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Pakistan cement distributors to decide action plan

Dispatches from cement plants are still facing unrest in Pakistan. The government’s new tax policy has been opposed and has led to continue the continued protests since 1 July.

The All Pakistan Cement Distributors Association (APCDA) has supported the action following the government’s introduction of new tax measures in the federal budget 2019-20. To move forward, APCDA has called a of the association’s general body today to discuss all tax-related matters, ie withholding tax and different taxes imposed on distribution/transportation of cement.

Furthermore, the discussion held between All Pakistan Cement Manufacturers Association with its Taxation Officer and association, and its tax experts would also be discussed. A resolution will then be submitted at the end of the meeting on 17 July 2019 in the office of Federation of Pakistan of Chamber & Industry, Lahore, to work out APCDA’s plan.

Pakistan’s State Bank releases 3QFY19 cement report

The State Bank of Pakistan’s third quarterly report on the state of the country’s economy shows the pace of economic growth slowed down considerably during FY19. This was mainly in response to the policy measures taken to curb the twin deficits. These measures affected the performance of the industrial sector and dampened manufacturing activities in the country.

According to the report, cement production recorded contraction of 5.4 per cent during July-March FY19, compared to double-digit growth of 12.4 per cent in the same period last year. This was the first decline in last eight years during July-March period. The decline may have been greater had it not been for cement exports, which partially offset the weakness in domestic demand.

The cement sector has been going through a major expansionary phase in recent years, mirroring the increase in economic activity in the country. Public sector development spending, complemented by CPEC outlays on infrastructure, provided a boost to the cement industry. However, this type of support may not be as forthcoming during the ongoing phase of macroeconomic stabilisation.

Cement exports grew 32.8 per cent YoY to US$221.3m in the period. A hefty 55.5 per cent increase in quantum exports offset the drag from lower unit prices. Facing continuously rising surplus capacity and declining local sales amid the slowdown in domestic economic activity, cement manufacturers have diverted their attention to mostly African markets. That said, the lower unit prices reflect the shift in the exporting product mix. The trend is for increased exports of the low-value clinker rather than finished cement.

Reon Energy’s solar project commences at FCCL Jhang

Pakistan – Reon Energy Limited Monday announced the Commissioning of its latest 12.5 MW captive solar power project at Fauji Cement Company Limited (FCCL) in Jhang Bahtar, Punjab. The proposed move is a key step in commercializing a unit in order to achieve a lower cost of electricity.
 
The 12.5 MW photovoltaic project is expected to produce approximately 20 GWh (Gigawatt hours) annually. The output energy will be used for captive generation and will avoid around 121,437 Tonnes of CO2 equivalent emissions in the next 10 years. The project aims to integrate the new photovoltaic project with the existing power generating facility.
 
Mujtaba Haider Khan, CEO, Reon Energy Limited said “The 12.5 MW Solar Plant shall offset higher energy prices for power from grid and other sources. Cement sector is going through a tough patch, lower prices and demand compression; this initiative should help preserve margins in a tough environment. I commend the Fauji Cement Team for taking a leap towards energy independence; we’re privileged to have played our role.”
 
The Solar Plant was said to create 500 jobs during the project duration. Reon Energy Limited is Pakistan’s leading Solar Company with deep domain expertise in lifetime solar and storage resource assessment, engineering, development and construction, operational asset management, troubleshooting and performance management. Reon started its operations in 2012 and since then has managed to turn around the nation’s Renewable Energy Market with successful partnerships with groups such as ENI Pakistan, Total, Indus Motor Company, Sindh Engro Coal Mining, Kohinoor Textile Mills, Abbott Pharmaceuticals, and Unilever Pakistan.-PR
 
Copyright Business Recorder, 2019

Pakistan’s exports increase by 7% as production goes up

Pakistan ExportsA worker monitors an automatic copper wire unit at the Fast Cables plant in Lahore, Pakistan. Reuters

Adviser to Prime Minister on Commerce Abdul Razak Dawood says Pakistan’s exports have increased by seven per cent as production line had gone up despite difficult environment.

Talking to Chairman Faisalabad Industrial Estate Development and Management Company, Mian Kashif Ashfaq in Lahore, Razak Dawood said the trade gap is narrowing down as exports are showing steadying trajectory while imports have reduced by four billion dollars.

Chief Operating Officer FIEDMC Aamir Saleemi was also present on this occasion.

Terming the project of Allama Iqbal Industrial City imperative for industrial development in the country, the Adviser said projects like Faisalabad Industrial Estate Development & Management Company (FIEDMC), would help the industry generating economic activities by attracting foreign and local investors besides enhancing volume to exports to meet the challenges of trade deficit.

Razak Dawood said Pakistan’s exports went up by 7 per cent as production line had gone up despite difficult environment.

“The trade gap was narrowing down as exports were showing steadying trajectory while imports got reduced by $4 billion and overall current account deficit also improved,” he added.

He said that the situation on economic front was not as bad as being portrayed by some quarters and they were ready as well to correct things. However, he also conceded that the economic situation must have improved at much accelerated pace.

He said that the exports of garments went up by 29 per cent, cement 25 per cent, basmati rice 21 per cent and footwear 26 per cent in the current fiscal year.

