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Maple Leaf completes expansion of cement plant
April 17, 2019
KARACHI: In the backdrop of a reduction in development spending by the government, the cement sector, which has boosted its production capacity, is witnessing enhanced supplies and a sharp decline in demand, which has pushed down product prices.
“Maple Leaf Cement has completed the expansion of its new cement line,” the company reported.
“The company has undergone to set up an additional dry process clinker production line of 7,300 tons per day,” said the notice.
The company has made the expansion under the brownfield category, which gives some tax benefits, at the company’s existing site in Iskanderabad, according to the notice. The extension will help the company take grey cement production capacity up to 18,000 tons per day.
Maple Leaf signed the engineering, procurement and construction (EPC) contract and opened a letter of credit on March 17, 2017 in favour of plant supplier FLSmidth A/S, Denmark for supplying and setting up the new production line.
The company has revised the cost of the project, which is estimated to be completed at a cost of Rs 26 billion, according to the notice. The cement manufacturer is financing 41% of the cost from its books while the remaining 59% is the debt. Despite announcement of the expansion, Maple Leaf share price rose just Rs0.12, which was attributed to the surplus production of cement in the country.
With the addition of Maple Leaf plant, the demand would further fall in the coming month of Ramazan, so prices in the northern region were expected to come under pressure, said Syeda Humaira Akhtar, Chartered Financial Analyst at BMA Capital Management Limited.
However, prices in the south will remain stable as demand growth is in double digits and there is no new supply.
Pakistan’s cement producers aim to increase their production capacity from 49.4 million tons per year to 72.8 million tons keeping in view the numerous projects under the Public Sector Development Programme (PSDP) and China-Pakistan Economic Corridor (CPEC), according to the State Bank of Pakistan’s third quarterly report for fiscal year 2017-18.
“Demand in the northern region always comes from public-sector projects and they, relatively, do not have the option for export,” she said. However, “demand in the southern region comes from the private sector, which is intact, and it also has export option,” she added.
Northern region companies bear approximately an additional cost of $15 on every ton if they want to export cement.
April 17, 2019
KARACHI: In the backdrop of a reduction in development spending by the government, the cement sector, which has boosted its production capacity, is witnessing enhanced supplies and a sharp decline in demand, which has pushed down product prices.
“Maple Leaf Cement has completed the expansion of its new cement line,” the company reported.
“The company has undergone to set up an additional dry process clinker production line of 7,300 tons per day,” said the notice.
The company has made the expansion under the brownfield category, which gives some tax benefits, at the company’s existing site in Iskanderabad, according to the notice. The extension will help the company take grey cement production capacity up to 18,000 tons per day.
Maple Leaf signed the engineering, procurement and construction (EPC) contract and opened a letter of credit on March 17, 2017 in favour of plant supplier FLSmidth A/S, Denmark for supplying and setting up the new production line.
The company has revised the cost of the project, which is estimated to be completed at a cost of Rs 26 billion, according to the notice. The cement manufacturer is financing 41% of the cost from its books while the remaining 59% is the debt. Despite announcement of the expansion, Maple Leaf share price rose just Rs0.12, which was attributed to the surplus production of cement in the country.
With the addition of Maple Leaf plant, the demand would further fall in the coming month of Ramazan, so prices in the northern region were expected to come under pressure, said Syeda Humaira Akhtar, Chartered Financial Analyst at BMA Capital Management Limited.
However, prices in the south will remain stable as demand growth is in double digits and there is no new supply.
Pakistan’s cement producers aim to increase their production capacity from 49.4 million tons per year to 72.8 million tons keeping in view the numerous projects under the Public Sector Development Programme (PSDP) and China-Pakistan Economic Corridor (CPEC), according to the State Bank of Pakistan’s third quarterly report for fiscal year 2017-18.
“Demand in the northern region always comes from public-sector projects and they, relatively, do not have the option for export,” she said. However, “demand in the southern region comes from the private sector, which is intact, and it also has export option,” she added.
Northern region companies bear approximately an additional cost of $15 on every ton if they want to export cement.
