Cement Sector Report

1. RESEARCH & INNOVATION LAB
ROYAL CAPITAL LIMITED
CEMENT SECTOR REPORT

2. Cement Sector Report
R E S E A R C H & I N N O V A T I O N L A B ( R I L ) K N O W B E F O R E Y O U I N V E S T Page 1
CEMENT SECTOR OF BANGLADESH
Bangladesh’s economic growth is reflected by an acceleration in urban development, with the
construction of houses, apartment blocks, road infrastructures and public facilities. The country’s
increasing urbanization has stimulated the building materials sector and has generated considerable
needs for cement.
Since the eighties and early nineties the country experienced the establishment of cement industries in
the private sector. Before that, the country had to import almost 95 per cent of the construction materials
including cement from outside of the country. The country experienced huge demand for construction
materials including the cement at the beginning of the 21st
century.
Currently, there are more than 125 companies
incorporated as cement manufacturers in Bangladesh
among these, 45 cement manufacturers are in
operation, including 5 multinationals, along with 63
grinding plants all over the country, created a
domestic market of more than 18 million metric tons
a year. Many of these cement factories are fairly
small as 85 per cent of total market share is held by
top ten manufacturers. The Bangladesh cement
industry enjoys the participation of the top four
global cement producers: Lafarge, Holcim, Cemex
and HeidelbergCement. The cement sector of
Bangladesh has been considered as the 40th
largest
market in the world.
Out of total production, 73 per cent cement is
consumed in Dhaka & Chittagong divisions and
the rest in other divisions. The Governmental
projects through ADP consume around 43 per
cent of the total cement production. Around 85
per cent of cement is transported by road and the
remainder by barge. Moreover every month on
an average 15,000-20,000 MT of cement is
being exported by the industry.
REVENUE
PEAK FALL
NOVEMBER – APRIL MAY - OCTOBER

3. Cement Sector Report
R E S E A R C H & I N N O V A T I O N L A B ( R I L ) K N O W B E F O R E Y O U I N V E S T Page 2
The total installed capacity of cement production of the industries of the
country is about 33-35 million metric tons per year and the effective capacity is
around 25-27 million metric tons per year Most of the cement manufacturing
plants in Bangladesh operate at 60-65 per cent efficiency. On the other hand the
current annual demand for cement in the country is around 18-20 million
metric tons indicating the country has a surplus cement production capacity.
Though there is over-capacity in the sector, the market demand is almost equal
to the effective capacity during peak season. Peak season is considered during
the winter season while demand for cement goes slow during the rainy seasons.
Revenue peaks from November to April while it falls from May to October in
each calendar year. Local cement manufacturing companies needed to import
almost all the raw materials for cement manufacturing from outside of the
country, including clinker, gypsum, fly ash and iron slag etc. Bangladesh
remained as the largest importer of clinker globally in FY 2014. Due to lower
requirement of clinker, the core material, Portland Composite Cement (PCC),
is widely produced around 95 per cent, substituting Ordinary Portland Cement
(OPC) which is 5 per cent of current availability in the industry.
Though in the short run the cement sector’s
capacity is underutilized but it has been
forecasted that the entire capacity might fall short
of supply if the demand increases in line with the
expected big infrastructural public projects of the
country to be implemented in the future.
TOP 10
CEMENT
MANUFAC
-TURERS
HOLD
85% OF
TOTAL
MARKET
SHARE
COUNTRY
PER-CAPITA
CONSUMPTION
Bangladesh 105 kg
India 217 kg
Malaysia 570 kg
S. Korea 705 kg
China 1700 kg
Pakistan 265 kg
Sri Lanka 310 kg
World Avg. Above 500 kg

4. Cement Sector Report
R E S E A R C H & I N N O V A T I O N L A B ( R I L ) K N O W B E F O R E Y O U I N V E S T Page 3
CEMENT SECTOR IN DHAKA STOCK EXCHANGE
Monthly Average Sector Capitalization to Average Market Capitalization:
Individual Company's Accumulated Share in Sector Capitalization:
6.33%
6.10%
5.96%
5.72%
5.72%
6.10%
6.03% 5.97%
5.70%
5.33%
4.99%
4.83%
JANU FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC
CEMENT SECTOR CAP. TO MARKET CAP.
ARAMITCEM
0.63%
CONFIDCEM
2.21%
HEIDELBCEM
17.11%
LAFSURCEML
68.47%
MEGHNACEM
1.34%
MICEMENT
6.08%
PREMIERCEM
4.16%
INDIVIDUAL COMPANY'S SHARE IN SECTOR CAPITALIZATION
AVERAGE OF JANUARY'15 - DECEMBER'15

