3.1 FINANCIAL DECISION MAKING AND USER OF ELECTRONIC DATA
MAPLE LEAF CEMENT FACTORY LIMITED used Oracle ERP (Enterprise Resource Planning) software. It refers to a set of software that MAPLE LEAF CEMENT FACTORY LIMITED use to manage day-to-day business activities.
Enterprise Resource Planning (ERP) software systems tie together and define an overabundance of business processes and enable the flow of data between them. By collecting an organization shared transactional data from multiple sources, Enterprise Resource Planning (ERP) software systems eliminate data duplication and provide data integrity with a single source of truth
MAPLE LEAF CEMENT FACTORY LIMITED used four different modules of Enterprise Resource Planning (ERP) software.
? Oracle Financials
? Oracle Procurement
? Oracle Inventory
? Oracle Enterprise Asset Management (EAM)
MAPLE LEAF CEMENT FACTORY LIMITED used some business applications for smooth running of business. The business applications are following;
? Supply Chain Management
? Call Center Agent Application
? Call Center Management Systems
? Team Improvement Forums
? Team Energy Application (Forums)
? Admin Forum Application
? Health and Safety Application
? M.net Application
? Human Resource Management (HRM) Applications
? IT Asset Management Applications
These are different kinds of software and applications that MAPLE LEAF CEMENT FACTORY LIMITED used. The total operations of company are controlled through the applications.
5.1 SWOT ANALYSIS
SWOT analysis is being used at MAPLE LEAF CEMENT FACTORY LIMITED Cement as a strategy formulation tool, in order to match our Strengths with perceived opportunities and minimize our weaknesses to avoid market and other threats. Management at MAPLE LEAF CEMENT FACTORY LIMITED considers the following factors of SWOT analysis relevant to us
Single largest cement producing site in Pakistan.
State of the Art FLSmidth plants.
Higher EBITDA %.
Excellent logistic management including Pakistan
Fully diversified cement producer.
Strong local and international branding.
Offering over 330 days/year production.
Well diversified fuel mix and efficient operation.
Well-developed refined human resource.
Lowest energy cost per ton of clinker.
Self-power generation – owned coal-based power plant
High transport cost.
Highly regionalized and localized
High electricity cost.
Energy load shedding.
Focus on cost optimization.
Huge Govt. expenditure in infrastructure development.
Availability of housing loan from financial institutions.
Rising population works as a catalyst for housing boom.
Low per capita consumption.
Research to develop new products.
Long term growth at the rate of 7% to 8%.
Rising cost of logistics.
Rising cost of power.
Currency devaluation risk.
New entrant threats due to high
High incidence of taxes
i. HIGH QUALITY OF CEMENT
MAPLE LEAF CEMENT FACTORY LIMITED (MLCFL), produces good quality of cement. MLCFL is recognized for producing good quality of cement due to which customer satisfaction regarding MAPLE LEAF CEMENT FACTORY LIMITED Cement is high, as well as countries like Afghanistan, India, Tanzania and Oman prefer to import cement from MLCFL.
ii. EXCELLENT MANAGEMENT:-
Management of MLCFL is very active and working hard to boost up MAPLE LEAF CEMENT FACTORY LIMITED Cement, almost each and every corner of the country which is a noteworthy strength of the company.
iii. ENORMOUS DEALING WITH DEALERS:-
One of the main strengths of MLCFL is their policies toward Dealers. The MLCFL employees make incessant efforts to satisfy their Dealers in every possible imaginable way. Whenever an existing or a potential new Dealer comes to any sales-office of MLCFL, he/she is propose to be entertained with drinks / tea / coffee and the employees and personnel pay their full attention to the dealer obliging him / her out of the usual way sometimes
iv. CEMENT EXPORT TO INDIA AND AFGHANISTAN:-
MLCFL export Cement to Afghanistan and India. In order to facilitate cement export to India, the railways has doubled its cement capacity and increase its frequency of trains to India from Pakistan. This step has been taken by Pakistan Railways in order to increase cement export to India, which is regarded as a highly profitable market for the company. However, in Afghanistan reconstruction of infrastructure increase the demand of cement that on the other hands source of increase in companys exports to Afghanistan.
