Displaying items by tag: DG Khan

Pakistan: DG Khan has completed the installation of its new cement grinding plant at Hub in Baluchistan. A new vertical cement grinding mill with a COPE drive has started trial operations together with cement siloes and a packing plant. Commissioning has also taken place of raw material crushing, transportation and storage units. Loesche, who supplied the mills for the project, said in 2017 that a 1050t/hr raw mill was the biggest raw material mill in the world.

Pakistan: Cement producers have proposed finding an alternative water source in a case about the Katas Raj Temples being adjudicated by the Supreme Court. They have also agreed to pay the Punjab government for any water they use until then, according to the Statesman newspaper. The court was investigating allegations that the pond at the Hindu heritage site was drying out due to water consumption by nearby cement plants.

Bestway Cement and DG Khan Cement proposed that they would submit up to US$17m and US$4m respectively as security deposits until they find alternative water sources. They have also proposed building a small dam in the area, the outflow of which will be maintained in a way that the pond at Katas Raj is not adversely affected. Local cement plants of the two companies are currently using water from nearby river and underground sources.

Pakistan: DG Khan’s sales grew by 8% to US$154m in the second half of 2017 from US$142m from in the same period of 2016. However, its profit after taxation fell by 21% to US$31m from US$40m.

At the beginning of September 2013 Lucky Cement reportedly resigned from the All Pakistan Cement Manufacturers Association. The implications of this departure raise interesting implications for Pakistan's cement industry and its export markets.

Lucky Cement reacted to a growing row over energy prices for cement producers in Pakistan. The government increased electricity taxes for industrial consumers by 55% but only increased gas prices by 17.5%. This has created an uneven rise in the cost of production between those smaller cement producers powered off the national electricity grid and those larger cement producers using captive power plants. Suddenly smaller cement producers have found it much more expensive to make cement than their larger competitors.

Although Pakistan's cement industry contains over 20 producers, it is dominated by four major players - Lucky Cement, Bestway Cement, DG Khan and Maple Leaf – who hold nearly half of the country's cement production capacity of around 45Mt/yr. According to local media covering the spat, Lucky Cement uses 100% captive power generation, DG Khan Cement uses 40% and Maple Leaf Cement uses 45%.

In 2009 the Competition Commission of Pakistan issued fines to 20 cement producers found guilty of acting as a cartel and co-ordinating rises in cement prices. Following the action cement prices fell by 30%. Since then prices have steadily risen again with the industry publicly denying the existence of a cartel as recently as April 2013.

Regardless of whether any collusion exists today, with new cement production capacity announced this week by DG Khan, the incentives for Pakistan's larger cement producers are growing to keep their prices low with the benefit of seizing greater market share. Meanwhile the smaller cement producers could be squeezed on both energy input costs and price.

In Pakistan, if the larger cement producers act on the new market opportunities, industry consolidation seems possible. Internationally, if the big cement producers in Pakistan concentrate more on the domestic market then this presents opportunities elsewhere. For example, markets in East and South Africa receive significant cement imports from Pakistan. If the volumes of these imports decrease then local African producers and rival exporters will benefit.

Changes in Pakistan's cement industry carry implications both at home and abroad in its export markets. Who exactly these changes will be 'lucky' for remains to be seen.

Sri Lankan cement demand fell in the first half of 2013. Yet this doesn't seem to be stopping the cement industry's slow recovery following the civil war that ended in 2009.

As reported by Sri Lankan media around the launch of Holcim Lanka's 2012 Sustainability Report, the local cement industry has seen volumes fall by 7% but this is expected to improve in the second half. Tokyo Cement, a grinding plant operator, confirmed a similar drop in the first quarter of 2013.

Despite the talk of downturn so far in 2013, Tokyo Cement has announced plans for a 1Mt/yr cement plant costing US$50m complete with its own captive biomass power plant. In addition, plans have emerged of a joint venture involving Pakistan's D.G. Khan Cement to build a grinding plant at Hambantota in the south of the island. Costing US$15m, the plant is intended to process exports to South Africa and Kenya.

The explicit intention to produce clinker in Pakistan and then grind it in Sri Lanka before export to a third destination makes an interesting notion. The Pakistan cement producer may benefit from being able to export cement from Sri Lanka with the added security of knowing that the grinding plant is located in a growing market itself. A helpful strategy given Pakistan's cement production overcapacity.

The Hambantota project is also noteworthy because another Pakistan-based company, Thatta Cement, announced in April 2013 that it had signed an agreement with the Sri Lanka Ports Authority to a build a grinding and bagging plant at Hambantota. Also in 2013 the Nepali entrepreneur Binod Chaudhary submitted a US$75m plan for a cement plant in the north of the island.

Of course all of this appears miniscule in comparison to the level of investment Semen Indonesia has chalked up to spend between now and 2016: up to a whopping US$2bn.

Elsewhere in the news this week the price of extending a US Environmental Protection Agency (EPA) deadline has revealed itself to be US$1.5m. Lafarge North America has succeeded in pushing back pollution controls at its Ravena plant by over a year in exchange for interim limits and an investment in air pollution projects in the local community. It's not a fine but the announcement follows other pollution-related payments at cement plants run by Holcim and Ash Grove. Let's hope that any new plants in Sri Lanka avoid these kind of payments.