Displaying items by tag: Pakistan

Pakistan: Bestway Cement's turnover on a consolidated basis jumped by 38% year-on-year to US$89.1m in the first quarter of its 2016 fiscal year, which ended in September 2015. This was largely due to the acquisition of Pakcem Limited, the increase in domestic demand and stable retention prices during the quarter. Its profit before tax grew by 28% to US$30.3m, while its profit after tax grew by 34% to US$21.8m.

On a consolidated basis, Bestway's domestic sales volume increased by 48% 1.2Mt, while exports fell by 4% to 189,208t. Overall, cement dispatches increased by 38% to 1.4Mt. Despite fierce competition, Bestway was able to maintain its market share in the north of Pakistan and retained its position as the largest exporter of cement to Afghanistan and India.

During the quarter, Bestway further reduced its reliance on the national grid by taking energy-saving initiatives and launched a 12MW waste heat recovery power plant at its Pakcem Kallar Kahar operations. The implementation of this project, which is expected to cost US$15m, will support in alleviating the country's power crisis to a certain extent and also reduce the cost of production whilst generating clean, affordable energy.

Pakistan: The All Pakistan Cement Manufacturers Association (APCMA) has said that the growth in the domestic economy has supported overall growth in the cement industry. However it added that the industry has had to approach various decision makers to stop the influx of Iranian cement into Pakistan from Iran via Balochistan. The APCMA said that the industry needs a safeguard mechanism to be put in place to stop the adverse effects of cement smuggling into the country. It stated that the government should impose a 20% Regulatory Duty for import of cement in addition to the current customs duty.

The APCMA spokesperson added that, due to the high cost of doing business in Pakistan, the country's cement industry is losing competitiveness to other countries such as Iran, the UAE and India. The industry has appealed for reduction in energy costs, removal of taxes imposed on gas, a reduction of custom duty on coal to zero and an additional incentive of 5% on export of cement by sea.

Statistics indicate that the cement sector is now almost completely dependent on domestic sales, the share of which has increased to over 80% of total cement sales compared to just 50% in 2008 - 2009, as domestic sales continue to increase, while exports are showing constant decline. Cement dispatches to domestic markets during the month of October 2015 were 2.6Mt compared with 2.1Mt during October 2014, an increase of 24% year-on-year.

Pakistan: Fauji Cement Company Limited's profit rose from US$5.71m to US$10.5m in the third quarter of 2015, which ended on 30 September 2015. Company revenue grew by 4.9% year-on-year to US$41.6m as local dispatches remained strong and prices remained intact.

"The result outperformed the market forecast for the quarter on the back of lower-than-anticipated cost of goods sold and financial charges," said Faizan Ahmed. "Resultantly, gross profits grew by 41% to US$18m. In addition, financial charges declined by 40% to US$1.88m due to deleveraging and monetary easing."

Pakistan: Lucky Cement's net profit rose by 11.2% year-on-year to US$28.2m during the first quarter of its 2016 fiscal year, which ended on 30 September 2015. On a consolidated basis, its net profit rose by 13.8% to US$31.3m.

The company's net sales revenue declined by 1.2% to US$98.1m during the quarter. This was primarily attributed to a 2.7% decrease in sales volume, which was partially offset by a 1.5% increase in net retention due to an improved sales mix. Lucky Cement's domestic sales volume grew by 11% to 1.07Mt, whereas export sales volumes fell by 23.2% to 490,000t.

The Board of Directors have also decided to set up a 2.3Mt/yr capacity greenfield cement manufacturing plant in Punjab. The expected project cost is US$200m and construction work is expected to start in the first quarter of the 2016 calendar year. It is expected that plant will become operational in the second quarter of the 2018 calendar year. Lucky Cement also reported progress on its key foreign and local projects; namely an integrated cement plant in the Democratic Republic of Congo; a 660MW, supercritical, coal-based power project; a 50MW wind farm, electricity supply to the Peshawar Electric Supply Company (PESCO); and a waste heat recovery unit at its Pezu power plant.

Pakistan: DG Khan Cement plans to set up a new cement plant at Hub to meet growing demand of cement in the country, particularly in Karachi.

DG Cement Director of Marketing Fareed Fazal said that the new plant produce 10,000t/day of clinker. Fareed said that the company's cement was being exported regularly to Northern Africa and Sri Lanka, among others. In addition, Fazal said that recently France had expressed willingness to import bagged cement from DG Khan Cement and that efforts were afoot to meet the production requirement. The French importers, however, have requested 35kg bags instead of the standard 50kg.

Pakistan: Cement exports from Pakistan fell by 36% year-on-year to 467,000t in September 2015, as the import duty by South Africa took a heavy toll on its exports.

"Around 45 – 50% of total cement exports were destined for South Africa before the duty was imposed," said Sheikh Adeel, Senior Manager of Sales and Marketing at Maple Leaf Cement. South Africa has imposed duty as high as 77% on Pakistan's cements. Adeel said that the drop in exports has adversely affected exporters in Punjab. The transportation cost from Punjab to Karachi Port also rose by US$20/t.

Another industry official said that the industry is not utilising its production capacity. "There is enough idle capacity. The government should step in to support the industry to export surplus volumes, otherwise cement exports will continue to decline in the coming months," said Shahzad Ahmed, a spokesman of the All Pakistan Cement Manufacturers Association (APCMA). "We expect the government to announce export incentives for the cement industry."

In September 2014, cement exports stood at 730,000t, according to APCMA data. Total cement dispatches were recorded at 2.95Mt in September 2015 compared to 3.15Mt in September 2014, showing a cut of 6.34%. The industry data showed that cement dispatches to domestic markets were 2.48Mt in September 2015 compared to 2.42Mt in September 2014, up by 2.6%.

