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LOCATION ANALYSIS
ACKNOLEGMENT
In completing our project, we had to take guidelines from some people. We would like to show
our gratitude to Sir Aftab Bhati for giving us a good guideline for this project through numerous
consultations and guiding us at every step.

We would also like to show our gratitude to Sir Muhammad Farooq, senior production manager.
Who gave us time to interview him despite his busy schedule and gave us many details on
location analysis of Askari cement.

We would also like thank the rest of the employees of Askari cement for giving us a detail tour
of the plant.
EXECUTIVE SUMMARY
This report shows how location analysis is an important factor for a company to be profitable.
Any kind of business needs a good location to progress. For example for a manufacturing
company, like Askari cement, first it is important to be near raw material reserves. Second is the
supply of water. Third is electricity. Fourth is dispatch of goods. There are a number of other
factors like manpower, governmental regulations, environmental and cultural barriers that are
needed to be kept in mind before making decision of establishing a plant.
TABLE OF CONTENT

Sno HEADING Pg. no.

1 INTRODUCTION OF THE COMPANY 1

2 MANUFACTURING PROCESS 2

3 FINDINGS 4

4 CONCLUSION 6

5 RECOMMENDATIONS 7

6 APPENDIX A: INTERVIEW GUIDE 8

INTRODUCTION OF THE COMPANY
BRIEF HISTORY OF THE COMPANY

Established in 1921-22 with the rated capacity of 120 tons per day by a Bombay based
Company. In 1974 State Cement
Corporation of Pakistan (SCCP) was
created & management of the company
was put under the administrative control
of SCCP. The unit was privatized in Jan
1996 and the management was
transferred to Employees Management
Group on 17th February 1996.

Askari Cement Limited is part of Fauji Foundation, one of the largest business conglomerate in
Pakistan. With its two plants at Wah and Nizampur, have a total production capacity of 8,925
tons per day. Besides having major share in Pakistani markets.

Askari Cement, being the best quality cement is preferred for construction of mega projects like
Dams, Bridges, Highways, Commercial and Industrial complexes and residential societies. Our
product has been used in all the major projects in the northern half such as Warsak Dam, Tarbela
Dam, Mangla Dam, Simly Dam, FWO, NLC and Ghazi Brotha Concrete Channel.

The Company is currently exporting its product to Afghanistan. In the past, it has also exported
to India, South Africa, Central Asian Republics and Sudan.

COMPANY’S ORGANOGRAM

PROPERTIES
SIZE OF THE COMPANY Factory 108.5 Acre Colony 125.4 Acre
NUMBER OF EMPLOYEES 450
GEOGRAPHICAL 45 KM North West of Islamabad
BOUNDARIES
OPERATIONS AREA/DOMAIN Privately Held
CAPITAL OF THE COMPANY 14,752 billion
MANUFACTURING PROCESS
STARTING FROM THE RAW MATERIAL

List all the items of raw material:

- Calcium Carbonate CaCO3 from lime stone

- Alumino- silicates Al2SiO5 from
clay/Marl/sand stone/shale/Slate
- Bauxite/Laterite/Iron ore/blue dust

Supplier of supplier of supplier:

At Askari Cement, the raw material all

comes from the natural resources which
they own and when the final product is
made it is packaged and distributed to different areas.

Quantity and frequency of supply of raw material

- 75% Lime stone or carbonate rocks

- 22% Clay having 10% Al2O3
- 03% Laterite or Mill Scale / iron Ore.
- Raw material Cost usually 7-10% of
variable cost of cement

EXPLANATION OF STEP BY STEP

MANUFACTURING

We can divide the manufacturing process into three

stages. First stage is about quarrying, crushing, pre-
blending, raw grinding and homogenizing of the
raw material such as limestone and clay. They form
a raw meal. At second stage, the chemical and
thermal process starts. After heating the material
changes to clinker. At third stage gypsum is added,
it act as an inhibitor and transform clinker to cement. Then it is dispatched to different
customers.

POINTS OF QUALITY INSPECTION

Askari Cement Ltd., shall maintain a quality system in accordance with the ISO 9001: 2008
standard as relevant to the business of Cement. Effectiveness and continual improvement of
QMS will be reviewed regularly in Quality Council Meetings.

QUALITY CONTROL METHODS

- X-ray Fluorescence XRF analysis
- ASTM C114 Standard testing Method
- Statistical analysis of data
- X-ray Diffraction analysis XRD
- Microscopic Quality Control
- Differential Thermal analysis

MAINTENANCE METHOD AND SCHEDULE

Liquid and gas state material are easy to handle as compared to solid state matter. Solid state
matter like coal, clinker and cement are hard to store. After every six months maintenance is
done. They list down tasks separately for production and chemical departments. Every employee
is especially trained before maintenance period. As it is one of the crucial period were defect
needs to negligible.

Maintenance cost is usually from seven to thirteen percent.

FINAL PACKING OF THE FINISHED PRODUCTS

There is a separate building for packaging. Paper packets cost about ten to twelve percent.
Packaging material for cement that is being exported and sold in Pakistan is packaged in paper
bags that come Saudi Arab at the cost of Rs 8/-.

