Fauji Cement's Business Internal & External factors and Strategy plans

1. FAUJI CEMENT COMPANY LTD.
BUSINESS POLICY & STRATEGY

2. PRESENTED BY:
1. Nasir Mehmood Shahid
2. Mazhar Abbas
3. Hamza Amjad
4. Waqas Ahmad
5. Arbaz Gul
6. Jahanzaib Ahmad
FAUJI CEMENT COMPANY LTD.

3. Fauji Cement is a Pakistani cement manufacturing company under the Fauji
Group. It operates a cement plant in Punjab, Pakistan, producing various types
of cement for construction purposes.
INTRODUCTION

4. Establishment/History
• Incorporated in 1992
• The cement industry for the last thirty-one years in
Pakistan.
• ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007
in 2018-certified company
• Total annual production capacity 8.4 million tons
• Acquisition of Askari Cement Company Limited in 2021.
• Three manufacturing Plants are:
Jhang Bahtar
Nizampur
Wah Cantt

5. Type of
Organization
Manufacturing

6. To be a role model cement
manufacturing company,
benefiting all stake holders and
fulfilling corporate social
responsibilities while enjoying
public respect and goodwill.

7. FCCL while maintaining its leading
position in quality of cement,
maximize profitability through
reduced cost of production and
enhance share in domestic and
international market.

8. CFO
MANAGING
DIRECTOR
CORPORATE SVC
DEPTT
HR &
ADMIN
SUPPLY CHAIN
DEPTT
OPERATIONS
DEPTT
MKTG & SALES
DEPTT
INTERNAL AUDIT
FINANCE DEPTT
IT
DEPTT
Operational Structure/Hierarchy

9. Organizational Chart
CFO
CHIEF EXECUTIVE
/MANAGING
DIRECTOR
GM
SUPPLY CHAIN
GM
HR & ADMIN
COMPANY
SECRETARY
DIRECTOR
OPERATIONS &
TECHENCAL
GM
MARKRTING &
SALES
DIRECTOR
PROJECT
GM
INTERNAL AUDIT
CFO Chief Financial Officer
GM General Manager
DGM Deputy General Manager
HR & ADMIN Human Resource & Administration

10.  Ordinary Portland Cement
 Sulphate Resistant Cement
 Low Alkali Cement
 Low Heat of Hydration Cement
 Pamir Cement (Green Cement)

11. Fauji Cement Company Limited
while maintaining its leading
position in the quality of cement,
maximize profitability through
reduced cost of production and
enhances its share in domestic and
international market keeping in view
the expectations and benefits of the
stakeholders and employees.
Proposed Mission Statement

12. • The external environment plays an
integral role in the company’s operational
and financial performance.
• Our strategy seeks to optimize
performance by aligning with the external
environment.
• This involves managing risks and
capitalizing on opportunities across
political, economic, social, technological,
environmental, and legal domains.
PESTEL

13. PESTLE
P
Political
E
Economic
S
Social
T
Technological
L
Legal
E
Environmental
• Political Instability
• Inconsistency in
Government Policies
• Lower economic
growth
• Currency devaluation,
hike in inflation &
interest rates
• Reduced Government
spending on PSDP
• Corporate Social
Responsibility (CSR)
• Socio-economic
development of the
community
• New technologies in
manufacturing
processes
• Innovation in
business processes
• Compliance with
applicable laws and
regulations
• Global
environmental
protection
awareness
• Environmental
protection laws
COMPANY’S RESPONSE
• Close monitoring of
macroeconomic
policies, indicators,
and political
developments.
• Proactive responses
based on observed
trends and changes
• Admitting economic
risks.
• Monitoring key
indicators, including
PSDP allocation.
• Optimizing costs,
introducing value-
added products for
economic resilience.
• Community's socio-
economic growth is
vital for business
sustainability.
• The Company actively
invests in CSR,
spanning health,
education, and the
environment.
• Company prioritizes
facility upgrades,
aiming to stay
technologically
current and prevent
obsolescence.
• The Company
complies with all
the applicable laws.
• Dedicated and
experienced
individuals ensure
that all areas of the
business adhere and
comply with their
respective laws.
• Company adheres to
local environmental
laws, going beyond
to conserve natural
capital.
• Water conservation,
biodiversity
protection,
renewable energy use
for reduced carbon
footprint outlined in
Sustainability
section.
FACTOR IMPACTING EXTERNAL ENVIRONMENT

