Industry

Power Cement market share increases to 19.9%

By Kashan Bhatti

Karachi, June 23, 2022: Power Cement Limited (POWER) held its corporate briefing session today to discuss outlook of the company and sector. The Management shared that the company has increased its market share to 19.9% and is now the largest player in South after LUCK. The company believes that better quality of its line-3 production has helped increase its share in the market. POWER offers Grade-53 cement which sets fairly quickly and attains ultimate strength within 7 days’ time versus 28 days for other cement brands.

The management foresees a 6-8% growth in South region dispatches in FY23, citing lesser correlation of the south market volumes with PSDP allocation as the key reason.

Export market has been dull due to high freight charges and issues with logistics, while the company earns a minimal profit on export sales. Common export destinations for the company have been Bangladesh, Sri Lanka, Yemen, Madagascar and China. Current retention prices are in the range of Rs11.8-12k/ton.

The company’s coal consumption stands around 1,000 tons/day. According to Management, the company has not imported any coal in the last 5 months and is mainly consuming Afghan coal which currently costs them lower than South African coal at ~Rs50-55k/ton. The company’s new line has the ability to use coal with a lower calorific value and since Afghan coal has almost similar GCV as South African coal, there have been no issues in its usage so far.

The increments in cement prices in the near future is expected, price pass on will likely be measured from now on.

The company broadly relies on grid for its electricity needs (35MW approx.), the current cost is around Rs23.11/kWh including fuel price adjustment of Rs4/kWh. With the expected hike in electricity tariffs from next month, the grid cost will increase to ~Rs25/kWh. POWER has a solar power generation plant of 7MW and a waste heat recovery plant of 9-10MW. The company has been actively exploring alternative solutions to reduce its power costs.

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