Author Topic: Cement Sector  (Read 236591 times)

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Offline Learner7

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Cement Sector
« Reply #-1 on: December 29, 2009, 02:29:29 PM »
All about cement industry.
« Last Edit: February 01, 2012, 10:04:44 PM by M&M »

Pakinvestorsguide

Cement Sector
« Reply #-1 on: December 29, 2009, 02:29:29 PM »

Offline Learner7

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Re: Cement Sector
« on: December 29, 2009, 02:30:20 PM »
Inland freight subsidy urged to boost cement export


KARACHI: Manufacturers of cement in Pakistan have sought a 50% subsidy on the inland freight cost to boost cement export to more than one billion dollars, industry sources said on Thursday.

All Pakistan Cement Manufacturers Association (APCMA) has written a letter to the government in this regard seeking a payment of $ 36 million as the freight equalization subsidy to the cement factories to get an additional export earning of $ 359 million.

Pakistan cement export through Karachi sea ports is estimated to increase from $ 422 million in 2008-09 to $ 781 million in 2009-10. Exports to India and Afghanistan through land routes, the cement industry is likely to fetch the country more than $ 1 billion per annum.

These sources explained, that depending on the cement units location in the north, which has 80% of the production capacity of the country, inland freight cost for exports to the port range from Rs 900 ($11) to Rs 1400 ($17) per ton. The cement factories located in the south are paying an inland freight at an average rate of Rs 300 ($3.5) per ton.

APCMA has maintained, in its letter, that high inland freight costs of the units located in the north is a major impediment in the way of raising cement exports, particularly when cement prices have gone down in the international market. The FOB cement prices have dropped in the international market from about $ 80 per ton to US $ 50 ·$ 56 per ton.

APCMA has projected an increase of 36 percent in cement export if the government agrees to pay a subsidy of 50% on inland freight costs.

The cement production capacity in Pakistan has surged to 44.07 million tons per annum. With the additional capacity coming up in the north this will further increase to 46.34 million tons per annum by 2011.

The domestic demand for the cement in the country during the year 2008-2009 was only 19.40 million tons. After providing for exports to Afghanistan and India by the land route the industry has a surplus exportable capacity of 13.27 million tons of cement.

Sources said that Pakistan which is ranked 5th in global cement export, can take the second position if the government would provide the freight subsidy.

http://www.pakistantimes.net/pt/detail.php?newsId=7110

Offline Karuli

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Re: Cement Sector
« Reply #1 on: December 29, 2009, 05:33:19 PM »
thanx nice share Leaner7

Offline Learner7

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Re: Cement Sector
« Reply #2 on: December 29, 2009, 05:43:14 PM »

Offline niaz.ahmed

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Re: Cement Sector
« Reply #3 on: January 18, 2010, 12:51:23 AM »
dear seniors, after news of revival of cement industry, what could be companies to invest beside lucky and DG. What about FCCL and KOHC. thanks.

Offline Farzooq

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Re: Cement Sector
« Reply #4 on: January 30, 2010, 10:30:57 AM »
Cement exporters to benefit from UAE price surge

RIZWAN BHATTI
KARACHI (January 30 2010): Pakistani cement export price for UAE is likely to rise by $3-4 per tonne from February 1, as the UAE cement manufacturers have announced to increase the commodity price by about 10 percent in the wake of rising cost, industry sources said on Friday. Although, the development and construction activities in the UAE, except Abu Dhabi, are slow, the local cement manufacturers of UAE have raised the prices by 20-30 dirham per tonne owing to rising raw material cost, they added.

Sources said the UAE cement manufacturers have raised the cement prices by some 10 percent from February 1, 2010 to rationalise the rising cost of production. With current surge, the ex-factory cement price has mounted to approximately 250 UAE dirham per tonne, which previously stood at 225-230 dirham per tonne, depicting an increase of some 25-30 dirham per tonne.

Now, locally produced 50-kg cement bag would be available at some 14-16 UAE dirham as compared to 12-15 dirham per bag previously. With the surge in the cement prices by the UAE manufacturers, Pakistani exporters believe that they will get some benefits in shape of increase in price and export. "We were already expecting that cement prices in UAE would surge following high cost of production, as the rising prices of raw material have badly hurt the cost and it was not possible for the UAE companies to sell cement on old rates," said a leading cement exporter.

"UAE is a leading importer of the Pakistani cement and some 50-60 percent cement is being exported to the Emirates, therefore, the Pakistani cement manufacturers would be the real beneficiaries of the current price hike by the UAE companies, he added. "We expect that Pakistani cement export prices for the UAE would go up by $3-4 per tonne," he said and added that now cement exporters would further focus the UAE markets to earn more foreign exchange.