14. Porters Five Forces Model

15. Threats of New Entrance
• Fauji Cement Company
operates in a
competitive industry
with low entry barriers.
• Large investment is
required to do such
businesses.
Bargaining Power of Suppliers
• Cement materials (limestone,
coal, gypsum) impact costs.
• Strong relationships,
competitive rates, timely
payments maintain broad
supplier base and power.
Bargaining Power of Buyers
• Construction buyers impact
cement prices and terms.
• Buyer bargaining power is
moderate.
• Company's quality focus,
customer satisfaction, and
diverse customer base provide
Industry advantage.
Competitive Rivalry
• In Pakistan's cement industry,
fierce rivalry among multiple
competitors focuses on pricing,
innovation, and client attraction.
• Fauji Cement competes with well-
known brands, with fierce
competition due to product
similarities and the industry's
cluttered landscape.
Threat of Substitutes
• Cement is one of the main
construction material being
used globally.
• Threat of its substitution with
new product is not significant.
Porters Five Forces

16. Porter five forces model
In the context of Porter's Five Forces Model, Fauji Cement Company Limited
faces moderate threats from new entrants, suppliers, and buyers. The threat of
substitutes is low due to the essential nature of cement in construction.
Competitive rivalry is high in the industry. To remain competitive, Fauji Cement
needs to focus on cost efficiency, product quality, and differentiation strategies to
distinguish itself from competitors and mitigate the impacts of these forces.
Summary:

17. External Factor Evaluation
(EFE Matrix)

18. EFE Matrix
Factors Weight Rating (1-4) Weighted Score
Opportunities
Infrastructure Development (CPEC, Dames,
Metros project)
0.15 4 0.60
Population Growth 0.13 4 0.52
Export Potential 0.15 4 0.60
Green Initiatives 0.10 3 0.30
Technological Advancements 0.10 3 0.30
Total Opportunities 0.63 2.32
Threats
Economic Slowdown 0.08 4 0.32
Competition 0.07 3 0.24
Raw MaterialAvailability 0.07 3 0.24
Regulatory Changes 0.07 2 0.14
Energy Costs 0.08 4 0.24
TotalThreats 0.37 1.18
Total EFE Matrix Score 1 3.50

19. Competitive Profile
Matrix

20. Competitive Profile Matrix
CPM Fauji Cement Bestway Cement Fecto Cement
WEIGHT RATING SCORE RATING SCORE RATING SCORE
Financial
Position
0.15 4 0.60 4 0.60 3 0.45
Quality 0.08 3 0.24 3 0.24 2 0.16
Exports 0.15 4 0.60 3 0.45 2 0.30
Production Capacity 0.07 4 0.28 3 0.21 3 0.21
Sale Distribution 0.07 2 0.14 4 0.28 3 0.21
Technology 0.18 3 0.54 3 0.54 2 0.36
Price 0.12 3 0.36 3 0.36 4 0.48
Energy Production 0.18 4 0.72 1 0.18 1 0.18
Total 1 3.48 2.86 2.35

21. Competitive Profile Matrix
DATA INTERPRETATION
• FCCL need to maintain Financial position and exports through clear business plan control
overheads.
• Need to improve the quality to make major strength.
• FCCL need to improve the sale distributor network specially in the southern part of country
by
 Target lead sales
 Feed back
 Launch products to distributors
• Reduce the cost of production to reduce the prices to gain the major strength Invest more
on WHRP to produce more energy to maintain the major strength.
• Current energy production is 15MW

