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Pakistan best cement producer in region

14 February, 2013

LAHORE: Pakistan is considered one of the best cement producers in the region, as its products are readily accepted in Middle Eastern countries, Africa as well as the neighbouring countries including India, Sri Lanka and Afghanistan, though the exports remained below the full potential mainly due to high transportation cost as most of cement units are located in north.

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LAHORE: Pakistan is considered one of the best cement producers in the region, as its products are readily accepted in Middle Eastern countries, Africa as well as the neighbouring countries including India, Sri Lanka and Afghanistan, though the exports remained below the full potential mainly due to high transportation cost as most of cement units are located in north.

Noman Hasan, the CEO of the largest cement exporting company of Pakistan - the Lucky Cement - said that with a view to reduce transportation cost, the major hurdle in the way of exports, the company has established its Karachi plant.

It exports to the Middle East and other countries via sea and has streamlined its transportation system, built storage and deployed energy-efficient machinery. He said that in 2007, the company exported loose cement mainly to Middle Eastern countries because of massive development work there.

According to industry experts, the cement producer also managed to cut back on its finance costs to Rs66 million by reducing its long-term debt leverage. It has also managed to boost its other income by supplying electricity to Hyderabad Electric Supply Company to Rs153 million against a meagre Rs0.77 million in 2012's corresponding period.

As per statistics, during first half of current fiscal, the company relied on short term borrowings, which amounted to Rs2.6 billion, whereas the company had zero short-term borrowings in June 2012. Despite the strong performance, the company lost 2pc of its footing in the cement industry as its market share went down to 17pc for the half-year 2012-13.

The profits solidified at Rs4.29 billion in the first half of the fiscal year 2012-13, up 42.15pc from Rs3.018 billion in the corresponding period of last year. The astounding boost was driven solely by selling prices, which surged 13pc to Rs465 per bag in the south zone and 8pc to Rs438 in the north. Additionally, surging other income and declining financial charges supported the bottom-line.

Noman said that Lucky Cement in 2011 kicked off work on a plant in the Democratic Republic of Congo with a capacity of 1.5 million tons which will take another three years before coming on line. Last year, the company invested in a cement grinding plant as a joint venture partner in Basra (Iraq) and this will start production before the close of the current year.

Industry sources said cement industry has now been focusing high-growth markets within the fastest-growing Asia and MENA regions and planning to go beyond borders in high cement deficient countries with strong GDP growth prospects.

They said that Karachi-based Thatta Cement Company has also received approval from the Sri Lanka Ports Authority (SLPA) to set up a cement processing plant at the Port of Hambantota in the South.

End.


 
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