Displaying items by tag: Pakistan

Pakistan: Lucky Cement has reported a net profit of US$119m for the year that ended on 30 June 2015, some 9.6% higher than in the prior year. On a consolidated basis, Lucky Cement's net profit grew by 15.7% to US$132m for the year that ended on 30 June 2015.

Its net sales revenue improved by 3.9% to US$429m. The increase in net sales revenue was attributed mainly to an increase in sales volumes. Local sales volumes grew by 7% to 4.42Mt, while export sales fell by 4.5% to 2.37Mt.

Lucky Cement has also reported progress on its key foreign and local projects, including its integrated cement plant in the Democratic Republic of Congo, a 660MW supercritical coal-based power project, a 50MW wind farm, the electricity supply to PESCO and a waste heat recovery project at PEZU power plant.

Pakistan: Lucky Cement is close to winning a permit to extract limestone in Punjab province, signaling expansion plans by the nation's largest maker of the building material. An agreement is expected to be signed in the next few days, according to Arshad Mehmood, secretary for Punjab's mines and minerals department.

Lucky Cement is the third cement producer in Pakistan to have announced expansions after Attock Cement and D G Khan Cement earlier acted on signs that Prime Minister Nawaz Sharif is looking to boost infrastructure spending. "Everything is positive for construction," said Bilal Khan, analyst at Karachi-based Global Securities Pakistan. "If growth stays at the same pace, those who decide to expand today are the winners."

South African cement producers may be cheered this week with the news that Iranian cement is causing grief in Pakistan once more. Imported cement from Iran is allegedly undercutting local product in Pakistan through massive 'under-invoicing.' Sources quoted in Pakistan – itself a cement exporter (!) – described the situation as 'incomprehensible.'

The issue here is that Iran is doing to South Africa what Pakistan is doing to South Africa: selling cement cheaper than locally produced product. It's especially ironic this week because one Pakistani cement producer, Lucky Cement, is taking the fight against South African anti-dumping duties to the courts.

A report from July 2015 reckoned that Pakistan's cement exports might drop by 10 – 15% at the start of 2016 as economic sanctions on Iran are lifted. The report had a bit more sense than the usual scaremongering. It predicted that removing sanctions in Iran would not affect competition in Afghanistan as Iranian producers generally targeted Kandahar.

Despite this, cement exports to Afghanistan from Pakistan hit a high of 4.73Mt in the 2010 – 2011 financial year, according to All Pakistan Cement Manufacturers Association (APCMA) data. Since then they dwindled slightly for the next couple of years before decreasing more sharply from mid-2013. Overall exports fell by 11.57% to 7.2Mt in the 2014 – 2015 period. Pakistan's exports to Afghanistan may have been hit by the departure of North Atlantic Treaty Organisation (NATO) forces and a new cement plant in neighbouring Tajikistan.

In part the battle seems to be about tax. In June 2015 the APCMA lobbied the Pakistan government to cut duties. At the time these included a 5% federal excise duty and a 17% general sales tax on the retail price of cement. One APCMA spokesman reckoned that these taxes added US$1.56 per bag of cement. More recently the APCMA rallied against a tax on cement exports and an increase in import duties on coal. In this climate, repeated news stories on Iranian exports to Pakistan dodging taxes don't sound so good.

Meanwhile, back in South Africa, Lucky Cement has started to take legal action against anti-dumping duties imposed upon its cement exports by the International Trade Administration Commission of South Africa (ITAC). The ITAC imposed provisional anti-dumping duties of 14.3 – 77.2% on Portland Cement originating in or imported from Pakistan from 15 May 2015 for six months. The duty was imposed on bagged cement. Pakistan-based cement producers may defend themselves by saying that they are following the laws of the countries they are exporting to. In theory Iranian exports to Pakistan that pay the correct taxes should be the same price as Pakistani products.

What this debacle shows is that things could get a whole lot worse for coastal cement markets within easy reach of Iran once the sanctions fall. National bodies like the ITAC across the Middle East, South Asia and East Africa should start tightening up their import policies now.

Pakistan: Cherat Cement Company posted a profit of US$12.4m in the year ending 30 June 2015, a slight decrease from US$12.7m a year earlier. Turnover rose to US$63.2m compared to US$62.1m a year ago.

