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Kohat Cement plans to set up a Greenfield cement plant in Punjab

Kohat Cement (KOHC) conducted its corporate briefing on 26th Nov’20 to discuss the financial performance of 1QFY21, its future prospects, and strategy.

To highlight, KOHC witnessed a whopping 5.75x increase in net profits to Rs 507 million for the quarter ended September 2020, compared to the profits of Rs 88 million earned in the same quarter last year.

Sharing their insight on the latest performance, the management of the company attributed this increase in profitability to robust local demand and better retention price. The top line of the company depicted a jump of 73% YoY owing to a 71% YoY increase in offtake to 905k tons and a recovery in retention prices.

As per the key takeaways covered by BMA Capital, the company is planning to set up a 100tph Low-Pressure Coal Fired Boiler Power Plant with a net power generation capacity of around 16.2MW at an estimated capital expenditure of PKR 1.04bn that is expected to achieve COD by 4QFY22.

Aiming at cost efficiency enhancement, the company is also undergoing the optimization of the pyro process of Line 3 to reduce fuel and power costs that are expected to achieve Cod by 2QFY22 at an estimated outlay of PKR 1.2bn.

It was further informed by the management that the company is setting up a vertical mill which is likely to cost PKR 1.26bn. The current grinding mill is a ball rolling mill at KOHC while the newest technology is vertical rolling mills which are more energy-efficient and provide a better quality output, highlighted by Fortune securities in its report.

Talking about its expansion plans, the management spoke that the company is securing a site in Punjab (North) for setting up a Greenfield cement plant and has applied for NOC. As per the management, the capacity of the line would be approx. 7.5k – 9.0k TPD with a projected cost of PKR 25-30bn. The project is expected to be financed through 60% Debt and 40% Equity, BMA research added.

Going forward, the management expects cement demand growth to remain healthy in the upcoming years. The company is foreseeing an annual growth for North Zone at 13.7% with capacity utilization of around 79%.


source: Mettisglobal

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