DG Khan Cement is exploring Mexico to export cement from Pakistan

According to AKD Research, DG Khan Cement Co Ltd (DGKCC) held its corporate briefing on 24 November to apprise investors of its FY22-23 financial results and the company’s future outlook. DGKC recently exported two shipments to Mexico and four shipments to the USA.

Management is actively focussing on exports to increase capacity utilisation. It expects higher clinker exports this year, but the impact would not be significant as clinker exports have minimal margins. However, margins on cement exports are comparable to local margins, as per management.

Clinker export prices stand at US$30-31t and cement export prices stand at US$45t. Due to bulk shipments, export price to the USA is over US$50t (Retention price: US$43-44t; bag cost ~US$10t). The continuity of the company’s supplies to the USA is anticipated to improve gross margins.

Along with the USA, the company has exported to Mexico and is trying to export more in that region. However, export to South Africa has become unviable after the imposition of an 80 per cent anti-dumping duty on most southern cement players (except Lucky Cement, only a 30 per cent duty). Besides, export to Afghanistan is minimal, mostly exported by players near its border.