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Pakistan Cement News

Pakistan’s cement industry is included in those industries which were present even before the partition of the sub continent, like textile Industry in Pakistan. Why this industry has survived so long? The reason behind this is the presence of the raw materials. Pakistan is so rich in possessing very great reserves of limestone and clay which can support the cement industry for another 5 or 6 decades.

Cement factories has a very influential part in making the of socio economic sector of Pakistan  strong.

Steel shortage may impact the cement industry

The Pakistan Ship Breakers Association (PSBA) said on 18 January that the shipbreaking industry is on the verge of closure as local banks are reluctant to open letters of credit to import vessels for breaking up (recycling) and as a result, producing raw material for the steel industry.

This is expected to lead to an acute shortage of construction steel bars in the country. Therefore, there could be a drastic escalation in construction steel prices and it is anticipated that consumption of cement and other building materials will also plummet. Work is expected to stop on low-rise buildings, low-cost housing, flood rehabilitation activities.

The PSBA has requested the government to amend the EPD Circular Letter No 20/2022 and include the “Vessels for Breaking Up – HS Code 8908.0000” to save not only the ship breaking Industry from closure but also save hundreds of re-rolling mills, small steel furnaces and thousands of steel cottage Industries from closure and resultant unemployment of 0.5m people across the country.

Maple Leaf Cement wins award

Maple Leaf Cement Factory Limited received award for Health, Safety & Environment 2022 in a graceful ceremony organized by The Professionals Network (TPI) in Annual Environment Excellence Awards 2022, said a company spokesman here on Wednesday.
The said award was unanimously decided by the jury and board of TPI, he further said.
The management of Maple Leaf Cement embraces responsibility for company’s actions and encourages a positive impact through the activities on environment, employees, community and all other members of the public sphere who may be considered stakeholders.

Cherat Cement Co sells its hydropower project’s feasibility

Director and Chief Operating Officer of Cherat Cement Co Ltd (CHCC), Yasir Masood, informed the Pakistan Stock Exchange (PSX) on 14 July that Madian Hydro Power Ltd (MHPL) has entered into an agreement with Pakhtunkhwa Energy Development Organization (PEDO) of the KPK government for sale of the feasibility study of Madian, a 148MW hydro power project for total consideration of PKR160m (US$762,485) and has also received the sale consideration.

CHCC, owned by Pakistan’s Ghulam Faruque Group, has a 50 per cent shareholder of MHPL and will eventually be entitled to 50 per cent of the sale consideration after adjusting any cost and taxation impact in the event MHPL distributes the same.

The Ghulam Faruque Group made a bankable feasibility study through the German Consultant Fichtner GmbH to assess the project’s technical, economic and environmental viability of the Madian Hydropower plant in the Upper Swat Valley, on Swat River 60km north of the town of Mingora.

Cement Sales Decrease to 54% in July

Cement sales have dipped by a massive 54 percent year-on-year (YoY) to 1.79 million tons in July 2022 from 5.30 million recorded in the previous month, whereas domestic sales shrunk by 52 percent year-on-year (YoY) to 1.64 million tons.

According to provisional data released by the All Pakistan Cement Manufacturers Association (APCMA), month-on-month (MoM) sales growth appears dismal, led by a significant 68 percent descent in domestic sales amid Eid holidays and monsoon rains across the country, which wiped off a considerable chunk of working days.

According to the data, the month of July depicts a massive decline in offtake by 54 percent YoY to 1.79 million tons. Meanwhile, exports contracted by a massive 67 percent YoY during July 2022 to 150,000 tons due to a decline in North-based exports to Afghanistan by 54 percent YoY to 60,000 tons and a 72 percent YoY dip in South-based exports to 90,000 million tons.

Exports too showed a slump on MoM basis, going down by 33 percent with a slowdown seen in both North (-37 percent MoM) as well as South (-30 percent MoM) based exports. As a result, utilization of the industry dropped to just 31 percent in July 2022 from 92 percent witnessed last month, and 77 percent in financial year (FY) 2021-22.

Utilization of the North region settled at 33 percent vis-à-vis 98 percent in June 2022 and 77 percent in FY22, whereas the South region posted a utilization of 25 percent compared to 72 percent in the prior month and 76 percent in FY22.

On a YoY basis, all players posted a decline in offtake during July 2022 with laggards as follows: ACPL (52,000 tons; -73 percent YoY), LUCK (293,000 tons; -57 percent YoY), GWLC (48,000 tons; -57 percent YoY), CHCC (135,000 tons; -56 percent YoY), KOHC (112,000 tons; -56 percent YoY), BWCL (264,000 tons; -55 percent YoY), DGKC (190,000 tons; -52 percent YoY), FCCL (126,000 tons; -50 percent YoY), PIOC (118,000 tons; -50 percent YoY), MLCF (183,000 tons; -45 percent YoY), POWER (96,000 tons; -43 percent YoY), and FECTC (26,000 tons; -40 percent YoY).

Kohat Cement plans a 10MW solar power plant in Punjab

Kohat Cement Co Ltd (KOHC) has informed Pakistan Stock Exchange (PSX) that the Board of Directors of the company has approved the setting up of 10MW solar power plant at its Kohat cement plant, in northern Punjab, says CEO, Nadeem Atta Sheikh.

The company’s Board of Directors has also re-appointed Aizaz Mansoor Sheikh as chairman and Nadeem Atta Sheikh as CEO for three years.

Financial performance
Total dispatches for July-March 2021-22 stood at 2.85Mt compared 1.75Mt in the corresponding period, made from a new grey cement plant (line-4) during the test runs.

KOHC earned a profit after tax of PKR2.53bn (US$12m) in 9MFY21-22. Officials attribute that better retention prices, improved capacity utilisation and increased volumes due to the new production lines resulted in higher profits during the nine months ended 31 March 2021. However, an increase in input costs, ie coal, electricity and packing materials, in the third quarter ended 31 March 2021, could not be fully passed on to the customers, which resulted in a reduction in gross profit margins by around two percent during the third-quarter as compared to these margins during the second-quarter ended 31 December 2020.

Capacity utilisation of the whole plant was 74 percent during the nine months of 2022.

Future project
The company has obtained all the requisite regulatory approvals for setting up the greenfield cement production Line in Khushab, Punjab. Acquisition of land is in process, and it is expected that contracts for the supply of the plant will be executed by the end of this financial year.