Analysis on the Cement Industry in Pakistan 
| ANALYSIS ON THE CEMENT INDUSTRY IN PAKISTAN | Managerial Economics | | Javeria Siddiqui & Mohammed Tallal | 12/17/2011 |
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TABLE OF CONTENTS
STUDY OBJECTIVES & HYPOTHESES 3
METHODOLOGY 3
HISTORICAL OVERVIEW 4
INDUSTRY ANALYSIS * Market Structure 5 * Growth Trends & Expansion Cycles 8 * Factors Affecting Growth 10
FUTURE OUTLOOK 12
CONCLUSION 12
APPENDIX 1 – Herfindahl Calculation 13
APPENDIX 2 – Concentration Ratios 14
REFERENCES 15
STUDY OBJECTIVES & HYPOTHESES
This report aims to evaluate the cement industry in Pakistan with respect to growth and the competitive structure of the market.
The objective of the research will be two-fold: 1. To determine Industry dynamics by evaluating historical performance and background as well as market structure and degree of competition. 2. To identify factors that drive growth and capacity and expansion cycles.
Hypotheses for this research study are developed as follows:
Hypotheses 1: The cement industry follows an oligopolistic market structure.
Hypotheses 2: The cement industry will follow economic trends of the country.
METHODOLOGY
The research methodology largely employed secondary research for data collection and analyses utilizing industry research reports, publicly available financial statements and literature on the industry available online.
A minor part of primary research entailed gaining insight on the industry’s future outlook through one-on-one interviews with industry experts.
HISTORICAL OVERVIEW
Pakistan’s cement industry has shown tremendous progress since Independence. In 1947, there were only four operational cement units in West Pakistan with the total production capacity of approximately half a million tonnes per annum. Demand during the same period was estimated at over a million tonnes. The industry experienced gradual growth as five plants were
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TABLE OF CONTENTS
STUDY OBJECTIVES & HYPOTHESES 3
METHODOLOGY 3
HISTORICAL OVERVIEW 4
INDUSTRY ANALYSIS * Market Structure 5 * Growth Trends & Expansion Cycles 8 * Factors Affecting Growth 10
FUTURE OUTLOOK 12
CONCLUSION 12
APPENDIX 1 – Herfindahl Calculation 13
APPENDIX 2 – Concentration Ratios 14
REFERENCES 15
STUDY OBJECTIVES & HYPOTHESES
This report aims to evaluate the cement industry in Pakistan with respect to growth and the competitive structure of the market.
The objective of the research will be two-fold: 1. To determine Industry dynamics by evaluating historical performance and background as well as market structure and degree of competition. 2. To identify factors that drive growth and capacity and expansion cycles.
Hypotheses for this research study are developed as follows:
Hypotheses 1: The cement industry follows an oligopolistic market structure.
Hypotheses 2: The cement industry will follow economic trends of the country.
METHODOLOGY
The research methodology largely employed secondary research for data collection and analyses utilizing industry research reports, publicly available financial statements and literature on the industry available online.
A minor part of primary research entailed gaining insight on the industry’s future outlook through one-on-one interviews with industry experts.
HISTORICAL OVERVIEW
Pakistan’s cement industry has shown tremendous progress since Independence. In 1947, there were only four operational cement units in West Pakistan with the total production capacity of approximately half a million tonnes per annum. Demand during the same period was estimated at over a million tonnes. The industry experienced gradual growth as five plants were
References: 1. http://tribune.com.pk/story/267809/cement-prices-increased-to-rs400-per-bag/ 2. http://www.scribd.com/doc/26152245/Cement-Industry-Pakistan-a-Strategic-Analysis 3. Personal interview with Ayub Humayun Ansari, Senior Analyst, AKD Securities. 4. http://www.scribd.com/doc/965425/Cement-Industry-Pakistan 5. http://www.cement.com.pk/latest-developments/107-latest-news-test2.html 6. www.apcma.com 7. http://www.slideshare.net/msaadafridi/cement-industry-of-pakistan