STAMFORD UNIVERSITY BANGLADESH

Assignment On: Capital Structure Analysis of Lafarge Surma

Cement Limited
Course Title: Finance Theory

Course Code: FIN -608

Submit To

Mohammad Salahuddin Chowdhury, ACA

Assistant Professor, Dept. of Finance,
University of Dhaka

Submit By

Md. Jahidul Islam; ID: MBA-05014570

Jabun Nahar; ID: MBA 05014443
Rajib Kumar Saha; ID: MBA 05014533

Date of submission
17th April 2013
Letter of Transmittal

April 17, 2013

Mohammad Salahuddin Chowdhury, ACA

Assistant Professor, Dept. of Finance,
University of Dhaka

Subject: Submission of Assignment titled “Capital Structure Analysis of Lafarge Surma

Cement Limited”.

Dear Sir,
This is informing you that I have done this assignment on “Capital Structure Analysis of
Lafarge Surma Cement Limited”. It is a great pleasure for me to present you such type of
assignment. To prepare this assignment I collect essential data. I learnt a lot of unknown
issues of direct Marketing, while preparing this assignment. This assignment was a
challenging experiences for us a theoretical as well as practical. I tried my best to make the
assignment a sound one as per your valuable counseling and proper guidance.

I express our gratitude to you for giving us the opportunity to making this assignment. I
would be obliged if you kindly call me for any explanation or any query about the assignment
as and when deemed necessary.

Within the time limit, I have tried my best to compile the pertinent information as
comprehensively as possible and if you need any further information, I will be glad to
assist you.

Thanking you,
On behalf of my group

Md. Jahidul Islam

MBA: 05014570
Dept. of Business Administration
Stamford University Bangladesh
 Executive Summary

Capital structure, the mixture of a firm's debt and equity, is important because it costs
company money to borrow. Capital structure also matters because of the different tax
implications of debt vs. equity and the impact of corporate taxes on a firm's profitability.
Firms must be prudent in their borrowing activities to avoid excessive risk and the
possibility of financial distress or even bankruptcy.

A firm's debt-to-equity ratio also impacts the firm's borrowing costs and its value to
shareholders. The debt-to-equity ratio is a measure of a company's financial leverage
calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion
of equity and debt the company is using to finance its assets.

A high debt/equity ratio generally means that a company has been aggressive in financing its
growth with debt. This can result in volatile earnings as a result of the additional interest
expense.
The target (optimal) capital structure is simply defined as the mix of debt, preferred stock
and common equity that will optimize the company's stock price. As a company raises new
capital it will focus on maintaining this target (optimal) capital structure.
Table of Contents

1. Introduction 1

2. Capital Structure 2
Clarifying Capital Structure-Related Terminology 2
Capital Ratios and Indicators 3
Additional Evaluative Debt-Equity Considerations 3
Factors That Influence a Company's Capital-Structure Decision 4

3. Cement Industry of Bangladesh 5

Industry Overview 6
Existing Industry Structure 6
Market for Cement Industry 6
Future Prospect 7
Market Share 7

4. Lafarge Surma Cement Limited 8

Company Overview 8
Basic Information 9
Interim Financial Performance: 2012 9
Shareholders & Investors 10
Composition of the Shareholders

5. Data Analysis 12
Findings from Annual Report Analysis 12
Comparison of Balance Sheet & Income Statement Items 12
Cross Table Analysis of Ratios 14

6. Conclusion 16
Introduction
Capital structure, the mixture of a firm's debt and equity, is important because it costs
company money to borrow. Capital structure also matters because of the different tax
implications of debt vs. equity and the impact of corporate taxes on a firm's profitability.
Firms must be prudent in their borrowing activities to avoid excessive risk and the
possibility of financial distress or even bankruptcy.

A firm's debt-to-equity ratio also impacts the firm's borrowing costs and its value to
shareholders. The debt-to-equity ratio is a measure of a company's financial leverage
calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion
of equity and debt the company is using to finance its assets.

