Skip to content

Attock Cement

Pakistan’s Cement makers shifting to alternative energy

Pakistan: A number of cement makers are setting up solar and coal-fired power plants to curtail surging electricity expenses which is a material component of cement manufacturing cost.

From January 2021 till date, manufacturers have also informed the Pakistan Stock Exchange (PSX) about their plans and commissioning of solar and coal-fired plants.

Attock Cement Pakistan Ltd (ACPL) company secretary Irfan Amanullah told Dawn that the Rs1.8 billion 20-megawatt solar power plant had successfully been commissioned from Jan 1 at the existing plant premises in collaboration with Attock Energy (Pvt) Ltd and leading Chinese suppliers.

He said if the cement makers do not invest in alternative energy/power solutions, the cost of making cement would increase by at least Rs60 per 50 kg bag based on the current grid power tariff.

Mr Irfan said manufacturers are investing in clean energy solutions to minimise the cost of cement manufacturing.

Power Cement Ltd (PCL) has also decided to explore environmentally friendly renewable energy solutions without any major capacity expansion.

PCL signed an agreement with Burj Solar Energy Ltd on Jan 6 for procurement of electricity on a fixed tariff (around 40pc lower than the existing grid tariff) for the next 20 years. The supplier will invest by setting up a dedicated 7MW solar power plant at the existing site of the company which is expected to become operational within the next six to eight months.

Flying Cement Company Ltd (FCCL) on Jan 3 announced that it had successfully started commercial operations of 12MW captive power plant (CPP) in District Khushab.

FCCL said the key objective of the CPP is cost rationalisation and lower dependency on Wapda’s power supply. The company is contemplating saving the energy cost by up to 30pc, which would positively reflect on the company’s financial performance and profitability.

In the third week of October 2021, Bestway Cement Ltd (BCL) said it had decided to set up a brownfield cement plant with a capacity of 7,200 tonnes clinker per day at its Hattar Site, District Haripur, Khyber Pakhtunkhawa, along with a nine-megawatt Waste Heat Recovery Plant.

BCL had entered into an EPC agreement with Sinoma International Engineering Company Ltd.

BCL had also decided to set up a 6.4MW off-grid solar power plant at the same site for which an agreement has been entered into with Reon Energy.

DG Khan Cement Company Ltd (DGKCCL) on Sept 10, 2021 said that the company had successfully completed the second phase of installation and commissioning of a 30MW captive coal-fired plant with air-cooled condenser technology at Hub Site, District Lasbela, Balochistan.

The plant is based on a high temperature and pressure reheat thermal system which would generally improve the overall efficiency of the captive power plant. With the completion of this phase, the captive power generation of this project had reached 40MW.

Maple Leaf Cement Factory Company (MLCFC) in August 2021 said the company had signed a contract with plant supplier zero carbon for a 5MW solar plant at the existing plant site in Iskandarabad Mianwali. The Rs450m project is expected to start generation this month.

Two Pakistan cement plants complete power projects

Attock Cement Pakistan Ltd (ACPL) and Flying Cement Co Ltd (FCCL) have both opened new power plants in Pakistan.

ACPL informed the Pakistan Stock Exchange that its 20MW solar power plant project has been completed at Hub Chowki, Lasbella in Baluchistan. According to ACPL Company Secretary, Irfan Amanullah, the solar power project was implemented at an estimated cost of PKR1.8bn (US$10.19m) in collaboration with lead consultant Attock Energy Pvt Ltd and leading Chinese suppliers.

Meanwhile, Flying Cement Co Ltd also told the stock exchange that it has successfully started commercial operations of its 12MW captive power plant at its site in Khushab district, Punjab. Shahid Ahmad Awan, FCCL’s company secretary, said, “This is a significant milestone achieved by the company in line with its strategic objectives of cost rationalisation and optimisation resulting lower dependency on Pakistan Water & Power Development Authority’s (WAPDA) power supply. Under this, the company is contemplating saving in energy cost up to 30 per cent compared to WAPDA’s surging tariff, which would positively reflect the overall financial performance and profitability.”

Pakistan is entering a new cement capacity expansion phase

In a cement conference, conducted by AKD Securities Ltd CEO, Muhammad Farid Alam, on 15 September 2021, Pakistan’s cement industry producers confirmed that the country has entered another expansion phase. The total installed capacity of the cement industry in Pakistan is currently at 69Mta, and a further 18Mta of capacity is in the pipeline. This will take total production capacity to 87Mta by FY24.

Atif Kaludi, CFO of Lucky Cement Ltd, Muhammad Rehan, CFO at Attock Cement Pakistan Ltd, Shamail Javed, CFO at Gharibwal Cement Ltd, and Inayatullah Niazi, CFO at DG Khan Cement Ltd verified that the next expansion phase was imminent.

In FY21 Pakistan’s cement sales grew by 20 per cent YoY to 57.4Mt. For FY22 experts expect demand to grow by 10 per cent YoY. They estimated that if demand continues to increase by 10 per cent each year, the industry will reach 100 per cent capacity utilisation by FY26.

Lucky Cement

Lucky will incur capex of PKR23bn (US$136.99m) for its upcoming cement expansion, of which approximately 50 per cent is funded through Temporary Economic Relief Financing (TERF) and Long Term Financing Facility (LTFF) facilities. The development is expected to commence operations by December 2022, Atif Kaludi added.

Attock Cement

Cement expansion of 4250tpd is expected to come online by January 2024. Similarly, a solar plant of 20MW is expected to go online by October 2021, said Muhammad Rehan.

Garibwal Cement

According to Shamail Javed, GWLC’s announced expansion is subject to board approval. If the board approves, it will take two years to start commercial production.

DG Khan Cement

The company is expected to start construction of a project from next year. The 10,000-14,000tpd is expected to come online by FY25. The total cost of the project is expected to be US$250m and will be financed through a combination of debt and equity, said Inayatullah Niazi.

Pakistan cement production rises 27% in 12MFY21

International news agency CEMNET reported, The overall output of the Large-Scale Manufacturing Industries Index (LSMI) in Pakistan increased by 14.9 per cent for July 2020-June 2021 compared to July 2019-June 2020, including local cement production, FBS estimated. Industry attributes the increase in production on the back of a boost in local demand by housing schemes.

During the last fiscal year of July 2020-June 2021, Pakistan’s cement production increased by 27.3 per cent, YoY to 49.803Mt compared to 39.121Mt in the preceding fiscal year. The upward trend in cement output was also noted in June 2021 alone, when it rose by 32.4 per cent to 4.666Mt versus 3.523Mt in the same month last year.