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cement industry – Profit by Pakistan Today

Profit by Pakistan Today

Tag: cement industry

  • APCMA condemns CCP’s operation at member offices 

    APCMA condemns CCP’s operation at member offices 

    LAHORE: The All Pakistan Cement Manufacturers Association (APCMA) on Saturday condemned the entirely unwarranted operation carried out at the offices of APCMA and a member of APCMA as well as the ensuing harassment and intimidation of its officers and staff by the staff of the Competition Commission of Pakistan (CCP) on Thursday, September 24. 

    “The CCP team’s forcible entry and the subsequent action can only serve to damage the atmosphere of investment revival and growth that the present government has striven hard to create,” the association said in a statement. 

    According to the details, personal property, including mobile telephones, of the members of the staff present at the APCMA office and at the office of a member mill were appropriated without lawful authority and in violation of guarantees of privacy and dignity assured to every individual by the constitution of Pakistan. 

    “It is apprehended that the items unlawfully appropriated will be tampered with or used selectively, out of context, to malign chosen individuals or companies,” the statement said.

    Further, the statement added that the APCMA and its member have regularly provided to the CCP all information that has been required by the CCP. The stated basis of the unwarranted operation on 24.09.2020 is a matter of utmost concern, not only for the cement industry but for all businesses in the country. 

    It has been stated that the action of September 24 was carried out because of an increase in the market price of cement since April 2020, even though the cost of some items such as fuel has fallen since then. 

    The premise that the market price of cement or any other item is linked to the cost of production through some simple cost-plus formula betrays a complete lack of understanding of market dynamics and the market determination of price. 

    The market price is determined by the forces of supply and demand and not by variations in the cost of production alone. Cement produced by different manufacturers being a largely homogeneous commodity cannot exhibit a significant difference in price across the various brands. This basic fact has also been lost sight of by the CCP.

    The cement industry of Pakistan has made large investments into plant expansion and modernization over the last five years. This has led to the cement industry being in a position to play a dynamic role in public interest infrastructure projects, such as the Basha and Mohmand Dams, as well as the revival of the construction sector in general. 

    The action taken by the CCP on September 24 and the threat posed to cement manufacturers of continuing witch-hunts and fishing inquiries is inconsistent with the effort by the Government of Pakistan to create an atmosphere conducive to investment and growth.

     

  • Cement sector profits decline 42pc in first quarter FY19

    Cement sector profits decline 42pc in first quarter FY19

    ‘Stagnancy in domestic consumption and increasing input costs are badly hurting the bottom line of cement sector’

    ISLAMABAD: The spokesman for All Pakistan Cement Manufacturing Association (APCMA) said on Wednesday that the cement industry’s profitability has declined considerably due to increase in input cost, while the construction sector is not posting the anticipated demand.

    “Profit after taxation of cement manufacturers has declined by up to 42 per cent in the first quarter of this fiscal as compared to the same period last year,” he said. “Exports became competitive only because of a steep decline in the value of rupee, as dollar increased from around Rs124 at the start of this fiscal to Rs133 on November 1, an increase of 7.26 per cent in just four months. This decline in currency, however, increased the input cost of most of the fuels (imported coal) and spare parts consumed by the industry.”

    He said the cement industry of Pakistan is heavily taxed. “During the financial year 2018-19, federal excise duty was further increased by Rs250 per tonne. FED was Rs400 per tonne (Rs20/bag) in the Financial Year 2013-14, which was increased to Rs1,500 per ton (Rs75/bag) in the budget for 2018-19,” he noted.

    He said cement despatches are also subjected to general sales tax at 17% on maximum retail price, which is Rs86 per bag. Other taxes include income tax (31%), workers profit participation fund (5%), workers welfare fund (2%) and provincial levies i.e. royalty and excise duty. The total taxes on a bag of cement works out to Rs185 per bag, which is 31% of Rs600 per bag.

    Stagnancy in domestic cement consumption and increasing input costs have badly hurt the bottom line of the cement sector, he said. “But healthy growth in exports from the southern mills saved the day for the industry.”

