Pakistan: amalgamation of Bestway Cement and Pakcem complete

The Board of Directors of Bestway Cement Ltd (BCL) and Pakcem Ltd (formerly Lafarge Pakistan Cement Ltd) in their meetings held on 7 April 2016 have approved the scheme of amalgamation of Pakcem Ltd with and into Bestway Cement Ltd and its placement before the shareholders in the extraordinary general meeting of the company as special business for their approval as per requirement of Companies Ordinance, 1984.

In July 2014, BCL entered into a binding agreement to acquire Pakcem and on 22 April 2015, BCL completed the transaction and assumed management control of the company after a public tender.  Pakcem’s plant has a production capacity of 2.4Mta. Consequently, BCL has now become the largest cement manufacturer in Pakistan with a cement capacity of 8Mta.

The acquisition has already impacted positively on Bestway margins in 2015. Its net turnover on a consolidated basis soared by 45.5 per cent from PKR14.5bn (US$139m) to PKR21.1bn. This was largely due to acquisition of Pakcem Ltd, increase in domestic demand and stable retention prices during the period.

The company’s consolidated profit after tax also registered a growth of 47 per cent to reach PKR5.7bn in the half-year FY2015-16 against PKR3.9bn from the corresponding period of FY2014-15. Despite fierce competition, Bestway was able to maintain its market share in the north zone and retained its position as the largest exporter of cement to Afghanistan and India.