However, industry sources said that only a few Pakistani cement companies could take benefit of price hike by UAE cement manufacturers. Cement exporting companies, which have cement plants in north zone (Sindh-Balochistan), would take some benefit in price and export, as they pay less transportation cost as compared to south zone factories, they added. "It will also be a hope for revival of the ailing Pakistani cement industry, which presently is facing massive decline in the local as well as export dispatches due to slow economic activities," they said.
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Offline Karuli

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Re: Cement Sector
« Reply #5 on: February 01, 2010, 06:13:15 PM »

Offline Farzooq

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Re: Cement Sector
« Reply #6 on: February 06, 2010, 10:27:31 AM »
Govt may give freight equalisation  
 
support to boost cement exports

Saturday, February 06, 2010
By Jawwad Rizvi

LAHORE: The Federal Ministry Of Finance has principally agreed to provide freight equalization support to the cement industry in order to achieve their one billion US dollar cement export this year.

The News has learnt that the cement manufactures have demanded the government to provide some relief in shape of freight equalization in order to increase the export of Pakistani cement by sea. The cement makers had asked for 50 per cent support from the government in freight tune which was agreed by the government with a view that the export of the cement would be touch to one billion US dollar mark this year.

The sources in ministry of finance revealed that some one billion rupees would be allocated in this tune and the preparation of mechanism to support the cement industry was underway.

The cement industry has been asking for around $27 million dollar support in freight equalization tune and committing to generate some extra $160 million revenue for the country in return, they added.

Under this freight equalization support program for the cement industry, the government had divided that country into two parts, South and North. The South contains cement manufacturing units operating in Sindh and Balochistan while North comprises of Punjab and NWFP. The North zone is further divided into three parts extreme north, which has three cement manufacturing units, central north which has 15 cement making units and South-North which has only one cement manufacturing unit.

For south zone cement manufacturing units Rs300 per metric ton freight equalization support would be given on export of cement. For extreme north Rs1,400 per metric ton, for central north Rs1,300 per metric ton and South-North Rs900 per metric ton freight equalization support has been proposed.

In the first seven months of current financial year Pakistan has exported almost 6.2 million metric tons of cement out of which some 3.8 million metric tons went by sea, 0.4 million metric tone to India by train and almost 2 million metric tones of cement went to Afghanistan by road. The country has earned around $350 million foreign exchange from this export.

If cement export would continue without freight equalization support it would touch $650-700 million by the end of this financial year. However with freight equalization support the export may add some additional revenue of $150-160 million and it would jump to $850 million or above. However, the cement industry may not touch the one billion US dollar cement export but it may come close to this ambitious target, finance ministry officials pointed out.

During the last financial year of 2008-09 the country had dispatched some 10.6 million metric tons of cement and earned some $600 million foreign exchange. This year it has been eyeing to break the previous export targets.

The spokesman of All Pakistan Cement Manufacturers Association (APCMA) said the industry would welcome the government support and it would defiantly be increase the cement export of country.

He added the APCMA would do its level best to achieve touch the one billion US dollar export mark this year if the freight equalization support would be given to the industry timely.
 
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Offline Research Doctor

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Re: Cement Sector
« Reply #7 on: February 08, 2010, 12:31:54 AM »
After the great fall last year, the first sectors to rebound were OMC's, then banking, then power, then fertilizer and insurance. Then came the turn of revival of textile sector, then the sugar sector, then telecommunication sector. Now seems to be the turn of cement sector. Do u agree for cement rally now??????

Offline Small Investor

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Re: Cement Sector
« Reply #8 on: February 19, 2010, 09:56:42 AM »
Any news in cement sector ot its normal daily satta
Lucky has started running

Offline ::WASIF::

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Re: Cement Sector
« Reply #9 on: February 23, 2010, 04:16:20 PM »
Fecto Cement ke kia expectation hay ais result per ais ko result say pahlay sale karna chahiya y wait karna chahiya kese ko pata hay tou please result say pahlay apni advise day
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Offline Dr nouman

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Re: Cement Sector
« Reply #10 on: March 06, 2010, 02:50:53 AM »
salam...
anynews about fecto cement.....i m stuck up in it ...bought at 10.31......any good  news about it or kohat cement....
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SNGP, NCPL, KEL, EPQL, SPWL, CSAP,

Offline ::WASIF::

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Re: Cement Sector
« Reply #11 on: March 06, 2010, 11:52:10 AM »
sell it and shift to FCCL below 6 or 5.85 and sold above 7
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Offline Mr.TOOL

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Re: Cement Sector
« Reply #12 on: March 08, 2010, 10:17:55 PM »
TRUST IN GOD AND DO THE RIGHT.

