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A PROJECT ON FAUJI CEMENT COMPANY LIMITEDTO: SIR SALEEM JAHANGIR MIRZABY: MUHAMMAD NAEEM 3778 MUHAMMAD USMAN 3763 HASAN ALI MALIK 3765 MUHAMMAD UMAIR KAYANI 3781 MUHAMMAD FARRUKH NOUMAN 3762 FACULTY OF MANAGEMENT SCIENCES INTERNATIONAL ISLAMIC UNIVERSITY, ISLAMABAD.
INTRODUCTION- THE ORGANIZATION:A longtime leader in the cement manufacturing industry, Fauji Cement Company,headquartered in Islamabad, operates a cement plant at Jhang Bahtar, Tehsil Fateh Jang,District Attock in the province of Punjab. The Company has a strong and longstandingtradition of service, reliability, and quality that reaches back more than 11 years. A VIEW OF FAUJI CEMENT PLANT AT JHANG BAHTARThe cement plant operating in the Fauji Cement is one of the most efficient and best maintained in the Country and has an annual production capacity of 1.165 million tons of cement. The quality portland cement produced at this plant is the best in the Country and is preferred in the construction of highways, bridges, commercial and industrial complexes, residential homes, and a myriad of other structures needing speedy strengthening bond, fundamental to Pakistans economic vitality and quality of life.
Fauji Cement Company Limited was sponsored by Fauji Foundation andincorporated as a public limited company on 23 November 1992. It obtained theCertificate of Commencement of Business on 22 May 1993. The Company hasbeen setup with primary objective of producing and selling Ordinary PortlandCement (OPC). For the purpose of selection of sound process technology, state ofthe art equipment, civil design and project monitoring, local and foreignconsultants were engaged.The Company entered into a contract with World renowned cement plantmanufacturers M/s F.L. Smidth to carry out design, engineering, procurement,manufacturing, delivery, erection, installation, testing and commissioning at site ofa new, state of the art, cement plant including all auxiliary and ancillaryequipment, complete in all respects for the purpose of manufacturing a minimumof 3,000 tpd clinker and corresponding quantity of Ordinary Portland Cement asper Pakistan/ British Standard Specifications.The contract came into force on 1 January 1994. Physical work on the projectstarted in August 1994Commissioning activities started in May 1997 generallyremained smooth and trouble free, which enabled first batch of clinker productionon 26 September 1997 followed by cement production in November 1997.Subsequently in 2005, the Plant capacity was increased to 3,700 tons of clinker perday i.e. 3,885 tons of cement per day. - BUSINESS PATTERN:The Company has been set up with the primary objective of producing and sellingordinary portland cement. The finest quality of cement is available for all types ofcustomers whether for dams, canals, industrial structures, highways, commercialor residential needs using latest state of the art dry process cement manufacturingprocess. - COMPANY’S MISSION:FCCL while maintaining its leading position in quality of cement and throughgreater market outreach will build up and improve its value addition with a view toensuring optimum returns to the shareholders. - COMPANY’S VISION:To transform FCCL into a role model cement manufacturing Company fully awareof generally accepted principles of corporate social responsibilities engaged innation building through most efficient utilization of resources and optimallybenefiting all stake holders while enjoying public respect and goodwill.
- COMPANY’S STRATEGIES:We shall achieve our vision by maintaining high quality product, relentless pursuitof customer satisfaction, empowering FCCL employees to lead cement industryand achieve manufacturing excellence, producing superior returns to ourshareholders. - COMPANY’S VALUES: We listen to our customers and improve our product toCUSTOMERS meet their present and future needs. Our success depends upon high performing people working together in a safe and healthy work place wherePEOPLE diversity, development and team work are valued and recognized. We expect superior performance and results. Our leadersACCOUNTABILITY set clear goals and expectations, are supportive and provide and seek frequent feed back. We support the communities where we do business, holdSOCIAL ourselves to the highest standards of ethical conduct andRESPONSIBILITY environment responsibility, and communicate openly with public and FCCL employees. - INVESTORS: PATTERN OF SHAREHOLDING IS AS UNDER: SHARES PERCENTAGEFAUJI FOUNDATION INCLUDING 235,938,214 31.79DIRECTORSFFC 93,750,000 12.63FFBL 18,750,000 2.52FOTCO 18,750,000 2.52GENERAL PUBLIC 374,800,472 50.51TOTAL 741,988,686 100 - MANUFACTURING PROCESS:Fauji Cement is manufactured from best quality raw materials using dry process.Major portion of such raw ingredients consists of Limestone and Clay. The rawmaterials are quarried, crushed and corrected. After which they are mixed in thecorrect proportions to form the best raw mix. The raw mix is then ground in a rawmill and subsequently burnt in a rotary kiln at a temperature around 1450 °C. Theraw materials under go a number of complex chemical reactions in the burningphase and leave the kiln as cement clinker, consisting of agglomerate of clinker
minerals. Finally the clinker is ground to a fine powder called cement, in a CementMill together with 4-6% gypsum. The gypsum serves to retard the setting time ofthe cement, which would otherwise harden, immediately with the addition ofwater.