A high debt/equity ratio generally means that a company has been aggressive in financing its
growth with debt. This can result in volatile earnings as a result of the additional interest
expense.
If a lot of debt is used to finance increased operations (high debt to equity), the company
could potentially generate more earnings than it would have without this outside financing.
If this financing increases earnings by a greater amount than the debt cost (interest), then
the shareholders benefit as more earnings are being spread among the same amount of
shareholders. However, the cost of this debt financing may outweigh the return that the
company generates on the debt through investment and business activities and become too
much for the company to handle. Insufficient returns can lead to bankruptcy and leave
shareholders with nothing.
The debt/equity ratio also depends on the industry in which the company operates. For
example, capital-intensive industries such as auto manufacturing tend to have a debt/equity
ratio above 2, while personal computer companies tend to have a debt/equity ratio of under
0.5. (Read more in Spotting Companies In Financial Distress and Debt Ratios: Introduction.) A
company can change its capital structure by issuing debt to buy back outstanding equities or
by issuing new stock and using the proceeds to repay debt. Issuing new debt increases the
debt-to-equity ratio; issuing new equity lowers the debt-to-equity ratio.
As you will recall from Section 13 of this walkthrough, minimizing the weighted average cost
of capital (WACC) maximizes the firm's value. This means that the optimal capital structure
for a firm is the one that minimizes WACC.
Capital Structure

For stock investors that favor companies with good fundamentals, a strong balance sheet is
an important consideration for investing in a company's stock. The strength of a company'
balance sheet can be evaluated by three broad categories of investment-quality
measurements: working capital adequacy, asset performance and capital structure. In this
section, we'll consider the importance of capital structure.
A company's capitalization (not to be confused with market capitalization) describes its
composition of permanent or long-term capital, which consists of a combination of debt and
equity. A company's reasonable, proportional use of debt and equity to support its assets is a
key indicator of balance sheet strength. A healthy capital structure that reflects a low level of
debt and a corresponding high level of equity is a very positive sign of financial fitness.
(Learn about market capitalization in Market Capitalization Defined).

Clarifying Capital Structure-Related Terminology

The equity part of the debt-equity relationship is the easiest to define. In a company's capital
structure, equity consists of a company's common and preferred stock plus retained
earnings, which are summed up in the shareholders' equity account on a balance sheet. This
invested capital and debt, generally of the long-term variety, comprises a company's
capitalization and acts as a permanent type of funding to support a company's growth and
related assets.
A discussion of debt is less straightforward. Investment literature often equates a company's
debt with its liabilities. Investors should understand that there is a difference between
operational and debt liabilities - it is the latter that forms the debt component of a company's
capitalization. That's not the end of the debt story, however.
Among financial analysts and investment research services, there is no universal agreement
as to what constitutes a debt liability. For many analysts, the debt component in a company's
capitalization is simply a balance sheet's long-term debt. However, this definition is too
simplistic. Investors should stick to a stricter interpretation of debt where the debt
component of a company's capitalization should consist of the following: short-term
borrowings (notes payable), the current portion of long-term debt, long-term debt, and two-
thirds (rule of thumb) of the principal amount of operating leases and redeemable preferred
stock. Using a comprehensive total debt figure is a prudent analytical tool for stock investors.
Capital Ratios and Indicators
In general, analysts use three different ratios to assess the financial strength of a company's
capitalization structure. The first two, the debt and debt/equity ratios, are popular
measurements; however, it's the capitalization ratio that delivers the key insights to
evaluating a company's capital position.
The debt ratio compares total liabilities to total assets. Obviously, more of the former means
less equity and, therefore, indicates a more leveraged position. The problem with this
measurement is that it is too broad in scope, which, as a consequence, gives equal weight to
operational and debt liabilities. The same criticism can be applied to the debt/equity ratio,
which compares total liabilities to total shareholders' equity. Current and non-current
operational liabilities, particularly the latter, represent obligations that will be with the
company forever. Also, unlike debt, there are no fixed payments of principal or interest
attached to operational liabilities.
The capitalization ratio (total debt/total capitalization) compares the debt component of a
company's capital structure (the sum of obligations categorized as debt plus the total
shareholders' equity) to the equity component. Expressed as a percentage, a low number is
indicative of a healthy equity cushion, which is always more desirable than a high percentage
of debt. (To continue reading about ratios, see Debt Reckoning).

