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High cost impacts Pakistan cement export in 3MFY22 

According to Intermarket Securities Ltd, in 1QFY22-23 (July-September 2022) overall cement industry utilisation stood at 56 per cent, compared to 72 per cent in the same period last year. The fall in capacity utilisation was also partially reflected in exports. The overall increase in manufacturing cost has discouraged cement companies in the South from exporting cement/clinker at current prices, which have not moved in tandem with cost. In addition, higher international coal prices coupled with recent floods have made the export market unattractive for the industry.
Pakistan’s cement industry earned US$46.35m by dispatching 941,532t of cement and clinker overseas in the 1QFY22-23, compared to US$55.20m from 1.555Mt of exports in the year-ago period, says data released by the Pakistan Bureau of Statics (PBS). Therefore, the sector saw a YoY reduction of 16 per cent in dollar terms and 39.5 per cent in volume in the 1QFY22-23. However, exports valued in Pakistani rupees rose by 15 per cent to PKR10.51bn during this period.
On a positive note, in September 2022 alone, export revenues saw an increase of 151.4 per cent MoM to US$29.13m on the shipment of 612,404t, compared to US$11.55m from 223,987t of exports in August 2022. The quantity increased by 173.4 per cent during this period.
However, if compared with September 2021 (US$33.81m from 1.020Mt), the trend was revered as an export drop by 13.8 per cent in cost and volumes by 40 per cent.
Meanwhile, on an encouraging note, Karachi Port Trust (KPT) adds that it coordinates closely with exporters to enhance the country’s cement exports and extend all possible facilities per their requirements. In this regard, KPT is paying special attention to cement exporters, raising Pakistan’s cement exports to as far as the USA. During the last quarter of the FY21-22, KPT handled 60,109t of cement. In the 1QFY22-23, KPT dealt with the export of 125,660t of cement, a 48 per cent increase from the previous quarter. Taking into account the orders in the pipeline, these volumes are expected to grow further.
Pakistan has been exporting clinker or cement to Bangladesh, Sri Lanka, Afghanistan, Madagascar, South Africa, Tanzania, USA and India.

Askari Cement ignites Nizampur cement plant’s new kiln

Askari Cement has ignited the newly installed 6500t/day kiln at its Nizampur cement plant in Khyber Pakhtunkhwa province. The kiln increases the plant’s capacity by 73% to 4.85Mt/yr. The project, along with parent company Fauji Cement’s construction of a new 2.05Mt/yr integrated cement plant in Dera Ghazi Khan, cost US$339m. Fauji Cement took a US$212m loan to support the works in January 2022. The group expects both projects to raise its capacity by 56% to 10.5Mt/yr and to increase its market share to 13%.

Fauji Cement’s upcoming Dera Ghazi Khan cement plant is scheduled for commissioning in mid-late 2024.

Power Cement reports 82% YoY rise in 1H net profit

Power Cement posted a 43.6 percent increase in revenues to PKR5162m (US$29.1m) in the quarter ended 31 December 2021 (2QFY21-22), up from PKR3595m m in the 2QFY20-21.

Operating profit saw a 37.3 percent hike to PKR961m in the 2QFY21-22 from PKR700m in the equivalent period of the previous year. Net profit advanced 96.7 percent YoY to PKR471m in the 2QFY21-22 from PKR239.4m.

Half-year results
In the half-year ended 31 December 2021, Power Cement saw its revenues increase by 35.7 percent to PKR9276m from PKR6835m in the 1HFY20-21. Operating profit reached PKR1377m, up 23.2 percent from PKR1117m in the equivalent period of the previous year while net profit advanced 81.8 percent to PKR280m from PKR154m over the same period.

Pakistan: January cement sales down 16.58pc

Pakistan Cement dispatches declined 16.58 percent to 3.95 million tonnes in January 2022 against 4.73 million tonnes in the corresponding period last fiscal, mainly due to harsh weather in hilly areas that affected construction and transportation activities.

According to the data released by All Pakistan Cement Manufacturers Association (APCMA) on Wednesday, local cement sales in January 2022 were 3.4 million tonnes compared to 4.04 million tonnes in January 2021, down 15.87 percent. Exports suffered a massive decline of 20.71 percent as volumes reduced from 694,934 tonnes in January 2021 to 551,006 tons in January 2022.

