Fauji Cement commissions additional solar power plant

Fauji Cement Company Ltd (FCCL) has informed Pakistan Stock Exchange (PSX) on 17 March that in addition to the already commissioned 12.5MW captive solar power plant, the company has brought online an additional 2.5MW captive solar power plant. This will increase the captive generation capacity of FCCL to 15MW from renewable energy, says Brig Riaz Ahmed Gondal, Company Secretary in a bourse filing.

According to a research house report, the increase in power production from renewable energy sources would mitigate the increase in electricity costs for the company with an expected positive result on the cement producer’s future financial results.

FCCL produced 1.651Mt of cement during first six months of 2019-20 compared to 1.548Mt in the same period last year. This represents a growth of 6.6 per cent.

Outlook
Domestic demand has shown an increasing trend in the 1HFY19-20 and is expected to remain when the summer season starts after March. Exports to Afghanistan have also shown double-digit growth and are expected to remain consistent in the next quarter. Notwithstanding growth in demand, the prices of cement continue to remain under pressure due to substantial increase in input costs and disproportionate increase in supply following recent expansions. This is expected to put pressure on profit margins in the next quarter as well, according to the company’s recently-published half-yearly report.