Swot & Pest

1. Due to shortage of rupee and increasing rate of outflow of rupee from the economy, the government suspended all housing loan in 2013 which caused a drastic fall in demand in construction sector having a similar effect on the demand for cement. After the ban on loan was lifted but with high borrowing rates the growth in demand for cement continues to be poor and is threatening future profitability of the company.

2. The road network for internal market becomes expensive due to mountainous terrain leading to increased price per bag of cement. The road network is prone to climatic change. Eg. Landslides during Monsoon which causes disruption of supply to the three main depots of the company located in Thimphu, S/jogkhar & Phuentsholing and Supply of raw materials may not be regular from mines in Eastern Bhutan during such times. Now Supply to external markets of Sikkim, Assam and West Bengal is threatened by unstable political situations in the region which causes total shutdown of cross-border vehicle movement. This threatens the company’s growth and expansion.

3. It is a threat to the company’s capability to increase exports as Competitors in the Indian Market like UltraTech Cement & Star Cement have access to raw materials from more mining sources and at lower prices and offer their products at competitive rates thereby holding a majority share in the Indain market. With logistic advantage as they are based in India, they are able to offer their products at a lower price.

4. The depleting reserve of high grade limestone, sandstone, clay and iron ore from two captive mines operated by the company is a potential threat to the year-round and regular production of cement.

5. Global increasing fuel prices poses a threat to the turnover of the company as the extra charge of transportation will be added to the cement price which can decrease the demand for the product and threaten the company’s external and internal market