Dadabhoy Cement Industries, Pakistan

Published 27 February 2006

This 27 year old cement manufacturing unit of Nooriabad (Sindh) has been able to move upward towards revival from massive loss of PKR 666m three years ago. This has generated lot of confidence among all of its stakeholders in this enterprise which is manifest from high market value of its share, and all time high cement sales, output and profit.
 
The accumulated deficit has drastically been reduced although capital deficiency remains. However financial backbone of the company has further strengthened. It has made long term investment in the subsidiary company which generates electricity. As a long term strategy it is committed to reduce the financial charges for which it has extinguished the borrowings from UBL and negotiated reduction in the mark-ups on borrowings from NBP. 
 
 The Chief Executive of the company is member of Pakistan Senate and has utilised his allocated funds for providing electricity in the remotest area of Dadu District and different villages near Nooriabad. Information Technology provides cutting edge in competition. The company has started implementing ERP (Enterprise Resource Planning) from a reputed company. 

One of the main reasons for the increasing attention of investors towards the company is its improved performance after 2002 when it had booked massive pretax loss of Rs 666.53m. The accumulated deficit continues to decline since the last three years and now it stood reduced at Rs 246.34m. 
 
It has been pointed out by Chief Executive Muhammad Amin Dadabhoy that the sustainable government policy to achieve double digit growth and brisk activities in construction industry in the country and neighbouring Afghanistan has led the consumption of cement to maintain a healthy growth during the year. The disbursement of fund at cheap rates by bank for construction of houses also boosted the demand for cement in the country. 
 
The company’s gross profit margin significantly improved and pretax profit increased to Rs 113.85m which is eleven times of the preceding year’s figure of Rs 10.28m. 
 
The growing demand led to increase cement sales by 31% from 351,252t in the preceding years to 460,300t in the year under review.