    Consumption pattern in northern and southern parts of the country highlights a huge contrast in cement demand in different parts of the country, the spokesman said. “The mills in the northern part of the country usually lead the growth but they have suffered so far due to negative domestic and export demand. Domestic cement demand declined in first four months of this fiscal by 4 per cent as the despatches fell from 10.671 million tonnes in July-Oct 2017 to 10.244 million tonnes in July-Oct 2018 while the exports posted a decrease of 21.54 per cent, going down from 1.287 million tonnes in the first four months of last fiscal to 1.010 million tonnes during same period this year,” he added.

    In contrast, he mentioned, mills in the southern part of the country posted high growth in the first four months of this fiscal. “These mills despatched 2.702 million tons of cement for the local market that was 24.53 per cent higher than 2.170 million tons despatched during the corresponding period of last year. Exports of cement from the southern region also increased by 216 per cent to 1.397 million tonnes in July-Oct 2018 from 0.442 million tonnes only during the same period last year.

    It is pertinent to mention that in the first four months of this fiscal, the overall despatches increased by 5.37 per cent to 15.353 million tonnes. The domestic uptake increased by paltry 0.82 per cent during July-October 2018, while the exports registered growth of 39.13 per cent during the same period.

    In October 2018, cement despatches grew by 7.45 per cent. The industry despatched 4.536 million tonnes of cement last month out of which almost 3.921 million tonnes was consumed domestically and rest 0.615 million tonnes was exported. Exports grew by impressive 38.87 per cent while the domestic consumption registered an increase of 3.76 per cent.

    The spokesman appealed the government to cut down duties and taxes on cement to improve its local demand and help the manufacturers to explore foreign markets to earn precious foreign exchange and contribute more to the national economy.

     

  • Cement industry export revenues up by 9pc

    Cement industry export revenues up by 9pc

    According to Pakistan’s Federal Bureau of Statistics, the Pakistan cement industry earned a foreign exchange revenue of $20.78 million by exporting 446,741t of cement in May 2018 compared to $19.147m on 404,898t of cement in the previous month (April).

    This represents a month-on-month (MoM) growth of 8.6 per cent and 10.3 per cent in terms of value and quantity, respectively. When compared with the figure of May 2017 – earning $14.863m on 283,193t of cement –  cement exports advanced year-on-year (YoY) at 39.9 per cent and 57.8 per cent in terms of value and quantity, respectively.

    On a cumulative basis, export revenue between July 2017 and May 2018 stood at $206.533m on 4.189Mt of cement against $219.812m on 4.166Mt in corresponding 11 months of the last fiscal year. This reflects a YoY fall in value by 6 per cent, but a 0.6 per cent rise in volumes on a YoY basis. However, the value of cement fell from $52.75/t to $49.29/t during this period.

  • Power Cement completes financing for new plant

    Power Cement completes financing for new plant

    One of Pakistan’s leading cement producers, Power Cement Ltd has completed the financing arrangements of Rs24.9 billion ($205 million) for the 2.5Mta expansion of its cement plant in the Nooriabad Industrial Area, Kalo Kohar District, Jamshoroo, Sindh.

    On completion of this expansion, Power Cement will be the second-largest producer in the Southern Region by May 2019, with a total capacity of 3.4Mta, said Power Cement’s CFO, Tahir Iqbal.

    The breakdown of financing includes equity of Rs1.3 billion by foreign investors such as The Investment Fund for Developing Countries (IFU), IFU Investment Partner K/S and FLSmidth. Equity of Rs7.4 billion has been retained by local shareholders for subscribing to right shares.

    Other than equity, local investment includes Rs12.1 billion, financed by the National Bank of Pakistan (NBP), Habib Bank Ltd (HBL), Faisal Bank Limited (FBL), The Bank of Punjab (BoP), Al Baraka Pakistan Ltd, Bank Alfalah, Dubai Islamic Bank (DIB), Askari Bank, First Oman Investment Co, and the First Credit and Investment Pakistan Ltd.

