| INVESTMENT OPPORTUNITY STUDY – NEW COUNTRY |
|
Holderbank Financiere Glaris Ltd. (HOFI) –
Bangladesh |
| HOFI, is the investment arm of Holderbank, which has, as one of its objectives,
identification of new investment opportunities. This includes exploring new countries for
investment. Bangladesh, being a deficit cement market, has attracted the attention of many
trans-national companies, including Holderbank. Non-availability of limestone leave
companies with two primary options for investment - a grinding unit or packing terminal.
Holtec assisted HOFI in assessing Bangladesh, the country, its cement industry &
market, identify available investment opportunities and evaluate investment options.
Holderbank’s investment in Bangladesh was intended to synergise with its other
operations in the region. |
| A Cement Transporting Barge 
|
Key Assignment Information
- A comprehensive country study covering all
relevant factors for a cement-related investment.
- Options for investment with respect to
build/ buy, JV partner, unit type (grinding or packing), location & capacity,
generated and evaluated
- Evaluations carried out by team of experts
for raw materials, plant operations, marketing and logistics
- About 100 consultant days spent on field and
about 200 consultant days in the home office.
|
Objective and
Coverage
Investigating the economic & investment climate in
Bangladesh, its cement industry and the general business outlook were focus areas to
understand the operating environment.
A key objective of the assignment was to arrive at the
production unit type (grinding or packing unit), location and capacity. The various
options were formulated and evaluated considering various issues like demand-supply gap,
transportation & logistics and raw material sources, including clinker
The status of the cement market in the country was studied
including key players, extent of imports, supply patterns and distribution along with an
assessment of the future outlook
Possible acquisition targets were evaluated to facilitate a
buy/ build decision
Probable JV partners were identified and evaluated
- The status of various raw materials (availability &
costs) including limestone, coal, gypsum and blending materials like clay & rice husk
was evaluated
- A key component of the study encompassed an assessment of
transportation & logistics. Water, as a mode of transportation, was a major focus area
- Infrastructural factors, particularly at potential
investment locations, were addressed in detail. This included issues like land
availability & costs, access to ports, power, social infrastructure, manpower
availability, etc. Additionally, investment incentives at various locations were also
studied
- Combinations of potential unit types, locations &
capacities were evaluated on four primary parameters – markets, raw materials,
transportation & infrastructure and investment incentives. A prioritisation of the
investment concept (unit type-location-capacity) was then done.
- Major activities and procedures involved in making an
investment were also identified. Significant bottlenecks were highlighted along with means
of overcoming them.
- The above assignment included field-work of approximately
100 man-days by a 4-member team.
Holtec’s intervention was
instrumental in providing HOFI a detailed understanding of Bangladesh and its cement
environment and identifying the most attractive investment options. Investment has since
been made in a JV with a local company. The JV company is called Cemcor.
Holtec has executed 50 similar
assignments. |