DELIVERY AND DISTRIBUTION METHOD AND FREQUENCY

After packaging of material, the cement packets are uploaded on trucks with the help of
conveyor belt.

PROBLEMS BEING FACED BY

THE COMPANY

- Layout design faulty: there is no

symmetry in the design. Clinker is
placed in front of the colony. The
administrative department is close to
factory plant. Coal is kept in front of
CCR.
- Environmental issue: Askari cement
is located at midst of a colony. Due to
this many calls are received by
Askari cement just on the basis of
environmental hazards.
FINDINGS
After visiting Askari cement, looking at their operations and behind
the scenes work. We have finally started to understand the major reason for being taught about
operations management. Our topic of interest was location analysis of Askari cement. After
having one to one discussion with the management head, we understand that how much location
analysis matters to the company.

The location analysis decisions is a onetime decisions and are very critical so when these
decision are being made for any cement factory they need to make sure that the supply of raw
materials is enough which will help the industry in operations for a long period of time. For e.g.
if the project team of Askari cement decided to locate in Malakand, as its one of the places were
consumption of cement is greater but it’s not a wise decision. As transporting raw material is
much of a harder task then transporting cement. As the raw material available at Wah cantt is
unlimited and it may not even be finish after many decades.

Even though in Pakistan due to many reasons everything is not as systematic as it should have
been. Even after that, the project team of Askari cement has done what they could to the best of
their abilities, when the project team who is in charge of making the location decisions for any
new plant. They sits down together to brain storm about the factors they need to successfully
operate their plant. The most important things to keep in mind are the raw material needed for
cement manufacturing, the amount of water it may need, electricity supply and the sale of the
product. If you make a plant in a place where the product is not needed and it is not easily
transported then it is of no use.

In case of Askari cement the raw materials are limestone, coal, clay and electrolyte which are all
available to them at Wah cantt also cement production requires a lot of water so there is a lot of
water and electricity supply in Wah cantt and they can easily sell the cement to the prospective
customers as it is not very far from the city. Once all these requirements are set than the project
team who is in charge of making location analysis decisions go into the mines do different
analysis to check whether or not locate here or not.

Prospective customers are one of the reasons for locating in Wah cant another reason is that as
mentioned before the raw material that are needed for cement so those raw materials are very
close to the actual machinery which cut a lot of transport cost for the organization also it is far
from the city so it causes less pollution for the people living in Islamabad and Rawalpindi.

Even though the factory has been built in such an isolated place people have properties nearby
and with time people have started to build houses and start small businesses there due to which
now the industry has to face a lot complaints from the locals and also a lot of government
policies have been imposed on them which causes a lot of problems.to overcome these problems
the industry has implemented new better and efficient technology for e.g. cyclone which has
reduced the pollutions and further new bills for improvement are being passed. Another
important thing is that in cement industry there is no waste every single thing is being recycled.

Furthermore in a large organization like this a lot of different type of talent and skill needed so
what the industry does is they hire all the local talent and many retired engineers from GM join
Askari and the industry provides them with a lot of employee advantages which reduces the
turnover.

As for the packaging material all the cement that is being exported and sold in Pakistan is
packaged in paper bags that come Saudi Arab at the cost of Rs 8/-.

The last thing we were curious about was the ideal location to build any factory of Pakistan so as
we found out the ideal case scenario for any factory of Pakistan is Quetta as its soil carries all the
good properties. Plus exporting cement to nearby area is less costly.
CONCLUSION
After completing this project we came to understand that how our academic study on location
analysis is actually incorporated in the industry. Usually what we study in books are ideal
scenarios but this time we could see that Askari cement did their research on different basis when
they decided to build this plant. There are four major factor needed to consider while establishing
a plant. First is the availability of raw material, second is the water supply, third is the electricity
or fuel supply and forth is the sales dispatch. Askari cement faces no problems in all four factors.
RECOMMENDATIONS
Firstly, a plant near Quetta would be very much profitable as all four key factor for a profitable
location fits and an additional benefit is the ease of transportation of cement especially to
Afghanistan.

Secondly, finding an area where there is no residence permitted to build house as environmental
issues has become one of the heating debate. In future it might become a more pressure able
factor for ease of production.
 APPENDIX A
INTERVIEW GUIDE
INTERVIEW GUIDE
1. What were the main reasons that made you decide to build the plant in these two
area?
2. Did you use any kind of tools to assess whether these locations are profitable for
future operations?
3. Who are the people involved in doing location analysis? Do you have a different team
formed for that?
4. How does being situated near wah cantt impose on investors and operation cost?
5. Since the area around here is developing. Has there been any complaints related to
environmental issues by the residents?
6. How near is your supply of raw material and buyer to your factory? How much time
it takes to transport material to factory then to the supplier warehouse?
7. How long do you have the sufficient supply of raw material?
8. Is supply of labor easily available? What kind of benefit do you provide to your
workers? How much is their daily wage?
9. From where do you get your packaging material?
10. Have you faced any kind of difficulties due to government regulation?
11. Do you believe that the current infrastructure is the best? If not what do you think it
should have been like?
12. Since you also export cement. Wouldn’t it be better if there was factory near cost?
13. What improvement would you like to bring to the location if you had a chance?