Student Name: Teoh Yin Ling Student No: CT0261066
1 Description of the company
YTL Cement Bhd was founded by Executive Chairman Tan Sri Dato’ Seri Dr Yeoh Tiong Lay after whom the company is named. It is a manufacture of cement, concrete, and quarry products and provided materials related to construction industrial. Currently it is the second largest cement producer and the largest producer of ready-mixed concrete in Peninsular Malaysia. Cement is an inorganic, non-metallic substance with hydraulic binding properties, and is used as a bonding agent in building materials. It is a fine powder, usually grey in colour, that consists of a mixture of the hydraulic cement minerals to which one or more forms of calcium sulphate have been added (Greer et al., 1992).
YTL Cement Bhd is one of the business by YTL Corporation Bhd (YTL Corp) since 1955. YTL Corp is an infrastructure conglomerates. Other of subsidiaries are power supply, hotels and properties, land and development, high speed rail, operating and maintenance activities, IT incubation, real estate investment trust, and carbon consulting.(ytl.com, 2016)
According to (The Star Online, 2010) “With its cash reserves amounting to about RM10.8bil, analysts said YTL Corp could easily acquire assets up to US$25bil-US$30bil without the need to raise more money. It had been reported that the group was looking at acquisition opportunities in the water utilities, power generation and cement businesses, especially in China where it wanted to grow its presence in cement and power generation.” Therefore, unlimited outlook of YTL Corp is being affected by attention.
2 PESTEL analysis
Political
Political factors are the stability of political issues in Malaysia helps to reduce disputes between each other and then business growing faster with pro-business policies. Political included government support, regulations and standards, employment laws, transportation policy, environmental regulations and tax policy.
“Required standards and new regulations, laws and cumbersome bureaucracy such as labour laws, health and safety laws and waste disposal laws. Government support and policies, research & Development Centres and taxation are the next political factors ranked by 4.30, 4.20 and 2.91 average indexes. The need to adopt an innovative method and component standardization is the main issue to do with the government in the Malaysian construction industry (Abd Shukor, et al., 2011).
Economic
According by MSC Malaysia, “Malaysia is one of the most cost-effective and easiest places to do business. Malaysia's corporate tax today is 28%, one of the lowest in the region.”
“As a conglomerate that employs over 12,000 people globally, we believe that our tremendous economic growth has been mainly attributed to having the right talent, with the right skills in the right roles, thriving in the right culture and successfully driving the Group into its next phase of growth and development.” (YTL.com, 2016, p.1)
Social
Responsibility of social factors are the most concern by YTL Corp, support to community and non-profit organisation, develop for young generation, and promote various cultures.
“Among the social factors, the factors which were suggested to have the highest scores are employment issues and professionalism, and training and education. The IBS method requires a professional workforce to handle construction projects. Training and development of the workers are important to ensure that they are competent to join the projects.” (Chung, 2006)

Technological
Factors of technological are awarded Green Label by Singapore, Sirim QAS International Eco Label by Malaysia when processing cement. Low Heat (LH) and Sulphate Resistant (SR), in accordance with BS EN 197-1:2011. As Low Heat cement, it complied with the heat of hydration limit of 270 J/g.
Provided training to workers and standardization of manufacturing process and construction, quality of materials and better finishes to any projects.
Environmental
Environmental issue in Malaysia was not much affect to YTL but the company’s strategy and core business decisions they did their best to protect and improve the natural environment for future generations by few operation:
YTL turns industrial emissions carbon footprint into renewable energy to reduce greenhouse gas (GHG). Improving water efficiency in their operations by decrease water usage, develop to generate clean water and recycle water from the operations. Remain committee to the concept of 3Rs - Reduce, Reuse and Recycle – to minimising waste generation (YTL.com, 2016, p.4)
Legal
The legal impact of Malaysia’s GST performance since Apr 2015, it is effected to every companies. It would be faced complication of cash flow due to late payment from client (KJ, 2014). “Industrial relations in Malaysia are harmonious. Trade disputes and strikes are very unusual in the country due to Malaysia's labour laws which safeguards the interests and spells out the rights and responsibilities of employers and employees. This in turn provides a legal framework for the orderly conduct of industrial relations in the country.” (MSC Malaysia,2012)

