Maple Leaf Cement Factory Ltd (MLCF) was in the news this week when FLSmidth announced it had secured an EPC contract for a new 7300tpd third line at Daud Khel in Iskanderabad, Mianwali, Pakistan, which will be completed before the end of 2018. The brownfield project is an expansion that is estimated to cost PKR20bn (US$190.8m) and will take grey cement capacity at the factory up to 18,000tpd, the equivalent of around 5.9Mta.

Started in 1956, MLCF was established in northern Pakistan as a collaboration between West Pakistan Industrial Development Corp and the Government of Canada, with an initial clinker capacity of just 3000tpa. Its growth led to its privatisation and it was transferred to the Kohinoor Maple Leaf Group in 1992. Two years later, the company was listed on the stock exchange. The Lahore-based cement producer quickly built up an established customer base for its grey and white cement. MLCF now has a 7.4 per cent share of the domestic cement market and is the fourth-largest producer in the country, according to The All Pakistan Manufacturing Association (APCMA). Its white cement capacity is 500tpd and the company has a total (grey and white) clinker capacity of 3.36Mta.

In 2016 the cement company formed a new subsidiary, Maple Leaf Power Ltd, to build a 40MW coal-fired power plant. Equipment was already on site for this project last October and civil works have been underway for a few months with operations set to start in FY17-18. The aim is to reduce dependence on the national grid and to protect itself against future rises in heavy fuel oil prices. Reduced heavy fuel oil and coal prices helped profits last year. Coal is mainly imported from South Africa, as the product has a high gross calorific value and low moisture content, says the company. MLCF is also looking into the use of alternative fuel resources.

During 1QFY16 (July-September 2016), company sales volume for cement and clinker reached 792,796t, up 12.52 per cent on the 704,551t sold in the corresponding period a year earlier. Domestic sales volumes rose by 11.34 per cent to 632,202t. Operating profits have risen substantially to PKR1741m from PKR1338m in Jul-Sep 2015.

Cement demand is being driven in Pakistan by a number of factors. These include the government’s Public Sector Development Programme (PSDP), as well as the China Pak Economic Corridor (CPEC) and other key projects such as the Bhasha dam and Dasu hydropower project. Motorway projects include the Tarbell extension project and Karachi-Lahore motorway.

The export market is not as vibrant for the company at present. MLCF has seen the Afghanistan market contract and the presence of surplus Iranian cement has meant fewer export sales for MLCF. However, export sales were boosted by other countries (UAE, India and African markets) and reached 160,594t in 1QFY16, an increase of 17.45 per cent.