News

The Board of Directors of Lucky Cement Limited (PSX: LUCK) has approved to undertake a 28.8 MW captive wind power project at its Karachi plant, the company informed the Pakistan Stock Exchange on Monday.

The project is expected to be completed by the end of FY 2024. Moreover, the Board has also approved to undertake solar power projects, of 6.3 MW and 2.5 MW at the Company’s Karachi and Pezu plants respectively, which are expected to be completed by Q3 of FY 2024.

These solar power projects are in addition to the 25 MW and 34 MW solar power projects commissioned recently at Karachi and Pezu plants respectively, as per the filing.

The estimated cost of these upcoming projects is Rs. 11 billion. The filing said the contribution of renewable energy projects in its power mix will significantly increase after the completion of the above-mentioned projects.

According to Topline Securities, a significant portion will be financed through equity as the company currently holds Rs. 26 billion in cash and cash equivalents as of June 2023.

The Company’s initiatives for investment in renewable energy projects will play a key role in cost savings as well as the reduction of the country’s reliance on imported fuel.

LUCK’s BoD has also authorized the Company to evaluate participation in the equity of Lucky Core Ventures (LCV), along with other companies of the Yunus Brothers Group.

LCV is a wholly-owned subsidiary of Lucky Core Industries Limited, a subsidiary of the Company, and has been set up to act as a holding company in respect of future growth projects of LCI. LCV has recently, on May 2, 2023, published a Public Announcement of Intention (PAI) to acquire approximately 75.01 percent shareholding of Lotte Chemical Pakistan Limited (PSX: LOTCHEM). This deal is still pending.

The Company’s participation in the equity of LCV is subject to completion of satisfactory due diligence and obtaining applicable regulatory and Board approvals.

The investigation determined that the cement manufacturer failed to provide proper protection, including floatation devices, when employees were susceptible to drowning hazards.
An OSHA investigation has determined that Buzzi Unicem USA, which operates as River Cement Sales Co., could have prevented the drowning of one of its employees earlier this year. The incident occurred when three workers boarded a barge without wearing personal floatation devices. While attempting to repair a blocked valve, one employee fell over the side of the barge, landing headfirst into the Mississippi River. The investigation determined that the cement manufacturer failed to provide proper protection, including floatation devices, when employees were susceptible to drowning hazards. In addition, there were no guardrails to prevent workers from falling overboard, there was no first aid training, and there was no eyewash station. For the five serious violations, the company faces penalties of $62,500.

In a recent quote, OSHA Area Office Director Courtney Bohannon said, “Buzzi Unicem USA could have prevented this tragedy by making sure employees wore the personal protective equipment that was readily available. Employers have a legal responsibility to provide employees with a safe and healthy workplace. This employer’s failures cost a worker his life and leaves family, friends, and loved ones with an unfillable void in their own lives.”

ISLAMABAD: The Cement sector has introduced a track and trace system under the guidance of the Federal Board of Revenue (FBR). The FBR had been working since July 1, 2022, to implement this solution in collaboration with Authentix Inc. from the US, and AJCL Private Limited and MITAS Corporation of South Africa.

The FBR has previously applied this system in the tobacco industry and is progressing towards its application in the fertilizer sector.

Purpose of the Track and Trace (T&T) system:

The T&T system is necessary to counteract under-reporting of production by manufacturers to evade taxes. This practice leads to oversupply, price reductions, and tax avoidance. The unreported surplus is then sold at lower rates outside the tax framework, contributing to an extensive shadow economy in Pakistan.

The T&T system entails:

The T&T system proposes direct tax collection from the source. Governments monitor production, catalog output, and apply taxes based on actual numbers. For instance, cement production would involve stamping bags for scanning before sale. Scanned data is sent to the FBR, enabling accurate tax assessment.

Implementation and Impact:

Successful demonstrations have been conducted, though cement manufacturers faced delays. The tax department has set an August 18, 2023 deadline for powerful cement manufacturers to adopt the T&T system.

Approximately 70% of operational cement plants are in the North Region, and the remaining 30% in the South Region.

The cement sector’s production capacity is around 83.1 million tonnes. Current taxes include Customs duty, additional Customs duty, Federal Excise Duty (FED), Sales tax, and income tax.

The cement sector is organized and oligopolistic, with major players listed on the stock exchange. Its market capitalization was about Rs 378 billion in March 2023.

In FY22, sector revenues grew by 24%, reaching Rs 671 billion. The sector achieved a gross profit of Rs 72 billion and pre-tax profit of Rs 49.7 billion in H1 FY23.

Pakistan’s per capita cement consumption is 215 kg, reflecting potential growth, as the global average is 550 kg.

The International Monetary Fund supports track and trace implementation for optimal taxation benefits.

Local reports indicate positive results in limiting illicit trade in the tobacco sector through the FBR’s Track and Trace system.

Real-time production monitoring via the T&T system enables proactive decision-making and accurate tax assessments. This repository offers unprecedented visibility into the sector’s production landscape, enhancing revenue collection and contributing to the national exchequer.

Montenegro has completed a feasibility study for the construction of a cement plant in the northern city of Pljevlja, the government said.

The study is part of the 700 million euro ($774 million) infrastructure development plan drawn in accordance with the Memorandum of Understanding (MoU) signed in April between the Montenegrin government, state-owned power utility EPCG, and British private equity firm Chayton Capital, the government said in a press release.

According to the study, the project will have substantial positive effects on the country’s economy. Depending on the final scope of investment in the entire Green Pljevlja project, the proposed investment is expected to contribute between 1.4% and 4.3% to Montenegro’s annual GDP over a ten-year period, and create jobs for 200 to 600 people.

The project is connected to the modernisation of the energy generation segment of the Plevlja coal-fired thermal power plant, as the cement factory will utilise by-products from the operation of the power plant.

Chayton Capital is a full-service globally operating investment advisory firm specialising in innovative, high-return alternative investments and asset management solutions. It has been active in the SEE region since 2006.

($ = 0.9038 euro)

A Chinese company has won a contract to build a cement plant in Iraq at a cost of around $200 million, the local press reported on Monday.

The China Sinoma International Engineering will construct the facility for “Sama Sawa” group in the Southern Muthanna Governorate, Hathalyoum News and other Iraqi publications said, citing a company statement in Iraq.

The plant will have a production capacity of 2 million tonnes per year and will be completed within 18-20 months, the statement said.

“This is a major project which will open up more investment opportunities for the Chinese company in Iraq,” it said, adding that the plant will be operated in 2025.

The report said Iraq, OPEC’s second largest oil exporter, has 22 cement factories with a combined designed output capacity of nearly 30 million tonnes per year.

Introduction:

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Supporting Dreams through Education:

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Breaking the Cycle of Poverty:

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Inspiring Aspirations and Hope:

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Conclusion:

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