Additional Evaluative Debt-Equity Considerations

Funded debt is the technical term applied to the portion of a company's long-term debt that
is made up of bonds and other similar long-term, fixed-maturity types of borrowings. No
matter how problematic a company's financial condition may be, the holders of these
obligations cannot demand immediate and full repayment as long the company pays the
interest on its funded debt. In contrast, bank debt is usually subject to acceleration clauses
and/or covenants that allow the lender to call its loan. From the investor's perspective, the
greater the percentage of funded debt to total debt, the better. Funded debt gives a company
more wiggle room.
Factors That Influence a Company's Capital-Structure Decision
The primary factors that influence a company's capital-structure decision are as follows:

1. Business Risk
Excluding debt, business risk is the basic risk of the company's operations. The greater the
business risk, the lower the optimal debt ratio.
As an example, let's compare a utility company with a retail apparel company. A utility
company generally has more stability in earnings. The company has less risk in its business
given its stable revenue stream. However, a retail apparel company has the potential for a bit
more variability in its earnings. Since the sales of a retail apparel company are driven
primarily by trends in the fashion industry, the business risk of a retail apparel company is
much higher. Thus, a retail apparel company would have a lower optimal debt ratio so that
investors feel comfortable with the company's ability to meet its responsibilities with the
capital structure in both good times and bad.

2. Company's Tax Exposure

Debt payments are tax deductible. As such, if a company's tax rate is high, using debt as a
means of financing a project is attractive because the tax deductibility of the debt payments
protects some income from taxes.

3. Financial Flexibility
Financial flexibility is essentially the firm's ability to raise capital in bad times. It should come
as no surprise that companies typically have no problem raising capital when sales are
growing and earnings are strong. However, given a company's strong cash flow in the good
times, raising capital is not as hard. Companies should make an effort to be prudent when
raising capital in the good times and avoid stretching their capabilities too far. The lower a
company's debt level, the more financial flexibility a company has.
Let's take the airline industry as an example. In good times, the industry generates significant
amounts of sales and thus cash flow. However, in bad times, that situation is reversed and the
industry is in a position where it needs to borrow funds. If an airline becomes too debt
ridden, it may have a decreased ability to raise debt capital during these bad times because
investors may doubt the airline's ability to service its existing debt when it has new debt
loaded on top. (Learn more about this industry in Dead Airlines And What Killed Them and 4
Reasons Why Airlines Are Always Struggling).
4. Management Style
Management styles range from aggressive to conservative. The more conservative a
management's approach is, the less inclined it is to use debt to increase profits. An aggressive
management may try to grow the firm quickly, using significant amounts of debt to ramp up
the growth of the company's earnings per share (EPS).

5. Growth Rate
Firms that are in the growth stage of their cycle typically finance that growth through debt by
borrowing money to grow faster. The conflict that arises with this method is that the
revenues of growth firms are typically unstable and unproven. As such, a high debt load is
usually not appropriate.
More stable and mature firms typically need less debt to finance growth as their revenues
are stable and proven. These firms also generate cash flow, which can be used to finance
projects when they arise.

6. Market Conditions
Market conditions can have a significant impact on a company's capital-structure condition.
Suppose a firm needs to borrow funds for a new plant. If the market is struggling, meaning
that investors are limiting companies' access to capital because of market concerns, the
interest rate to borrow may be higher than a company would want to pay. In that situation, it
may be prudent for a company to wait until market conditions return to a more normal state
before the company tries to access funds for the plant. (Read more about market conditions
in The Cost Of Unemployment To The Economy and Betting On The Economy: What Are The
Odds?)
Cement Industry of Bangladesh
Industry Overview
The development of cement industry in Bangladesh dates back to the early-fifties but its
growth in real sense started only about decade or so. Bangladesh has been experiencing an
upsurge in the use of cement in recent years. Increase in demand for cement has soared
mainly due to the property sector boom and infrastructure development concentrated in the
Dhaka Metropolitan area and other major urban areas of the country. The infrastructural
development at grass root level has led to an increased demand for cement at an average rate
of 8% per annum during the past decade.
Existing Industry Structure
In terms of cement production, Bangladesh ranks about 40th in the world. Cement
manufacturing is a highly fragmented business in Bangladesh. During the 1990s, many small
cement companies entered the market as soon as the government started encouraging local
production with favorable tariff differential. Currently 123 companies are listed as cement
manufacturers in the country. Of them 63 have actual production capacity while about 30 do
not have any production at all. The current installed capacity is 22.0 MMT. However, because
of supply constraints for power and clinkers, the actual capacity is about 17.0 MMT.
Bangladesh is one of the few sizable producers of cement that does not have its own supply
of limestone and cannot produce clinkers domestically. There is a strong tax-support for
local cement manufacturers in Bangladesh. They receive a significant import tax advantage
over finished cement (about 15% for raw-materials versus 100% for finished cement). This
tariff differential helps most to operate profitably. A change in the tariff structure is not
anticipated in the near future.