    Investment worth Rs4.1 billion is being financed by overseas organisations, including the Islamic Corporation for the Development of the Private Sector (Saudi Arabia), OFID, OPEC Fund for International Development (Austria) and DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbh (Germany).

    Equipment is being supplied by FLSmidth Europe while TEPC China is working as the construction contractor.

  • Capacity utilisation in cement reaches all time high at 95pc

    Capacity utilisation in cement reaches all time high at 95pc

    KARACHI: With fifteen days of fasting falling in the month of May, cement consumption has slightly been affected as domestic despatches have posted a modest growth of 2.40 per cent – lowest in this fiscal year. Exports, however, grew by a healthy 41.88 per cent boosting overall growth to 5.69 per cent.

    Construction activities normally slow down in Ramzan and even a modest growth in May indicates that the buoyancy in the sector is still present. Exports continued to post a healthy growth after currency devaluation growing by 84, 80 and 40 per cent respectively during March, April and May this year.

    In May 2018, the industry despatched 3.919 million tons of cement against 3.708 million tons despatched in May 2017. In May 2018 the domestic cement despatches in the Northern region were 2.812 million tons against 2.811 in May 2017 whereas, despatches in the Southern region amounted to 0.669 million tons in May 2018 against 0.588 million tons in the same month last year. Exports from North were 0.224 million tons last month against 0.219 million tons in May 2017. Exports from the South stood at 0.215 million tons in May 2018 against 0.090 million tons in May last year.

    Total cement despatches in the first 11 months of this fiscal have been the highest ever in history as the cement industry despatched 42.915 million tons during July-May 2017-18 period against 37.588 million tons during the corresponding period last year. The sector grew by a healthy 14.17 per cent in the first 11 months of this fiscal year.

    Capacity utilisation in the first 11 months of this fiscal was 94.69 per cent, which is the highest ever in the history of Pakistan’s cement industry. The previous highest capacity utilisation was achieved in 1992-93 which totalled 93.62 per cent.

    Domestic consumption in the Northern parts of the country stood at 31.811 million tons showing a growth of 16.76 per cent over the corresponding period in the last fiscal year. The cement plants in the South despatched 6.755 million tons of cement posting a growth rate of 12.12 per cent. Total exports in 11 months increased to 4.348 million tons posting a modest growth of 0.69 per cent as exports surged afthe ter devaluation of the rupee in the last few months.

    The spokesman of the All Pakistan Cement Manufacturers Assoication (APCMA) expressed hope that local cement consumption will once again rise after Ramzan while a continuous increase in exports is a welcome sign for the whole industry. However, he said that the major factor behind a rise in exports is the decline in rupee value against the dollar which improved the competitiveness of cement sector in the global markets.

    APCMA urged the government to withdraw the recent increase in Federal Excise Duty (FED) which will hurt local consumption as this will have an impact of Rs15 per bag, thereby raising the cost of construction.

    “We have been demanding for years to abolish the FED as cement is not a luxury item, use of which should be encouraged,” the spokesman added. “Reducing FED to “Zero” will give rise to construction activities which has a positive effect on multiple industries and thousands of job opportunities will be created with the increase in construction,” he concluded.

  • Cement prices increased ahead of FED implementation

    Cement prices increased ahead of FED implementation

    LAHORE: Cement makers have increased prices in the northern region by Rs15-20 per bag ahead of the Federal Excise Duty (FED) to be passed through the recent budget for the fiscal year 2018-19.

    Industry sources told Pakistan Today that the current price range around Rs490-520/bag for the North region, where the latest 3 per cent increase in price will take cement prices back to the price levels seen in March this year. The South region, on the other hand, may not increase the prices for now, given the stability seen in prices in the past six months (current range Rs570-600 per bag.