COMPETITORS:Following are some important competitors of Fauji Cement. - Lucky Cement - Bestway Cement - D.G. khan CementSTRUCTURE:The company’s management structure consists of Board of Directors, Committeesand Company’s Management. - BOARD OF DIRECTORS:Lt. Gen Hamid Rab Nawaz, HI (M) (Retd) ChairmanLt. Gen Javed Alam Khan, HI (M) (Retd) Chief executive/MDMr. Qaiser Javed DirectorMr. Riyaz H. Bokhari, IFU DirectorBrig. Arif Rasul Qureshi, SI (M) (Retd) DirectorBrig. Rahat Khan, SI (M) (Retd) DirectorDr. Nadeem Inayat DirectorBrig. Liaqat Ali (Retd) DirectorBrig. Munawar Ahmed Rana (Retd) DirectorBrig. Shabbir Ahmed (Retd) Company Secretary - HUMAN RESOURCE COMMITTEEDr. Nadeem Inayat PresidentMr. Qaiser Javed MemberBrig Liaqat Ali (Retd) MemberBrig Shabbir Ahmed (Retd) Secretary - AUDIT COMMITTEEMr. Qaiser Javed PresidentMr. Riyaz H. Bokhari MemberBrig Rahat Khan (Retd) MemberDr. Nadeem Inayat MemberBrig Shabbir Ahmed (Retd) Secretary - TECHNICAL COMMITTEEBrig Rahat Khan (Retd) PresidentBrig Arif Rasul Qureshi (Retd) MemberBrig Liaqat Ali (Retd) Member
Mir Khawar Saleem, Director (Project) Secretary - COMPANY’S MANAGEMENT:
PRODUCTS AND SERVICES:Fauji cement is currently producing only Ordinary Portland Cement (OPC), havingPS:232-2008 ® : 53 Grade. - INGREDIENTS: - Clinker 95% - Gypsum 5%In making its Products, Fauji cement meets the requirements of Following internationalStandards: - ASTM-C-150, Type I - BS EN-197-1, Strength Class 42.5 NSALES:Following is the Sales of Fauji Cement for Last 10 years: YEAR SALES (in Millions) 2009 5314.538 2008 3,545.902 2007 3,463.283 2006 4,286.138 2005 2,845.143 2004 2,296.231 2003 1510.738 2002 1586.606 2001 1575.604 2000 1696.581 1999 1340.411In the Table You can see that Sales was increasing continuously from 1999 to 2006, thentheir was decline in 2007 and 2008, but Fauji cement has Significantly increased it salesand reached to Rs. 5314.538 Millions.
GRAPHICAL REPRESENTATION OF SALES 6000 1999 5000 2000 2001 4000 2002 2003 3000 2004 2000 2005 2006 1000 2007 2008 0 S ES AL 2009NET PROFIT:Following is the Net Profit of Fauji cement for Last 10 years. YEAR Net profit (in Millions) 2009 1007.623 2008 413.598 2007 646.323 2006 1203.735 2005 510.490 2004 314.148 2003 (531.381) 2002 (110.480) 2001 (570.455) 2000 (282.974) 1999 (562.901)In the Table , you can see that from 1999 to 2003, Fauji cement was in loss, In 2004,company recovered and earned Rs. 314.138 Millions as Net Income, Up till 2006,
Company’s net Income was increasing with a significant Pace, and reached 1203.735Million, but afterwards Net Income again start decreasing. In 2009, Fauji cement EarnedRs. 1007.623 Millions as Net Income. GRAPHICAL REPRESENTATION OF NET INCOME 1400 1999 2000 1200 2001 1000 2002 800 2003 600 2004 2005 400 2006 200 2007 0 2008 S ES AL 2009ANALYSIS OF CUSTOMERS AND DEMANDFAUJI CEMENT CUSTOMER’S VALUE:“We listen to our customers and improve our product to meet their present andfuture needs.”Fauji Cement Company supplies cement throughout Pakistan especially in theprovinces of Punjab, AJK and NWFP through extensive dealer’s network.Due to its strength, Fauji cement is a first choice for all hydro electric powerprojects and projects which specially requires strength and durability to overcomestructural problems.Due to its strength, Fauji cement is used in many mega projects some of which areas under: - Motorway (M1-Project, Islamabad-Peshawar)
