Maple Leaf Cement Factory Ltd (Kohinoor Textile Mills Ltd group) has become the fourth-largest grey cement producer in Pakistan after its capacity now stands at 7.9Mta after the completion of its Iskanderabad plant expansion last November. The company’s domestic share in grey cement stands at 10 per cent and white cement at 90 per cent. White cement achieves good prices compared to grey cement due to a higher cost of 1.5 per cent over grey cement, positively impacting the company’s margin.
According to AKD Securities Ltd, Maple Leaf Cement has a better edge due to the timely completion of expansion on a subsidised loan, less reliance on the national power grid, less leverage and growth-oriented profit margins. The company relies heavily on local coal while meeting its 80 per cent power requirement through a subsidiary power generation coal plant, solar power facility and waste heat recovery unit.
1HFY22-23 financial results
The company earned a consolidated profit of PKR4.308bn (US$15.35m) against PKR2.757bn for the corresponding period last year, representing an increase of 56 per cent. The total sales volume of 2.11Mt achieved represents a decrease of 12.2 per cent over 2.41Mt sold during the corresponding period last year. Domestic cement sales volume reached 2.05Mt, showing almost the same level of demand due to political instability causing uncertainty is another major factor contributing to negative growth of the construction sector.
The company’s export volumes decreased by 8.2 per cent to reach 64,264t from 70,020t in the corresponding period. Exports have not picked up post the American departure from Afghanistan. This has slowed down the economy, and banking restrictions are another major reason for the decline in export sales. Cement dispatches to the rest of the world were not feasible due to high production costs in Pakistan compared to global markets and increased shipping costs, impacting competitiveness in the regional markets.
