Cherat Cement Co Ltd (CHCC), during a financial briefing on 13 September 2021 updated about its planned Line 4 greenfield expansion of 10-11,000tpd at DI Khan, Khyber Pakhtunkhwa province in Pakistan. The completion of the project is expected in three years.
The expansion represents an investment of PKR34bn (US$202.1m). The financing structure includes 70 per cent of the total cost will be debt component and the remainder will be equity. The company has obtained PKR5bn for this capacity addition under the State Bank of Pakistan Long Term Financing Facility (LTFF) for Plant & Machinery (SBP’s LTFF). However, as it does not include the WHR plan, the overall project cost may be higher.
Export to Afghanistan
The management of CHCC has pointed out that although exports from Afghanistan had increased by 34 per cent YoY last year and with the US exit, the administration believes exports will remain buoyant in 2021. However, sea-based exports may face some challenges. The current cement export price to Afghanistan is US$36-40/t.
Financial results highlights
The company posted a profit after tax of PKR3.205bn in FY21, against a loss of PKR1.893bn last financial year. The primary reasons behind the turnaround were robust sales (total dispatches went up by 21 per cent YoY to 5.773Mt with local sales depicting a jump of 21 per cent while exports rose by 19 per cent) and an improvement in retention prices. The management of CHCC has a positive outlook for local dispatches, expecting 10 per cent growth in FY22.