    Given the timing of price hikes that started in March 2018, they said that two months of decreased prices had been raised following the rise in coal prices amid seasonal demand for the third quarter which hovered around $93 per ton, and 4.5 per cent devaluation of the rupee in the third quarter of fiscal year 2018. They believe that any positive impact of the current scenario on sector margins is unlikely to be seen in the third quarter of the fiscal year 2018.

    Industry sources further added that the impact of the previous price increases had partially offset the impact of higher coal prices. They said that the possibility of further price increases is likely in the North region which has been plagued by a price-war like situation for the past few months, to be adjusted on a weekly basis, while the southern region would follow suit.

    Nevertheless, both regions are expected to pass on the full impact of a rise in FED by 20 per cent to Rs1.5 per kg in the recent budget as soon as it comes into effect.

    Sources believe this development may drive a short-term positive market reaction after the underperformance by the cement sector by 13 per cent in past one month.

    They, however, maintain their market weight stance on the sector, and expect the upcoming two to three months to be crucial for the cement sector to set the stage (in terms of pricing) following the upcoming supply additions in both North and South regions.

    To this end, rising coal prices, currently trading at $102/ton and any further development may also be expected to put pressures on margins despite a reduction in customs duty on coal from 5 to 3 per cent in the fiscal year 2019.

    They were of the view that two factors are expected to offset each other, and may lead to stable margins in the last quarter against the third quarter of fiscal year 2018. Nevertheless, they say margins in the southern region are expected to take a hit.

  • Massive demand for Pak cement in South Asian, African markets

    Massive demand for Pak cement in South Asian, African markets

    KARACHI: The export of cement to India and Vietnam is viable through land routes since there is a huge demand for Pakistani cement in these countries, while East Africa in general, and Uganda and Tanzania, in particular, could be other potential export venues for Pakistani cement, said speakers of conference at a local hotel here Thursday.

    In the next 10-15 years, India may become a blue-chip market for Pakistan cements as its reserves of limestone are rapidly dwindling. Moreover, inter-state Indian tax issues and logistics make it difficult for various states to buy cement from each other, thus, allowing them to prefer importing cement from Pakistan. The demand of cement in India is more than 1 million tons per annum (1mn tpa).

    Al Habib Capital Market Ltd (AHCML), a subsidiary of Bank Al-Habib, conducted a cement conference with Irfan Chawla and Irfan Amanullah as guest speakers to grapple with the ever-changing dynamics of the cement sector of Pakistan.

    Speakers of the moot said that a higher potential for Pakistan rested abroad since excess capacities in China have curtailed, substantially on the back of environmental concerns, while demand from Bangladesh (5mn tpa), the largest clinker importer from China, is constant.

    The quality of Pakistani cement remains far more superior to Iranian cement, earning Pakistani cement recognition and trust abroad, they said.

    Moreover, the speakers remained sceptic of the Basha-Diamer Dam mentioning that the dam is situated in a disputed territory, thereby making it unlikely to attract foreign investment from an international financial institution. If, however, the dam project is successful, it is expected to generate a cumulative 5 million tonnes incremental demand for cement.

    Recently, LUCK and ACPL have exported clinker from South Asian countries and explored avenues for Pakistan clinker abroad. ACPL has recently inked a deal for the export of 150,000 tons of clinker at $34/ton FOB, Karachi. However, the margin on this deal is almost negligible as the key focus of management was to explore new markets and develop long-term relationships with dealers abroad.

    With the recent commissioning of 1.3 million tons expansion by LUCK and 1.2 million tons expansion of ACPL, the upcoming 2.8 million tons expansion of DGKC in South is expected to temporarily disrupt pricing mechanism in South. In the short-term anxiety and imminent price-war fears loom, however, in the long run, the management foresees that things will settle down.

    Regional, political stability has also paved way to further stimulate economic and infrastructure development facilitating cement off-take in the local market.

    In North, prices have increased by about Rs30/bag recently but only selectively. Furthermore, any price increments in future will depend upon steps to be announced in Budget 2018-19 especially those related to FED and other charges dictating its cost, hence its price.

