In its newly-released 2018 annual report, Pakistan-based Dandot Cement Co says it has received a firm intention from Calicom Industries (Pvt) Ltd to acquire control and 63,542,787 voting shares (67 per cent of paid up capital) of the company. The new buyer is expected to invest in the modernisation of electrical equipment at its facilities.
The report adds that on 5 November 2018, the firm's majority shareholders have given the intention that they are entering into negotiations for sale of their shareholding, either individually or with other associates and family members. Therefore, it is expected that new buyer will provide further funds to upgrade the company's equipment, particularly to improve the efficiency in terms of power and fuel costs, which have been the major cause of company losses sustained in recent years.
In FY17-18, company capacity utilisation stood at 44 per cent and it sold 216,245t of cement as compared to 266,097t in FY 2017. Officials stated that cement production and sales have decreased with shortfalls mainly attributable to the severe financial crunch. This has resulted in the procurement of poor-quality coal, which has caused frequent shutdowns of the kiln. In addition, annual maintenance during the current year has not met company benchmarks.
Furthermore, high input costs, power shutdowns with voltage fluctuations, the upward coal price trend, frequent repair, maintenance and alternative fuel testing costs have also impacted the company's results.
