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Analysis of Pakistan's Cement Industry
Analysis of Pakistan's Cement Industry
Term Report
Submitted by:
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Cement Industry
Contents
Analysis of Pakistan’s Cement Industry..............................................................................1
Submitted by:...................................................................................................................1
Class: IBA (Main Campus): BBA 4 (Yr 2005)..................................................................1
Course Instructor: Ms. Amber Imtiaz..................................................................................1
Contents...............................................................................................................................2
A. Introduction.....................................................................................................................4
B. Global Cement Trends....................................................................................................5
C. Types of Cement.............................................................................................................6
Ordinary Portland Cement (OPC)....................................................................................6
Slag Cement.....................................................................................................................6
Super Sulfate Resisting Cement (SSRC).........................................................................6
Sulfate Resisting Cement (SRC)......................................................................................6
D. Manufacturing Processes................................................................................................7
Wet Process......................................................................................................................7
Semi-Wet Process............................................................................................................7
Dry Process......................................................................................................................7
The Quarry ......................................................................................................................7
Raw Milling.....................................................................................................................9
Pre-heater and Pre-claimer...............................................................................................9
The Kiln.........................................................................................................................10
The Process ...................................................................................................................11
Packaging and Distribution............................................................................................12
...........................................................................................................................................13
E. Raw Material.................................................................................................................14
F. Historical Development of Cement Industry of Pakistan..............................................15
Derived demand.............................................................................................................19
As the demand of cement is derived demand and grows with the GDP. The above figure
shows the comparative demand and growth of the cement industry with respect to the
growth in the GDP of the country. The boom of the eighties and the nineties and again
the growing GDP after 9/11 has caused a tremendous growth in the cement industry.....19
G. Size and Trends.............................................................................................................20
Demand-Supply Gap to Restrict Profit Growth.............................................................21
Sustainability of Demand Growth.................................................................................21
Capacity Expansions- a Test for APCMA.....................................................................22
Per Capita Consumption of Cement..............................................................................25
Exports to Afghanistan..................................................................................................27
H. PROFILE OF PAKLAND CEMENT...........................................................................29
Process Features at Pak land..........................................................................................29
Sophisticated Technology..............................................................................................30
Quality Program.............................................................................................................30
Growth of Pak land Cement...........................................................................................30
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A. INTRODUCTION
Cement industry is a major indicator of economic growth and revival of any country.
This industry gives the growth and improvement of infrastructure of a country. In
Pakistan, positive macro economic indicators and governments intention of spending
more on social and infrastructure development has increased the demand for cement
many folds.
This report begins with a general overview of the industry locally and globally. Then we
go on with the manufacturing processes and the types of cement. This report also
discusses the size, trends, major players, a detailed profile of Pak land cement is also
given in the report, regulatory bodies, factors affecting demand and supply, factor
conditions, porters competitive forces according to the cement industry, governments role
in the industry, comparison with India and China, and finally future prospects and
recommendations.
Before discussing the local industry let us first analyze the global scenario regarding this
industry.
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Now let us find out what are the types of cement and their manufacturing processes.
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C. TYPES OF CEMENT
It is the most widely used cement. It is commonly used in our daily lives. It is popular
because of its uniformity and excellent quality and in general construction and buildings.
This is basic cement all other types are derived forms of OPC with minor chemical
changes in the composition.
Slag Cement
This cement is manufactured by mixing limestone, clay, silica sand, and iron ore (5-
10%). Its use is recommended for construction of basement foundation, especially near
the areas with higher humidity and near the sea etc. the capacity of this cement to protect
reinforcement is limited so its use in superstructures is not advisable.
This cement has been developed as a compromise between SSRC and OPC. It has the
strength of OPC and the resistance to sulfates and salts of SSRC.
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D. MANUFACTURING PROCESSES
Wet Process
In view of the constraints of kiln dimension and large water requirements and extremely
poor heat efficiency, wet process has become obsolete.
Semi-Wet Process
The process is suited for materials with sufficiently high plasticity. This process has also
become outdated due to high fuel/energy consumption.
Dry Process
The dry process was formerly used where water and the raw materials were scarce. But
now it is the most popular process in the cement industry. The advantages are: (1) the
fuel requirement is about 800 Kcal per kg of clinker (which is about 40 percent less as
compared to the wet process). This process enables the processing of a water range of
raw and the maintenance is easier. The raw material is preheated and partially calcium
resulting in higher kiln efficiency. The kiln being shorter in length requires less space in
erection and easier to maintain.
