Working Capital Management of Heidelberg Cement Bangladesh

Working capital administration of Heidelberg Cement Bangladesh Limited (HCBL) Executive Summary: In this report we have introduced the general working capital administration of Heidelberg Cement Bangladesh Limited (HCBL). We have assemble most extreme data from the yearly reports and by taking meeting of Board of Director, M. Abul Hashem; Company Secretary. In this report we have attempted to coordinate the terms and conditions that we learned in FIN340 with HCBL’s working capital administration. We have done money related examination and gave recommendation.Company Overview: Heidelberg Cement Bangladesh is one the biggest makers of value concrete in Bangladesh. Heidelberg Cement Group from Germany, one of the world’s pioneers in development and building material with tasks in excess of 50 nations, claims 61% portions of the organization. In 1998 Heidelberg Cement Group set up its quality in Bangladesh by setting up a gliding terminal with on board packing offices in th e port of Chittagong and by conveying the concrete to the key markets of Dhaka and Chittagong.In 1999 the gathering additionally reinforced its situation in Bangladesh and fabricated a greenfield producing plant close to Dhaka to be specific â€Å"Scancement International Limited† with an introduced limit of 0. 750 million tons for each year. In 2000 Heidelberg Cement bunch likewise purchased a minority position in Chittagong based organization to be specific â€Å"Chittagong Cement Clinker Griding Co. Constrained (CCCGCL)† immediately followed by the securing of an in controlling stake. The plant in Chittagong has an introduced limit of 0. 7 million ton for each year. In 2003, the two organizations were amalgamated and the company’s name was changed to Heidelberg Cement Bangladesh Limited.Corporate Mission: The Corporate Image : Building overall development by building a superior world. Business Culture : Building on nearby duty regarding worldwide achievement Employee Policy : Building our business on the information on our kin Market Strategy : Building our development on a strong base of income Customer Philosophy : Building consumer loyalty Quality Standard : Building on quality items to fabricate notoriety Commitment to Innovation : Building on new advancements decides our future successBrief History Heidelberg Cement Bangladesh Limited meets 13% of the Bangladesh interest for concrete from two plants situated at Dhaka and Chittagong. Heidelberg Cement Bangladesh Limited utilizes 260 individuals the nation over. The organization with 1. 5 million tones yearly concrete creation has become a significant power in the Bangladesh Cement industry in the course of the most recent eight years. In Bangladesh, Heidelberg bunch is one of the biggest remote financial specialists having a venture of 100 million US$ with in excess of 260 representatives working nonstop to appear the strategic this extraordinary worldwide company.By fulfilling the necessities and yearnings of its clients, workers, investors and the more extensive network, the organization can keep up its situation of solidarity as an economical concrete supplier without bargaining promise to long haul dependability and natural duty. Heidelberg Cement Bangladesh Limited is a sister worry of Heidelberg Cement Group. Natural Policy Heidelberg Cement Bangladesh Limited Protection of the earth is a basic piece of Heidelberg Cement Group’s system. As regular assets are the premise of concrete, measures for reasonable ecological consideration are received in all our operations.In Bangladesh, our approach is to deliver great concrete, improve tasks to save money on common assets and forestall contamination so as to make a cleaner and more secure condition. Items and Innovation Portland Composite Cement (PCC) As a component of its tenacious interest for development and steady drive to improve quality, HeidelbergCement has presented Portland Composite Cement (PC C) during 2003. Engrossing European Norms in concrete delivering made HeidelbergCement Bangladesh Ltd. the pioneer in this division. Presently a-days all the concrete processing plants of Bangladesh are creating concrete according to European Norm.The class Portland Composite Cement (CEM II) is the market head in Europe. Concrete created by the BDS EN ScanCement and RubyCement are intended to accomplish the best attributes for its clients; this outcome is accomplished by configuration utilizing clinker and top notch different constituents. PCC has the ideal of: Durability, Long-term quality and functionality. ScanCement and RubyCement are delivered by the European standards BDS EN 197-1:2003. Attributes of ScanCement/RubyCement: Higher Strength ScanCement and RubyCement have higher long haul quality than a standard Portland Cement (OPC).The slag part in the structure contributes that the hole in long haul quality with OPC is enlarging as time advances. Higher Durability The structur e of ScanCement and RubyCement builds the thickness of solid (lower penetrability). Littler voids are the impact of the response between the clinker and