The local industry has been demanding that the government curb cement imports from Iran, which they said is eating into local share. "The industry expects the government to take effective steps to stop the penetration of Iranian cement in Pakistani markets through massive under invoicing and/or mis-declaration," said Ahmed. He added that the mills in the south suffered more than those operating in northern part of the country.

In the south, domestic cement dispatches declined to 399,581t in September 2015 from 431,133t in September 2014. Domestic consumption in the north, however, rose to 2.08Mt in September 2015 from 1.99Mt in September 2014. Ahmed said that domestic dispatches in the north were nominally higher than the 2.02Mt of consumption in September 2015. "This shows that the pace of construction in the north has not been hit as badly as in the south," he said. The export decline was almost the same both in north and south. Cement exports from the north declined to 306,564t in September 2015 from 480,025t in September 2014. Exports from the south dipped to 160,698t in September 2015 from 249,906t in September 2014.

Pakistan: Listed cement producers in Pakistan continued to deliver double digit profitability growth in the 2015 fiscal year, which ended on 30 June 2015. Their collective profits grew by 13% year-on-year to US$446m, with the improvement in profits caused by volume growth and lower energy costs.

Local cement demand remained strong, rising by 8.2% to 28.3Mt. This was due to higher public and private sector. The growth in profits was also supported by declining financial charges and falling selling and distribution expenses.

However, not all results were encouraging. Exports fell by 11.7% year-on-year to 7.2Mt due to weak demand from the Afghan market coupled with anti-dumping duty imposed by South Africa on Pakistani cement manufacturers.

Total industry dispatches are expected to grow by 8.8% to 38.6Mt in the fiscal year to 30 June 2016, primarily due to strong local demand expected from higher infrastructure spending and mega-projects including the China Pakistan Economic Corridor.

Analysts expect that manufacturing costs for the coming fiscal year will remain 'benign' for the industry and will be led by lower energy costs. Lower electricity charges and shift to more efficient sources like waste heat recovery will lead to further decrease in power and fuel costs for manufacturers. Moreover, imported coal prices are expected to remain at lower levels, owing to slowdown in China's growth, which will further drive up margins of cement manufacturers.

Pakistan: The boards of directors of Bestway Cement and Pakcem have reported that net turnover increased by 5.4% to US$292m for Bestway Cement in the year that ended on 30 June 2015 and by 9.4% to US$53.5m for Pakcem for the six months that ended on 30 June 2015.

In its 2015 fiscal year, Bestway Cement's revenue grew by 4.18% to US$371m, its pre-tax profit grew by 10% to US$121m and its sales volumes grew by 1.2% to 4.42Mt. In the six months that ended on 30 June 2015, Pakcem's revenue grew by 11.5% to US$68.1m, its pre-tax profit grew by 11% to US$15.7m and its sales volumes grew by 8% to 836,000t.

"We are happy to share our annual results for 2014 - 2015 for Bestway Cement and six-month period for Pakcem, with growth in sales of 4.18% for Bestway and 11.5% for Pakcem,' said Zameer Choudrey, chief executive of Bestway Group. "This was a transformative year for us, with multiple major initiatives that will shape Bestway for years to come. We closed the year by becoming the largest cement manufacturer in Pakistan. Construction trends are favourable in Pakistan and I am confident that we are particularly well positioned to succeed and accelerate growth through innovation."

Domestic cement demand grew by 8% year-on-year to 28.2Mt. Exports, however, fell by 12% to 7.2Mt, mainly due to sluggish demand and competitive prices. The year 2014 - 2015 posed fierce competition for cement producers. However, Bestway Cement increased its market share in the north zone from 17% to 21.4% and became the largest cement producer in the country with 8Mt/yr of cement production capacity. Additionally, the company continued to be one of the largest cement exporters to Afghanistan and India.

During the year, Bestway Group further reduced its reliance on the national grid by taking energy-saving initiatives and launched two 6MW and 7.5MW waste heat recovery (WHR) power plants at its Hattar and Farooqia oplants. It also plans to inaugurate another 12MW plant at Pakcem Limited.

"We are confident about 2015 - 2016," said Choudrey. "The outlook for Pakistan's economy is positive, but there are still macroeconomic and geopolitical risks. We will continue to benefit from the positive development trend witnessed in infrastructure projects such as Pakistan China Economic Corridor. The considerable drop in global coal prices and lower interest rates will provide us with additional tailwind. In view of our strong positioning, our excellent product portfolio, our production sites in attractive locations and the commitment of our people, we are well-equipped to achieve our goals."

Pakistan: Higher volumetric sales and lower coal prices helped Maple Leaf Cement beat market expectations as the company boosted its profits by 22% to US$33.6m during its 2015 financial year that ended on 30 June 2015.

Maple Leaf Cement's revenue grew by 9.2% year-on-year to US$199m. The growth in earnings was due to higher dispatches and expansion in margins. Monetary easing and deleveraging helped ease Maple Leaf Cement's finance cost, which was US$9.59m, down by 26% from US$14.4m in its 2014 financial year. The company has announced a plan to invest US$47.9m in Maple Leaf Power Limited to set up a 40MW coal-fired power plant.

Pakistan: DG Khan Cement has signed a contract with Germany's Loesche GmbH to supply complete raw, cement and coal grinding mills for its greenfield cement plant in Lasbella, Baluchistan. The cement grinding mills will be provided by a German company, while Denmark's FLSmidth has been contracted for engineering and equipment, according to DG Khan Secretary Khalid Chohan. The new 9,000t/day plant will be completed with a cost of around US$300m within three years. DG Khan has already signed an agreement with K-Electric for the supply of 40MW of electricity.