v. LUMINOUS FINANCIAL REPORTING & INTERNAL CONTROLS:-
MLCFL implement an effective and transparent system of financial reporting and internal controls to safeguard the interest of shareholders and fulfill the regulatory requirements.
vi. INCREDIBLE BUSINESS POLICY:-
The business policy of the company is based on the principles of honesty, integrity and professionalism at every stage which is an important strength of MLCFL.
vii. MODERNIZED TECHNOLOGY:-
Use of Modernized technology makes MLCFL one of the leading companies in Pakistan.
A secure future after retirement is very attractive advantage for employees. So its keeps them motivated as they feel more secure. Employees Old-Age Benefit Institution (EOBI) provides this facility to the MLCFL employees.
ix. HIGH STANDARD:-
MLCFL produced the cement of high quality (greenish) i.e. 6500 PSI/ LBS 28 days strength. They have quality control department.
The pension provided to MLCFL employees under the Employees Old-Age Benefit Institution (EOBI) gives them a sense of security about the future. Under this program the age limit is 60 years.
xi. REDUCE TURNOVER:-
The MLCFL needed loyal employees for all the organization. To reduce the turnover of employees MLCFL ltd provides medical facility along with the insurance, which make MLCFL a good commentating company.
xii. BENEFIT TO THE FAMILY:-
If an employee dies then the family of the employee gets the monthly pension, only the wife of employee gets it and parents.
xiii. FINANCIAL HELP:-
MLCFL management cuts 7% from the salaries of the employees for the benefit of the employer, when they get retire they get it in lump sum.
xiv. ISO 9002 CERTIFIED:-
MLCFL is ISO 9002 certified which give it high repute. And give customer sense of quality.
The factory is located in the center near main target market. Peshawar, charsada for export to Afghanistan it is the best location. So due to sound location they have high profit margin as compare to other companies.
xvi. USAGE OF OWN ELECTRICITY AND PAPER SACK :-
MLCFL produces their own electricity, which is situated inside the factory. Also they have their own paper sack mill situated in gadoon industrial stat. these both give mush benefit & minimize the cost of the production.
xvii. BEST PRICING STRATEGY:-
The price of MLCFL is high but accepted by customer, which is the proof of their establishment sense of quality.
xviii. EXPORT TO AFGHANISTAN:-
MLCFL, has highest market share in Afghanistan and MLCFL has high rate as relate to other companies.
xix. BEST DISTRIBUTION CHANNEL
Their channel distribution is suitable for all the customers. All the wholesalers, dealers & customers are directly related to company means have good relationship.
i. LEISURELY PROMOTION POLICY:-
MLCFL is not using any print or electronic media for its product advertising. That causes less savoir faire about Maple Cement.
ii. DAMAGED CONSIGNMENT CASES:-
If the dealer complaints that so much bags of cement have been damaged due to rain and are not in a condition to be sold, then SOL Lahore inform this problem to Karachi Office, which in return contacts with the transport contractor, means no specific policy for these kinds of situations.
iii. EMPLOYEES NOT AT ALL FACILITATED PROPERLY:-
In Sales office Lahore there is a separate dining room for staff that is crammed enough that all employees cannot accommodate at a time, during lunch hours few employees launch at their working seats.
iv. INCREASE FREIGHT CHARGES:- Cement exports have been badly hit by high fee that is being charged by trucks and also by foreign shipping companies for the haulage of cement from Pakistan to India and Afghanistan. This increase in freight charges affects Companys exports due to which MAPLE LEAF CEMENT FACTORY LIMITED (MLCFL) exports are declining.
v. NIX HR DEPARTMENT:-
There is no HR management in MLCFL, Sales Office Lahore (SOL). The basic and foremost purpose of HR department is to facilitate to any existing or potential new employees. But there is no separate department for Human resource management. No one is conscientious for employees tribulations.