Offline Karuli

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Re: Cement Sector
« Reply #13 on: March 09, 2010, 10:21:52 AM »
115 percent decrease in cement sector profit
During the first six months of the current fiscal year, decrease in cement prices accounted for the decrease of profitability in the sector.
According to a report by Invest Cap Securities, cement worth Rs 12.1 billion was sold during the first six months of fiscal year 2009, however cement worth Rs 58.3 billion during the same period last year consequently significant drop of 115 percent profitability was recorded.
The recent reductions in coal prices have reduced the overall cement sector spending. The sector margin stands at 23 percent after decrease of eight percent. The prices increased by Rs 16 due to increase in deman

Offline Farzooq

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Re: Cement Sector
« Reply #14 on: March 30, 2010, 01:52:17 PM »
35% Inland Freight Subsidy Announced

The GoP has agreed to provide a 35% inland freight subsidy for Cement manufacturers on transportation expenses for goods brought to the port from cement companies situated at least 100km away from the sea.
The subsidy is only valid for the period 4Q FY10. This subsidy follows the earlier indication provided in the trade policy for FY10. However, the quantum of the subsidy at 35% is lower than the anticipated 50% subsidy. The subsidy is most likely to benefit the plants in the Northern region of the country with approximately 80% of country's total cement production.
According to our estimates, the cost incurred on inland freight varies between USD 15-18/ton, thus a 35% subsidy is expected to induce a reduction in cost to the tune of USD 5.25-6.5/ton.
Amongst the IGI Cement Universe companies, DG Khan Cement Company (DGKC) stands to be the biggest beneficiary. Based on initial estimates, we have revised our EPS estimates for DGKC for FY10 to PKR 1.96 per share from PKR 1.83 per share. We maintain our BUY stance on the scrip with Jun10 PO of PKR 47 per share.
In our opinion, Lucky Cement Company (LUCK) does not stand to gain much from this subsidy as most of its exports are channelized from the southern plant which is within the 100km distance from the port, making it ineligible for the subsidy. We remain neutral on the scrip with Jun10 PO of PKR 78 per share.
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Offline Farzooq

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Re: Cement Sector
« Reply #15 on: April 04, 2010, 11:31:13 AM »
Cement manufactures demand an end to ‘discrimination’ in subsidy
 
Sunday, April 04, 2010
By our correspondent

KARACHI: Cement manufactures have asked the government for an inland freight subsidy to all the stakeholders of this industry instead of just to those companies located at least 100 kilometers away from the port.

All Pakistan Cement Manufacturers Association, in a letter to Trade Development Authority (TDA), said that according to a government notification, subsidy can be claimed only by those cement plants, located at least 100 kilometers away from the Seaport.

“With the subsidy available only for plants located 100 kilometers away from the port, there is a risk that bulk export would suffer greatly, resulting in lower exports,”

This condition has eliminated all the running plants located in the south from availing this subsidy, it said. “This discrimination within the sector will definitely hurt the basic objective of promoting cement exports through sea route as this would make the cement plants of south, especially those located in and around Karachi and Hub, at a highly disadvantageous position.”

The bulk of export through sea route is being made by cement plants located in south. Similarly, the entire export through the land route to Afghanistan and India is being made by plants located in north, the letter added.

The plants in south do not have any share in the exports through the land route because of high inland freight, the letter said.
 
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Offline Farzooq

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Re: Cement Sector
« Reply #16 on: May 06, 2010, 09:08:35 AM »
Massive cut in PSDP, power outages hit cement industry  
 
Thursday, May 06, 2010
By Khalid Mustafa

ISLAMABAD: The massive cut in the Public Sector Development Programme (PSDP), power tariff hike, increase in coal prices in the international market and power outages have exposed the cement industry to vulnerability owing to which several business tycoons have indicated to the Industries and Production Ministry that they feared closure of their plants as running cement industry is no more feasible, a senior official told The News.

The power tariff has increased by 30 per cent within a year. The coal prices, being used as a fuel in the cement industry, swelled by over 100 per cent to $125-135 per ton during 2009/10 from $57-85 per ton during 2008/09, he said.

In April 2009, only one plant of Lafarge Cement paid Rs124 million, but due to power tariff hike it had paid Rs163 million during the current year.

The paper sacks price has increased by Rs13-14 in the wake of increase in paper price in the international market, the official said, adding that the cost of per ton cement has increased by Rs500, but in the wake of less domestic demand, the price of a cement bag has drastically tumbled by Rs100 from Rs315-320 per bag during the last fiscal year to Rs225-240 during the current year.

Likewise, the massive power outages are also causing phenomenal increase in the input cost of the commodity.

All the cement plants are running at just 50 per cent production capacity despite the fact that more plants have been installed, the official said.

The domestic demand for cement has witnessed significant reduction of 10-15 per cent during the current year, he said, adding that the massive cut in PSDP has also reduced the local demand for the commodity and huge increase in input cost has forced several enterprisers to seriously think to either reduce their operations or close the plants as most of them are not even have enough liquidity to service their debts.

