KARACHI: Gharibwal Cement Limited has announced 10,000 tonnes/day capacity expansion, which is expected to come online two years after the commencement of the civil work, which is to begin soon.
The project cost, being undertaken by a China-based firm, is estimated to be around Rs8 billion to Rs10 billion. The company has not availed Temporary Economic Refinance Facility (TERF) facility for the expansion.
“The management informed that the proceeds from the issuance of the Sukuk bond worth Rs3 billion are likely to be utilised for the upcoming expansion, as well as BMR [balancing, modernising and replacement] of their existing capacity. However, this decision is still under discussion,” the company management said at a briefing.
Going forward, the company expects the gross profit margins to sustain due to efficient fuel and power mix. The company is currently carrying an average coal inventory of $133/tonne for the second quarter of FY22, comparatively lesser than most of the competitors.
The cement industry is expanding with the hope that the demand will increase due to a rise in the allocation on the Public Sector Development Programme (PSDP), increase in CPEC-related projects, and the demand from the housing sector due to subsidised markup rates.
Besides, coal and other fuel prices are consistently on an upward trajectory and creating pressure on the profitability of the industry. However, the company is hopeful to deal with all the challenges.
Gharibwal has a modern state-of-the-art plant with 6,700 tonnes/day clinker production capacity, and in-house power generation plant of 38MW.
The Waste Heat Recovery (WHR) Plant is also under the test-phase, which will generate electricity up to 12MW from the waste hot gases of the process and 8MW from the coal-fired system.