The parent company of Attock Cement Pakistan Limited (ACPL), Pharaon Investment Group Limited (Holding) S.A.L, is exploring strategic options, including a potential sale of its investment in Pakistan’s cement sector. The development was disclosed by ACPL in a notice to the Pakistan Stock Exchange (PSX) on Wednesday.
In its communication to the bourse, ACPL stated, “We hereby notify you that we have received a letter from Pharaon Investment Group Limited (Holding) S.A.L, Lebanon, the parent company of Attock Cement Pakistan Limited, advising us about their intention to re-evaluate their long-term strategic options, including a potential sale, in relation to their investment in the cement business in Pakistan.” A copy of the letter was also shared with the PSX.
The letter from Pharaon Investment Group outlined that no formal decision has been taken yet. “We will be carefully considering various options including a potential sale with due consideration to appropriate pricing, timelines, and broader market conditions before taking a final decision,” it stated.
The group has appointed Standard Chartered Bank as its international financial advisor to assist in this strategic evaluation. The company assured that stakeholders will be informed of any significant developments during the process.
Following the announcement, ACPL’s share price surged to Rs259.27, hitting its upper lock with an increase of Rs23.57 or 10% on the PSX.
Attock Cement Pakistan Limited, a subsidiary of the Lebanon-based Pharaon Investment Group, was incorporated on October 14, 1981, and is primarily engaged in the manufacturing and sale of cement. Known for its Falcon Cement brand, the company operates a manufacturing plant in Hub, Balochistan, and has a production capacity of 3 million tons annually. It exports clinker and cement to markets including the UAE, Africa, Iraq, and Sri Lanka.
Despite its strong market presence, ACPL has recently faced challenges. The company expects a 10% decline in cement dispatches for the financial year 2025. During the first quarter ending September 30, 2024, local dispatches fell by 20% year-on-year to 7.91 million tons, while exports grew by 22% to 2.14 million tons. Turnover and profit also declined during this period, highlighting the impact of reduced demand, particularly in southern Pakistan.
To mitigate rising costs, ACPL is investing $4.5 million in a 4.8MW wind power project set to become operational in January 2025. Additionally, the company plans to increase its use of alternative fuels to lower production costs further.
Previously, ACPL divested its Iraqi grinding unit in May 2023, selling its 60% stake in the operation to local interests. The Iraqi unit had a capacity of 0.9 million tons annually.
The strategic review by Pharaon Investment Group comes amidst a shifting landscape for Pakistan’s cement industry. Any decision regarding the potential sale could have significant implications for the sector, given ACPL’s established market footprint and export capabilities.
