Displaying items by tag: Pakistan
Pakistan: Cement dispatches during the six months that ended on 31 December 2014 increased by 6% to 17.1Mt, compared with dispatches of 16.1Mt during the corresponding period of 2013, according to the All Pakistan Cement Manufacturers Association (APCMA).
"The most pleasant aspect of this growth is that it is led by domestic consumption, which increased by 9.10% during July - December 2014," said the APCMA.
Analysis of the dispatches revealed that the plants located in north of the country showed robust growth in domestic consumption, selling 10.9Mt in the domestic markets from July - December 2014 against 9.9Mt during same period of 2013, a 10.5% increase. The southern plants witnessed 2.4% growth in domestic dispatches, supplying 2.10Mt of cement to local markets from July - December 2014, compared to 2.05Mt during the same period of 2013.
Pakistan: People living in the vicinity of Kohat Cement Factory have complained that dust and fumes emitted from the plant's two kilns are causing serious diseases. A group of local elders said that continuous blasts in the mountains near the factory had also caused cracks in the houses of local people, but that the factory administration was not ready to listen to their complaints or provide assistance to repair them.
The elders said that the plant administration was bound under an agreement to pay surface rent to the people on whose collective land the plant had been built, but no dues had been paid to the people since 1992. The agreement also included providing 80% of the jobs in the plant to local people, which the elders said was also being violated.
Pakistan: Attock Cement Limited and K-Electric have agreed to set up 40MW coal-fired plant, enough to power its cement plant. Surplus electricity will be sold back to the grid.
"Attock Cement has signed a Memorandum of Understanding (MoU) with K-Electric for the installation of 40MW coal-fired plant at its Hub plant for its own utilisation and sell surplus power to K-Electric," said Attock Cement.
Fed up with constant electricity cuts and soaring energy prices, Pakistani businesses are exploring options to generate electricity from coal-fired plants. Attock Cement has already discussed various aspects of its planned coal-fired project with suppliers of plants and machinery.
Pakistan: Cement sales grew by 8.9% to 8.2Mt during the first four months of the current Pakistani fiscal year, according to data from the All Pakistan Cement Manufacturers Association (APCMA). In July to October 2014, exports of cement decreased by 4.4% to 2.8Mt.
Cement factories in the north of Pakistan despatched 6.9Mt to the domestic market during the four month period, 10.4% more than the same period of last fiscal. Exports from the north dropped by 12.3% to 1.7Mt. Cement factories in the south sold 1.3Mt, 1.4% more than in the same period of 2013. Exports from this region, however, rose by 12.5% to 1.0Mt.
Pakistan: Cement producers in Pakistan are considering sourcing their coal from Indonesia instead of South Africa. The move is in response to an on-going investigation initiated by the International Trade Administration Commission (ITAC) on alleged dumping of Portland Cement from Pakistan.
The ITAC intends to finish its investigation by the end of January 2015 with the introduction of a preliminary antidumping duty on import of Pakistan cement in South Africa, according to Pakistan local media. Pakistan's Ministry of Commerce has also raised the matter with its South African counterpart in the meeting of Joint Trade Commission (JTC) of the two countries in South Africa in November 2014 but so far no consensus has been reached between the two countries.
Industry sources have said that five to six Pakistan-based exporters of cement constitute the biggest buyers of South African coal. Pakistan is the third largest buyer of coal from South Africa after China and India. Local cement makers collectively import 3Mt/yr of coal worth US$240m from South Africa and export around 1.3Mt/yr of cement worth US$120m.
Pakistan: Cherat Cement has reportedly decided to install a new 1.3Mt/yr capacity production line, according to local media.
Abid A Vazir, executive director of Cherat Cement, said that the expansion is being undertaken to meet expected increases in domestic demand. The increase is expected to be fuelled by government spending on major infrastructure projects, with a special focus on the construction of highways and hydropower as well as housing projects. Expected improvements in the political situation in neighbouring Afghanistan, Pakistan's largest export market, may also give a boost to reconstruction activities.
Tianjin Cement Industry Design and Research Institute has reportedly been contracted to build the plant. Cherat Cement currently operates a 1.1Mt/yr capacity cement plant near Nowshera, in the Khyber-Pakhtunkhwa Province of Pakistan.
Pakistan: Kohat Cement has posted a net profit of US$6.63m in the quarter that ended on 30 September 2014, up by 11% year-on-year compared to US$5.98m during the corresponding period of the previous year. The company attributed the results to better income on cash placements and lower financial charges.
During the first quarter of the 2015 financial year, sales revenues increased by 11% to US$28.1m amid higher cement prices and a slight increase in volumetric sales, which were up by 5% year-on-year. However, Kohat Cement's reduced gross margins restricted earnings growth. The gross margins in the first quarter of 2015 were recorded at 35.5% against 38% in 2014, down by 250%. The decline in gross margins was caused due to the increase in electricity prices by more than 50%.
The quarterly statement also revealed that the company is in the process of installing a 15MW waste heat recovery (WHR) power plant, which is expected to reduce production costs. The plant, which will meet 30% of Kohat Cement's energy requirements, is expected to come online by the end of the 2015 financial year. The project will cost US$19.4m, 80% of which will be financed through debts.