  • Cement exports up 18.41pc, industry still faced with challenges

    Cement exports up 18.41pc, industry still faced with challenges

    KARACHI: Cement exports in the month of February 2018 have gone up by 18.41 per cent as compared to same month last year, which gives a glimmer of hope to the industry that has been suffering due to declining exports for years.

    In February, though the local cement consumption continued to grow robustly and stood at 9.38 per cent, the percentage of increase in exports was even higher than domestic consumption for the first time in current fiscal.

    Cement sector is experiencing dream growth particularly in the domestic market for the last three years. According to data released by All Pakistan Cement Manufacturers Association (APCMA), this fiscal year the cement despatches have crossed 3 million tonnes in the eight months period (July-Feb). In two of these months, cement despatches crossed 4 million tonnes. The total cement despatches in the first eight months of this fiscal stood at 30.106 million tonnes compared with despatches of 26.339 million tonnes during the corresponding period of last year. This is an increase of almost 4 million tonnes in eight months. Overall the sector grew by 14.30 per cent during this period.

    In the month of February, the total cement despatches were 3.781 million tonnes. Out of this, despatches in the North were 3.052 million tonnes while cement despatches in Southern part amounted to 0.729 million tonnes. The exports from North based mills amounted to 0.181 million tonnes and from South based mills was 0.120 million tonnes.

    The increase in exports was 18.41 per cent compared with an increase of 9.38 per cent recorded in domestic consumption. The capacity utilisation in the first eight months of this fiscal was 91.34 per cent of the total installed capacity of the cement sector.

    The spokesman of APCMA said that the cement industry is among the highest contributors to the national exchequer over the last few years. The contribution has increased to Rs117 billion in 2016-17 from Rs39 billion in 2012-13. During the year 2016-17, per tonne impact of duties and taxes was Rs3,082, Rs154 per bag. This incidence of high taxation negatively affects domestic consumption. Presently, FED on cement is Rs1,250 per tonne i.e. Rs62.5 per bag.

    APCMA spokesperson further added that the government should keep its promise and gradually reduce FED to “Zero” to encourage cement offtake as this would support housing and infrastructural development of the country and create more employment.

    The spokesman of APCMA, attributing the domestic growth in the sector to the policies of the government and its thrust on mega infrastructure projects, said that the local production could increase substantially if the smuggling of this commodity from Iranian border is checked. Moreover, he appealed to the government to eliminate the mafia that is bringing in Iranian cement at engineered low rates to save government levies including sales tax. “Iranian cement would not be able to stand against Pakistani cement in quality and price if the import rules are strictly followed. Customs duty on import of both clinker and cement should increase to a uniform rate of 35 per cent in order to support the local cement industry. Moreover, import of cement should not be allowed until Pakistan Standards and Quality Control Authority certifies the quality of cement being imported into the country,” he added.

  • Cement industry capacity utilisation touches 99pc in January

    Cement industry capacity utilisation touches 99pc in January

    ISLAMABAD: Domestic consumption of cement increased by a whopping 37.3 per cent in January 2018 on a year-on-year basis as the construction activities continue to lead the economy and employment of both skilled and unskilled workforce of the country.

    However, the dismal performance of exports remained the weakness of the cement industry as the exports went down by 7.82 per cent from 0.376 million tonnes in January 2017 to 0.347 million tonnes in January 2018. Capacity utilisation for the month of January 2018 was 99.11 per cent.

    According to the data released by All Pakistan Cement Manufacturers’ Association (APCMA), out of total cement dispatches of 4.084 million tonnes in January, the domestic consumption was 3.737 million tonnes. The capacity utilisation of the industry during the first seven months of this fiscal year reached 91.28 per cent which is the highest since 2004-05. Cement sector is quite hopeful that the present growth momentum in cement sector will continue and absorb the upcoming production capacities of around 15 million tonnes in the next three to four years.

    Cement consumption in the northern zone was 3.018 million tonnes and surged by 41.68 per cent in January 2018 compared to same month last year. This is the second time in this fiscal year that cement consumption in the northern zone of the country exceeded 3 million tonnes.