Market for Cement Industry

Construction takes up an important role in the economy (about 10% of the GDP). Annual
demand for cement in the country is about 10.0 MMT. Understandably the market has a
capacity overhang. There is a small market for export of cement, mainly to the small
northeastern states of India. However, the size of the export is quite small (about 200 KMT a
year). There are four categories of cement consumers in the country. The largest with about
60% of the consumption are the individual homebuilders. This is also the most price
sensitive segment. Real estate developers, especially in the country’s urban area constitute
about 8% of the market. Construction contractors constitute another 3% of the market.
Lastly, various government projects take up about 30% of the total cement construction.
Future Prospect
The industry realized about 20% sales growth in 2009, mostly because of the latent demand
from last years. On a secular basis, ongoing demand growth is expected to be about 8%, the
outlook for the cement industry seems positive for a number of reasons.
First, the government seems to be on a war footing to increase both the amount and the
efficiency of spending in social and physical infrastructure under the Annual Development
Programs (ADP). Second, the private sector is also energized because of certain tax
advantages for undeclared funds if they are invested in real estate.

Third, a number of large infrastructure construction projects (such as the Padma Bridge) are
on the horizon. Both the government and the private sector are soliciting funds for such
projects. If implemented, these projects would significantly improve demand for
construction materials.

Market Share
The largest 10 cement manufacturers hold about 70% of the market share. While Heidelberg,
Holcim and Lafarge are the leaders among multinational cement manufacturers; Shah, Akij
and MI are the leading domestic manufacturers. Shah cement is the market leader with close
to 12% of the market share, closely followed by Heidelberg with about 10% of the market
share.
Lafarge Surma Cement Limited

Company Overview
Lafarge Surma Cement Ltd. (LSC) was incorporated on 11 November 1997 as a private
limited company in Bangladesh under the Companies Act 1994 having its registered office in
Dhaka. On 20 January 2003 Lafarge Surma Cement Ltd. was made into a public limited
company. The Company is listed in Dhaka and Chittagong Stock Exchange. Today, Lafarge
Surma Cement Ltd. has more than 20,000 shareholders.
In November 2000, the two Governments of India and Bangladesh signed a historic
agreement through exchange of letters in order to support this unique cross border
commercial venture and till date it is the only cross border industrial venture between the
two countries. Since Bangladesh does not have any commercial deposit of limestone, the
agreement provides for uninterrupted supply of limestone to the cement plant at Chhatak in
Bangladesh by a 17 km long belt conveyor from the quarry located in the state of Meghalaya.
The company in Bangladesh, Lafarge Surma Cement Ltd. wholly owns a subsidiary company
Lafarge Umiam Mining Private Ltd. (LUMPL) being registered in India, which operates its
quarry at Nongtrai in Meghalaya.
This commercial venture with an investment of USD 280 million, which is one of the largest
foreign investments in Bangladesh, has been financed by Lafarge of France, world leader in
building materials, Cementos Molins of Spain, leading Bangladeshi business houses together
with International Finance Corporation (IFC – The World Bank Group), the Asian
Development Bank (ADB), German Development Bank (DEG), European Investment Bank
(EIB), and the Netherlands Development Finance Company (FMO).
Lafarge Group, with 176 years of experience, holds world’s top-ranking position in Cement,
Aggregates, Concrete and Gypsum. It operates in 64 countries with around 68,000
employees. Lafarge is named as one of the 100 Most Sustainable Companies in the World.
Cementos Molins of Spain, with 75 years of experience, also operates in Mexico, Argentina,
Uruguay, and Tunisia.
Now, after three years of production operations, we are producing world class clinker and
cement which is a demonstration of the sophisticated and state-of-the-art machineries and
processes of our plant at Chhatak. The Company is already meeting about 8% of the total
market need for cement and 10% of total clinker requirements of Bangladesh market
whereas we continue to enjoy strong growth rates. By supplying clinker to other cement
producers in the market, we contribute some USD 50~60 million per annum worth of foreign
currency savings for the country. We contribute around BDT 1 (one) billion per annum as
government revenue to the national exchequer of Bangladesh. About 5,000 people depend on
our business directly or indirectly for their livelihood.
We believe that cement is an essential material that addresses vital needs of the construction
sector. We are optimistic to meet the growing needs for housing and infrastructure in the
construction sector of Bangladesh.