- Bahria Town / Safari Villas, Rawalpindi City - Pak Gulf Construction Pvt Ltd (CENTAURUS) - Karakorum Highway (KKH Project) Islamabad - Dong Fang Electric Corp, Batagram, NWFP - Yucel Turk Const (Pvt)Ltd, Mansehra City - Sino Hydro Power Project, Duber Khwar, Bisham Swat City - Siyahkalem Engineering,Construction Company, Muzaffarabad City - Essem Hotel and Serena Hotel, Islamabad. - Malakand (Dargai) Hydro Power Projects - Army Housing Schemes - Air Force Housing Schemes - National Logistic Cell Projects - Fauji Foundation Projects - Agha Khan Development Network, Muzaffarabad City. - Projects of Izhar Group of Industries. - Mineral Development Project, Islamabad. - A Q Khan Laboratory, Rawalpindi City - National Highway Authority Projects - Shifa International Hospital, Islamabad. - Habib Rafique (Pvt) Ltd, Islamabad. - CGGC- CMEC- NJ (Neelum Jhelum Hydro Electric Power Project), Muzaffarabad City - Mangla Dam Raising Development Project.EXPORTS:Due to its strength and better marketing, Fauji cement is also in demand in foreigncountries. Fauji Cement is one of the major exporters of cement to Afghanistan,with an effective presence in all cities. Their dealer’s network effectively coverthe markets of Jalalbad, Kabul, Northern Afghanistan (Kunduz-Mazar Sharif andsurrounding areas) and other markets of Afghanistan.They also export to Tajikistan and India. FUTURE PLANS FOR LONG TERM GROWTHREFUSE DERIVED FUEL (RDF):In pursuance of its commitment to produce cement under stringent environment friendlyconditions, Fauji Cement Company Limited (FCCL) has taken the lead by installing firstever Refuse Derived Fuel (RDF) Processing Plant at a cost of Rs. 320 Million.NEW LINE OF PRODUCTION WITH CAPACITY OF 7200 TONS:To meet the future challenges of Cement Industry and Countrys future demand, FCCLhas planned to install a new line of production with an installed capacity of 7200 tons
clinker per day in parallel with the existing line.In this regard services and supply contracts have been signed with world famous GermanCement Plant manufacturer i.e. Polysius (ThyssenKrupp) Germany, ABB Switzerland(Electrical equipment & PLC), Haver & Boecker (Packing Plant) and Loesche GmbHGermany (for vertical cement mills). The contracts have been made effective from 1stOctober 2007.Contract with M/s Descon Engineering Limited for civil design, civil works of wholeplant, local parts fabrication, erection and commissioning was signed effective from 1stDec. 2007, 85% civil works has been completed, mechanical erection 10% has beencompleted & Elect. Erection work has just started, 98% of imported equipment hasarrived at FCCL Site. The project is moving as per schedule commissioning of plant willbe started "Insha Allah" by May 2010.98% of imported equipment has arrived at FCCL site. Mechanical erection has also beengeared up recently. The project is moving as per schedule. Commissioning of plant willbe completed "Insha Allah" by May, 2010.CAPTIVE POWER PLANT:6 MW power plants have been commissioned in the month of July 2007 and areoperating successfully.NEW CAPTIVE POWER PLANT: 1. A new captive power plant is under progress. In this regard Supply andServices contracts for 16.3 MW dual fired (Gas + Oil) power plant was signedwith M/s Wartsilla Finland.Engine and other accessories have arrived at FCCL plant and erection of powerplant is in process.Civil work was awarded to Descon Engineering Ltd and local fabrication anderection of mechanical equipment to M/s Wright Engineering Co (PVT) Ltd.Electrical erection work has been awarded to M/s Power Engineering Co.16.3MW duel fuel Power Plant has been erected & commissioning of Power Plantis in Progress.Duel Fuel engine model 18V50DF is supplied by Wartsilla Finland & can beoperated on HFO & Natural Gas / LFO.Power Plant will be commissioned “Insha Allah” by end December 2009.
2. 3x2MW Gas Engine already functioning at Fauji Site since July 2007. RECOMMENDATIONCOMPARISON WITH COMPETITORS:Following is the comparison of Fauji cement with its competitors i.e. Bestway Cement,Lucky Cement and D.G Khan Cement. SALES YEAR FAUJI BESTWAY D.G KHAN LUCKY CEMENT CEMENT CEMENT CEMENT2009 5314.538 14814 18038209 263302008 3545.902 7487 12445996 169582007 3463.283 5649 6419625 125222006 4286.138 4544 7955665 79852005 2845.143 3536 5279560 3980 NET INCOME YEAR FAUJI BESTWAY D.G KHAN LUCKY CEMENT CEMENT CEMENT CEMENT2009 1007.623 974 525581 45972008 413.598 169 (53230) 26782007 646.323 52 1622471 25472006 1203.735 1226 2418455 19362005 510.490 931 1682078 827