the slag. This thickness adds to the sturdiness and lifetime of the development. Better Workability To improve the nature of mortar and stone work Limestone is added to the plan of ScanCement and RubyCement. This improves emphatically the usefulness of the solid. Putting will look smoother, better and more beautiful.The concrete is simpler to utilize. Different Improvements on the previously mentioned upgrades ScanCement and RubyCement lessens warm breaking. Because of the slag in the structure less warmth is produced which diminishes the danger of warm breaks. Besides our brands utilize less water to accomplish the necessary usefulness. This adds to the quality and nature of the development. Every day Cash Inflow and Cash Outflow: Here we have introduced the day by day money inflow and surge of HCBL. 200820072006 Cash got from cust omers6,332,191,0005,573,231,0004,963,425,000 Cash got from other working income84,205,00049,963,00014,630,000Cash Inflow all through the year6,416,396,000. 00 5,623,194,000. 00 4,978,055,000. 00 Daily Cash Inflow17,579,167. 12 15,406,010. 96 13,638,506. 85 200820072006 Payment for budgetary expense(68,293,000)(55,096,000)(96,760,000) Income charge paid(206,802,000)(96,947,000)(35,495,000) Cash paid to suppliers(5,480,284,000)(3,835,873,000)(3,334,740,000) Cash paid for working expenses(628,326,000)(507,571,000)(501,761,000) Cash outpouring all through the year(6,383,702,992. 00)(4,495,484,993. 00)(3,968,753,994. 00) Daily Cash outflow(17,489,597. 24)(12,316,397. 24)(10,873,298. 1) Net Daily Cash Inflow89,569. 883,089,613. 722,765,208. 24 Cash inflows and outpourings are not consummately synchronized. Here we have net money inflows in 3 years; it shows that HCBL had adequate cash gracefully to back its activity proficiently. Changes in Short Term Loan Account: The HCBL don’t h ave any attractive protections account in monetary record. In 2006 the organization has a momentary advance of 467884000 and in 2007 and 2008 the organization has transient credits of 654441000 and 829715000. From 2006 to 2007 there is an expansion in Short term credit record of tk. 186557000.And from 2007 to 2008 the momentary credit has increment by Tk. 175274000. Over the period the transient advance has expanded over the period. The credits were mostly taken from their sister concern Meghna Energy Limited. Regularity sway in Cash Inflow and Cash Outflow: Seasonality Variations in Cash streams from deals: Highest deals: We have come to know from our meeting that there is regularity is available in Heidelberg concrete. Their top in deals and variety in income is around quarterly premise. It has pinnacle of the deals during January to March. In this time they need to keep up enormous inventory.At these time their business increment, accordingly net benefit and income increment and money inflow additionally increments in this first quarter. They have likewise great deals from October to April. Ordinary money inflow comes during this time. From May to September their deals as a rule decline due to blustery season. Money Outflow: When deals increment advertising and transportation costs increment. Accordingly, money surge increments as of now. As crude materials are primarily imported from that point entomb organization exchange that’s why they don’t need to pay promptly a gigantic cash when they import RM. They get an adaptable credit term.Geographical Spread and Customers: Heidelberg Cement has partitioned their business in 6 divisions in Bangladesh. They have two primary branches in Dhaka and Chittagong. They have additionally deals specialists in other four divisions. However, the greater part of the deals produce from Dhaka and Chittagong divisions. At that point Sylhet and deals in other 3 divisions are roughly same. They don't have any physi cal fare of products. In the event that they offer merchandise to EPZ territory and on the off chance that they get paid in dollars, this is named as fare. The over all piece of the pie of Heidelberg Cement is 13%. The business soaked. Still they have opportunity to accumulate more piece of the pie in the industry.They are confronting some limitation since they are global organization. They have 3 sorts of clients: 1. Vendors 2. Corporate clients (e. g. designers, contractual workers) 3. Government ventures (e. g. Mohakhali Flyover, Lalon Shah Bridge, Karnafuli Bridge, Banani Bridge) Except these they have additionally not many retailers who are near them. In any case, as a rule they don't manage retailers. Assortment Procedure: Checks/pay request: Most of the time, they get installments through checks. They likewise get installments by pay request which is constrained. By and large, they don't permit some other methods of payments.They don’t have any money exchange. Assortme nt Points , Concentration Banks, Deposit banks, Lock Box: There are assortment focuses. The clients pay through the neighborhood offices of Dhaka Bank, Dutch Bangla Bank and Marcentile Bank. These banks fill in as assortment focuses. As these nearby banks have loads of branches in Bangladesh it enables a great deal in assortment to process. Thro