process.
 Conservation of resources through
maximizing the use of low-grade
limestone for cement manufacture
 Development of application oriented
cements with decreased CO2 emissions
 Development of new products or
discovering new methods of analysis
 Productivity research for increased
efficiency in use of resources
 Recycling of wastes and research for
efficient use of scarce materials
 Development of cements tailored for
specific market clusters and application
segments
Resources based view of
Heidelberg Cement
Organization Resources aspects Resources that prevailed
al resources
    -It has net profit after tax 803162 (thousand
    BDT)
  Financial -Its earning per share is 14.21 BDT(2017)
  -Net assets 4700 million(BDT)
  -NAV per share 83.17(BDT)
  -Return on capital 7%
  - Return on assets 9%
  Physical -Floating terminal with onboard packing
  facilities in Chittagong port(1.5 million tons)
  -Greenfield manufacturing plant near
Tangible Dhaka(1.4 million tons)
resources -Kanchpur plant(0.45 million tons and 8000 MT
cement silo plant)
 
Technological -Innovative production process
-Patents and trademarks are very strong
-Superior geographic footprint
- Continuing cost saving & efficiency
improvements
Organizational -Effective management systems at our various
business lines help to ensure a continual
process of improvement in accordance with
our sustainability strategy
  Human resources -High level of personal commitment and
  unconditional loyalty are particular strength of
  Heidelberg Cement BD Ltd
  -A strong corporate culture that forces on the key
  success factors
  -The balances composition of management team
  with its different personalities, competences,
  level of experience mirrors
Intangible   --CO2 reduction
resources   – Development of alternative clinkers
Innovation and Creativity – Product innovation
– Recycling
--The aim of their research activities is to provide
customers
with innovative products and to minimize energy
consumption and CO2 emissions by improving
-They have made a commitment to accept their
share of the worldwide responsibility to limit the
global rise in temperature to below 2°C
Reputation - Strong brand reputation
-Value based pricing
-Reputation with customer for quality and reliability
-Very friendly management team and strong
relationship with the supplier of raw materials.
 
Organization   - Widely respected CEO who promote firm
al reputation
capabilities -Excellent product development capabilities
-Outstanding customer service
-Outstanding sustainable strategy 2030
-Sense of urgency
-Fast decision making
-Avoidance of big company syndrome
 Is the resources or capability.....

Valuable? Rare? Difficult to Without Implication for

imitate? substitute? competitivenes
s

Yes No No No Temporary
Competitive
Advantage
CROWN CEMENT
Crown cement mission vision
analysis:
Vision
 To make a contribution to the nation by creating
opportunities in the arena of industrial growth and
development of Bangladesh, and to provide a solid
foundations for society's future.

Mission
 As a modern cement company, we manufacture
cement (Brand name: Crown Cement) to meet the
needs of clients through innovative products &
services that create value for all of our stakeholders.
 Crown cement mission vision analysis(contd.):

 Crown cement have installed modern technologies and

state of art equipment which they use efficiently in
increasing quality of their product and service rendering
but they lag behind in case of product innovation which is
the main focus in their mission.
 Butthe growth of the crown cement in the industry
indicates they are forwarding toward their vision with the
market expansion in home and abroad creating and
showing the path to earn foreign currency.
Resource based view
Tangible resource:

Financial resource
 Cash and cash equivalent: 4,313 crore taka (2018) which is
11.84% higher than previous year.
 The Revenue was 1,259 crore in 2017-2018 Tk. 311.95 Crore
increased by (33.05%) in comparison with last year due to
production initiating and market expansion
 Total equity 7,124 crore tk (2018) increased from 7,097 crore tk
(2017)
Physical resources:
 Property, plant and equipment of Taka 7,797 crore