vi. TIME CONSUMING:-
The process for getting registered is very lengthy and time consuming. The speed which cases are handled is also slow, which lengthens it further. The registration process as well as commencement of pension in case of retirement takes considerable time which is weakness. Some staff of office are not on the right position on which they are working.
vii. DELEGATION OF AUTHORITY:-
In MLCFL, the authority is more centralized. Every section has manager who has a sole authority and there is no delegation to subordinate.
viii. COMPLICATED PROCESS:-
The actual process for registration and receiving of pension and old age benefits with the Employees Old-Age Benefit Institution (EOBI) is complicated and the applying person has to fulfill a lot of formalities.
ix. LOW CONTRIBUTION RATE
x. The contribution rate of Employees Old-Age Benefit Institution (EOBI) pension scheme is set at 6% of the monthly salary. The rate should be increased up to 8%.
xi. LOW AWARENESS
The Employees Old-Age Benefit Institution (EOBI) pension scheme is used in many companies however its awareness is not that much. It needs more awareness to capitalized on the opportunities available in the market.
Although cement is an industrial product & there is no much need of advertisement. However the existence is necessary in market. MLCFL give less emphasis on advertisement as compare to competitors.
xiii. OTHER WEAKNESSES:-
There is inconsistency in MLCFL profit.
Downsizing and retrenchment caused brain drain.
Weak promotion policy
Weak advertising policy
Low brand margin
High administrative expenses.
Less focus on ruler area
New growing market specially Afghanistan
Opportunity to export quality cement to those new growing markets
Cost reduction (production)
I. GOVERNMENT DEVELOPMENT EXPENDITURE:-
Increase in development expenditures has helped cement demand to grow at very high rates. Infrastructure development in a region triggers private development projects having even positive impact on cement demand which is a great opportunity for the company to increase its sales.
II. CONSTRUCTION OF LARGE DAMS:-
Construction of dams in Pakistan will generate demand of Cement. Extent of demand generation will depend on size of dam, type of dam, and extent of relocation/resettlement activities required.
III. IMPROVED ACCESS TO REGIONAL MARKET
Afghanistan is Pakistans largest cement export market. The prospects for cement exports seem bright in the medium term due to rising domestic as
Well as regional cement demand. MLCFL also achieved improved access to India after the complete removal of 12.5 percent custom duty on Portland cement imports in this country from January 2007, showing improved export opportunities for the company. India is planning to import more cement from Pakistan to stabilize prices in the market and the government wants a balance in demand and supply of cement in the current fiscal year. Due to boom in the construction industry, India needs cement in bulk to meet its growing needs. Indian market is excellent opportunity for the company to increase its export sales.
DEMAND OF PAKISTANI CEMENT BY RUSSIA
Fresh enquiries have been received from Russia and buyers are quoting very attractive prices as Pakistani cement quality is of very high standard and holds good strength. MLCFL can expand its business by exporting Cement to Russia as well.
IV. HIGH DEMAND
High demands because of the improvement in the construction sector through major projects by government. So it is an opportunity for MLCFL to avail.
V. NEW MARKET COVERAGE
Because of the high demand throughout the country MLCFL can over new market locally as well as in Afghanistan. There are opportunity & potential for new market in northern Afghanistan.
VI. HOUSE / BUSINESS
The employees have benefit that when they get the lump sum amount, they can buy their own home or the retired employee can start any sort of business which can help the employee to continue
his/her life smoothly and this is the step which makes thee employees more loyal toward the organization. That realizes the employee that how mushes organization care about them.
VII. EASY ACCESS TO MARKET
MLCFL offer high rates as compare to other still it is preferred by majority of consumer because of its image, reality and consistency.
