Page 1 of 10
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 02
March 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 236
The Cement Industry of Pakistan: A Swot
Analysis
Najabat Ali*1
, Muhammad Anwer 2Abbas Jaffar3
, Syed Murtazain Raza Zaidi4
*1Research Scholar,Hamdard Institute of Education and Social Sciences,
Hamdard University, Main Campus, Karachi, PAKISTAN.
2Faculty Member, Department of Special Education, Gilgit, Gilgit Baltistan, PAKISTAN
3PhD Scholar,Glorious Sun School of Business and Management,
Donghua University, West Yan’an Road 1882, Shanghai Post Code 200051 China.
4Research Scholar,Hamdard Institute of Education and Social Sciences,
Hamdard University, Main Campus, Karachi, PAKISTAN.
*
1Corresponding Author: Najabat Ali Email: alinajabat@hotmail.com
ABSTRACT
The study attempts to evaluate the cement
industry of Pakistan by SWOT analysis. It
investigates the major strengths,
weaknesses, opportunities and threats of
the cement industry of Pakistan. In the early
days of Pakistan, this industry was a smaller
one but it turned into one of the biggest
industries of Pakistan. At present cement
industry is one of the top industries of
Pakistan which has a significant
contribution in the economy of Pakistan.
The cement industry of Pakistan is
exporting cement after fulfilling the
domestic demand. The strengths and
opportunities of the cement industry attract
not only the domestic investors but also
foreign investors. On the other hand
cement industry has few problems and
threats which affect the industry negatively.
The study thoroughly analyzes all the
strengths, weakness, opportunities and
threats of the cement industry of Pakistan.
INTRODUCTION
Cement industry is one the important
industries of Pakistan which has a
significant contribution in the economic
development of Pakistan. When Pakistan
came into existence it had only four cement
plants but presently over twenty cement
firms are operating in the cement industry
of Pakistan. (Agha, 2014). The cement
industry requires high infrastructure and
favorable conditions for production.
Majority of the cement firms in the country
are located in the vicinity of mountainous
areas. These areas are highly rich in the
inputs required for the cement production
Page 2 of 10
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 02
March 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 237
such as clay, iron, gypsum and other
minerals. (Manarvi, & Gardezi, 2014).
The cement industry of Pakistan is divided
into two broad regions on the basis of their
geographical location which include
Northern zone and Southern Zone. The
Northern zone covers over 80% of the total
cement share of the country while rest of
the cement is produced in the southern
zone. (Manarvi, & Gardezi, 2014).
The cement industry of Pakistan has an
oligopolistic market structure where top
five companies have controls over 55% of
the market share of cement. While the
remaining all companies cover only 45% of
market shares. The total production
capacity of the cement industry of Pakistan
stood 44.8 million tons in FY13. The
capacity utilization of cement production
stood 75% in the same year. (Nayyar,
Zaigham, & Qadeer, 2014).
Cement industry of Pakistan is fulfilling the
local demand of cement and also exporting
cement to the neighborhood countries like
Russia, Iraq, Sri Lanka, India, Afghanistan
and United Arab Emirates. At present,
Pakistan is also exporting cement to some
African countries as well. Currently,
Pakistan is ranked among the world's top 10
cement exporting countries. (Nayyar,
Zaigham, & Qadeer, 2014).
LITERATURE REVIEW
The history of cement industry of Pakistan
goes back to 1921 when the first cement
plant was planted at Wah. When Pakistan
came in to the map of the world there were
only four plants with the production
capacity of approximately 0.5 million
tonnes. This capacity was not sufficient for
the country (Sharwani, 1976). In 1956 two
more plants were installed by the Pakistan
Industrial Development Corporation in
Hyderabad city and Daudkel. Furthermore
plants were installed in the private sector
(Gardezi et al., 2014). Due to the shortage
of cement in the country, cement was
imported from other countries. So the
extension of cement industry of Pakistan
was need of the time. The number of
cement plants in the country was only 6 till
the year 1965. But just after this year the
cement sector of Pakistan observed a good
development and three cement units were
planted by the private sector. The newly
opened cement units were Javedan cement,
Gharibwal cement and Mustehkam cement.
Javedan cement was launched in Sindh
province while Gharibwal cement and
Mustehkam cement were set up in the
province of Punjab. This initiative of
entering in cement industry was a good
step not only for the cement industry but
also for the economic development and
growth of the country. (Gardezi et al.,
2014).
In the era of 1971-1977 nationalization
came into place and all private cement units
Page 3 of 10
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 02
March 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 238
were nationalized by the government of
Pakistan (Ahmad, 1962). During this period
no any new cement unit was introduced.
The government of Pakistan came up with
the establishment of State Cement
Corporation of Pakistan (SCCP) in 1972 and
the management of cement production in
the country was assigned to it (Buttress,
Jones, & Kingman, 2015). During this tenure
all the existing cement firms in the cement
industry came under the control of SCCP.
The State Cement Corporation installed five
new cement manufacturing plants in order
to reduce the gap between demand and
supply in the industry with the production
capacity of 1.8 million tons (Rauf, 1994). It
was the time when cement industry worked
under the complete control of state and the
industry met strict regulations and policies
during this tenure (Bilgen, 2014).
During the age of 1977-88,
denationalization of industries came into
action and people were motivated to invest
in different sectors of the economy
especially in housing and construction
sector, as a result demand for cement had
been increased. With the inception of
denationalization, private sector was also
permitted to establish new cement
manufacturing units. (Shahida, 1989).
In 1990, cement industry observed another
huge change, the industry had been
privatized and initially eight cement units
were privatized (Oggioni, Riccardi, &
Toninelli, 2011)(Wen et al., 2015). To boost
the industrial sector the state gave tax
exemption to main industries in Baluchistan
and Khyber Pukhtunkhwa. This tax
exemption was also enjoyed by cement
industry and as a result new manufacturing
units were also established in private
sector. Private sector was working
effectively due to their new technology
while SSCP started to lose its power during
the period of privatization and its control
over supply of cement went down to 25
percent of the installed capacity of the
country. But still there was a gap between
the demand and supply of cement and to
meet the demand of cement in Pakistan;
cement was imported from other countries
(Umar, Friis, Khan, Kassi, & Kasi, 2011).
The cement industry of Pakistan had
reached a level where surplus production
was achieved after meeting local demand in
1997. Due to this huge development in the
industry, many investors were attracted.
Other reasons for attraction of the investors
were cheap and abundant availability of
raw materials in the country. Increasing
local demand for cement consumption also
encouraged the producers for further
expansion in production capacity of their
manufacturing units. Currently the cement
sector is utilizing approximately 74 per cent
of its installed production capacity of 45
million tones approximately since the local
consumption of cement is dull for the last
several years. The total production of
cement during 2013 was 33mln tonnes.
(Wen et al., 2015).