5. Cement Sector Report
R E S E A R C H & I N N O V A T I O N L A B ( R I L ) K N O W B E F O R E Y O U I N V E S T Page 4
Individual Company's Month-wise Share in Sector Capitalization:
STOCK AVERAGE JANU FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC
ARAMITCEM 0.63% 0.61% 0.59% 0.55% 0.46% 0.49% 0.45% 0.56% 0.62% 0.76% 0.78% 0.79% 0.88%
CONFIDCEM 2.21% 2.28% 2.32% 2.32% 2.09% 2.16% 1.98% 1.95% 2.07% 2.12% 2.30% 2.41% 2.57%
HEIDELBCEM 17.11% 13.68% 14.49% 14.64% 14.73% 15.42% 16.05% 17.88% 17.26% 18.69% 20.18% 21.46% 20.80%
LAFSURCEML 68.47% 72.81% 72.41% 72.38% 72.31% 70.91% 71.14% 69.21% 69.00% 66.46% 63.02% 61.87% 60.17%
MEGHNACEM 1.34% 1.35% 1.37% 1.35% 1.24% 1.26% 1.29% 1.28% 1.24% 1.37% 1.41% 1.38% 1.56%
MICEMENT 6.08% 5.29% 5.14% 5.16% 5.64% 6.24% 5.87% 5.75% 5.85% 6.12% 6.73% 6.63% 8.54%
PREMIERCEM 4.16% 3.99% 3.69% 3.62% 3.52% 3.52% 3.22% 3.36% 3.96% 4.48% 5.58% 5.46% 5.48%
Please note that,
Gray color indicates Market Capitalization above average and no color indicates Market Capitalization below average.
Cement Sector Return: Cement Sector Risk:
JANU FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC
-0.12%
-4.13%
-3.04%
-6.57%
10.88%
17.26%
7.79%
-18.97%-18.05%-17.65%
-2.57%
-3.78%
-2.88%
0.88%
-4.95%
-11.17%
12.75%
-0.02%
4.50%
-0.47%
-5.73% -6.06%
0.42% 1.09%
RETURN
CEMENT MARKET
JANU FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC
1.80%
1.43%
2.78%
0.89%
1.98%
4.08%
1.98%
2.40% 2.30% 2.26%
1.01%
1.53%
0.79%
0.76% 0.74%
0.87%
1.42%
0.80%
0.64% 0.51%
0.68%
0.67%
0.75%
0.54%
RISK
CEMENT MARKET

6. Cement Sector Report
R E S E A R C H & I N N O V A T I O N L A B ( R I L ) K N O W B E F O R E Y O U I N V E S T Page 5
Cement Sector Return to Risk:
Cement sector holds 4.83%
share of DSE market
capitalization which has
been in downtrend since
July. Reason behind the
trend is 35.63% fall the price
of LAFSURCEML over the
period holding 68.47% of
sector capitalization. Due to
seasonality of the sector,
most of the stocks performs
better in the first half of
calendar year. Sector return
remains in negative zone
with higher volatility than
that of the market resulting
underperformed relative to
the market. MICEMENT is
the most liquid stock in the
sector whereas liquidity of
PREMIERCEM and
ARAMITCEM is above the
sector average.
Cement Sector Liquidity:
JANU FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC-0.07
-2.89 -1.09
-7.36
5.51
4.23 3.94
-7.90 -7.85 -7.81
-2.55 -2.47
-3.65
1.16
-6.67
-12.88
8.96
-0.03
7.09
-0.91
-8.37 -9.09
0.56
2.00
RETURN TO RISK
CEMENT MARKET
ARAMITCEM, 1.21%
CONFIDCEM, 0.16%
HEIDELBCEM, 0.15% MEGHNACEM,
0.34%
MICEMENT, 1.25%
PREMIERCEM, 1.11%
LAFSURCEML, 0.22%
SECTOR, 0.35%
LIQUIDITY

