TC Jan-Feb 2021 Issue

TRADE CHRONICLE
Popular Cement plant
inaugurated in Sindh
A new cement player has entered
the market with the start of formal
inauguration of Popular Cement on
February 9, 2021. Formerly Dadabhoy
Cement Industries, the unit strategically
located in Nooriabad had been in
operational for 12 years after defaulting
with lenders. Popular Group acquired
the assets in 2018 after clearing all bank
dues and immediately initiated major
overhauling with investment in Coal
Mill, Clinker Process, Grind, Packaging
and Automation to completely upgrade
and modernize existing production
capacity of 2000 MT in the first phase.
Fauji Cement Company plans
Greenfield cement plant in DG Khan
Fauji Cement Company Limited (FCCL)
has informed Pakistan Stock Exchange
(PSX) that consequent
to construction activity
picking up and significant
spend on infrastructure,
expected to continue,
the Company’s board of
directors has decided to
invest in additional cement
capacity in the Country.
Accordingly, the Board of
Directors of FCCL, in its
meeting held on February 19, 2021,
has approved, subject to all regulatory
approvals, setting up of Greenfield
Cement Manufacturing Plant of 2.05
With the clinker and cement plant now
operational, value natural resources,
proximity to market and port have all
been unlocked. While a first foray
into the cement sector, Popular
Group has extensive operations
across Pakistan in food and aseptic
packaging, sugar, energy and
textiles.
A small ceremony was held by group
chairman Mr. Imamuddin Shouqeen
to mark the commissioning of the
cement plant which was inaugurated
BY Ms. Ayesha Aziz, Managing Director
of Pak Brunei Investment Company
Limited. The DFI partnered with
Popular Group in this project. Speaking
on the occasion, Ms. Aziz explained a
shorter route to industrialization was by
reviving viable assets that were shut
down or operating below capacity. To
make such acquisitions successful,
the need is for investors with a longterm
investment outlook, commitment
to value generation and strong credit
Million Tons per
annum at Dera
Ghazi Khan. The
equity portion of
the expansion will be funded through
Internal Cash Generation.
DG Khan Cement plans
Brownfield cement plant in DG Khan
DG Khan Cement Ltd, in communication
to Pakistan Stock Exchange (PSX),
briefed that concerning the Government
of Punjab’s permission for Expansion
of Existing Cement plant by adding
12,000 TPD brown filed cement line
No. 3 at Muza Khofli Sattai, Dera Ghazi
Khan. The Board of Directors of the
Company has decided to evaluate the
capacity of brown filed cement plant
ranging between 9,000 TPD to 12,000
TPD. Further details awaited.
The total project cost will be announced
after the conclusion of the negotiation
Meanwhile, D.G. Khan
Cement
Company
Limited
(DGKC) also released its
2QFY21 financial result
on February 19, posting a
profit after tax (PAT) of PKR
11,152mn (EPS: PKR 2.63),
compared to PKR 581mn
(EPS: PKR 1.33) in SPLY.
This took the 1HFY21
bottom-line to PKR 801mn
(EPS: PKR 1.83) vis-à-vis
loss of PKR 847mn (LPS:
history.
She pointed out this was a second
“dead” asset revived by Popular Group
in partnership with Pak Brunei. The
acquisition of National Sugar in Punjab
and also resulted in converting a sugar
mill that was in default with its bankers
in into the most preferred mill for
sugarcane growers in that district for
its prompt payment practice. As with
Popular Cement, the acquisition was
done after cleaning all outstanding loan
payments to banks without any write
off. Mr. Shouqeen explained that the
Group investment philosophy centered
around maximum appetite for Pakistan
risk. This is why the 50 years history
of the Group is marked with a series of
Greenfield projects in new areas. The
next big milestone is the commissioning
of the size 6000 MT p.a. aluminum
project that would cut down import of
Cold-Rolled foil in several sectors. This
would also be the first of its kind project
in Pakistan.
with the suppliers and contractors. The
project’s construction work is expected
to commence within the current
financial year and is expected to have a
construction period of about 2.5 years.
Currently, the Company is
targeting financial closed
by 31% March 2021,
Meanwhile, FCCL
announced its 2QFY21
financial result by posting
a profit after tax (PAT) of
PKR 905mn (EPS: PKR
0.66), compared to PKR
189mn (EPS: PKR 0.14)
during SPLY, depicting a
jump of 5x YoY. This took the 1HFY21
earnings to PKR 1,601mn (EPS: PKR
1.16), up by 3x YoY from PKR 482mn
(EPS: PKR 0.35) 1HFY20.
PKR 1.93) booked in SPLY.
TRADE CHRONICLE - Jan - Feb - 2021 - Page # 21