Basic Information
Authorized Capital in BDT* 14000.0
(mn)
Paid-up Capital in BDT* 11614.0 52 Week's Range 28.4 - 45
(mn)
Face Value 10.0 Market Lot 500

Total no. of Securities 1161373500 Business Segment Cement

Interim Financial Performance: 2012

Unaudited / Audited
Particulars Q1(3 Months) Q2(6 Months) Q3(9 Months) Q4 (12 Months)
201203 201206 201209 201212

Turn Over in BDT* (mn) 2797.71 5539.84 7823.46 0

Net Profit After Tax in BDT *(mn)
464.58 619.5 1236.33 1853.43
(Continuing Operations)
Net Profit After Tax in BDT *(mn)
0 0 0 0
(Including Extra-ordinary Income)
Basic EPS in BDT*
0.400 0.530 1.060 1.600
(Based on continuing operations)
Diluted EPS in BDT* (Based on
0.000 0.000 0.000 0.000
continuing operations)
Basic EPS in BDT*
0.000 0.000 0.000 0.000
(Including Extra-ordinary Income)
Diluted EPS in BDT* (Including
0.000 0.000 0.000 0.000
Extra-ordinary Income)
Shareholders & Investors
The Company is fortunate to have a blend of both international and local shareholders. The
international shareholders of Lafarge Surma Cement Ltd. bring in technological and
management expertise while the local partners provide deep insights of the economy of
Bangladesh. The shareholders believe that growth and innovation must add value, not only
for the Company, but also for customers, whom the Company serves through modern and
well-located production facilities as well as innovative and reliable products.

Composition of the Shareholders

Surma Holdings B.V.
Surma holding B.V. was incorporated in the Netherlands, which owns 58.87% of Lafarge
Surma Cement Ltd. Lafarge Group of France and Cementos Molins of Spain each owns 50%
share of Surma Holding B.V.
Lafarge Group
One of the major sponsors, Lafarge Group holds world’s top-ranking position in Building
Materials, with about 68,000 employees in 64 countries. Lafarge was founded in France in
1833. Through the years since its inception, it has been growing steadily to take lead in the
production of different kinds of construction materials and has established itself as the
world leader in construction material business. In 2010, for the sixth consecutive year,
Lafarge has been listed as one of the 100 most sustainable companies in the world.
Cementos Molins
Another major sponsor, Cementos Molins, based in Barcelona, Spain, is a renowned cement
company founded in 1928. With over 75 years of experience in manufacturing cement,
Cementos Molins has industrial operations also in Mexico, Argentina, Uruguay and Tunisia.
Lafarge and Cementos Molins as major sponsors, the equity partners are Asian Development
Bank (ADB), International Finance Corporation (IFC) and Islam Group and Sinha Group from
Bangladesh. The financiers to the project include Asian Development Bank (ADB),
International Finance Corporation (IFC), German Development Bank (DEG), European
Investment Bank (EIB), the Netherlands Development Finance Company (FMO) and local
Standard Chartered Bank and AB Bank Limited. In addition to that Citibank N.A., HSBC,
Commercial Bank of Ceylon PLC, Uttara Bank Limited, The Trust Bank Limited, Eastern Bank
Limited have participated in working capital management of the Company.

Share Holding Patterns

Years Director (%) Govt. (%) Institutions (%) Foreign (%) Public (%)

Lafarge Surma 59.06 0 9.06 1.94 29.94

Share Holding Patterns

Public
30%

Director
Institutions 59%
Foreign 9%
2%

Govt.
0%
Data Analysis

Findings from Annual Report Analysis

Findings from the Financial Statement analysis of the above mentioned five Cement
Companies.

Lafarge Surma Cement Limited

(Tk. In million)

Interest
Total Debt D/E Interest
Year Debt Equity EBIT Coverage
Assets Ratio Ratio Exp
Ratio

2010 16,558 10,393 2,768 62.77% 375.47% 660 1087 0.61

2009 17,291 8,222 4,430 47.55% 185.60% 2,332 870 2.68

2008 17,829 9,504 3,427 53.31% 277.33% 1,707 1224 1.39

2007 17,729 10,995 3,253 62.02% 338.00% (239) 1138 -0.21

2006 17,116 11,121 4,808 64.97% 231.30% (521) 163 -3.20

Laferge surma has the highest assets base Debt ratio and D/E ratio is decreasing steadily,
which shows that it is increased depending on equity rather than debt.