Abdul Razak Dawood said that the government provided subsidy to export-oriented sector on electricity and gas and it would be continued in coming year.

FIEDMC Chief Mian Kashif Ashfaq unfolding the distinctive features of Allama Iqbal Industrial City to Advisor said this sole project would house as many as 400 industries besides giving employments to 2,500, 00 people. He said approximately Rs400 billion foreign and local investments would be pumped into this project and development project is being carried out on fast track.

He further said FIDEMC always provided state of the art facilities to its customers besides resolving their issues through one window operation on top priority basis. He said the confidence of the investors on is being restored after completion of M3 project.

Mian Kashif said that Prime Minister Imran Khan has changed the image of the country within a short span of time since he formed the government in August last year. “Pakistan which suffered huge economic losses during the last 20-years due to militancy and war against terror, has now come out as a progressive new country under Imran’s leadership,” he added.

He appreciated Abdul Razak Dawood for taking serious steps for the revival of national economy. He said Pakistan’s economic indicators are now improving and soon the government would announce relief packages for the poor strata of the society.

He also said FIEDMC was committed to improve Pakistan’s ease of doing business ranking to under 100 within two years to attract international investors to the country.

Meanwhile a well renowned personality of Maritime Sector Chairman Pakistan Ship’s Agents Association (PSAA), Vice President Pakistan Stevedores Conference Ltd (PSCL), and Former Vice President Federation of Pakistan Chambers of Commerce & amp; Industry (FPCCI) Tariq Haleem says that the Pakistani nation, industrialists and the business community should not be disheartened.

For speedy recovery of economic activities the importance of ports has increased many folds as compared to the past and this is an admitted fact that Pakistani ports have special position for improvement of the country’s economy.

Tariq Haleem said that to keep pace with the modern fast improving world economical development we should immediately provide better facilities at our ports and take steps on war footing to reduce operational costs.

Certain amendments in relevant SRO’s are required to make Gwadar Port and Gwadar Free Zone operational. Huge investment is pending due to delays in the amendments. Afghan Transit Trade issues need to be addressed to bring back our lost revenue generating cargoes.

We believe that with dedication and honesty PM Imran Khan will Inshallah soon overcome the problems being faced by the country and he will lead the country’s economy into a stable environment. In a recent statement he mentioned that the need of the hour is for all of us to provide our trust and support to the present government.

However the government should also take the citizens of Pakistan into confidence to overcome the trust deficit “if any”. For the progress and well being of Pakistan all sectors will have to play their role.

Dewan Cement reports 60% fall in net profit

Pakistan’s Dewan Cement Ltd (DCL) has announced its financial results for the third quarter ended 31 March, reporting a 59.6 per cent YoY decline in net profit to PKR394m (US$2.78m) from PKR975m.

The company’s net sales fell 8.5 per cent to PKR9.46bn from PKR10.34bn during the 3QFY18-19. It also incurred a higher distribution cost of PKR175m, against PKR158m of the year-ago period. Administrative expenses rose to PKR472m from PKR412m.

DCL has a cement capacity of 1.76Mta in Dhabeji, Sindh District, and 1.134Mta at Hattar in Khyber Pakhtunkhwa province.

Lucky Cement reports strong export sales in 9MFY18-19

Pakistan’s Lucky Cement Ltd has reported a PAT of PKR8.29bn (US$58.53m) during the nine-month period ended 31 March, a 15.4 per cent fall compared to PKR9.80bn of last year. The profit declined despite the company having achieved an overall gross sales revenue growth of 3.3 per cent YoY to PKR52.32bn from PKR50.63bn, with the increase attributed to higher export sales volumes for clinker. However, the cost of sales during the 9MFY18-19 increased by 14.1 per cent per tonne, mainly due to an increase in coal, packing material and other fuel prices.

Lucky Cement’s overall sales grew by 1.9 per cent to 5.95Mt during the nine-month period. Local cement sales registered a 12.2 per cent decrease to 4.42Mt in comparison to 5.04Mt last year. Meanwhile, export sales improved by 105.5 per cent to 1.53Mt from 0.74Mt during the same period of last year.

Across the country’s cement industry, the drop in local sales reduced the overall sales volumes by 0.5 per cent to 34.58Mt for the nine months, against 34.76Mt during the year-ago period. Exports advanced 49 per cent to 5.13Mt from 3.44Mt, while the local sales volume declined six per cent YoY to 29.45Mt from 31.31Mt of the 9MFY17-18.

Projects
The civil work at the company’s 2.6Mta brownfield cement plant expansion in Khyber Pakhtunkhwa, Pakistan, is reportedly progressing as per target timelines. The company added that the project is expected to enter commercial operation in the 2QFY19-20.

The contract for the design and civil works has been finalised for a 1.2 Mta greenfield clinker production facility in Samawah, Iraq. Commercial production has been forecast to begin in the 1Q20-21.

Outlook
In the short to medium-term, Lucky Cement expects the cement industry to be challenging for domestic sales. However, export sales are anticipated to remain strong in view of favourable market dynamics and the rising demand for clinker in regional countries