22. Resource
Based
View

23. Resource
based
view
Resource Valuable Rare Inimitable Organized Advantage
Land
Y N N Y Competitive
Parity
Machinery Y N N Y Competitive
Parity
Materials Y N N Y Competitive
Parity
Waste Heat
Recovery
Plant
Y Y Y Y Competitive
Advantage
Inventory
Control
SAP
Y Y Y Y Competitive
Advantage

24. Resource
based
view
Resource Valuable Rare Inimitable Organized Advantage
Goodwill Y Y Y Y Competitive
Advantage
Patent and
Copyrights
Y Y Y Y Competitive
Advantage
Customer and
Supplier
Relationship
Y Y N Y Temporary
Competitive
Advantage
Marketing
Rights
Y Y N Y Temporary
Competitive
Advantage
HRM Skills Y Y Y Y Competitive
Advantage

25. IFE
Matrix
Factors Weight Rating (1-4)
Weighted Score
Strengths
Premium quality 0.15 4 0.60
Fetching mega projects 0.13 3 0.39
Production hybrid technology 0.12 3 0.36
Energy Plant 0.15 4 0.60
QualifiedWorkforce 0.10 3 0.30
Total Strengths 0.65 2.55
Weaknesses
Sea Export 0.10 2 0.20
Low Advertisement 0.04 2 0.08
Increase cost of production 0.13 3 0.39
Transportation Cost 0.08 2 0.16
Total Weakness 0.35 0.83
Total IFE Matrix Score 3.38

26. MUHAMMAD ARBAZ WILL CONTINUE…
• CONTENTS THAT WILL BE COVERED BY ARBAZ ARE THE
FOLLOWING:
• FORMULATION STRATEGY
• BCG MATRIX
• IE MATRIX

27. Formulation of strategy
• 1. Positioning Forces Before Action:
• FCCL should thoroughly analyze its external and internal environment before
making strategic decisions. This includes assessing market conditions, competitive
forces, and its own capabilities and resources.
• 2. Focus on Effectiveness:
• FCCL should prioritize strategies and actions that are most likely to lead to
effective outcomes. This might involve selecting strategies that align with its
strengths and opportunities and addressing weaknesses and threats.

28. Formulation of strategy
• 3. Intuitive and Analytical Skills:
• FCCL should assemble a team with a mix of intuitive and analytical skills.
Intuition can help identify trends and opportunities, while analytical skills
are crucial for data-driven decision-making.
• 4. Coordination Among Few Individuals:
 Strategy formulation at FCCL should involve coordination among key
individuals, such as top management and strategic planners. This ensures
that the decision-making process is focused and streamlined.
•

29. Boston consulting group matrix (bcg)
• 1. BCG:
• The model is based on the product life cycle theory that can be used to determine what
priorities should be given in the product portfolio of a business unit. To ensure long-term
value creation, a company should have a portfolio of products that contains both high-
growth products in need of cash inputs and low-growth products that generate a lot of
cash. Placing products in the BCG matrix results in 4 categories in a portfolio of a
company
 STAR: (High Market Share and High Market Growth)
 QUESTION MARK: (Low Market Share and High Market Growth)
 CASH COW: (High Market Share and Low Market Growth)
 DOG: (Low Market Share and Low Market Growth)

30. FCCL SALES REPORTS

31. BCG MODEL FOR FCCL

32. BOSTON CONSULTING GROUP (BCG)
• 1. ORDINARY PORTLAND CEMENT :
• FCCL should continue to invest in this product to maintain or expand its market leadership.
• Consider expanding production capacity or enhancing distribution channels to meet growing
demand.
• 2. SULPHATE RESISTANT CEMENT (SRC):
 Continuously innovate and improve the quality of SRC to maintain its competitive edge.
 Explore opportunities for producing specialised variations of SRC to cater to specific customer
needs.