In January 2022, cement factories based up north sold 2.707 million tonnes in the domestic markets, showing a reduction of 18.29 percent against 3.313 million tonnes in January 2021. South-based units dispatched 693,453 tonnes of cement in local markets during January 2022 that was 4.82 percent less compared to 728,568 tonnes sold in January 2021.

Exports from the north-based units nosedived 94.12 percent, as quantities reduced from 233,404 tonnes in January 2021 to 13,727 tonnes in January 2022. However, the exports from down south increased 16.41 percent to 537,279 tonnes in January 2022 against 461,530 tonnes during the same month last year. During the first seven months of the current fiscal year, total cement dispatches (domestic and exports) were 31.4 million tonnes that calculates to 5.89 percent lower than 33.37 million tonnes dispatched during the corresponding period of the last fiscal year. Further analysis indicated that domestic uptake of the commodity reduced by 0.69 percent to 27.465 million tonnes from 27.657 million tonnes during July-January 2021, whereas exports during the same period declined by 31.04 percent to 3.94 million tonnes from 5.71 million tonnes during July-January 2021.

North-based mills dispatched 22.87 million tonnes of cement domestically during the first seven months of the current fiscal, showing a reduction of 2.85 percent compared to 23.54 million tonnes during July-January 2021. Exports from the north declined by 61.39 percent to 557,615 tonnes during July-January 2022 compared with 1.444 million tonnes exported during the same period last year.

Domestic dispatches by the south-based units during July-January 2022 were 4.59 million tonnes, showing an increase of 11.67 percent over 4.115 million tonnes of cement dispatched during the same period of the last fiscal year. There was however a substantial decline of around 20.78 percent in exports from the south zone, as the volumes reduced to 3.384 million tonnes in the first seven months of the current fiscal year from 4.272 million tonnes in the corresponding period last fiscal.

A spokesman of the APCMA said the decline in cement dispatches was hitting the industry badly, while the industry was already under pressure due to sharp increase in the cost of production that includes international coal prices, high power tariff and transportation cost. He said that slowdown in the construction activities for public sector development projects amid unfavourable weather conditions were some of the major causes of lower cement consumption.

Tokyo Cement commissions Colombo cement terminal

Sri Lanka: Tokyo Cement has commissioned its new 0.45Mt/yr cement terminal at the Port of Colombo in Western Province. The company invested US$12.3m in the facility. It is equipped with three 6000t cement silos. The Daily News newspaper has reported that it will increase the company’s total import capacity to over 1Mt/yr from 0.6Mt/yr. Tokyo Cement says that this will ensure an uninterrupted supply of cement to customers in Western Province.

The cement producer also started work on a 1Mt/yr upgrade project at its Trincomalee plant in November 2021. The work is scheduled for completion in early 2023. Once finished the cement producer will have a total production capacity of 4Mt/yr.

Lucky Cement gets Corporate Excellence Award

KARACHI: Lucky Cement Limited won the Management Association of Pakistan’s Corporate Excellence Award in the cement sector category, a statement said.

Noman Hasan, executive director of the Lucky Cement received the award at the 36th MAP Annual Corporate Excellence Award ceremony.

The Corporate Excellence Awards was instituted by MAP in 1982 with the sole aim to recognise and honour companies, showing outstanding performance and demonstrating progress and enlightened management practices.

Hasan said: “We are pleased to accept this recognition and would like to thank all our internal and external stakeholders for their confidence and continuous support throughout the years.”

He also said: “Our dynamic human capital and efficient corporate governance framework aligned to our vision of ensuring a sustainable leadership position in Pakistan has helped us achieve remarkable results in every domain of our business. Being an industry leader, we are determined to continue setting new benchmarks and create an environment of growth and opportunities.”

Lucky Cement received the award based on having the best corporate practices and governance in the cement sector.

The primary criteria for this award emanates from best corporate and management practices reflected by the leadership, corporate governance, customer and market focus, HR, strategic planning and communication, social responsibility, risk management, IT infrastructure, service delivery and security.