 6 plants for manufacturing RMC at convenient location

 2 mother vessels (Bought in 1999 and 2015)
 State of art equipment. Some important equipment are,
 Digital Concrete/Cement compression testing machine
 Jotting Table LED Display and automatic stop control.
 Vacate Apparatus (for water consistency & setting time) test.
 Automatic / Manual 5 Liter Mixer Machine.
 Auto clave m/c
 Digital electronic balance
 PH Meter
 Blaine apparatus
 Electric Muffle Furnace etc.
Technological resource
 M.I.Cement Factory Ltd. is being produced in the ‘Close Circuit’
technology.
 Inaddition to this, the O’Sepa Separator System (Japanese technology)
assures the fineness of the cement. The whole production system is
computerized
A comprehensive backup solution for the Company’s SAP4/HANA based
ERP and redundant radio-based data connectivity are the two major
initiatives IT Department have planned to accomplish in the next fiscal
year.
 The Company opted US based dedicated server for hosting its website and
email systems. The new email gateway includes technologies absent in
the previous email system. M. I. Cement Factory Ltd. provided 24/7
support services to all concerns of M. I. Cement Factory Ltd. and arranged
trainings for new and existing members
Organizational Resources:
 Adopted ISO 900:200 ads model for their quality management system
 State of art equipment for quality control
 A powerful in house modern laboratory
Intangible Resources
Human resource:
 Permanent 1397
casual 80
 Highly qualified foreign trained chemist and technicians

Reputation:
 Strong brand name Crown cement
 ISO 9001:2000 certified (QMS)
Organizational capabilities:
 Good market expansion capability with efficiency in export marketing
 Production increment capability
 Balance scorecard:

  objectives Measure target action

customer Increase customer Best quality in More focus on R and D
perspectives Product feedback local market
Quality
Reduce Price per Reduced by 1% Reduce operating cost
Product cost product
Increase Average Increase Provide a wider variety
average customer size. customer size by of products to
customer size 5% customers.
of crown
cement
internal Reduce Administrative Reduce Train the employees so
business administrative expenses Administrative that they become more
perspectives expense expenses by 2% efficient.
Reduce Average Reduce the build more storage
delivery time delivery time average delivery
for customers time by 15%
at counters. within one year.
innovation and Increase Average training Increase training Hire outside
learning training hours hours per hours per trainers.
perspectives per employee. . employee. employee by Managers
5%. should increase
their time spent
for training.
Increase IT in Information Connect IT with Investing in IT
business technology Supply chain and process
operation automation
financial Increase return Return on Increased by More efficiency
perspectives on Equity 10% in operation
Equity(ROE)
Increase Market share Increased by 5% Advertising
market share product quality
Increase Revenue/total Increase Increase
revenues/total assets percent. . Revenue/total revenues; make
assets. assets by 8% a more thorough
during the next use of assets.
year.
VRIO FRAMEWORK
  Valuable Rare Difficult to imitate Without substitute Implication for
competitiveness
Financial Yes No No No Competitive
parity
Physical Yes Yes No No Temporary
competitive
advantage
Technologica Yes No No No Competitive
l parity
Organization Yes No No No Competitive
al parity
Human Yes No No No Competitive
parity
Reputation Yes Yes No No Temporary
competitive
advantage
Organization Yes No No No Competitive
al parity
capabilities
FINANCIAL RATIO
LIQUIDITY RATIO
Ratio 2016 2016- 2016- 2016- 2016 2016 2016-
Anal 17 17 17 -17 17

ysis
Parti ARAMI CONFI HEIDE LAFSU MEGH MICEM PREMI Industr
cular TCEM DCEM LBCEM RCEML NACEM ENT ERCEM y
s Averag
e

Curre 1.2 1.0 1.7 2.5 1.1 1.3 1.1 1.4

nt
Ratio
Quick 1.1 0.9 1.3 2.2 0.9 1.2 0.8 1.2
Ratio
Comments:
 The firm is operating with a very moderate current
ratio of 1.3 . it indicates that if the firm liquidated
all of its current assets at the recorded value, it
would only be able to cover of its current liabilities.
  The quick ratio of 1.2 indicates that the company
can only cover all of current liabilities by using all
cash-on-hand, liquidating short-term marketable
securities and monetizing accounts receivable.
 The cash ratio is 0.5 , which suggests that the firm
can only cover 50% of its current liabilities with its
cash and short-term marketable securities.
OPERATING EFFICIENCY
RATIOS
Ratio 2016 2016- 2016- 2016- 2016 2016 2016-
Analy 17 17 17 -17 17

sis
Partic ARAMI CONFI HEIDEL LAFSU MEGHN MICEM PREMIE Industry
ulars TCEM DCEM BCEM RCEML ACEM ENT RCEM Average