VIII. AFGHANISTAN (EXPORT)
The govt. of Pakistan has loose the rules regarding export to Afghanistan regarding cement. It cuts excise & sales tax 10 %. So the MLCFL has opportunity to establish roots in Afghanistan and penetrate the market because of high demand of its brand & image
i. HIGH ENERGY PRICES
Recently cement industry of Pakistan is facing high energy prices due to increase in the international prices of coal and oil. As our coal contain high percentage of SULPHUR. Due to which Pakistan cement industry is not able to use local coal as a source of energy. Due to which Pakistan cement industry has to import coal from different countries at high prices.
ii. HIGH LEVEL OF TAXATION
Presently, the cement industry of Pakistan is heavily burdened due to levy of Federal Excise Duty @ Rs. 700 per ton and General Sales Tax @ 17% on duty paid value. In addition to Federal Excise Duty and General Sales Tax, cement industry is also paying the provincial levies (Royalty and Excise Duty) on acquiring of raw material for production of cement i.e. lime stone and shall clay.
iii. INCREASING COMPETITION
There are 25 Cement manufacturers in Pakistan among all these D. G Khan Cement, FAUJI Cement, Best way Cement, Kohat Cement, Pioneer Cement, Lucky Cement, ATTOCK Cement, Askari Cement, DANDOT Cement, Pak Cem Cement and Flying Pakistan Cement etc. are major distributor of Cement throughout Pakistan. To, compete these companies is not trouble-free errandfor MLCFL and trend of entering new player in this industry is increasing because of massive cement demand.
iv. UNSTABLE ECONOMY
Pakistans unstable economy is also a constant threat to MLCFL. The recent incidents e.g., Target killing in Karachi and flood in Sindh, Swat, Peshawar, Nowshera (where Cement Plant of MLCFL is situated) etc. upset Pakistan and in a matter of days Pakistans major cities have been victimized by sheer acts of terrorism and this contributes a lot in the declining of Pakistans already dwindling economy. Currency exchange rate is fluctuating day another day which is detrimental for company while exporting cement to foreign countries as well.
v. Ever increasing Inflation
Inflation is increasing day by day in Pakistan and hence is a major threat to the Cement industry of Pakistan. Moreover, Prices of MAPLE LEAF CEMENT FACTORY LIMITED Cement as per ton increased by 9.22% in the month of June to July.
vi. PRICE REDUCTION BY COMPETITORS
Sometime, price reduction by competitors of MLCFL makes rate problem for it. Already MLCFL has high rates.
vii. UNSTABLE GOVT. POLICIES
The political situation in Pakistan is not static & secure. So, there is no stability In their policies regarding cement industry. So, it also creates problems for MLCFL.
5.2 MAJOR COMPETITOR OF MAPLE LEAF CEMENT FACTORY LIMITED CEMENT FACTORY LIMITED (MLCFL)
ASKARI CEMENT has two plants, one in wah and other in nizampur which has been installed by army welfare trust. The main product is ordinary Portland cement which is supplied in polypropylene as well as in a paper bag of 50 kg each. Total capacity of both lines is 4000 tons per day.
D. G KHAN CEMENT
D. G Khan Cement limited is one of the largest cement-manufacturing unit in Pakistan with a production capacity of 5500 tons clinker per day. It has country wide distribution network. Its main product are ordinary Portland cement and sulphate resistance cement.
Lucky cement has been successful in establishing its brand in several export market including Middle East, India, Sri-Lanka and east and South Africa. It has daily production capacity of 4200 tons per day. Its main
The company factory is located in khushab. Its major products are:
Ordinary Portland cement
Sulphate resistance cement
Main business of the company is manufacturing and sales of cement. Its main products are OPC and white cement Portland slag cement.
Headquarter of FAUJI cement is in Islamabad. It operate cement plant at district ATTOCK in the province of Punjab. Main product is ordinary Portland cement.
BEST WAY CEMENT
Best way cement is the part of renowned best way group of uk. In the response to the government of Pakistan call for non-resident Pakistans to invest in Pakistan, best way invested in cement industry in shape of best way cement group manufacture 6.0 million tons per annum. Main products are Portland cement.