بسم هللا الرمحن الرحمي

Group Members:

• Zaeem Wajahait Iqbal 5256/FMS/MBA/F11

• Muhammad Awais Ahmed 5262/FMS/MBA/F11

• Muhammad Bilal Jamil 5267/FMS/MBA/F11

• Khalid Mehmood 5272/FMS/MBA/F11

Bestway Cement Subsidiary in Bangladesh

LAYOUT OF PRESENTATION

• Introduction

• Theoretical framework

• Analysis and Finding

• Conclusion

Overview of Bestway

cement

• Bestway cement is part of Bestway Group of United Kingdom.

• This group has diversified in different sectors.

• Bestway group first time established its cement plant in 1992.

• It was listed on KSE in 2001.

Overview of Bestway

cement.

Vision of Bestway cement:

• To produce high quality cement at lower cost.

Mission of Bestway cement:

• Bestway will consistently produce high quality

• Best way will continue to provide a high standard of customer services.

• In order to meet future expansion needs, Bestway will continue its policies of staff trainings.

Bangladesh’s overview

• Bangladesh come into being in 1971 dependent and free

country.

• Its total area is around about 147,000 KM squares.

• Its total population approximately 153.51 million.

• Widely spoken languages are bangla and English

Bangladesh’s overview

• Bangladesh capital city is Dhaka and main big Cities are Dhaka,

Chittagong and Rangpur.

• Bangladesh has Major industries are Cement, Fertilizer , Paper and

Leather products

• Its total GDP is $ 133 billion and per capita income $ 885

• Its GDP growth rate is 6.35%

• DFI in Bangladesh is $ 1.36 billion

Industry Overview.

• Bangladesh cement industry is 40th biggest market in world.

• presently capacity of cement industry about 20 mn tonnes

(MT).

• There are four big production companies.

• There were 120 companies registered.

• 65 companies have their own production plants.

Motives for DFI:

Revenue Related Motives:

• Attract new sources of demand.

• Diversify internationally.

• Enter into a profitable market

Motives for DFI:

Cost Related Motives:

• Take full advantage from economy of scale.

• Use of foreign factor of productions.

• Use foreign raw material.

• Use of foreign technology.

• React to exchange rate moments.

Financial Analysis

• Safety and Tax Free Land

• 1 US $ is equal to 77.45 Bangladeshi Taka

• Exchange Rate Movements

• Labor Rates

Calculations of Estimated Cost

Description Estimated Cost (million) Cost US$ (million)

Factory Land 10 0.129107

Plant 50 0.645535

Building 15 0.193661

Equipment 18 0.232392

Misc. Cost 11 0.142018

Total 91 (BDT) 1.343($)

Calculation of WACC

Description Debt Equity

Amount 0.4029 0.9401

Weight 0.3 0.7

Cost 0.15 0.20

Total Investment = 0.4029 + 0.9401 = 1.818 (M)WACC = WeKe+WdKdWACC = (0.70*0.20) + (0.30*0.15)WACC = 0.185WACC = 18.5%

Calculations of Cash Flows; NPVYear 2015 2016 2017 2018 2019

Revenue 6000000 7200000 8400000 9300000 9700000

Variable Cost (1200000) (1400000) (1900000) (2500000) (2700000)

Other variable Cost (256000) (310000) (413000) (480000) (550000)

Fixed Cost (400000) (400000) (400000) (400000) (400000)

Depreciation(10%) (500000) (500000) (500000) (500000) (500000)

Interest (11%) (44311) (44311) (44311) (44311) (44311)

Earning bf Tax 3599689 4545689 5142689 5375689 5505689

Tax (27.5%) (1002100) (1262250) (1426425) (1490500) (1526250)

Earnings After Tax 2641900 3327750 3760575 3929500 4023750

Depreciation 500000 500000 500000 500000 500000

Net Operating Cash Flows 3141900 3827750 4260575 4429500 4523750

With Holding Tax (10%) (314190) (382775) (426057) (442950) (452375)

Total 2827710 3444975 3834518 3986550 4071375

Salvage Value900000

NCF Operating Cash Flows 2827710 3444975 3834518 39865504971375

NPV 2386253.2 2453292.7 2304388.7 20217332127575

Cumulative NPV -1043253.2 -836000.5 125388.5 804121.51588696.5

156327735.6

Conclusion:

• Attractive resources in Bangladesh.

• Profitable market.

• Cheap labor.

• Tax incentives.

• Easy availability of raw material.

Thank you