Inventor 5.1 7.4 5.3 5.6 5.7 9.2 7.5 6.5

y
Turnover
Ratio
Receivab 1.1 4.5 9.3 7.9 5.2 8.5 4.9 5.9
le
Turnover
Ratio
Average 315.2 80.7 38.9 45.7 69.8 42.5 73.0 95.1
Collectio
n Period
(Days)
Total 40.0% 54.5% 104.0% 51.1% 99.1% 63.7% 86.3% 71.2%
Comments:
 Inour firm the inventory turnover ratio of 9.2
means that inventory was “turned over” or
replenished 9.2 times during a period of one
year. 
  The receivables turnover is 8.5, signaling that,
on average receivables were fully collected 8.5
times during the period.
 Our asset turnover ratio of 63.7% indicates that
the firm generates 0.63 taka of revenue for
every 1 taka of assets that the company owns.
PROFITABILITY RATIOS
Ratio 2016 2016- 2016- 2016- 2016 2016 2016-
Analy 17 17 17 -17 17

sis
Partic ARAMI CONFI HEIDEL LAFSU MEGHN MICEM PREMIE Industry
ulars TCEM DCEM BCEM RCEML ACEM ENT RCEM Average

Gross 27.1% 16.9% 25.9% 35.1% 11.3% 18.4% 21.2% 22.3%

Profit
Margin
(GPM)
Net 1.9% 13.8% 14.2% 20.8% 1.4% 8.3% 7.4% 9.7%
Profit
Margin
(NPM)
Return 0.8% 7.5% 14.8% 10.6% 1.4% 5.3% 6.4% 6.7%
on Total
Assets
(ROA)
Return 3.2% 14.1% 27.0% 14.5% 8.0% 11.1% 15.9% 13.4%
Comments:
 The ratio reflects pricing decisions and product costs.
The 18.4% gross margin for the company in our example
shows that 18.4% of revenues generated by the firm are
used to pay for the cost of goods sold.
 The net profit margin of 8.3% suggests that for every 1
taka of revenue generated by the firm, 0.083 taka is
created for the shareholders.
 The firm in has an ROA of 5.3%, indicating that for every
1 taka of company assets, the firm is generating 0.053
taka in net income.
 The ROE 11.1% suggests that for every 1 taka in
shareholder’s equity, the firm is generating 0.11 taka
in net income.
LEVERAGE RATIOS
Ratio 2016 2016- 2016- 2016- 2016 2016 2016-
Analy 17 17 17 -17 17

sis
Partic ARAMIT CONFID HEIDEL LAFSUR MEGHN MICEME PREMIE Industry
ulars CEM CEM BCEM CEML ACEM NT RCEM Average

Total 271.2% 59.8% 0.0% 3.4% 367.0% 84.4% 114.1% 150.0%

Debt to
Equity
Debt to 0.8% 0.0% 0.0% 0.0% 1.7% 0.0% 3.4% 1.5%
Total
Assets
A high number of debt to asset ratio means the firm
is using a larger amount of financial leverage, which
increases its financial risk in the form of fixed
interest payments. This firm debt to asset ratio is 0%
which means they don’t use debt for creating asset.
  A ratio of 84.4% indicates that the firm uses the
same amount of debt as equity and means that
creditors have claim to all assets, leaving nothing for
shareholders in the event of a theoretical liquidation.
VALUATION RATIOS
Ratio 2016 2016- 2016- 2016- 2016 2016 2016-
Analy 17 17 17 -17 17

sis
Partic ARAMI CONFI HEIDEL LAFSU MEGHN MICEM PREMIE Industry
ulars TCEM DCEM BCEM RCEML ACEM ENT RCEM Average

Book 15.0 73.8 99.0 13.2 35.3 45.3 41.2 46.1

Value
Per
Share
EPS 0.5 10.4 26.7 1.9 2.8 5.0 6.5 7.7
Comments:

 Book value per share is good enough than other firm’s and industry average.
Resource Based View
of Premier Cement
Ltd.
Premier Cement Ltd

Premier cement ltd. Is one of the leading innovative

cement manufacturers in the country. It was
incorporated as a private limited company in 2001. It
start its first commercial production capacity of .6
Million tons per annum.
Vision & Mission of Premier Cement
Ltd.