Under this scenario, three main cement plants, Best Way Cement, Lafarge Cement and DG Khan Cement in Chakwal, are working hard to survive, but the incessant power outages are inflicting huge losses to the industry.

The three units are producing 11 million tons of cement, which is 25 per cent of the total cement production.

Around 10 million people are employed, directly or indirectly, with the cement sector.
 
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Offline Farzooq

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Re: Cement Sector
« Reply #17 on: May 14, 2010, 09:34:48 AM »
Cement exports to increase manifold

By Moonis Ahmed

KARACHI: Pakistan’s cement exports to Middle East and African countries are expected to increase manifold on its rising demands in the upcoming months and countries particularly Afghanistan and Iraq are very attractive markets for the ongoing construction projects.

A report prepared by Topline Securities said Afghanistan will be a permanent market due to lack of availability of limestone while the demand may rise to 15 million tonnes from current 2.5 million tonnes.

It said that in the last decade the demand for cement has increased by 235 percent to 33.2 million tonnes while, supply, due to expansions has increased to 44.8 million tonnes, i.e. excess supply of 11.6 million tonnes. The Pakistan cement sector may witness an expansion phase in 2014 due to pickup in local and regional demand, it said.

Currently, the combined installed capacity (35.9 million tonnes in North and 8.9 million tonnes in South) stands at 44.82 million while Fauji Cement’s 2 million tonnes project is expected to come online this year, which will increase name plate capacity to 46.82 million tonnes. After this, Pakistan will be included in top 20 cement producers, the report said.

Pakistan has great cement export potential of 5 million tonnes to 27 countries. While bagged cement has export potential of 10 million tonnes.

Key challenges highlighted by the report includes higher indirect taxes (Rs 700 per tonne fixed excise duty, 1 percent special excise duty) which make Pakistan’s cement less competitive against regional players like India and China.

With huge potential of exports, Pakistan cement industry requires the government to take effective measures to support export sales with reduction in port costs (port duties and dock labor cost), increase of rebate on exports, separate births at ports for export clinker and cement.

With fuel source changing from furnace oil to coal, the dynamics of the sector have changed. Large manufacturers apart from installing waste heat recovery project for cheaper electricity are also looking towards alternate fuel sources (bio mask and municipal waste), which is estimated to fulfill 25 percent of power needs of the respective companies.

With Pakistan targeting a gross GDP growth of around 6 percent in next 5 years, huge investment in construction, infrastructure and transportation would be required, it said. These infrastructure investments include development projects like dams, highways and trade corridors. Furthermore, with rising coal demand in the country the government should allocate investments for extraction of coal reserves from Thal
and Balochistan.

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Offline Farzooq

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Re: Cement Sector
« Reply #18 on: May 16, 2010, 10:47:21 AM »
Pakistani cement flooding East African markets  
 
Sunday, May 16, 2010
NAIROBI: Local cement manufacturers are headed for hard times after the Pakistan government offered huge subsidies to its domestic cement makers to increase exports to East Africa, media reported here.

Pakistan government has agreed to give 35 per cent subsidy on transportation expenses for cement meant for export. East Africa is one of the strategic markets for Pakistan cement owing to its proximity as well as the construction boom in the region. Cement demand in East Africa is expected to grow by 33 per cent to eight million tons in 2011 from six million tons in 2009. Pakistanís cement industry says that their government’s move should help generate better volumes as it will strengthen competitiveness over other manufacturers, which in turn can pave way to a fall in local cement prices. An umbrella body representing business associations in East African Community asked East African countries’ governments to support local cement manufacturers compete with imported cement. East African Business Council said cement industry faces increased competition from the imported product from countries with lower production costs.

Executive director Agatha Nderitu said that low cost producers such as Pakistan, China and India were flooding the region. “Pakistan Government recently granted cement manufacturers a generous subsidy on inland transportation of cement for export in what East African Cement Producers Association believe is likely to hurt the local market,” she said.

Cement in East African countries was classified as a sensitive product in 2005 with the import duty set at 55pc, which was to be reduced by five per cent every subsequent year. However, in June 2009, the status was removed and the tariff was cut to 25pct. This, along with the ability to produce at a lower cost and the implementation of 3pc inland freight subsidy, has made Pakistan’s cement manufacturers more price-competitive over African makers. Nderitu said that the drastic drop in duty from 40 to 25pc adversely affected cement industry by opening doors for cheap imported cement into the region. East African Cement Producers Association chairman David Njoroge said transport and electricity costs in East Africa were three to five times higher than in Egypt, Pakistan, and India. “Whereas we recognise the efforts being made by governments to improve the physical infrastructure, we are not yet at the level in terms of costs to compete with the low cost producers,” he said.
 
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