3 Porter’s Five Forces Analysis
Competitive rivalry within an industry
According to (Wood, L. 2012), “cement companies of the country continued on their path of growth in the first quarter of the year. Revenue of cement companies increased up to 19.8% appropriately in the first quarter of FY12. Four major of cement industrial -Lafarge Malaysia, YTL Cement, Tasek Corp and CIMA (Cement Industries of Malaysia Berhad) together, accounted for 96 percent of the annual cement production in the country.”
Strengths of YTL Cement's an advanced has processed of 1 million tonnes per annum, making it the largest in the East Coast of Peninsular Malaysia and it brings more opportunities to fulfill markets demand. The weakness of there are more competitors causing problem of low profit and threat among competitors.
Threat of new entrants
High retaliation possible from existing companies, if new entrants would bring innovative products and ideas to the industry. A few legal barriers protect existing companies from new entrants such as government regulations can reduce the threat of new entrants come into market.
The major challenges or weakness in front of Malaysian cement industry are affected by the global economic fluctuations like rising fuel and coal price, then it continuity influence to transportation cost. The industry will also have to meet global pollution and emission standards which will take considerable amount of investment
Threat of substitutes products or services
A newly product to substitutes cement is call GGBS and PFA. These materials are environmentally friendly. “The strengths in terms of resistance to chloride attack, sulphate attack and alkali-silica reaction. It follows that the structure would remain to be serviceable for longer period. Apart from the consideration of long-term durability, the use of PFA and GGBS results in the reduction of heat of hydration so that the problem of thermal cracking is greatly reduced. The enhanced control of thermal movement also contributes to better and long-term performance of concrete.” (Chu, V. 2015, p.2)
Due to issues of global warming, “the manufacture of one tonne of cement generates about 1 tonne of carbon dioxide” (Chu, V. 2015, p.1), consumers will more acceptant new products to replace traditional cement if the price is not much different. It could be the weakest for cement industrial in the future. Meanwhile, cement is still the only one material used in construction in the whole world. It is quite stable, especially the demand and opportunities in Southeast Asia is increased maintain its position in the market.
Bargaining power of Suppliers
Purchasing raw materials from large number of suppliers to select suitable at least two responsible suppliers for every single material to prevent break off supply. Even the ingredient of cement is not widely accessible. It is: Calcium Oxide (Lime), Silicon Dioxide (Silica), Aluminium Oxide (Alumina), Calcium Sulphate, Iron Oxide, Magnesium Oxide, Sulphate, Alkalis. (Biswas, L. 2013). For any emergency of shortage, use another type of material to instead. If no substitutes, be forced to exchange supplier and order with others.
Based of materials not generally available in market, it’s seem like the weakness for the company. Once suspend and shift to other suppliers, it effected to cost and profit.
Bargaining power of Customers
Concrete is a key building material for a variety of applications. It made from combination of cement, chemical, water, sand and rock to process different grade ratio (Kaushal, K. 2015). All cements are supply to downstream like ready-mix or concrete company. It is strength for cement company like YTL, because less of manufacturer cement in Malaysia but large number of concrete companies. Additionally, good quality is a trademark to YTL cement so practically requirement for cement increase year by year together with offer job opportunities as well.
4 Strategic Recommendations * Recommend for the issue of faced cash flow problem due to difficult to collect money from credit terms customer, perhaps need to do some adjustment or strategic from internal management. For example, insist to pay for outstanding before new order; change to cash sale, paid and get at the same time. * Even YTL is the major supplier to East Coast in Peninsular Malaysia and second large cement producer in Malaysia but some located is far from city or mountainous just like Sabah or Sarawak it is hard to delivery with heavy transportation. Suggestion to YTL, modify a light and medium size of cement transport, for easier and convenient to delivery. * One additional element which is more difficult to quantify, but which has an impact on long-term investments in the cement industry, is the high degree of regulatory uncertainty. When taking investment decisions, companies look for a stable regulatory framework that allows for long-term business planning. In addition, companies adopt a holistic approach to the three pillars of sustainability in each of their investment or restructuring decisions. Therefore, legal certainty is essential. * Innovation has also focused on new recycling schemes in order to achieve high levels of material recovery thereby reducing dependence on natural resources and associated transportation costs. It also limits the need for landfill. The cement and concrete industry’s commitment to material recovery and recycling has led to a reduction in construction and demolition waste. * The recovery of waste in the cement sector, which is also referred to more commonly as ‘co-processing’, is the optimum way of recovering energy and material from waste. * Energy efficiency is an important component of a company’s environmental strategy.

5 Conclusion
Product development strategy should be used if the current market growth is slow and the market is saturated. Based on PESTEL analysis, Porter’s 5 forces analysis and SWOT analysis, development of YTL Cement Bhd is growing year by year. It’s brought full of confidence to our future. Furthermore, YTL not just only running business to earn profit, but they are concern and doing well on issue of technological, social and environmental of domestic and global.
“Substantial potential for energy efficiency improvement exists in the cement industry and in individual plants. A portion of this potential will be achieved as part of (natural) modernization and expansion of existing facilities, as well as construction of new plants in particular regions. Still, a relatively large potential for improved energy management practices exists.” (Kema, 2015)