subsidiary of bestway cement in Bangladesh
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subsidiary of bestway cement in Bangladesh

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The Bestway cement ltd open the subsidiary in Bangladesh.which is a public limited in KSE

The Bestway cement ltd open the subsidiary in Bangladesh.which is a public limited in KSE

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subsidiary of bestway cement in Bangladesh subsidiary of bestway cement in Bangladesh Presentation Transcript

  • ‫لرحمي‬‫ا‬ ‫لرمحن‬‫ا‬ ‫هللا‬ ‫سم‬‫ب‬
  • Group Members: • ZaeemWajahait Iqbal 5256/FMS/MBA/F11 • MuhammadAwais Ahmed 5262/FMS/MBA/F11 • Muhammad Bilal Jamil 5267/FMS/MBA/F11 • Khalid Mehmood 5272/FMS/MBA/F11
  • Bestway Cement Subsidiary in Bangladesh
  • LAYOUT OF PRESENTATION • Introduction • Theoretical framework • Analysis and Finding • Conclusion
  • Overview of Bestway cement • Bestway cement is part of Bestway Group of United Kingdom. • This group has diversified in different sectors. • Bestway group first time established its cement plant in 1992. • It was listed on KSE in 2001.
  • Overview of Bestway cement. Vision of Bestway cement: • To produce high quality cement at lower cost. Mission of Bestway cement: • Bestway will consistently produce high quality • Best way will continue to provide a high standard of customer services. • In order to meet future expansion needs, Bestway will continue its policies of staff trainings.
  • Bangladesh’s overview • Bangladesh come into being in 1971 dependent and free country. • Its total area is around about 147,000 KM squares. • Its total population approximately 153.51 million. • Widely spoken languages are bangla and English
  • Bangladesh’s overview • Bangladesh capital city is Dhaka and main big Cities are Dhaka, Chittagong and Rangpur. • Bangladesh has Major industries are Cement, Fertilizer , Paper and Leather products • Its total GDP is $ 133 billion and per capita income $ 885 • Its GDP growth rate is 6.35% • DFI in Bangladesh is $ 1.36 billion
  • Industry Overview. • Bangladesh cement industry is 40th biggest market in world. • presently capacity of cement industry about 20 mn tonnes (MT). • There are four big production companies. • There were 120 companies registered. • 65 companies have their own production plants.
  • Motives for DFI: Revenue Related Motives: • Attract new sources of demand. • Diversify internationally. • Enter into a profitable market
  • Motives for DFI: Cost Related Motives: • Take full advantage from economy of scale. • Use of foreign factor of productions. • Use foreign raw material. • Use of foreign technology. • React to exchange rate moments.
  • Financial Analysis • Safety andTax Free Land • 1 US $ is equal to 77.45 BangladeshiTaka • Exchange Rate Movements • Labor Rates
  • Calculations of Estimated Cost Description Estimated Cost (million) Cost US$ (million) Factory Land 10 0.129107 Plant 50 0.645535 Building 15 0.193661 Equipment 18 0.232392 Misc. Cost 11 0.142018 Total 91 (BDT) 1.343($)
  • Calculation of WACC Description Debt Equity Amount 0.4029 0.9401 Weight 0.3 0.7 Cost 0.15 0.20 Total Investment = 0.4029 + 0.9401 = 1.818 (M) WACC = WeKe+WdKd WACC = (0.70*0.20) + (0.30*0.15) WACC = 0.185 WACC = 18.5%
  • Calculations of Cash Flows; NPV Year 2015 2016 2017 2018 2019 Revenue 6000000 7200000 8400000 9300000 9700000 Variable Cost (1200000) (1400000) (1900000) (2500000) (2700000) Other variable Cost (256000) (310000) (413000) (480000) (550000) Fixed Cost (400000) (400000) (400000) (400000) (400000) Depreciation(10%) (500000) (500000) (500000) (500000) (500000) Interest (11%) (44311) (44311) (44311) (44311) (44311) Earning bf Tax 3599689 4545689 5142689 5375689 5505689 Tax (27.5%) (1002100) (1262250) (1426425) (1490500) (1526250) Earnings After Tax 2641900 3327750 3760575 3929500 4023750 Depreciation 500000 500000 500000 500000 500000 Net Operating Cash Flows 3141900 3827750 4260575 4429500 4523750 With Holding Tax (10%) (314190) (382775) (426057) (442950) (452375) Total 2827710 3444975 3834518 3986550 4071375 Salvage Value 900000 NCF Operating Cash Flows 2827710 3444975 3834518 3986550 4971375 NPV 2386253.2 2453292.7 2304388.7 2021733 2127575 Cumulative NPV -1043253.2 -836000.5 125388.5 804121.5 1588696.5
  • Conclusion: • Attractive resources in Bangladesh. • Profitable market. • Cheap labor. • Tax incentives. • Easy availability of raw material.
  • Thank you