7. Cement Sector Report
R E S E A R C H & I N N O V A T I O N L A B ( R I L ) K N O W B E F O R E Y O U I N V E S T Page 6
FUNDAMENTAL CHARACTERISTICS
Management and Shareholding:
Stock
Mkt.
Category
Co. Com.
Op.
Year
End
Major Products
Shareholding (%)
Management
Dir. Govt. Inst. Fore. Pub.
ARAMIT CEMENT A 1999 31-Dec Ordinary Portland Cement (OPC) and Portland
Composite Cement (PCC)
42.83 0.00 25.75 0.00 31.42 Chairman – S. M. Jamal Ahmed,
MD – Rukhmila Zaman
CONFIDENCE
CEMENT
A 1991 31-Dec Ordinary Cement and CCL Cement 23.47 0.00 29.10 0.00 47.43 Chairman - Engr. Rezaul Karim,
MD - Ln. Rupam Kishore Barua
HEIDELBERG
CEMENT BD.
A 1974 31-Dec Ordinary Portland Cement (OPC) and Portland
Composite Cement (PCC)
60.67 0.00 23.43 0.00 15.90 Chairman - Dr. Albert Scheuer,
MD - Jose Marcelino Ugarte
LAFARGE SURMA
CEMENT
A 1997 31-Dec Clinker, Portland Limestone Cement (PLC)
and Portland Composite Cement (PCC)
64.64 0.00 12.67 0.00 22.69 Chairman - Thomas Gerard Farrell,
CEO - Tarek Samir Ahmed Elba
MEGHNA CEMENT A 1996 31-Dec Ordinary Portland Cement (OPC) and Portland
Composite Cement (PCC)
50.12 0.00 10.42 0.00 39.46 Chairman - Ahmed Akbar Sobhan,
MD - Sayem Sobhan
M.I. CEMENT
FACTORY
A 2000 30-Jun Ordinary Portland Cement (OPC) and Portland
Composite Cement (PCC)
67.08 0.00 0.00 0.00 32.92 Chairman - Md. Jahangir Alam,
MD - Al-haj Md. Khabiruddin Molla
PREMIER CEMENT A 2004 30-Jun Ordinary Portland Cement (OPC) and Portland
Composite Cement (PCC)
88.62 0.00 7.74 0.00 3.64 Chairman - Mohammad Mustafa Haider ,
MD - Mohammed Amirul Haque
Financial Health:
Stock SGR ROA ROE NPM
NAVPS
(A & R)
EPS
(A & R)
EPS (Cu) EPS (F)
NOCFPS
(A)
PE
(A)
PE (Cu) Payout
P Cap
(mn)
RS (mn) DE CUR
ARAMITCEM -3.66% 0.88% 3.81% 2.44% 15.49 0.51 0.37 0.47 -11.8 83.53 86.35 196.08% 339.00 101.30 2.00 48.13%
CONFIDCEM 4.44% 5.00% 8.37% 6.58% 64.41 5.32 3.98 7.00 -2.12 17.12 17.17 46.99% 450.00 1,790.20 0.48 66.00%
HEIDELBCEM -13.80% 11.29% 16.83% 11.23% 115.46 20.88 14.97 28.92 29.99 26.77 22.09 181.99% 565.00 5,959.00 0.02 64.13%
LAFSURCEML 13.66% 14.45% 23.21% 24.34% 11.41 2.43 1.48 3.23 3.07 31.07 38.26 41.15% 11,613.70 1,641.80 0.13 117.92%
MEGHNACEM 8.61% 2.49% 12.94% 2.69% 36.1 4.48 3.76 5.32 6.48 24.11 21.54 33.48% 225.00 587.20 3.05 77.00%
MICEMENT 4.06% 6.38% 11.97% 8.44% 38.22 4.54 0.98 4.78 0.81 18.95 21.12 66.08% 1,485.00 1,233.90 0.82 68.63%
PREMIERCEM 5.83% 4.11% 12.20% 5.05% 31.45 3.83 0.81 4.02 3.73 20.13 23.8 52.22% 1,054.50 1,609.60 1.71 41.00%

