Displaying items by tag: Pakistan
Pakistan: Pioneer Cement has signed an agreement with CITIC Heavy Industries, China to purchase a 12MW Waste Heat Recovery (WHR) system. The company's plant is located at Chenki, District Khusshab, in the heart of Punjab Province, 250km from Lahore. According to the company notice sent to the Karachi Stock Exchange (KSE), the total estimated cost of the plant is US$14.7m.
Pakistan: Cement exports fell by 26.1% to 560,000t in May 2015 as cheap Iranian cement is eating Pakistan's market share in Afghanistan, according to the All Pakistan Cement Manufacturers Association (APCMA). Pakistan exported 750,000t of cement in May 2014.
"Iranian cement is fast making inroads into Afghanistan," said an APCMA spokesperson. APCMA data showed that exports dropped by 10.8% to 6.64Mt between July 2014 and May 2015. Cement makers exported 7.44Mt in the same period of the 2013 – 2014 financial year.
The APCMA appealed to the government to support local manufacturers in winning back the Afghan market by withdrawing duties, which would enable them to compete with highly-subsidised Iranian cement. There is a 5% federal excise duty and a 17% general sales tax on the retail price of cement. "The taxes are equal to around US$1.56/bag," said the spokesperson. "The incidence of high taxation encourages evasion and negatively impacts consumption." He added that the government should gradually bring federal excise duty to zero, as announced by the previous government.
Exports from the south increased by 4.5% in the July 2014 to May 2015 period. These exports go via the sea. However, exports from the north decreased by 18.3% due to the Iranian cement factor, as exports from the north usually go to Afghanistan. The spokesperson said that Iran is also dumping its cement in Balochistan, Pakistan and that cement smuggling from Iran to Balochistan is resulting in substantial losses to national exchequer. "Policy makers ignored warnings from the cement industry over the inundation of Iranian cement in Afghanistan," he said. "It has penetrated our local market." He said that full taxes are not paid on Iranian cement imports.
A road trailer entering Pakistan from the Taftan border carries up to 60t of cement. A transporter issues two different weight loads receipts, one for the customs department and another one for freight purposes. The APCMA said that if taxes are fully paid, the price of Iranian cement is equal to that of domestic cement.
Pakistani cement manufacturers dispatched 2.49Mt of cement in May 2015 compared to 2.3Mt in May 2014, up by 8%. Cement sales were 25.5Mt in the 11 months that ended on 31 May 2015, compared to 23.6Mt in the corresponding 2013 – 2014 period, depicting over 8% growth.
Pakistan: The Pakistan government is working on two options to challenge South African anti-dumping duties on Pakistani exports of cement. The first step will be to hold bilateral consultations with the South African government to resolve the anti-dumping duties favourably. Failing that, then the Pakistan government has the option to take the issue to the Geneva-based World Trade Organisation (WTO), according to an official from the Pakistan National Tariff Commission (NTC).
The International Trade Administration Commission of South Africa (ITAC) imposed provisional anti-dumping duties of 14.3 – 77.2% on Portland Cement originating in or imported from Pakistan from 15 May 2015 for six months. The duty was imposed on bagged cement.
According to local media, Lucky Cement, the major supplier to South Africa with a 55% market share, seems to have had sales volumes little affected by the anit-dumping measure due to its low duty. However, Attock Pakistan, the second largest supplier with a 35% market share, has been the worst hit due to its high anti-dumping duty. Pakistani cement exporters are exploring other markets in southern Africa.
South Africa: South Africa has imposed provisional anti-dumping duties of 14.3 – 77.2% on Portland Cement originating in or imported from Pakistan from 15 May 2015 for six months. Lucky Cement is subjected to pay 14.3% duty, followed by Bestway at 77.2%, DG Khan at 68.9%, Attock Pakistan at 63.5% and other cement makers at 62.7%.
This follows an investigation initiated by the International Trade Administration Commission of South Africa (ITAC) on 22 August 2014 after a number of local cement producing companies submitted an application on behalf of the South African Customs Union (SACU). A number of companies, including Afrisam, Lafarge Africa, NPC Cimpor and PPC, approached the ITAC and established a prima facie case that convinced the commission to initiate an investigation on the basis of dumping, material injury, threat of material injury and causality. However, the application was opposed by Pakistani cement producers, such as Lucky Cement, Bestway Cement, DG Khan Cement and Attock Cement.
The commission found that the industry is suffering material injury through a decline in sales volume and output as well as profits and cash flow. The industry also experienced price undercutting and price suppression. The commission further found that a threat of material injury exists given that Pakistan has increased its production capacity; Pakistan's exports to its traditional markets are declining and imports from Pakistan into South Africa increased by >600% in 2010 - 2013.
The commission made a preliminary determination that Portland cement originating in or imported from Pakistan was dumped into the market. In order to prevent further injury to the industry while the investigation is under way, the commission has requested the SARS (South African Revenue Service) to impose the provisional measures on imported Portland cement originating from Pakistan for six months.
Pakistan/Afghanistan: Pakistan's cement exports to Afghanistan fell by 24% during the first nine months of the 2015 fiscal year due to the exit of North Atlantic Treaty Organisation (NATO) forces and smuggling. Industry sources said that the withdrawal of NATO forces from Afghanistan is also affecting Pakistan's economy.