Pakistan: During the first quarter of the current fiscal year, which began on 1 July 2014, the Pakistani cement industry posted growth of 9.9% in local sales compared with sales during the first quarter of previous fiscal year. However, exports declined by 8.1% compared with exports during the year-earlier quarter. Overall growth was 4.9% year-on-year for the quarter.
Cement despatches to domestic markets during the month of September 2014 were 2.42Mt, compared with 2.12Mt during September 2013, an increase of 13.9%. Exports during September 2014 were 0.73Mt against 0.82Mt during September 2013, a decline of 10.6%. Total despatches during September 2014 were 3.15Mt compared to 2.94Mt during the same month of 2013, an increase of 7.1%.
Officials said that Pakistan's cement industry is already facing a lot of issues due to high duty/tax structures, impractical imposition of sales taxes, increasing coal import duties, increasing power tariffs and axel load restrictions for haulage trucks that limit load capacities. Now they claim that it is also facing smuggling from Iran.
Domestic cement uptake in the south of the country is being seriously affected due to the influx of Iranian cement. Statistics showed that, against a 10.8% increase in domestic sales in the north during the first quarter of the current fiscal year, the domestic sales in the south showed an increase of only 5.4%.
A spokesman from the All Pakistan Cement Manufacturer's Association (APCMA) pointed out that despatches in the south should have been higher because the exports from this region during the first quarter of the current fiscal year increased by 12.2% to 0.78Mt against 0.70Mt during same period in 2013. On the contrary, exports from the north of Pakistan declined by 17.3% to 1.28Mt during the first quarter against 1.56Mt during same period last year.
The spokesman said that such lopsided sales are 'puzzling' at a time when the economic activities in the south have picked up appreciably. He said that a deep analysis of the situation revealed that the consumption has most probably increased at par or higher than the northern region but that Iranian cement smuggled without paying the duties and sales tax has penetrated the southern market, which is close to the Iranian border.
Pakistan: Kohat Cement Company Limited posted profits of US$30.9m for the year that ended on 30 June 2014, up by 20% year-on-year against US$25.8m. Cement sales increased to US$125m compared to US$111m in the same period of the previous year. Other income increased to US$2.60m from US$354,248 during the prior year.
South African authorities have started a new investigation into imports of cement from Pakistan. This time the inquiry will examine trade dumping allegations made by local producers including Afrisam, Lafarge, NPC Cimpor and PPC.
The application made by the cement producers provided evidence that the difference between the price of cement (the dumping margin) in Pakistan and for imports from Pakistan in 2013 was 48%. Or, in other words, the price of Pakistan cement imported to South Africa was nearly half that of what is was being sold for in the country that it was actually produced in.
The data submitted to the International Trade Administration Commission of South Africa comes from a report by Genesis Analytics on Pakistan cement prices in 2013 and tax information from the South African Revenue Service. Neither source is readily available for more detailed analysis here but data released by XA International Trade Advisors suggests that cement imports from Pakistan rose to 1.1Mt/yr in 2013 and at a value of US$59m. Roughly, this gives a price of US$55/t. This compares to an average price of US$90/t, from the All Pakistan Manufacturers' Association for the first nine months of the 2012 – 2013 Pakistani fiscal year, giving a dumping margin similar to the allegation by the South African cement producers.
Separate industry sources quoted by the Pakistan media on the story reported that the country supplies 1.5 - 1.6Mt/yr of cement to South Africa, its biggest export market, receiving a revenue of US$125m. Although this suggests a dumping margin lower than the one presented to the authorities it is still high.
Other information of note in the investigation notification is that the Pakistan cement imports are only competing heavily with the local bagged cement market in the Southern African Customs Union, which also includes neighbouring Botswana, Lesotho, Namibia and Swaziland. The notification discounts bulk cement imports from Pakistan as being 'prohibitively' expensive suggesting that the Pakistan cement producers have no import infrastructure in southern Africa or that something else is stopping them. For example, the country's market leader for production, Lucky Cement, has export facilities in Karachi with silos and automatic ship loaders. Yet it's only 'brick-and-mortar' presence overseas are projects building an integrated plant in the Democratic Republic of the Congo and a grinding plant in Iraq.
It may also be worth considering that South African industry newcomer Sephaku Cement hasn't joined the dumping allegation. The Dangote subsidiary was set to start producing clinker in late August 2014. This is out of character considering how prominent the Nigerian-based cement producer has been in campaigning against imports to its home nation. However, the Aganang plant in Lichtenburg, North West Province is over 700km from the coast and presumably safe from foreign imports at present.
One final question occurs. How are Pakistan cement producers able to dump bagged cement on the South African market at prices lower than what they are selling it for at home? If individual producers sold their excess at home at a lower price they could potentially undercut their competitors and make a profit. There are many barriers, from input costs to industry structural issues and other reasons that may be preventing this. However, if the South African cement producers succeed in their latest attempt to block imports from Pakistan it may add more impetus to remove such barriers.