Pakistan Cement Industry has received good news today. Company Secretary of Bestway Cement Limited Hassan Niazi has informed Pakistan Stock Exchange (PSX) that the Company has achieved a major milestone of lighting up the kiln at its 7,200tpd Greenfield plant near Paikhel, District Mianwali in Punjab Province of Pakistan today.
Meanwhile, commenting on the news, – Intermarket Securities Limited has stated Bestway Cement’s (BWCL) greenfield expansion of 2.2mtpa in Mianwali, Punjab, and Fauji Cement’s (FCCL) brownfield expansion of 2.0mpta in Nizampur, Khyber Pakhtunkhwa has commenced operations today.
Both companies are expected to start dispatching within 10-15 days. As both plants are located in the North, they will likely try to capture new capacity-based market share in that region.
More capacities in FY23: Apart from these two, brownfield expansions for LUCK and MLCF are expected to come online during the ongoing quarter. In addition, another brownfield expansion of BWCL is expected to start commercial operations in 3QFY23. The total size of new expansions due in FY23, including the two that have just come online, is 11.6mn tons per annum. This comprises 17% of the total outstanding capacity and 22% of the current North capacity.
Cement prices have recently increased: Cement prices in the North region increased by PKR25/bag to an average of PKR1,010-1,025/bag. This is encouraging. However, we expect this to likely be the last price hike of FY23, as coal prices have started cooling down, and there will be an ample supply of cement in the market, given the aforementioned expansions. Hence, it may be difficult for the industry to increase cement prices further unless major cost pressure materializes.