Cement

Lucky Cement Ltd

2010

SWOT analysis

Strengths:-

1. Due to flood affected area’s the local market had an increased demand of cement which the company effectively took advantage and increased it sales by 12.3%, inspite of govt not spending for public sector development.

a. The overall increase in sales of domestic market was 26.3% while overall exports increased by 2.2%

b. The Overall increase of market growth was 9.4% while the sales increased by 14.6%

2. The company invested in “Waste heat recovery project” of Karachi plant. Which in returned reduce 23% of power related cost of the company.

c. The overall effect has allowed the company to reduce the cost per ton of cement by 11%. As the major cost component was fuel and power which accounted for 62% of total cost

d. The conversion of waste heat into power generation has helped to reduced green gas omissions.

3. The company was able to repay the high markup carrying long term loans during the financial year which resultantly reduced the cost per ton by 59%.

e. Due to its low debt to equity ratio, the company was able to acquire a special low interest rate finance from “State Bank of Pakistan”

4. The company has a well-diversified portfolio of export market which effectively reduces the foreign risk.

Weaknesses:-

1. The company observes and decline of 6.9% in sales revenue, although the sales had been increased. This is due to decrease in sales prices both locally and export markets. This may be due to increased competition faced by the company specially in local market as the demand was high and yet the sale prices were decreased.

2. The gross profit ratio was decreased also, but due to effective planning (reduction in finance cost & waste heat recovery project) it was partially offset.

3. Distribution costs were increased due to increase in exports and prices of freights and fuels

4. The company is still trying to capture local market and...