The Quarry
The basic raw materials for cement are limestone, shale and sand.
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In order to get at the limestone, various other layers of rock have to be removed. In total,
the quarry moves some seven million tones of rock each year - two million tones of
limestone, and the remaining five million tones of other material. The various different
types of rock are illustrated in the diagram below:
• The dragline
• The bridge
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Raw Milling
The raw meal from the storage silos is fed into the pre-heater.
Initially the raw meal is crushed by two large grinding wheels
(the picture shows one) in the Raw Mill, and is then blown up
the pre-heater where it is heated by hot exhaust gases from
the kiln.
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The Kiln
After the pre-heater stage, the material is moved into the kiln.
The raw meal enters the 60m long, 4m wide kiln tube, which
is slightly inclined downwards. It rotates at 3.5 rpm, which
assists in moving the raw meal through the kiln, towards the
20m long flame.
The hot clinker then drops out of the kiln and is cooled. It is
then transported to the next stage of the process, ready for the
final milling operation.
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The Process
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Once inside the rotary kiln, the material is moved towards the
coal flame, which heats it to 1450 oC, completing the
chemical reaction. At this stage the material is known as
clinker. The hot clinker is then rapidly cooled by blowing air
over it. A small quantity of gypsum is added to prevent the
cement setting too quickly, finally prior to it being ground in
ball mills to form a fine powder: cement.
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E. RAW MATERIAL
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F. HISTORICAL DEVELOPMENT OF
CEMENT INDUSTRY OF PAKISTAN
30
25
Number of plants
20
15
10
0
1947 1948-58 1958-68 1971-77 1977-88
Years
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15000
Capacity (000 MT)
10000
5000
0
1999-00 2000-01 2001-02 2002-03 2003-04
Years
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10
5
0
1990-1991
1991-1992
1992-1993
1993-1994
1995-1996
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
1994-1995
-5
-10 Years 17
Cement Industry
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Derived demand
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Cement Industry
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600
500
400
MT 300
200
100
0
China Taiw an Srilanka Malaysia Indonesia India Pakistan
Countries
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Cement Industry
1000
900
800
700
600
Kg 500
400
300
200
100
0 Taiwan J apan Thailand Malaysia China Egypt USA P hilippine Indonesia Srilanka India Pakistan
Countries
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Exports to Afghanistan
Cement Exports
Cement
12000 White
Value in 000 US$
10000 Cement
Clinkers
8000
Cement
6000 Portland
4000 Others
2000 TOTAL
0
2000- 2001- 2002-
01 02 03
Years
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PAKLAND CEMENT
Produced over 100% annual rated capacity in the first year of ope
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Sophisticated Technology
Quality Program
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J. MAJOR PLAYERS
1) Attock cement
2) Best way cement
3) Chakwal cement
4) Cherat cement
5) D.G. Khan Cement
6) Dadabhoy cement
7) Dadex cement
8) Fauji cement
9) Fecto cement
10) Gharibwal cement
11) Javdan cement
12) Kohat cement
13) Luckey cement
14) Maple leaf cement
15) Mustehkum cement
16) Pakistan slag cement
17) Dewan (Pakland) cement
18) Saadi cement
19) Zeal pak cement
20) Essa cement
21) Dandot cement
22) Kohat cement
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Growth in Exports
Infrastructure Development
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Wars
Wars and reconstruction activity in countries like Afghanistan
and Iraq have increased the consumption of cement many
folds. The huge developmental expenditure by their
governments and the inflow of aid from developed countries
has also increased the demand for cement.
Disasters
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Imported Machinery
Fuel Conversion
Government Duties
Export Distribution
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GOVERNMENT’S ROLE
The Government of Pakistan has taken varying stances on
different issues regarding the industry:
Taxes
Licenses
Cement Cartel
Export Incentives
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Overview
Ownership
Production
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Cement Plants
Cement Markets
Domestic Demand
Prices
Transportation
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Trade
Overview
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Usage
Production
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Prices
Players
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Concerns
Transportation
Capacity additions
Industry inputs
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RECOMMENDATIONS
These are the recommendations that can be implemented in
the cement industry to reinforce its success:
• There are many players in the industry that are not
functioning efficiently. There needs to be certain
minimum requirements that should be fulfilled by the
manufacturers. The government can give deadlines to
the manufacturers for implementing those measures,
which if not implemented, will lead to the closure of
the companies. These minimum requirements can be
conversion to low-cost coal powered plants.
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