    The consumption in the southern zone of the country was also robust being 0.719 million tonnes compared with 0.591 million tonnes during the corresponding month of the last fiscal year. During the first seven months of the current fiscal year, cement industry dispatched 26.327 million tonnes while during the correspondent period of last fiscal year the total dispatches were 22.904 million tonnes.

    The growth in domestic consumption of cement during the first seven months of this fiscal year was 20.17 per cent. However, the overall increase in cement dispatches was restricted to 14.94 per cent due to 16.25 per cent decline in cement exports during the period under consideration.

    During the year under review, diesel and coal prices have continuously gone up which increased the cost of production and the competition with smuggled and imported cement has resulted in a steep decline in the profit margins of the industry.

    Spokesman of APCMA regretted that the government is not heeding the requests of the industry to take steps for increasing exports and eliminating the unlawful smuggled or under invoiced imports of cement. He said that the industry is managing the import threat through efficient operations and low-profit margins.

    “The government should take measures to increase cement exports and curb the smuggling and under-invoicing to provide some much-needed relief to the industry,” he added.

     

  • Cement industry capacity utilisation touches 94.65pc

    Cement industry capacity utilisation touches 94.65pc

    KARACHI: Cement industry of Pakistan despatched 2.261 million tonnes more cement in the first five months of this fiscal, which is 13.91 per cent higher than the cement despatched during the corresponding period of last fiscal. Capacity utilisation of the industry is 94.65 per cent during the first five months of this fiscal.

    Although the increase recorded in domestic consumption in November 2017 was 9.89 per cent, the overall growth of the sector stood at 5.16 per cent; as it was negatively impacted by a steep decline in exports that went down by 27.11 per cent.

    In November 2017, the mills situated in northern part of the country despatched 2.967 million tonnes cement locally, which is 10.2 per cent higher than 2.692 million tonnes local despatches in the same month last year. The local despatches in the southern region rose by 8.4 per cent from 0.578 million tonnes in November 2016 to 0.626 million tonnes in November 2017.

    However, exports from South based mills took a major hit as it went down by 45.4 per cent from 0.129 million tonnes in November 2016 to 0.070 million tonnes in November 2017. Exports from the Northern region also decreased by 8 per cent to 0.278 million tonnes last month from 0.350 million tonnes in the same month last year.

    However, the drop in exports continued in the first five months of this fiscal as the exports declined by 18.22 per cent to 2.079 tonnes from 2.542 million tonnes during the corresponding period of this fiscal.

    The cement industry is worried on the complacency shown by economic planners towards cement sector. The cement sector has so far withstood the impact of the decline in exports due to a robust growth in the domestic market. However, the current political uncertainty may impact domestic growth also, said the spokesman of APCMA adding that the worries are compounded by the fact that more capacities are expected to be commissioned in next three years, starting from January 2018.

    While all the previous issues raised by cement manufacturers in the last few months have remained unaddressed, increase in duties on coal has increased the cost of production, said the spokesman. The increased consumption of cement does not mean that government imposes duties on its inputs instead of providing relief to the industry which is badly hit by a decline in exports, he said adding that the government should also honour its commitment made to the cement sector that excise duty will be withdrawn in a phased manner.

    “The government can generate revenue from stopping the smuggling of cement from Iran and under-invoicing as inaction against the culprits is not only disturbing the industry but eating up a major chunk of revenue,” he added.

  • Quarterly result season poses a breather for PSX against political hammering

    Quarterly result season poses a breather for PSX against political hammering

    LAHORE: Last week the Pakistan Stock Exchange (PSX) shed 1,466 points and dropped below the physiological level of 40,000 points, while loses stood at 17 per cent. However, despite the rough week, the quarterly results season may hold some news for the PSX over the coming weeks.

    Experts believe that the political hammering will not end but is expected to continue to have its toll on the market in the coming weeks; however, they are hopeful that some scrips may perform well and bring about a much-awaited change. Following the quarterly results season, fertiliser and auto sectors are expected to post healthy earnings growth due to the improved market conditions both locally and internationally, during the quarter.

