Displaying items by tag: Pakistan
Pioneer makes changes to its board
10 October 2012Pakistan: Faisal Imran Hussain Malik has been appointed as a director on the board of Pioneer Cement in place of Asif Hussain Bukhari. In addition Shafiuddin Ghani Khan has been elected as chairman of the board with effect from 29 September 2012. The Lahore-based cement producer made the announcement in a letter to the Karachi Stock Exchange on 4 October 2012.
Capacity utilisation in Pakistan falls to 68.3%
07 September 2012Pakistan: Capacity utilisation in the Pakistan cement industry has fallen to 68.3% in the first two months of the 2013 financial year, according to data released by the All Pakistan Cement Manufacturers Association (APCMA). The figure is the lowest since 2002.
Demand for cement declined during July 2012 and August 2012 due to Ramadan and heavy rains in the country. Total cement despatches declined by 1.64% in July and 2.82% in August.
Exports of cement have also started to decline in Pakistan since hitting a high of 11Mt in 2008-2009. In 2011-2012 exports were 8.57Mt. This decline has continued in 2012-2013 as exports fell year-on-year by 5.87% during July 2012 and August 2012 to 1.46Mt from 1.55Mt
Exports to India decreased by 38% in July 2012 and August 2012 to 75,800t. They have been declining since India and Pakistan opened their borders for liberal bilateral trade.
"The decline is not due to a lack of cement demand in India but because of very stringent non-tariff barriers erected by our neighbour," said the APCMA. It added that cement from Pakistan is preferred in India due to its better 'quality.'
Pakistan is unable to export larger quantities of cement to India due to trade barriers, labour shortages on the Indian side of the Wagah border crossing, and short supply of railway wagons. The APCMA has also blamed delays in cement plants registering for export licenses.
Exports to Afghanistan are also declining due to economic slowdown. Exports declined by almost 5% in July 2012 and August 2012.
Lucky Cement’s annual profit jumps by 71%
16 August 2012Pakistan: Lucky Cement has declared its best ever profit after tax of US$71.8m for the year ending 30 June 2012. The result is 70.8% higher than the net profit of US$42.1m made in the same period in 2011.
The company's gross profit increased by 46% as its net sales revenue improved by 28.1% to US$353m from US$276m. Higher sales volume in the domestic market coupled with better retention prices attributed to the record-breaking profit. Local sales volumes grew by 7%, to 3.72Mt from 3.46Mt. However, export sales volume fell by 4% from 2.35Mt to 2.25Mt, mainly due to a focus on the domestic market, which contributed in increasing the overall profitability of the company.
Lucky Cement undertook various capital expenditures in the year ending 30 June 2012, including new refuse-derived fuel (RDF) and tyre-derived fuel (TDF) plants and a new European-origin packing plant. The RDF and TDF plants replaced up to 20% of coal consumption with alternative fuels. During the year, a project of supplying electricity to the Hyderabad Electric Supply Company (HESCO) was also successfully completed whereby a grid station and 22km of interconnection lines were installed. The company is also working on joint venture investments for a cement plant in the Democratic Republic of the Congo and a grinding facility in Iraq.
Lucky strike for imports to South Africa
15 August 2012Pakistan's Lucky Cement received the 'all clear' for its cement imports from the South African regulators last week. The situation exposes the increasingly competitive market in the country after the South African Competition Commission cartel investigations in 2011.
Sales of Lucky Cement were originally shut down in 2011 due to accusations made by its competitors, including Pretoria Portland Cement (PPP) and Natal Portland Cement (NPC). They complained that Lucky was not complying with South African standards. South Africa's National Regulator for Compulsory Specifications (NRCS) then ran its independent investigation and released its results last week.
The regulator's full 28-day test found no evidence that Lucky Cement imports were non-compliant with regards to their quality. A minor infringement concerning underweight bags was found and fixed. However, about a week beforehand, Lafarge South Africa's CEO said that his company was considering approaching another trade body with concerns about 'low-quality cheap cement' imported from Pakistan.
More serious criticism came from the Cement and Concrete Institute when the NRCS admitted that it didn't know how much cement had been imported into South Africa so far in 2012. The NRCS is supposed to inspect and approve the testing bodies each producer and importer uses for every 500t of cement.
Lucky Cement has been a regular importer of cement to South Africa since 2009. It exports around 1.65Mt/yr to over 22 countries in South East Asia, the Middle East and Africa. CCI figures reckon that 140,000t of cement was imported to South Africa in the first quarter of 2012, mostly by Lucky Cement. According to the Global Cement Directory 2012 South Africa's capacity is around 11Mt/yr.
Four domestic producers – Lafarge, PPC, AfriSam and NPC – were accused of cartel activity by the South African Competition Commission, in a case that has been running since 2008. PPC confirmed the existence of the cartel, whilst Lafarge and AfriSam were fined US$19.6m and US$16m respectively.
By letting Lucky Cement resume the sale of its cement in South Africa, the NRCS has arguably done more than the Competition Commission to prevent cartel activity. With reports surfacing that other producers in Pakistan and India are considering exports to South Africa, domestic producers are going to have to become more inventive and more competitive.
People in the cement industry in brief
08 August 2012Pakistan: Flying Cement has made changes to its board of directors, effective 6 August 2012. The new board consists of Mr Agha Hamayun Khan (Chief Executive), Mr Kamran Khan (Director and Chairman) and Mr Momin Qamar, Mr Yousaf Kamran Khan, Mr Qasim Khan, Mrs Shaista Imran, Mrs Samina Kamran and Mrs Misbah Momin as directors.
