Fauji Cement sees positive way ahead

Fauji Cement Co Ltd (FCCL) expects local cement demand to develop positively in the FY23-24 with exports to Afghanistan, depending on the border situation, to improve, the company said. The Pakistan-based cement company is continuing its efforts to become the lowest-cost producer and increase its market share through a timely completion of its DG Khan expansion, scheduled for the 2QFY23-24.

In addition, the company's board of directors has approved the construction of a 7.5MW solar power plant at its new DG Khan Cement plant site, in line with the company's strategy to optimise costs. FCCL has a combined capacity of 29.7MW of captive solar power plants and 47.5MW of waste heat recovery power units.

FCCL earned a profit after tax of PKR7.4bn (US$24.34m) in FY22-23, compared to PKR7.1bn in FY-2122. The result comes despite the retrospective increase in the Super Tax rate from four per cent to 10 per cent, having an impact of PKR1.98bn and taking the effective rate to 39 per cent. The gross finance cost also advanced from PKR1.2bn to PKR3.64bn during this period.

The company started commercial production at a rate of 3150tpd in 1998 and became Pakistan's third-largest cement producer. Its production capacity expanded from 0.9Mta to 8.34Mta in 2023 and is expected to reach 10.5Mta in 2024, after adding 6825tpd of capacity at its Wah DG Khan site in Punjab.