Vision Mission

To become a market leader in

To work towards the the cement industry by
development of the society satisfying the customers through
through sustainable growth production excellence,
and excellence in competitive pricing and by
performance. adding value for the
stakeholders
Resources of Premier Cement Ltd.

Tangible

Intangible
Intangible
Tangible Resources of Premier
Cement Ltd.

Financial:
-It has net profit after tax 562010(thousand BDT)
-Its earning per share is 5.17 BDT(2017)
-Net assets 4292.34 million(BDT)
-NAV per share 40.71(BDT)
-Return on capital 4%
- Return on assets 5%
Physical:
-Muktarpur plant(1.2 million MT per annum)
 Tangible Resources of Premier
Cement Ltd. (Contd..)

Technological:
-Innovative production process
-Patents and trademarks are very strong
- Continuing cost saving & efficiency improvements
Organizational:
-Effective management systems at their various business lines help to
ensure a continual process of improvement in accordance with our
sustainability strategy
 Intangible Resources of Premier
Cement Ltd.

Human:
-A strong corporate culture that forces on the key success factors
-High level of personal commitment and unconditional loyalty are
particular strength of Premier Cement BD Ltd

Innovation:
- Product innovation
-Recycling
-CO2 reduction
- Development of alternative clinkers
-The aim of their research activities is to provide customers
with innovative products and to minimize energy consumption and CO2
emissions by improving
Intangible Resources of McDonald’s
(Contd..)

Reputation:
-Value based pricing
-Reputation with customer for quality and reliability
-Very strong relationship with the supplier of raw materials.

Organizational Capabilities:
- MD promote firms reputation
-Excellent product development capabilities
-Outstanding customer service
-Sense of urgency
-Fast decision making
 Balance Scorecard
  Fast Response 20-30 day Half –Yearly Marketing
  Time distribution
Customer Customer Increased Half-yearly Quality
perspective Retention inspection management
Employee Training Half-yearly Management
Engagement department
Customer Increase by Half-yearly Marketing
Loyalty giving proper department
service

  Average product Increased by Half-yearly Operation

  labor output 10% management
Internal Supplier Participative Yearly Marketing
business frequency Culture department
perspective
Average decision Reducing by Yearly Board of
making time team work directors
 Balance Scorecard (Contd..)
Learning and Expense for Increase by 15% Yearly HRM
growth research
perspective
Frequency of IT connection Yearly Information
direct contacts with Supply chain technology
with customer
Organizational Friendly Culture Yearly Board of directors
capital & Participative
Leadership
  Profitability of Increased by 2% Yearly Finance
  asset department
 
Sales volume for Increased by 15% Half-yearly Sales department
Financial
new product
perspective
Increased market Increased by 10% Yearly Marketing
price per share department
Ratio of marginal Increased by 5% Yearly Finance
revenue department
 Comparative Financial Highlights
Premier Cement Bangladesh Limited

Ratio Analysis 2016 2016-17 20 20 20 2016 2016-17 Industry

16- 16- 16 -17 Average
17 17
Particulars ARAMIT CONFIDENC HEIDELB LAFSUR MEGHNA MI PREMIER
E C
LIQUIDITY RATIOS:

Current Ratio 1.2 1.0 1.7 2.5 1.1 1.3 1.1 1.4

Quick Ratio 1.1 0.9 1.3 2.2 0.9 1.2 0.8 1.2

Cash Ratio 0.0 0.1 1.0 1.1 0.1 0.5 0.0 0.4
Comparative Financial Highlights Premier
Cement Bangladesh Limited (Contd..)
OPERATING EFFICIENCY RATIOS
Inventory Turnover Ratio 5.1 7.4 5.3 5.6 5.7 9.2 7.5 6.5

Receivable Turnover Ratio 1.1 4.5 9.3 7.9 5.2 8.5 4.9 5.9

Average Collection Period 315.2 80.7 38.9 45.7 69.8 42.5 73.0 95.1
(Days)

Total Asset Turnover 40.0% 54.5% 104.0% 51.1% 99.1% 63.7% 86.3% 71.2%
Comparative Financial Highlights Premier
Cement Bangladesh Limited (Contd..)