Agha Hamayun Khan replaced Kamran Khan with effect from 23 July 2012.
India: Mangalam Cement Limited has said that Mr R C Gupta, Company Secretary, Compliance Officer and Chief Financial Officer of the company resigned with effect from 8 August 2012.
Environmental warnings issued to Pakistani producers
06 August 2012Pakistan: The Environment Protection Department (EPD) issued notices to eight cement factories across the Punjab region during the week ending 3 August 2012 for failing to install devices to mitigate dust pollution levels.
The notices were served under Section 12 and Section 16 of the Punjab Environment Protection Act 2012 after a month-long survey. This was initiated after three cement factories in Chakwal, DG Khan Cements, Bestway Cements and Pakistan Cements, were found not to be using electrostatic precipitators (EP), air bags and other devices, despite having installed power generators to keep them operational.
Dandoot Cement Factory in Jhelum, Gharibwal Cements in Chakwal, Maple Leaf Cements in Mianwali and Pioneer in Khushaab have also been issued notices for not installing EPs. Fauji Cements in Attock has been issued a notice for mishandling raw materials. Bestway Cement was also given a notice for drawing too much water from communal wells. A case involving Flying Cements was forwarded to the Environment Tribunal after the factory management did not respond to several notices issued for not taking any measures to mitigate its dust emissions.
EPD spokesman Naseemur Rahman Shah said that the only way these factories could mitigate dust emissions was to install their own power plants so that EPs were not reliant on external power sources. EPs can trip out when external power provisions fail, even for a short while, and can take up to 20 minutes to restart operation.
Commission hits back over Lafarge accusations
03 August 2012South Africa/Pakistan: Pakistan's Trade Commission in South Africa has defended products made by a Pakistani cement company, Lucky Cement, saying that they meet all quality standards in South Africa. The move follows accusations from senior figures within Lafarge's South African unit. The Commission also pointed out that the products were cheaper than established South African-manufactured products.
Lafarge had earlier said that it was considering approaching the International Trade Administration Commission of South Africa to protect the local market from what it deemed to be low-quality, cheap cement from Pakistan.
Pakistan cement sector under financial pressure
06 July 2012Pakistan: The All Pakistan Cement Manufacturers Association (APCMA) has revealed that the Pakistan cement sector remained under financial pressure during the fiscal year 2011-2012, which ended on 30 June 2012. This was attributed to increases in input costs in electricity, diesel, paper sack and gypsum and a devaluation of the Pakistani Rupee. However, for the same period the industry's local cement despatches met the highest levels ever recorded in the country.
Revealing the performance of the cement sector in the fiscal year 2011-2012, a spokesman for APCMA said that local cement despatches were 23.9Mt, an increase of 8.84% year-on-year. However exports remained under pressure throughout the year and declined by 9.12% to 8.57Mt. 2011-2012 was the third consecutive fiscal year when exports declined.
In 2011-2012 the cement sector increased its capacity by 3Mt. Total production capacity increased by 7.23% to 44.2Mt from 42.2Mt in 2010-2011. Capacity utilisation remained under pressure due to sluggish export demand, a sluggish construction sector, lack of investment in the housing sector and the government's 'inability' to initiate mega-projects.
Exports to India were only 0.61Mt in 2011-2012, a figure well below the expectations of the cement sector. However, exports to Afghanistan remained stable at 4.72Mt in 2011-2012. Exports to other destinations by sea declined to 3.25Mt, a drop of 17%.
Lucky starts supplying power to grid
04 July 2012Pakistan: Lucky Cement has started supplying 20MW/hr of electricity to Hyderabad Electricity Supply Company Limited (Hesco), according to a company announcement. The company said that it was aiming to start selling the same amount of electricity to Peshawar Electricity Supply Company Limited (Pesco) by the middle of July 2012. Speaking on 2 July 2012, a company spokesman said that the talks were underway on the sale and purchase agreement with Pesco.
Since 2010 Lucky Cement has operated 22MW waste-heat recovery units on two cement plants in Karachi and Pezu. The sale of surplus power has enhanced the company's balance sheet, as it struggles against continued low demand in the Pakistan market.
Pakistan consumption stagnant for 4 years
14 March 2012Pakistan: Cement manufacturers in Pakistan are regretting their decision to increase capacity as consumption has remained stagnant over the past four years, according to the All Pakistan Cement Manufacturers Association (APCMA). Exports are also declining, forcing the sector to operate at 69% of its installed capacity.
An APCMA spokesman explained how capacities were increased when the economy was booming and that most of the plant capacities were increased in the northern part of the country. For these regions Afghanistan was the only export market but its potential was limited. Exports to India were limited at that time and today as well due to many non-tariff barriers erected by India.
The spokesman regretted that the growth during the past four years had been much below expectations and that the government also failed to provide funds for, what he called, 'essential' infrastructure. The fierce competition between the mills sitting on huge capacities kept the rates of the commodity much below the average inflation in the country, he added. Rates of inputs of the industry increased in line with the inflation and rupee devaluation while the cement prices increased by just 6% from the average cement rates in 2006.
The APCMA spokesman added that exports, which provided some relief to the industry in the past few years, have declined at a rapid pace during the first eight months of the current fiscal year (July 2011 to February 2012). During this period the decline in exports was 5.57% to 5.62Mt from 5.95Mt during the corresponding period in 2010-2011. He said that exports to India, mostly via train, had increased by 39.5%.