The Bestway cement ltd open the subsidiary in Bangladesh.which is a public limited in KSE

1. ‫لرحمي‬‫ا‬ ‫لرمحن‬‫ا‬ ‫هللا‬ ‫سم‬‫ب‬

2. Group Members:
• ZaeemWajahait Iqbal 5256/FMS/MBA/F11
• MuhammadAwais Ahmed 5262/FMS/MBA/F11
• Muhammad Bilal Jamil 5267/FMS/MBA/F11
• Khalid Mehmood 5272/FMS/MBA/F11

3. Bestway Cement Subsidiary in Bangladesh

4. LAYOUT OF PRESENTATION
• Introduction
• Theoretical framework
• Analysis and Finding
• Conclusion

5. 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.

6. 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.

7. 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

8. 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

9. 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.

10. Motives for DFI:
Revenue Related Motives:
• Attract new sources of demand.
• Diversify internationally.
• Enter into a profitable market

11. 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.

12. Financial Analysis
• Safety andTax Free Land
• 1 US $ is equal to 77.45 BangladeshiTaka
• Exchange Rate Movements
• Labor Rates

13. 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($)

14. 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+WdKd
WACC = (0.70*0.20) + (0.30*0.15)
WACC = 0.185
WACC = 18.5%

15. Calculations of Cash Flows; NPV
Year 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 Value
900000
NCF Operating Cash Flows 2827710 3444975 3834518 3986550
4971375
NPV 2386253.2 2453292.7 2304388.7 2021733
2127575
Cumulative NPV -1043253.2 -836000.5 125388.5 804121.5
1588696.5

16. Conclusion:
• Attractive resources in Bangladesh.
• Profitable market.
• Cheap labor.
• Tax incentives.
• Easy availability of raw material.

17. Thank you