Comparison of Balance Sheet & Income Statement Items

Sales
(Tk. In million)
2010 2009 2008 2007 2006
Years
Lafarge Surma 5,655 7,543 6,211 2,399 153

Sales

8000

6000

4000 Sales

2000

0
2006 2007 2008 2009 2010
Total Assets
(Tk. In million)
Years 2010 2009 2008 2007 2006

Lafarge Surma 16,558 17,291 17,829 17,729 17,116

Total Assets
18000
17000
16000 Total Assets
15000
2006 2007 2008 2009 2010

Equity
(Tk. In million)
Years 2010 2009 2008 2007 2006

Lafarge Surma 4,229 4,430 3,427 3,253 4,808

Equity

6000
4000
2000 Equity

0
2006 2007 2008 2009 2010

Net Profit After Tax

(Tk. In million)
Years 2010 2009 2008 2007 2006

Lafarge Surma (505) 582 635 (855) (513)

Net Profit After Tax

1000
500
Net Profit After Tax
0
-500 2006 2007 2008 2009 2010

-1000
Cross Table Analysis of Ratios

Return on Equity (ROE) = Net Income/Common Equity

Lafarge Surma 2010 2009 2008 2007 2006

ROE 23.85% 22.46% 5.14% -33.69% -16.81%

Return on Equity (ROE)

40.00%
20.00%
0.00%
Return on Equity (ROE)
-20.00% 2006
2007 2008
-40.00% 2009

Current Ratio= Current Assets/Current Liabilities

Lafarge Surm a 2010 2009 2008 2007 2006

Current Ratio 0.25 1.93 0.32 0.26 0.53

Current Ratio

1 Current Ratio

0
2006 2007 2008 2009 2010

Debt-Equity Ratio = Total Debt/Total Assets

Lafarge Surma 2010 2009 2008 2007 2006

Debt Ratio 62.77% 47.55% 53.31% 62.02% 64.97%

Debt-Equity Ratio
100.00%

50.00% Debt-Equity Ratio

0.00%
2006 2007 2008 2009 2010
Debt-Equity Ratio = Total Debt/Total Equity
Lafarge Surma 2010 2009 2008 2007 2006

D/E Ratio 375.47% 185.60% 277.33% 338.00% 231.30%

Debt-Equity Ratio
400.00%
300.00%
200.00% Debt-Equity Ratio
100.00%
0.00%
2006 2007 2008 2009 2010

Interest Coverage Ratio = EBIT/Interest Expense

Lafarge Surma 2010 2009 2008 2007 2006

Interest Coverage Ratio 0.61 2.68 1.39 (0.21) (3.20)

Interest Coverage Ratio

4
2
Interest Coverage Ratio
0
-2 2006 2007 2008 2009 2010

-4

Net Profit Margin = Net Profit After Tax/Sales

Lafarge Surma 2010 2009 2008 2007 2006

Net Profit Margin 17.40% 13.19% 2.83% -45.69% -528.10%

Net Profit Margin

200.00%
0.00%
2006 2007 2008 2009 2010 Net Profit Margin
-200.00%
-400.00%
-600.00%
Conclusion

Even in the worst case that the Court puts a permanent ban on mining, LSCL is not without
options. How-ever, under any of these scenarios, the profitability of the company would
suffer.
There are other quarries in the region whose product are traded in the open market.
Transport of lime-stone by boat and trucks is already an established practice for Chattak
Cement Factory, a government owned manufacturer in the same area. Although it would
need substantial capacity building, LSCL can meet part of its limestone requirement from
importing locally traded limestone.
Import of clinkers like other cement manufacturers is also an option, although very costly for
LSCL. In such a case, the company would have to import cement via Chittagong, transport it
to current plants in Sunamganj for grinding, and then send it back to Dhaka and other
distribution centers. This may involve relocation of its grinding plant.
Acquiring other grinders may also be an option for LSCL, although that would require
additional capital outlay. As the cement sector consolidates, the larger companies such as
LSCL gains market shares at the cost of smaller manufacturers. It is expected that in the end
only the ten or so manufacturers, who cur-rently hold about 70% of the market share would
survive. In such a case, Lafarge can shift its manufac-turing from Sunamganj to Dhaka by
acquiring the facilities of the marginal producers.
References

 http://www.lafarge-bd.com
 http://www.dsebd.org/
 http://www.google.com.bd/
 http://www.stockbangladesh.com/
 http://en.wikipedia.org/wiki/
 Annual_Report_Of_ Lafarge_ Surma _ Cement_Year_2010
 Annual_Report_Of_ Lafarge_ Surma _ Cement_Year_2009
 Annual_Report_Of_ Lafarge_ Surma _ Cement_Year_2008
 Annual_Report_Of_ Lafarge_ Surma _ Cement_Year_2007
 Annual_Report_Of_ Lafarge_ Surma _ Cement_Year_2006