Abstract:
The role of industry in economic development is vital and plays a
very important role in economic growth of a country. The role of
cement industry in the development of economy is no doubt is very
very much imperative. The importance of cement industry role can be
realized from this fact that China, India and American are the top
producing and consuming cement countries. In 2010 the world
production of hydraulic cement was 3,300 million tones. The half of
the production was with china 1,800 million tones, India with 220
million tones and USA with 63.5 million tones. It is expected that over
2011 and 2012 and onwards global consumption of cement
continued to rising with annual growth rate of 8.3 and 4.2 percent.
It shows that the fast/rapid growing economic of the world have
large production and consumption of cement. Cement is one of
the most significant commodity required for physical development of
infrastructure essentially required for construction of houses,
complexes, factory, .school, universities, hospitals, bridges, tunnels,
runways , commercial buildings, Dam, rivers swage systems, flyovers
infrastructure etc., require for industry and economic development
Unfortunately there is great volatility of profit of cement industry due
to which the pace of economic development could not be geared up till now. Although Pakistan has rich indigenous raw material and
resources but could not properly utilize them for the progress of
cement industry.
A detailed study has been carried out by reviewing the local
and international literature on cement industry to find out the causes
of profit and revenue vitality of cement industry of Pakistan.
The revenue, profit, rate of return on assets and rate of
return on equity of various cement units are compared for the last 6
years. Further the profitability, liquidity, assets management, debts
and owners’ equity ratios also compared in order to reach findings,
conclusion and recommendations.
In this study the reasons and causes behind the profit volatility
of cement industry to be pinpointed and the suggestion and
recommendations thereof for the betterment of the industry will be
proposed at end of the report. The profitability, liquidity, leverage/gearing,
and owners’ equity are very important for firm for going concern.