DRIVING FORCES OF CEMENT INDUSTRY IN PAKISTAN: Driving forces are those External influences that Affect the Incumbents

in and industry so as these affect the cement industry of Pakistan. So first we assessed the driving forces of the said industry, and then we determine the impact of these factors on cement industry of Pakistan. STEP1 IDENTIFICATION OF DRIVING FORCES OF CEMENT INDUSTRY OF PAKISTAN Growth Rate of Industry First and foremost driving force is itself Industries growth, as the growth rate of cement sector industry has increased since three years, and companies enjoying a boom. Cement industry has also contributed to GDP and also Having GDP as driving force Public Sector Development Projects of Government Another Important and well weighted driving force of cement industry in Pakistan is the upcoming public sector development programs of Federal and provincial government. These projects need a lot Cement requirements and demand of Cement is in bulk. So these Public sector plans are one of Major Driving force of cement sector in Pakistan. Following are the upcoming projects of provincial and federal Governments of Pakistan. Sr. No 1 2 3 4 5 6 7 8 9 10 Project Name Dasu Power Project Neelum Jehlum Power Project Metro Bus Projects (RWP /ISB) PPIB And Chinese company MOU on Power Projects Punjab Govt. and chinese Govt. sign MOU on Coal Exploration ERRAs 85 Projects in AJ&K China to invest in energy and Infrastructure projects Behria Town Sponsers Underpass and Flayover construction in Karachi Exploration of coal Resources in Sindh KPK Governments Infrastructure and Solar Energy Plans Project Cost 468 BN 100 BN (Savings) 44.21BN 3.5 BN USD 32 BN Not available 50BN USD Not Available Not available Not available.

So above mentioned project have its impact on Cement industry of Pakistan and Affects Bulk Demand of Cement.

Real Estate/Societies Business: Real estate and Modern societies trend is emerging in Pakistan, real Estate Business and construction of houses are increasing due to increase in population, Urbanization, Change of life style from Old to Modern and same for Societies business . So Construction of Houses affects Bag Demand of cement and Contractors and Societies business demand Bulk cement. So these two Factors are also taken as driving force for Cement industry in Pakistan. Globalization: Another variable that impacts Cement industry Pakistan is Globalization, As Pakistan Cement industry have significant Export sales of its total production to Foreign countries. As world moving towards increased Geographical coverage so as cement industry of various countries doing. Other Economic Factors: There are certain other economic factors that indirectly affect cement industry and directly to construction process in country, these include change in interest Rates, Change in Gold Prices and spending pattern of individuals of economy. These factors are also affecting cement industry in Pakistan indirectly. Urbanization: Due to increase urbanization, there is Massive construction of Individual houses as well as Colonies and flats that also affects cement industry in General. Entry and exit Barriers: In cement industry entry and exit barriers are really high and these also affects the Overall industry.

STEP 2 ASSESSMENT OF IMPACT OF DRIVING FORCES ON CEMENT INDUSTRY OF PAKISTAN DRIVING FORCE Growth rate of industry IMPACT ON CEMENT INDUSTRY Positive IMPACT ON DEMAND It will cause increase in Demand of cement Locally Positive It will cause increase in Demand of cement Locally Positive It will cause increase in Demand of cement Locally Negative Will cause Decrease in demand Globally Positive/Negative If Interest depends upon Rate Variable +/increases will cause decrease in demand and vice versa Effects Positively Effects currently due to positively Incremental to current growth rate of incumbents industry and can achieve Economies of scale IMPACT ON IMPACT ON PROFITABILITY COMPETITION It will Cause Increase in profitability of cement industry in Pakistan It will Cause Increase in profitability of cement industry in Pakistan It will Cause Increase in profitability of cement industry in Pakistan Share of Profit of exports will reduce from overall profit If interest rate increases will cause profitability to decrease and vice versa Competition will increase to capture Market share

PSDPs

Competition will increase to capture Market share

Real Estate

Competition will increase to capture Market share

Globalization

Economic Factors

Will cause competition at global level more intensive Depends on Increase and Decrease in Variable

Entry and exit barriers

Profit will Increase Competition in short as well as would increase long run for Current incumbents