"Since the announcement of the exit of NATO forces, Pakistani cement exports to Afghanistan have been in decline as development work in Afghanistan has come to standstill after the exit of foreign forces, resulted in lower cement demand," according to the industry sources.
The set-up of a new cement plant in Tajikistan has also affected Pakistan's cement exports to Afghanistan. Previously, Pakistani cement was being exported to central Asian countries via Afghanistan, but the new plant in Tajikistan targets the same markets. The industry sources said that the smuggling of Iranian cement is another major factor behind the recent decline in exports to Afghanistan.
According to official statistics of All Pakistan Cement Manufacturers Association (APCMA), the cement export to Afghanistan notably fell by 24% during the first nine months of the current fiscal year. Pakistan exported 2.3Mt of cement to Afghanistan during July 2014 - April 2015 compared to 3.05Mt in corresponding period of the previous fiscal year.
"We are expecting a further fall in cement exports to Afghanistan in the coming years as NATO forces were the major consumer of Pakistani cement. As per industry estimates, by the end of this fiscal year, cement exports to Afghanistan will be some 2.7Mt," said the industry sources.
Pakistan: Bestway Cement, a subsidiary of Bestway Group, has announced assumption of management control of Lafarge Pakistan. This follows the company's successful bid for 75.86% of Lafarge Pakistan's shares for US$329m in July 2014. Bestway Cement also acquired another 12.07% shares of the target company through the public offer process taking its shareholding in Lafarge Pakistan to 87.93%.
Acquisition of Lafarge Pakistan's 2.5Mt/yr cement plant located in Chakwal, means that Bestway Cement has now become the largest cement manufacturer in Pakistan with a total capacity of more than 8Mt/yr representing 18% of the entire industry's capacity in the country. Bestway intends to invest nearly US$30m in the acquired company including, among other things, an environmentally friendly waste heat recovery power plant.
Pakistan/Iran: The All Pakistan Cement Manufacturers Association (APCMA) has condemned the illegal import of cement from Iran and tax evasions at the import stage by misdeclaration, which is seriously affecting Pakistan's cement industry. The APCMA has urged the government to stop the trade immediately.
An APCMA spokesman said that the quantity of cement being imported from Iran has been found understated on the Customs Goods Declaration form, resulting in a substantial loss to the national exchequer. This is done via the collusion of dealers with Customs departments officials and transporters. Not all of the necessary tax is being paid on Iranian cement imports.
"At present, the country's surplus cement production capacity is more than 20Mt/yr and it is coming under further pressure because of the illegal imports of cement. It is not only damaging the local industry, but also through misdeclaration it is giving a substantial loss to the national exchequer," said the APCMA spokesman. He urged the government to include cement in a negative list of import items so that the country's surplus production capacity could be used to the maximum. "This would help to increase economic growth in the country and will also curb malpractices at different levels."
Iraq/Pakistan: The Economic Coordination Committee (ECC) has approved Attock Cement Pakistan Limited's (ACPL) request to establish a cement production unit in Iraq.
The ECC meeting, chaired by finance minister Ishaq Dar, approved the proposal to allow Attock Cement Pakistan Limited (ACPL) to remit US$24m for the establishment of a grinding plant in Basra, starting from March 2015 onwards. The proposed investment venture is expected to bring foreign exchange through dividends repatriation and growth in clinker exports. As ACPL intends to hire 50% of its labour force from outside Iraq, the venture is expected to create employment opportunities for Pakistanis.
Pakistan: Lucky Cement Limited has reported a considerable rise in its net profit for the first six months of its 2015 financial year, which ended on 31 December 2014.
It net profit rose to US$54.9m, some 8.54% higher than in the same period of its 2014 financial year. Lucky Cement's gross profits increased by 9.03% during the period and its net sales revenue improved by 9.37% to US$210m, up from US$192m in its 2014 financial year.
Lucky Cement's local sales volume grew by 9.20% year-on-year to 2.02Mt, compared to 1.85Mt in the same period of its 2014 financial year. Its export sales volume grew by 2.24% to 1.23Mt compared to 1.21Mt in the same six months of its 2014 financial year. Lucky Cement maintained its market share at 19%. During the period, its combined sales revenue increased by 9.37%, which was mainly contributed to by increased sales volumes.
Pakistan: Mian Mansha's DG Khan Cement Ltd plans to build a US$300m plant near Karachi as economic growth boosts demand. This marks its first plant build since 2007. The new plant near Hub, west of Karachi, will produce 2 - 2.5Mt/yr of cement. Construction is targeted for completion late in 2018. The plant will be financed 40% through internal cash and the rest through debt, said Niazi.
"There will be a shortage domestically in three years if there is 10%/yr growth in demand," said CFO Inayat Ullah Niazi. DG Khan's two cement plants have operated near full capacity for the past two years. Pakistan's output is projected to expand by 43% in the year that ends on 30 June 2015 and 47.5% in the following fiscal year.
DG Khan Cement announced a net income of US$33.3m for the first six months of its financial year, which ended on 31 December 2014, up by 27% compared to US$26.2m in the same period of 2013. The company's earnings surged by 93% quarter-on-quarter to US$22m during the second quarter of its financial year. With stable off-take and prices, revenue increased by 2% year-on-year to US$124m during the first half of the fiscal year because of an improved sales mix. Revenues jumped by 18% quarter-on-quarter to US$66.8m during the second quarter.
"The earnings were significantly above our estimates due to higher-than-estimated other income and lower-than-expected taxation charges," said DG Khan.