Friday, October 23, 2020

Key takeaways from management meeting with Attock Cement 

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Zubair Yaqoob
Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com He can be reached at: [email protected]
Currently coal suppliers are offering coal at USD 78/ton C&F Karachi however, no deals have materliazed yet. Whereas cement manufacturers previously purchased coal at USD 85-90/ton.
• In particular, faltering Chinese demand due to strict environmental regulations has pulled down coal prices.
• Decline in coal prices has not entirely compensated for PKR depreciation yet.
• Coal is being imported via PIBTL to comply with the court judgement, while clinker is exported via KPT.
• At present, freight charges have declined. Transporters have lesser business due to curtailed imports into the country.
• On the demand front, reasons for decline in domestic dispatches in the northern region was discussed. This was due to a combination of slow down in government spending along with waning private sector demand.
• Further, Bahria Town’s presence in recent news flow was touched upon. Bahria Town Karachi’s peak demand was 2000tpd. For reference, total demand of South is 22,000tpd.
• It would take at least 3-5 months for Bahria to resume its operations completely and thereafter, demand is expected to reach 1500tpd in next 5 months.
• While external demand (exports of cement) is mainly driven by Bangladesh right now. We do highlight that Pakistan’s position might be threatened by incoming capacities in Vietnam. Post this, local manufacturers in south will have to find other market for exports in replacement of Bangladesh otherwise capacity utilization in the south region will drop and effect profitability.
• Moreover, strict enforcement of axle load restriction is expected to affect players situated on M-9.
• Cement exports from south are limited by port infrastructure and environmental regulations regarding storage of clinker.
• Additionally, new entrants in the cement sector which had planned green field projects, have delayed their plans.
Zubair Yaqoob
Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com He can be reached at: [email protected]

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