8. Cement Sector Report
R E S E A R C H & I N N O V A T I O N L A B ( R I L ) K N O W B E F O R E Y O U I N V E S T Page 7
Dividend History:
Stock 2014 2013 2012 2011 2010
ARAMITCEM 10.00% 10.00% 10.00% 10%B 10%B
CONFIDCEM 25.00% 27.50% 20.00% 20%, 20%B 25%, 15%B
HEIDELBCEM 380.00% 380.00% 50.00% 45% 43%
LAFSURCEML 10.00% - - - -
MEGHNACEM 15.00% 15.00% 25.00% 25% 25%
MICEMENT 30.00% 40.00% 35%, 10%B 15%, 35%B n/a
PREMIERCEM 30.00% 40.00% n/a n/a n/a
Please note that,
LAFSURCEML paid 5% interim dividend on May 31, 2015. MICEMENT and PREMIERCEM paid
25% and 20% dividends respectively on June 30, 2015.
Fundamental Review:
Stock Fundamental Review
ARAMITCEM
Long history of business, focusing on Chittagong region, one of the top ten cement manufacturers
in Chittagong, exporting, 22% of total production, its "Camel Brand" cement to Tripura, India,
and abating fundamental strength.
CONFIDCEM
First private sector cement manufacturing company in Bangladesh, moderate fundamentals,
especially high NAVPS and low debt equity ratio, with long history of business.
HEIDELBCEM
Strong fundamentals, especially high ROE, NPM and NAVPS, and very low debt equity ratio,
with long history of business, member of HeidelbergCement Group, Germany, reputed brands
“Ruby Cement” and “Scan Cement”, and experienced management team.
LAFSURCEML
One of the largest foreign investments in Bangladesh, strong fundamentals, especially high SGR,
ROE and NPM, with long history of business, member of Lafarge Group, and experienced
management team.
MEGHNACEM
Very low NPM indicating the company following cost leadership strategy but highest debt equity
ratio and low ROA indicating abating fundamental strength, reputed brand "King Brand",
member of Bashundhara Group, and experienced management team.
MICEMENT
Pioneer and the largest cement exporter in Bangladesh, consistent growth in EPS and
comparatively high NAVPS, reputed brands "Crown Cement", and experienced management
team.
PREMIERCEM
Consistent growth in NAVPS and NOCFPS but high debt equity ratio and abating EPS,
manufacture European Standard Cement, export to India and Myanmar and experienced
management team.

9. Cement Sector Report
R E S E A R C H & I N N O V A T I O N L A B ( R I L ) K N O W B E F O R E Y O U I N V E S T Page 8
Concluding Remark:
In stiff competition, the companies with a lower production capacity and low level of
affiliation are likely to remain satisfied with the local market. But the companies with
huge production capacity, multinational origin, and internal and external political linkage
are likely to grab big contracts like Padma Bridge, Metro Lane etc.
Acronyms:
SGR: Sustainable Growth Rate Cu: Current
NOCFPS: Net Operating Cash Flow Per
Share
Co. Com. Op.: Commencement of
Commercial Operation
NPM: Net Profit Margin Dir.: Directors
RS: Reserve & Surplus Govt.: Government
DE: Debt-Equity Inst.: Institutions
A & R: Audited & Restated Fore.: Foreign
P Cap: Paid-up Capital Pub.: Public
CUR: Capacity Utilization Rate
Disclaimer
All data and information contained herein are collected from Annual Reports of the listed cement companies, The Financial Express, The Daily Star, The
Daily Bonik Barta and RIL’s own storage and resources. RIL cannot ensure the accuracy of the data and information except for its own resources. Moreover,
this publication is produced by Research and Innovation Lab at Royal Capital Limited RCL) solely for the information of Clients of RCL. Clients are
expected to make their own investment decisions using any information contained herein. The contained info in the report do not be interpreted as an offer to
sell, or a solicitation of any offer to buy any investment. Projections of potential risk is based on published information but does not guarantee of any actual
risk or return to be materialized.