Flash Report /
Pakistan

Pakistan Cements - Two cement lines formally start operations

  • BWCL greenfield expansion of 2.2mtpa and FCCL brownfield expansion of 2.0mpta have commenced operations today.

  • The total size of new expansions due in FY23 including the two that have just come online is 11.6mn tons per annum.

  • Cement prices in the North region increased by PKR25/bag to an average of PKR1,010-1,025/bag.

Intermarket Securities
20 October 2022
  • Expansions start commissioning: As per our channel checks and company announcement, 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 have 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 to, 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 of 17% of total outstanding capacity and 22% of 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 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.