    Despite improved tax collection of 22 per cent and fiscal deficit for Q1 FY2017-18 at a 10-year low of 0.9 per cent of the GDP, Rs 324 billion, investors seem to have been distant from the market as their confidence was shaken amidst the political drama.

    Last week started with ECC announcing a number of key developments including imposition and enhancement of regulatory duty on around 297 items as a fresh revenue measure, extension and clarity of textile export package, and deregulation of HSD and revision of OMC margins. Likewise, the National Refinery Ltd (NRL) announced the commencement of its isomerisation unit which attracted investor’s interest in the stock, during the week. Despite the negative vibe, the week concluded on a positive note with PM’s inaugural of Jhandial well, which is one of the largest oil and gas discovery, while Foreign Direct Investment (FDI) recorded an increase of 154 per cent during last month.

    However, the army chief voiced his concerns over the failing macroeconomic indicators, while the State Bank of Pakistan (SBP) in its annual report also admitted to external and fiscal accounts pressures. World Bank in its report too painted a dismal picture of the county’s external balance.

    Rumors of the unsuccessful meeting between the cement manufacturers also contributed in shattering the investors’ confidence. Additionally, remittances data showed a decline of 20 per cent to $ 1.29 billion, pushing the Rupee down, with the State Bank of Pakistan (SBP) eventually intervening by calling an emergency meeting of the exchange companies.

    In participation terms, K-Electric emerged as the volume leader during the week, driven by clarity on Multi Year Tariff (MYT) released by NEPRA, whereby the new tariff has been approved at slightly above the tariff finalised earlier. Overall participation improved ADTO depicting increase of 4 per cent to 146 million shares while ADTV slipped 16 per cent to $ 59 million depicting tilt towards second and third tier stocks.

    Mutual funds, individuals and brokers were net sellers with a cumulative outflow of $ 36.5 million. On the other hand, foreigners swiped the market, taking advantage of multi-year low trade value seen in most of the blue chips, with a total net inflow of $ 38.9 million.

  • Large-scale manufacturing registered 13pc growth in July

    Large-scale manufacturing registered 13pc growth in July

    Islamabad: Data released by the Pakistan Bureau of Statistics (PBS) revealed a growth of 13pc in large-scale manufacturing (LSM) for first month of financial year 2017-18, reported a local newspaper.

    For FY 2016-17, Pakistan had registered a 5.6pc growth in LSM, and in all likelihood the government may cross the set target of 6.3pc growth for FY 2017-18 in light of data released by PBS.

    Large-scale manufacturing has a lion share of 80pc within manufacturing and 10.7pc in overall GDP. Compared to this, small-scale manufacturing only forms a paltry 13.7pc of the manufacturing sector and a meager 1.8pc in overall GDP.

    Breakup of industry-specific data revealed a growth of 46.36pc in iron and steel products, engineering products 21.95pc, food, beverages and tobacco 19.02pc, non-metallic mineral products 37.95pc, automobiles 42.56pc, pharmaceuticals 11.14pc, textile 0.43pc, leather products 2.52pc, chemicals 5.13pc and wood products 10.95pc.

    For the first month of FY 2017-18, electronics and fertilizers registered a fall of 0.91pc and 0.80pc respectively.

    Chemical sector experienced a positive growth during July 2017, mainly attributable to paints and varnishes-small rising 0.22pc and caustic soda increasing 24pc.

    For pharmaceutical sector, growth of 19.27pc was registered in capsules, 10.85pc in injections, liquids/syrups 10.58pc and tablets 10.29pc.

    Cement production grew by 38.3pc compared to same period last year (SPLY), which has been supported by a global decline in coal prices. Also helping the cement sectors cause was the consistency seen in construction activities and a decline in benchmark interest rate.

    For the automobile sector, tractors production surged by 146pc during July on a year-on-year basis, motorcycles production rising 26.4pc and for trucks it rose by 24.4pc.

