Displaying items by tag: Lucky Cement
Lucky Cement records highest ever profit after tax
19 September 2013Pakistan: Lucky Cement Limited has reported a year-on-year rise of 43.2% in profit after tax to US$91.9m for the year ending on 30 June 2013, from US$64.1m for the same period in 2012. This is the highest profit the Pakistan-based cement producer has ever recorded.
Sales by Lucky Cement rose by 12% to US$414m from US$370m. The company saw cement sales volumes grow by 1.4% to 6.06Mt from 5.97Mt. Local sales rose by 1.3% to 3.77Mt from 3.72Mt. Exports grew by 1.7% to 2.29Mt from 2.25Mt.
In its annual report Lucky Cement announced that two vertical grinding mills at its Karachi cement plant are scheduled to become operational in the last quarter of the 2013 – 2014 financial year and in September 2014 respectively. A tyre-derived fuel plant is planned to replace coal usage at it Pezu plant. The company is also in neogiation to supply surplus electricity generated at Pezu to the Peshawar Electric Company.
Overseas projects include a joint-venture cement plant in Democratic Republic of Congo, which is at the financial stage, and a joint-venture cement grinding plant in Iraq, which is due for completion at the end of October 2013 with commissioning and trial production due from early November 2013.
In its outlook Lucky Cement noted that cement consumption will rise in Pakistan due to the government's funding of the Public Sector Development Programme. However, rises in utility costs, weakening local currency and other factors will present challenges to the cement industry. The company intends to mitigate utility cost rises by investing in waste heat recovery systems at its Karachi and Pezu captive power plants. Each plant will producer 5MW, with expected completion set for December 2014.
Lucky strike? Changes in Pakistan’s cement industry
11 September 2013At 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.
Lucky Cement plans US$240m cement plant in DR Congo
03 June 2013DR Congo: Pakistan-based cement producer Lucky Cement has announced plans to begin construction of a US$240m plant in Democratic Republic of Congo (DRC) in June 2013. Lucky Cement has a 50-50 agreement with the Rawji Group, a banking company, to start production via a company called Nyumba Ya Akiba (NYA), according to Reuters.
"Now's the time to reconstruct a country that was destroyed by civil war," said Sajid Feroze, NYA's chief financial officer.
The proposed factory, to be located around 250km from the capital Kinshasa, is due to come online in late 2015 and will produce 1.2Mt/yr, more than double the current total production in Congo. The country currently consumes just 15kg/capita/yr. Neighbouring Angola uses 300kg/capita/yr and the global average is 400kg/capita/yr said Feroze.
Earlier in May 2013, South African cement firm PPC announced it would build a US$200m cement plant in Congo.
Pakistan: Lucky Cement has announced that its chief executive Muhammad Ali Tabba has been appointed as a member of the cement producer's Human Resource and Remuneration Committee. The committee now includes the following members of the board: Rahila Aleem, Jawed Yunus Tabba, Zulekha Razzak Tabba and Muhammad Ali Tabba.
Pakistan: Lucky Cement reports that its profit after taxation rose by 61.3% to US$27.4m for the quarter ending 31 March 2013, from US$17m in the same period in 2012. Revenue for the quarter rose by 16% to US$120m from US$103m. The cement producer attributed a 20% increase in sales as the reason for the increased profit.
Lucky out-performs peers at end of 2012
29 January 2013Pakistan: Lucky Cement Limited has outperformed its competition by recording a 42.2% rise in its half-year profit for the year 2012-13. It has declared a profit for the half-year ending on (31 December 2012) of US$43.9m.The company's gross profit increased by 32.3% during the half-year as its net sales revenue improved by 13.9% to US$179.3m.
During the period under review, the combined sales revenue of Lucky Cement increased by 13.9%. This was attributed to a 21.3% growth in domestic sales and a 3.7% growth in exports.
To enhance the quality of cement and for capturing new export markets, Lucky Cement plans to replace its existing cement grinding mills from Chinese suppliers located at the Karachi plant with vertical mills from European suppliers. This replacement will reduce the cost of production due to more energy efficient operations.
Lucky Cement: Profits up and progress abroad
26 October 2012Pakistan: Lucky Cement Limited has declared a profit after tax of US$21.0m for the quarter ending 30 September 2012, 33.8% higher than the same quarter of 2011 when it made a net profit of US$15.7m.
Gross profit for Lucky Cement, which is Pakistan's largest cement manufacturer, increased by a similar margin. This rose by 32.9% year-on-year as its net sales revenue improved by 18.1% to US$92.4m. Higher sales volume in the domestic markets, in line with the company's strategy gave rise to the increased profit.
Lucky's local sales volume during the quarter grew by 5%, rising to 0.86Mt compared to 0.82Mt sold during the 2011 quarter. However, its export sales volume declined by 9% from 0.62Mt to 0.56Mt. This was mainly due to intentional focus on the domestic markets, which increased the overall profitability of the company. The company also managed to decrease its financing cost by 76% compared to 2011.
Lucky has also reported that it had successfully sourced uninterrupted electricity from Hesco since 1 July 2012, averaging a supply of over 20MW/hr during the quarter. It said that this new source of electricity had helped to reduce Pakistan's power generation problems.
The company also reported progress with respect to its joint venture investment in a new cement plant in the Democratic Republic of Congo, where plant and machinery has been negotiated and finalised with a renowned European supplier, and on its joint venture investment for a grinding facility in Iraq, where the teams for the project have been mobilised at the site.
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.
Lucky Cement cleared in South African quality spat
09 August 2012South Africa: The South African National Regulator for Compulsory Specifications (NRCS) has cleared imports from Pakistan producer Lucky Cement for use in South Africa.
Thomas Madzivhe, the NRCS's acting chief executive, said that complaints of non-compliance received about Lucky Cement imported from Pakistan had been fully investigated and the NRCS was satisfied the certification bodies had done all the necessary checks and tests and that the cement complied with South Africa's regulations. Madzivhe said that the NRCS suspected market access and competitive and market share issues might be a reason for the complaints.
Musa Ndlovu, the NRCS's acting executive for non-perishable products, said a directive had immediately been issued against Lucky Cement when complaints of non-compliance were received at the end of 2010, which meant this cement could not be sold in South Africa. Ndlovu added that the NRCS had carried out a full 28-day test on the cement but the results did not provide it with any tangible evidence to prove the product was non-compliant in terms of quality. The NRCS had only found evidence once of non-compliance but this was based on under-weight bags and not quality.