Skip to content

News

FCCL to become the third-largest player in the country

Fauji Cement Company Ltd (FCCL) informed the Pakistan Stock Exchange (PSX) on 18 November that its Board of Directors has approved the process of amalgamation of Askari Cement Ltd into Fauji Cement Co Ltd and its placement before the shareholders in the Extraordinary General Meeting of the company as Special Business for their approval as per requirements of the Companies Act of 2017.

While commenting on the amalgamation, AHL Research stated that, pertinently, Askari has a cement capacity of 2.8Mta against FCCL’s current capacity of 3.43Mta. This implies an 82 per cent addition to existing capacity, which, together with FCCL’s announced greenfield expansion of 2.05Mta in the north (DG Khan, Punjab) and ACL’s brownfield expansion of 2Mta, will render FCCL to become the third-largest player in the country with a capacity of 10.3Mta.

Post-merger and expansion, ACL will add 47 per cent to the total capacity (4.9Mta out of the total 10.3Mta) in the new entity, whereas its current owners will hold nearly 37 per cent in shareholding (800m shares out of 2180m shares). Albeit, this deal will be beneficial for both ACL and FCCL, as the company’s cumulative market share will aid its augmented presence in North (third largest capacity in the region after Bestway Cement Ltd expands by 2.16Mta to 12Mta and Lucky Cement expands by 3.15Mta to 15Mta).

Iraqi Cement-makers Angry At Fuel Subsidy Cut

Iraq’s association of cement manufacturers on Tuesday slammed a government decision to reduce subsidises on fuel for the sector, warning the move risks factory closures and cement price increases.

The oil ministry earlier this month raised the price of fuel sold to cement manufactures from 150 dinars per litre (around 10 cents) to 250, following on from a previous hike earlier in the year.

The measure caused industry outrage in the crisis-hit country, where some regions are still waiting for costly post-war reconstruction.

“The cement industry is the only one that has been self-sufficient from 2016 until now and hasn’t raised prices,” Ammar al-Saadi, deputy director of the cement manufacturers’ association, told AFP on Tuesday.

He said public and private activity in the sector employed almost 50,000 people directly or indirectly, from factory workers to truck drivers.

The association warned of “enormous losses” in the sector, calling on authorities to reverse the decision.

Cement manufacturers will have to choose between “closures, which would lead to thousands of lay-offs… or an increase in the sale price of cement to at least $10 a tonne,” a statement from the association said.

“That would increase the burden for the population and the state, which is embarking upon the reconstruction of the country and wants to develop infrastructure projects.” The subsidised fuel price for cement manufacturers was originally approved in exchange for their commitment to cap the price of cement.

“The decision will lead to an additional cost of 35 million Euros ($41 million) per year, which could lead to heavy losses for the business,” said Adham al-Sharkawy, head of Lafarge Iraq.

He said the measure could threaten more than a thousand jobs if the firm is unable to pay salaries.

Iraq is the number two oil producer in the Organization of the Petroleum Exporting Countries and almost all of its revenues come from the sector.

Authorities say they want to diversify the economy to reduce their dependence on the sector.

Minister Seeks Timeline For Setting Up New Cement Plants

Pakistan: Provincial Minister for Industries and Commerce Mian Aslam Iqbal Monday asked the companies obtaining the No Objections Certificate (NOC) to give a timeline for setting up a new cement plant.
He was discussing the matter with representatives of companies obtaining the NOC for setting up new cement plants at the Civil Secretariat on Monday.

They discussed in details the progress regarding the timeline for setting up of new cement factories after the issuance of the NOC.

Some of the companies apprised the minister the reasons for the delay in establishment of new plants. The minister said that the company was bound to start work on establishing cement plant within six months after obtaining the NOC. He said that the provincial government had issued 10 NOCs for setting up of new cement factories to promote the construction sector and increase employment opportunities.

He said more NOCs would be issued after the approval by the cabinet.

The minister said that never in the history of the country had so many NOCs been issued in such a short span of time.

Mian Aslam Iqbal said that with the setting up of new cement factories, billions of rupees would be invested in Punjab. It is great that new industries were being set up in the province due to the government’s pro-industry policies.

Among the representative who called on the minister included Brig (retd) Syed Kausar Hussain of Bestway Cement, Asim Khawas Khan of Pioneer Cement, Syed Ahsanuddin of Fatima Cement, Muhammad Tariq of Fauji Cement Limited, Muhammad Ashraf of Maple Leaf, Khurram Shahzad of Kohat Cement, Annan Khan of DG Khan Cement and others.

Secretary Industry and Commerce Dr Wasif Khurshid, Additional Secretary Commerce and officers were also present.

Punjab issues 22 NOCs for setting up cement factories

LAHORE: The Punjab government has regulated the cement sector and issued 22 no-objection certificates (NOCs) for the setting up of new cement factories while ensuring that no more unit is established in the areas declared “negative”.

A study earlier conducted declared areas around Kallar Kahar as “negative” for the setting up of cement factories as the underground water had fast depleted.

Mines and Minerals Department Secretary Amir Ijaz Akbar told Dawn the salt range had been found as an ideal location for the setting up of cement factories as almost all raw material including limestone, clay and gypsum potential was available.