33. BOSTON CONSULTING GROUP (BCG)
• 3. PAMIR CEMENT:.
• This product unit in emerging or high-growth markets but has a low market share.
They require investment to grow their market share and potentially become stars.
• 4. LOW HEAT OF HYDRATION CEMENT:
• This FCCI product has a large market share in a mature, declining market.
Companies should focus on harvesting the cash generated from these units
• 5. MOHAFIZ CEMENT:
• This product of FCCI lies in the Dog category of BCG due to its low market share
and low growth rate. So this should be eliminated or phased out.

34. IE (Internal and external) matrix
INTERNAL MATRIX OF (OPC)

35. IE (Internal and external) matrix
EXTERNAL MATRIX OF (OPC)

36. IE (Internal and external) matrix
INTERNAL MATRIX OF (SRC)

37. IE (Internal and external) matrix
EXTERNAL MATRIX OF (SRC)

38. IE (Internal and external) matrix
EXTERNAL MATRIX OF (PC)

39. IE (Internal and external) matrix
INTERNAL MATRIX OF (PC)

40. IE (Internal and external) matrix
EXTERNAL MATRIX OF (PC)

41. IE (Internal and external) matrix
INTERNAL MATRIX OF (MC)

42. IE (INTERNAL AND EXTERNAL) Matrix
• EXTERNAL MATRIX OF (MC)

43. IE MATRIX

44. INTERNAL EXTERNAL FACTORS

45. Internal Factor
•FCCL is among the premium quality brands in Pakistan’s cement industry.
•Trusted for mega projects both private and public, fetching a premium price and optimal capacity utilization.
•State-of-the-art, energy-efficient production lines of European/Chinese Hybrid Technology.
•FCCL owns Captive multi-fuel/renewable energy generation power plants (Solar, Waste Heat Recovery and Multi Fuel generators).
•FCCL is an environmentally responsible corporate entity as evident from its investment in eco-friendly developments such as renewable
energy generation, emission control equipment and water conservation.
•Significantly reduced dependency on imported coal as a result of increased utilization of local indigenous coal.
•Highly-qualified, motivated and dedicated workforce with a low turnover rate.
•Increased production capacity due to the amalgamation of ACL with and into FCCL. Post the two ongoing expansions poised to be the
3rd largest cement manufacturer in Pakistan.
STRENGTHS
WEAKNESSES
• Potential disadvantage for sea exports compared to south plants.

46. External Factors
• Significant growth opportunities in the domestic market due to Pakistan’s low per capita cement consumption,
growing population and increasing urbanization.
• CPEC presents a great opportunity for long-term growth of the industry.
• Continuous Government spending on infrastructure development and hydropower projects including major dams
and various housing schemes.
OPPORTUNITIES
THREATS
• Continuous pass on of input costs to consumers with ever high cement prices effecting demand
• Rising input costs due to the increase in Power, coal and other fuel prices, as well as the
devaluation of PKR.
• Any resurgence of the COVID-19 Pandemic can have an adverse effect on cement demand.
• Slowdown in exports due to the political instability in Afghanistan.

47. TOWS

48. Quantitative Strategic Planning Matrix
QSPM stands for "Quantitative Strategic Planning
Matrix." It's a tool used in strategic management
to evaluate and prioritize various strategic
alternatives based on their potential impact on an
organization's success. QSPM involves assessing
internal and external factors, assigning weights
and scores, and generating a matrix that helps
decision-makers choose the most suitable
strategies to pursue.

51. Conclusion:
The Management Team of Fuji cement company supported
by their energetic, highly qualified and experienced
professionals. They expert in qualities like leadership,
collaboration and project management etc. These
Professionals are proficient with technical and
entrepreneurial skills and are confident, dynamic, creative
and ready to take future challenges. They implement their
strategies by putting people first and striving for excellence
in all they do As a result, they have increased profits and
delivered on returns to their shareholders.

52. Thank
You