    Light commercial vehicles (LCVs) production spiked up by 16pc, cars and jeeps rose by 55.77pc for July. A fall in production of buses of 31.3pc was witnessed during the first month of FY 2017-18.

    Sugar production witnessed a massive surge in production of 207pc in context of the food, beverages and tobacco sector in comparison to last year due to a major increase in sugarcane crop supported by a rise in prices domestically.

  • Maple Leaf Cement to raise Rs4.28b from right share issue to expand production line

    Maple Leaf Cement to raise Rs4.28b from right share issue to expand production line

    Karachi: In a notification sent to the bourse on Tuesday, Maple Leaf Cement Factory (MLCF) has announced that it will be conducting a rights share issue for raising Rs4.28b from the Pakistan Stock Exchange.

    This money is being raised for part-funding the cost of an additional dry process clinker production line.

    The notification from MLCF read that the Board of Directors had given approval to issuing 65,966,740 right shares to existing shareholders at a price of Rs65 per share (Rs55 per share premium) in portion of 12.50 right shares for every 100 ordinary shares held.

    According to a report compiled by BMA Capital, MLCF retains the highest retention rate in the cement industry, with a 90pc share in white cement sector and 8.4pc share in grey cement sector. A 40MW coal based captive power plant which is expected to come online soon will help provide tax benefits and lessen power cost of the company.

    This production line expected to come online by 4th financial quarter of 2019 is expected to cost Rs23b, of which 47.8pc will be financed by debt, 18.7pc right share issue and 33.5pc by internal cash generation.

  • Cement sales spike up by 45pc in July

    Cement sales spike up by 45pc in July

    Lahore: On Friday, it was reported that cement sales had spiked up by a remarkable 45pc in comparison to same period last year (SPLY).

    Capacity utilization for the cement industry stood at 86.46pc and annual cement production on a whole rose to 46.94m tons. Domestic consumption also rose 55pc as exports registered a small increase of 2.28pc.

    Cement exports to Afghanistan rose from 0.150m tons to 0.210m tons during July 2017, however a fall was registered in exports to India of 11.61pc reaching 0.122m tons. Exports of cement by sea to other nations declined by 18.95pc to reach 0.144m tons.

    Dispatches from manufacturers based in the northern region roughly stood at 2.423m tons while export shipments were recorded at 0.338m tons during July 2017. In comparison, local sales in SPLY stood at 1.516m tons and exports were recorded at 0.306m tons.

    South based manufacturer dispatches also witnessed an increase in its local sales as it reached 0.483m tons from 0.352m tons in SPLY. Exports plunged to 0.138m tons in July 2017 from 0.158m tons in SPLY.

    A spokesman from All Pakistan Cement Manufacturers Association (APCMA) said the industry had recorded its highest ever sales figure for July which reached 3.382m tons. He added that the industry had never crossed the mark of 3m tons of dispatches.

  • Cement exports predicted to fall 15pc YoY: Topline security

    Cement exports predicted to fall 15pc YoY: Topline security

    Karachi: According to a Topline Security report, the country’s cement sales have started on a positive note during July, which is the first month of new financial year 2017-18.

    The report predicted that it is expected for total cement dispatches to grow 32-36pc year on year (YoY) in July 2017, as per their sources. It has also forecast a monthly growth of 13-17pc in cement sales.

    Topline stated that a 44-47pc YoY growth in local dispatches of cement are expected in the outgoing month due to lower number of working days as a result of eid holidays last year in July.

    Local sales of cement are expected to rise 8pc YoY during FY 2017-18 and 5pc growth is estimated in local dispatches YoY.

    Capacity utilization is predicted to be at 89pc during FY 2017-18 in comparison to 87pc in FY 2016-17. Exports have been estimated to register a decline of 15pc YoY.

    Export dispatches aren’t expected to improve, as there is a lull in demand of Pakistani cement in the Afghani market where sales are said to have fallen and the manufacturers attention on domestic consumption as compared to same period last year (SPLY).