KARACHI: Kohat Cement has decided to set up a grey cement production line of 7,800 tons per day capacity at its existing plant site.
The company will also establish a waste heat recovery power plant, according to a notification sent to the Pakistan Stock Exchange (PSX) on Tuesday.
Located in Kohat, the company was incorporated as State Cement Company of Pakistan with plant capacity at 1,000 tons per day in 1984. Later, the government privatised the enterprise in an open bidding in 1992. Kohat Cement earned Rs4.4 billion in fiscal year 2016, up 33% compared to Rs3.32 billion in FY15.
The healthy profit was primarily due to a historically high growth in sales volumes, reduction in coal and power costs and generation of low-cost electricity from the company’s furnace oil-based captive power plant and waste heat recovery plant, which started producing electricity from April 1, 2016.
Large-scale infrastructure development projects under the China-Pakistan Economic Corridor (CPEC) and a hefty allocation for the Public Sector Development Programme will further enhance cement demand in domestic markets in the foreseeable future, which will result in handsome revenues and profits, according to the company’s annual report for 2016. At the PSX, Kohat Cement’s stock price rose Rs3.85 to close the day at Rs246.69 with a volume of 106,800 shares.
For a long time, the cement industry has depended on exports, but for the past few years growing domestic demand has been providing vital support. This is happening mainly due to improving macroeconomic indicators and higher construction activities in the country.
More than half a dozen cement companies are going through an expansionary phase with combined investments of over $1.5 billion.
Cherat Cement, Attock Cement, DG Khan Cement, Lucky Cement, Power Cement, Bestway Cement and others have announced expansion plans and all these plants will come online in the next two to three years.
Pakistan’s cement industry is going through extraordinary times and it is expected to grow at a rapid pace in the next couple of years.
At present, the installed capacity of the industry is 47 million tons, according to the All Pakistan Cement Manufacturers Association – a lobby group of the industry.
Owing to the construction boom, the capacity utilisation of cement plants is improving and is now close to 88% which is the highest in 11 years.