Since the Punjab government had lifted restrictions on cement industries for the development of construction sector, the revenue collection by the mines and minerals department surged to Rs10.19 billion in FY21 from just Rs4bn a couple of years ago. Besides, Mr Akbar said, Rs40bn was being collected annually under the head of federal excise duty.

Answering a question, the mines secretary said that the NOCs were being given for the establishment of cement factories after complete environment impact assessment and involved all line departments including industries and irrigation departments for all around permission.

Meanwhile, Chief Minister Usman Buzdar says the new cement factories will generate jobs for millions of people and result in uplifting and ensure economic development in the backward areas.

Mr Buzdar stated that the steps taken by the government for the development of salt and coal industries were also yielding positive results. He said the Punjab Mineral Development Corporation had collected Rs1.64bn. He said as many as 21 rock salt exploration licences had been issued for the promotion of the salt industry. The department’s production capacity has been increased with the launch of four coal and eight salt mines.

The chief minister says the ban on coal mining has been lifted and transparency ensured in the public auction of 20 blocks of coal. The Mineral Cadastral System has been introduced to provide timely information.

The chief minister says e-Fighting & Office Automation System has been implemented with the cooperation of PITB, while Human Resource Management Information System (HRMIS) has also been introduced in the mines and minerals department.

The mines and minerals department has established a state-of-the-art in-service training academy in the Punjab School of Mines, Katas, wherein some 3,000 workers have been provided professional training.

Similarly, the Mine Sample Testing Laboratory, Khushab, was being restored with better facilities. New offices of Deputy Director Mines and Minerals have been set up at Khushab, and Mianwali.

The chief minister says steps are being taken for ensuring welfare, betterment and safety of miners across Punjab adding that the inspection system has been digitalised to ensure the safety of miners. A rescue squad has been set up at Sargodha Bridge 111 to deal with emergencies and untoward incident during mining.

Scholarships for miners’ children have been increased by 300 per cent and Rs80.5 million has been distributed. A special grant of Rs6,000 per month is being given to the disabled miners. A 10-bed minesabour welfare hospital has been set up in Makarwal, Mianwali.

Six mines labour welfare dispensaries are also being set up in the remote areas for providing medical facilities to the miners. A mobile health unit has also been set up for the miners in Chakwal district. Three water supply schemes and RO plants are being set up in Basti Daher, Makarwala and Chowasidan Shah.

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.

Turkish exporters to EU face EUR 771 million burden due to carbon border tax

Turkish companies that sell their cement, aluminium, electricity, and steel to the European Union could face additional costs estimated at EUR 399-771 million with the introduction of the carbon border in 2026.
Turkey is among the top ten exporters of cement, aluminium, and steel to the EU, so it is set to be heavily affected by the carbon border adjustment mechanism (CBAM).
The additional costs amount to EUR 771 million in the first year, or EUR 399 million if just the direct emissions are charged
A study by the European Bank for Reconstruction and Development (EBRD) found businesses in Turkey would be paying EUR 771 million more in 2026 than the average measured between 2017 and 2019, or EUR 399 million if just the direct emissions would be charged.
According to the Fit-for-55 package, presented last month by the European Commission, CBAM will be introduced in 2026, after the preparatory period from 2023 to 2025. The commission said the tax would be paid only on direct emissions, but that by the end of the transitional period it would evaluate whether to extend its scope to more goods, including indirect emissions (like those from the electricity used in production).
The EBRD study is a result of cooperation with the Ministry of Environment and Urbanization on CBAM’s consequences for Turkey. The aim is to foster an informed debate about the monetary implications and transitional risks for Turkish exporters to the EU.
CBAM payments can represent up to 50% of current prices for cement, 18% for aluminium and 9% for steel
The study found CBAM payments can represent a significant share of current prices for some products, for instance up to about 50% for cement, 18% for aluminium and 9% for steel. In total, CBAM payments would represent 0.07% of Turkey’s gross domestic product forecast for 2023, provided that the commission’s proposal enters into force at the beginning of that year, the EBRD said.
In addition to delivering cost estimates, the study analyses ways to adjust to the coming changes and their medium- and long-term implications.
Turkey already has a measurement – a reporting and verification system similar to the EU emissions trading system or ETS, but in order to meet and enhance its climate targets, the country could ratify the Paris Agreement, set sectoral and national net zero carbon targets and introduce a national emissions trading scheme.
Access to financing will be conditioned by climate risk management
The analysis also warns Turkish companies that, in order to access financing, climate consideration and, in particular, climate risk management would be increasingly important. The EU and the G7 plan to make requirements of the Taskforce on Climate-Related Risk Disclosures mandatory.

Carbon pricing is an example of climate transition risk

One such climate transition risk is carbon pricing, and financiers will want to know how corporations are managing them. Carbon markets across the world are growing, and carbon prices, which have almost doubled in the EU this year, are placing increasing pressure on emitters to decarbonise.

Şule Kılıç, EBRD Deputy Head of Turkey, said the international lender is working on a set of strategic policy choices for the government to mitigate trade risks and foster domestic low-carbon economic development in line with the EU climate policy objectives.

Together with advising on policy, the EBRD is offering financing.

Source :balkangreenenergynews.com