Bestway boosted by Pakcem contribution
Bestway Group of the UK, parent company of Pakistan's largest cement producer, announced that its consolidated turnover for the year ending 30 June 2015 increased by 20 per cent to GBP3.06bn from GBP2.55bn in 2014. Profit before tax for the year ended 30 June 2015 was up 39.9 per cent to GBP373.8m from GBP267.1m in 2014. All group businesses continued to be profitable, the group noted.
Commenting on the results, group chief executive, Zameer Choudrey, CBE, said: “The past financial year has been very exciting for the group. Despite difficult business conditions we have maintained our focus on our strategic goals by increasing turnover and market share of our businesses both in the UK and in Pakistan”.
Taking the top spot
During the year Bestway acquired an 88 per cent shareholding in Lafarge Pakistan (now re-branded as Pakcem) for a total consideration of GBP182m, of which GBP161.6m is direct consideration and GBP20.4m is existing debt within Pakcem, taken on by the group on completion of the deal. Pakcem’s cement plant has a capacity of 2.4Mta and the acquisition has resulted in Bestway Cement becoming Pakistan’s largest cement producer, with a production capacity of 8Mta.
Shift in market dynamics
The company highlighted that recently there has been a shift in market dynamics for Pakistan cement producers as domestic demand is exhibiting strong growth but the export market has seen a decline due to less activity in Afghanistan and the imposition of import levies in certain economies.
Consequently, Bestway Cement Ltd (BCL) saw its domestic dispatches increase by 15.4 per cent to 4.1Mt from 3.5Mt in 2014, with like-for-like sales up by 7.8 per cent. Exports were down by 7.9 per cent to 772,000t (versus 838,000t a year earlier). Despite a decrease in exports to Afghanistan, BCL was able to maintain its position as the largest exporter of cement to Afghanistan, the company noted.
During the financial year BCL consolidated dispatches increased by 10.9 per cent to 4.9Mt from 4.4Mt in the corresponding period of the previous year. The strong performance is due to domestic demand and the contribution of Pakcem for the two months to June 2015.
Turnover for the financial year 2015 amounted to GBP205m compared to GBP174.5m for 2014, an increase of 17.5 per cent. Profit before tax registered an increase of 19.9 per cent from GBP56.9m in 2014 to GBP68.2m for the year to 30 June 2015. "This is attributable to the increased economies of scale and synergies generated through the acquisition of Pakcem as well as our continued focus on cost control," Bestway said in a statement.
Waste heat recovery installations
During the year, BCL installed waste heat recovery (WHR) plants at its Hattar works (7.5MW) and Farooqia plant (6MW) which became fully operational in May and June 2015, respectively. BCL also signed a contract for a 12MW WHR plant at the Pakcem works which is currently under construction and is expected to come online by March 2017.
"The investments in WHRPPs are part of our continued strategy to reduce our reliance on the national grid as well as to reduce the environmental impact of our operations through the reduction of carbon emissions. This will reduce our cost of production and we shall be able to enjoy financial benefits in future years," Bestway said.