Pakistan/Iran: The Pakistani cement industry has once again spoken out against imported cement from Iran and alleged massive under-invoicing across the border. Industry sources said that the Iranian cement, which was earlier being smuggled, is now entering Pakistan at very low rates due to under-invoicing. They say that importing cement into Pakistan, itself a cement exporter is 'incomprehensible.'

Taha Khan Javed, Elixir Securities Pakistan's head of research, said that the government needs to realise that this lax attitude towards under-invoicing and the 'rampant' import of Iranian cement is hurting both the government and the local cement industry. Pakistan already has surplus capacity and its exports are falling due to a slowdown in exports to Afghanistan and other regions. In the case of Afghanistan this is also, in part, due to Iranian imports.

Pakistan: Lucky Cement has signed a contract with Siemens Pakistan to implement an SAP Enterprise System across its operations. The move will integrate all the departments, including finance, production and supply chain. Lucky Cement is the first Pakistani cement plant to implement the system.

"We have always focused on innovation and excellence as the building pillars of our continuous growth," said Executive Director, Noman Hasan. "Through SAP, we aim to drive progress through greater integration of our various locations, agility and enhanced efficiency of our operations and further efficiencies in our processes."

Pakistan: A memorandum of understanding has been signed between the Punjab Government and Chinese cement producer Yantai Baoqiao Jinhong to establish a US$350m cement plant in Salt Range.

Pakistan: Attock Cement has released its results for the 2015 Pakistani fiscal year, which ended on 30 June 2015. The company earned a net profit of US$21.7m, a 9.5% increase on the US$19.6m that it made in the year to 30 June 2014. Its revenue rose by 4.3%, from US$122.7m to US$127.6m.

The results were released at the same time as an announcement of the company's expansion plans. In a notice sent to the Karachi Stock Exchange, Attock Cement announced the expansion of its production capacity by installing a US$120m cement kiln line at its existing facility in Hub, Balochistan.

Attock Cement is the third cement manufacturer to announce an expansion after DG Khan Cement and Cherat. There is anticipation that the government will shortly ramp up infrastructure developments, leading to anticipation that there will be higher demand for cement in the coming years.

Pakistan: Bestway Cement signed a Memorandum of Understanding (MoU) with NUST Institute of Civil Engineering on 27 July 2015. The MoU marks a collaborative effort between both organisations to promote research and development of cutting edge, innovative construction materials and building solutions in Pakistan.

Irfan Sheikh expressed his delight and stressed the need for construction materials related cutting-edge research and development in Pakistan. In July 2015, Bestway Cement commissioned two 13.5MW waste heat recovery (WHR) power plants at its cement plants in Hattar and Farooqia. Aimed at not only reducing Bestway Cement's reliance on national grid, the WHR plants will help to alleviate the country's power crisis to a certain extent and reduce greenhouse gas emissions.

"We aim to develop products through collaborative research and development that will add value for our customers. Innovation defines our focus on our customers' needs, provides solutions for improving quality of life and generates much needed economic activity in the country, while ensuring that our environment is safeguarded," said Irfan Sheikh, director of finance and CFO of Bestway Cement and Pakcem Limited.

Pakistan/Iran: Pakistan's cement exports may drop by 10 – 15% at the start of 2016 as more Iranian cement will enter on the world market after sanctions have been lifted, according to Dawn.

Pakistani manufacturers will have to increase their export market destinations. However, local Pakistani cement industry officials believe that 'quality-conscious' countries like the UAE, India, Qatar and Sri Lanka may still prefer Pakistani cement as it is 'better' than its Iranian counterpart.

The officials are optimistic that the budget allocation for Public Sector Development Programme (PSDP) may play a positive role in incrasing domestic cement consumption and may dilute to some extent the negative impact posed by the anti-dumping duty in South Africa on Pakistani cement and influx of Iranian cement on the international market. Around 60 – 65% of Iran's cement exports go to Iraq, 10 – 15% to Afghanistan and the remaining to other countries including Pakistan.

The removal of sanctions is not expected to aggravate competition in Afghanistan, as it is only feasible for Iranian producers to target the Kandahar region closer to the border. The main market for Pakistani producers is Kabul and Jalalabad, where Iranian cement will not be competitive due to the higher transportation cost.

Iran is the fourth largest manufacturer of cement in the world with a capacity of around 80Mt/yr. This capacity is set to rise in the next two years. The country's cement production stands at 66Mt/yr, around 84% capacity utilisation, out of which 28% is exported.