Displaying items by tag: Pakistan

Pakistan: The All Pakistan Cement Manufacturers Association (APCMA) has asked the Federal Board of Revenue (FBR) to exclude cement from the 'Third schedule' of the Sales Tax act or to fix the maximum retail price (MRP) on the basis of two different zones in the upcoming budget of 2014 - 2015.

In a letter to the FMR chairman the APCMA said, that as the dynamics of every province and region are different, collection of sales tax on the basis of a single MRP across the country would force producers to restrict sales to nearby markets. It added that this would restrict sales to further-away markets reducing the potential revenues the FBR could collect.

The APCMA has proposed a zone-based MRP to protect both local consumers from paying excess prices and producers from paying more to sell cement in outlying markets. It also asked the FBR to introduce a uniform tax rate for the corporate sector.

Cement in Pakistan is subject to various taxes including: Corporate Income Tax - 34% of taxable income; Minimum tax – 1% of turnover; Federal excise duty (FED) – US$3.8/t; and Sales Tax 17% of the MRP. The APCMA has also proposed removing the FED and reducing the duty on alternative fuels to zero. Further suggestions included restoring the initial allowance on plants and machinery to 50% (from 25% at present) to encourage production capacity development and reducing import taxes on raw materials and capital goods for industrial development from 5 to 1%.

Pakistan: Maple Leaf Cement has appointed Tariq Saeed Saigol as the chairman of the company from 1 January 2014 for a three year term.

Saigol studied Law at University Law College, Lahore. He started his career in 1968 at Kohinoor's Chemical Complex at Kala Shah Kaku and became the chief executive of Kohinoor Textile Mills, Rawalpindi in 1976. Since 1984, he has been chairman of Kohinoor Maple Leaf Group, which has interests in textiles, energy and cement production.

He has also been chairman of the All Pakistan Textile Mills Association in 1992 - 1994, president of the Lahore Chamber of Commerce and Industry for 1995 - 1997 and chairman of the All Pakistan Cement Manufacturers Association from 2003 - 2006.

Pakistan: Exports of cement from Pakistan to Afghanistan have fallen year-on-year for the first four months of the Pakistan fiscal year that started on 1 July 2013, according to figures from the All Pakistan Cement Manufacturing Association (APCMA).

For the first four months of the 2013 fiscal year Pakistan exported 1.46Mt of cement, less than one third of the 4.4Mt of cement exported in the entire 2012 fiscal year. Exports to India are also down year-on-year, at 0.14Mt for the first four months of the 2013 fiscal year.

Commentators in the Pakistani media attributed the fall in exports to competition from Iranian exports in Afghanistan and falling demand in India. Once NATO troops leave Afghanistan the cement consumption in that country is expected to become volatile depending on whether civil unrest grows or if government development programmes continue. Cement exports to Afghanistan currently comprise 50% of Pakistan's cement exports.

Tajikistan: A Lafarge Pakistan (LP) delegation, led by CEO Amr Ali Redahas, met with the Ministry of Energy and Industry (MoEI) to discuss trade and economic cooperation. They agreed that the cement production issue would be tabled to the agendas of the commission's sessions. While in Tajikistan, the LP representatives intended to meet with senior representatives of Tajikistan's largest cement producers Tojikcement (Dushanbe cement plant) and Huaxin Gayur Cement.

A 1Mt/yr Greenfield cement plant, built by Huaxin Gayur Cement in Yovon, Tajikistan, started operation in August 2012. Cement demand in Tajikistan is currently well ahead of production levels and imports continue to play an important role. However, the Tajikstan government has attracted foreign investment to expand its cement production base.

Pakistan: Lucky Cement has won the Green Supply Chain Award at the 3rd International Shipping, Logistics and Supply Chain conference held in Karachi. The conference was organised by the Publicity Channel with the support of United Nations Environment Programme (UNEP) to acknowledge companies that are making sustainability a core part of their supply chain strategy.

The Pakistan-based cement producer has initiated a number of sustainability projects such as alternative fuel, energy conservation and plantation drives. In addition, the company's captive power plants have been upgraded to improve environmental efficiency.

"As an industry leader we have a huge responsibility to foster a culture of environmental sustainability throughout the manufacturing sector. We take pride in stating that we have done this job above par, owing to our innovative strategies in acquiring green technology across all our operations," said Lucky Cement Chief Operating Officer Noman Hasan.

Pakistan: Muhammad Ali Tabba of Lucky Cement Company has been unanimously elected Chairman of the All Pakistan Cement Manufacturers Association (APCMA) for the 2013 – 2014 term. Sayeed Tariq Saigol of Maple Leaf Cement and Babar Bashir Nawaz of Attock Cement Pakistan were also unanimously elected as Senior Vice Chairman and Vice Chairmen of the association respectively.

Muhammad Raza Mansha of DG Khan Cement, Azam Farooque of Cherat Cement, Major General Rehmat Khan (retired) of Lafarge Cement Pakistan, Lieutenant General Muhammad Sabir (retired) of Fauji Cement, Lieutenant General Taufiq Rafiq (retired) of Askari Cement, Syed Asif Shah of Bestway Cement, Aizaz Mansoor Sheikh of Kohat Cement, Mazhar Iqbal of Pioneer Cement and Muhammad Tousif Paracha of Gharibwal Cement were elected as members of the executive committee.

Pakistan: 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.

Pakistan: Lafarge Pakistan and Saif Holdings have signed an agreement to manufacture refuse derived fuel (RDF). The agreement was signed between Pavel Cech, Lafarge's regional vice president of industrial ecology, and Hoor Yousafzai, director of Saif Group.

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.

Pakistan: DG Khan Cement has reported that its profit after taxation rose by 35% year-in-year to US$52.5m for the 2012 – 2013 financial year that ended on 30 June 2013. In the same period in the 2011 – 2012 year it reported a profit of US$39.2m. No reason for the increase in profit was given in the notice sent to the Karachi Stock Exchange. The cement producer also saw its sales rise by 9% to US$238m from US$219m.

In its release DG Khan revealed that its board has approved plans to build a green-field 2.6Mt/yr cement plant on land the company owns at Hub, Lasbela District. Meanwhile, plans to build a cement plant in Mozambique have been dropped due to a lack of supporting infrastructure.