OPERATING PROFITABILITY RATIOS

Gross 27.1% 16.9% 25.9% 35.1% 11.3% 18.4% 21.2% 22.3%
Profit
Margin
(GPM)
Net Profit 1.9% 13.8% 14.2% 20.8% 1.4% 8.3% 7.4% 9.7%
Margin
(NPM)
Return on 0.8% 7.5% 14.8% 10.6% 1.4% 5.3% 6.4% 6.7%
Total
Assets
(ROA)
Return on 3.2% 14.1% 27.0% 14.5% 8.0% 11.1% 15.9% 13.4%
Equity
(ROE)
Comparative Financial Highlights Premier
Cement Bangladesh Limited (Contd..)

LEVERAGE RATIOS

Total 271.2% 59.8% 0.0% 3.4% 367.0% 84.4% 114.1% 150.0%

Debt to
Equity

Debt to 0.8% 0.0% 0.0% 0.0% 1.7% 0.0% 3.4% 1.5%

Total
Assets
Comparative Financial Highlights Premier
Cement Bangladesh Limited (Contd..)

VALUATION RATIOS

Book 15.0 73.8 99.0 13.2 35.3 45.3 41.2 46.1

Value
Per
Share
EPS 0.5 10.4 26.7 1.9 2.8 5.0 6.5 7.7
 Strengths & Weaknesses of Premier Cement Ltd.

• Human Resource Competencies • High Production Cost

• Well Material Management System • Inappropriate
• Technological Competencies Organizational Rewards
• Sufficient Working Capital • Price is expensive than
• Strong Brand name reputation customers perceived
value
• Logistics dependencies on
Strength Weaknes
s s
rental trucks
• Ineffective promotion &
advertising
• Brand name reputation
Opportuni
ties Threats
Presentation on Royal Cement Company
Missions of Royal Cement Company
 To provide satisfaction to customers,
 To provide an enjoyable working environment for the
employees &
 To create value for the stakeholders.

Vision of Royal Cement Company

 “Working towards the development of the society, through
Sustainable Growth and High Quality Performance.”
Balanced Scorecard Analysis of Royal
Cement
Area of objectives Measure or target Time expectation Responsible
Department
Time delivery Marketing
1.Customer Price Administra
perspectives tion
Quality QC

Process improvement HRM

2.Internal Quality optimization R&D
business
perspectives
Capacity utilization Production
 Area of Measure or Time Responsible Dept
objectives target expectation
Cost savings      Production
and efficiency
3.Financial Profit margin      Finance
perspectives
Revenue      Finance
sources

Human capital     HRM 

4.Innovation Information      IT
and learning capital
Organizational      Finance
capital
 Resource Based View

 Tangible Assets:

 Plants :4
 Trucks :107
 Truck Loader :7
 Mother Vessel :2
 Lighter Vessel :18
 Manpower :494
Resource Based View

 Intangible Assets:

1. Reputation : Brand Name: - Royal

2. Human:

a. Experience of Employee.

b. Managerial skill
Financial Ratio Analysis of
Royal Cement
 Ratio 2016-2017 2015-16 2014-15
       

Gross Profit ratio - % 16.79% 12.10% 9.98%

       

Net Profit ratio - % 9.45% 5.04% 4.95%

       

EBITDA margin to Sales - % 15.92% 11.71% 9.51%

       

Return on Shareholders' Equity - % 18.35% 8.40% 9.12%

       

Return on Capital Employed - % 23.50% 11.03% 8.60%

       

Current Ratio - Times 2.02 1.85 1.68

       

Quick / Acid test ratio - Times 1.00 0.85 0.64

       

Inventory turnover ratio - Times 45.71 2.82 2.84