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DGKCC projects favor national repute; posts 9pc growth in first half of Fy2017

DGKCC’s products are preferred on projects of national repute both domestically and globally due to the un-parallel and consistent quality. DGKCC production processes are environment-friendly and comply with the World Bank’s environmental standards.

The company has announced financial highlights of half yearly FY2017. Over the current first half industrial cement dispatches increased by about 11 percent on local front and dropped by about 4 percent on exports side in comparison with comparable 6 monthly statistics. This produced an entire growth of about 9 percent. Industrial dispatch utilization for 6 months stayed at about 87 percent. Almost 74 percent is used within Pakistan while 13 percent is used outside of Pakistan.

D. G. Khan Cement Company Limited (DGKCC) is amongst largest cement manufacturers in Pakistan with a production capacity of 14,000 tons per day. DGKCC has 3 cement plants, 2 plants placed at Dera Ghazi Khan and 1 plant at Khairpur District Chakwal. All the plants are based on new dry process technology.

D. G. Khan Cement Company operates by a nationwide distribution network managed by dissimilar regional sales offices. DGKCC’s products are preferred on projects of national repute both domestically and globally due to the un-parallel and consistent quality. DGKCC production processes are environment-friendly and comply with the World Bank’s environmental standards.

The company has announced financial highlights of half yearly FY2017. Over the current first half industrial cement dispatches increased by about 11 percent on local front and dropped by about 4 percent on exports side in comparison with comparable 6 monthly statistics. This produced an entire growth of about 9 percent. Industrial dispatch utilization for 6 months stayed at about 87 percent. Almost 74 percent is used within Pakistan while 13 percent is used outside of Pakistan.

DGKCC’s earning per share (EPS) is Rs10.28 as against to Rs9.31, which is almost 10.42 percent rise as from the same period last year. Clinker and cement production increased by 13 percent and 12 percent respectively.

Company clinker production reached 103 percent of capacity for 6 months. Dispatch utilization is approbatory 105 percent as against to industry’s 86 percent. Sales volumes are posted with almost 10 percent rise. Net sales raised by about 8 percent over 6 months. Selling expenses are up chiefly because of export handling charges. Major impact in export handling is for Indian by road exports.

As financing for Hub plant started, it raised long term loans by about Rs 6.6 billion. Short term loans jumped by 76 percent, it includes export refinance and import finances for coal as main portion. Profit before tax (PBT) raised by 9 percent.

The company has been certified for environment management system ISO-14001 by quality assurance services, Australia. DGKCC was also certified for ISO-9002 Quality Management System during 1998. By achieving this landmark, the company became the first and only cement factory in the country certified for both ISO-9002 & ISO-14001.

Fuel, being one of the main inputs in cement manufacturing cost and ever rising prices has forced the company to look for alternate cheaper fuels in order to sustain its results optimistic. The management started with domestic coal having calorific value ranging 5000-6000 Kcal/ton. Historically coal price movement is somehow linked to oil but the present pattern appeared to be based on supposition. The Company’s new cement plant at Hub is progressing and extensive construction work is underway.

CEMENT INDUSTRY REVIEW
PAKISTAN: EXPORT OF CEMENT & CLINKER
Fiscal
Year
Afghanistan
Via Land
India Via
Sea & Land
Other
Countries
Via Sea
Other
Countries
Via Sea
Total
Exports
%age
Incr/(Decr)
North
Zone
South
Zone
|–Quantity in Metric Tons–|
|–Quantity in Metric Tons–|
2012
4,715,109
605,453
3,247,268
8,567,830
-9.12
6,266,327
2,301,503
2013
4,404,633
482,214
3,487,255
8,374,103
-2.26
6,105,815
2,268,288
2014
3,655,201
677,305
3,804,021
8,136,528
-2.84
5,418,214
2,718,314
2015
2,872,951
696,337
3,625,781
7,195,069
-11.57
4,467,534
2,727,535
2016
2,439,140
992,631
2,440,833
5,872,604
-18.38
3,851,615
2,020,989
2017 (7-Month)
1,322,666
752,564
1,212,222
3,287,452
-3.44
2,221,760
1,065,692

The growth trend in the cement industry shows that the present production capacity of 46 million tons would be inadequate to meet the local demand in next 2-year in Pakistan. The industry is making huge investments to add new capacities in view of consistent local demand and the government of Pakistan’s thrust on massive infrastructure projects. Industry experts revealed that the cement production capacity would rise in a couple of years to approximately 72 million tons, rising further domestic sales by approximately 27 million tons.

The industry recorded a growth in the first half of present fiscal as the total cement dispatches stood 19.81 million tons.

Experts also revealed that during the first half of present fiscal year, the cement industry has registered a growth of 11.07 percent in domestic dispatches as against with domestic dispatches during the corresponding period of last fiscal year.

Exports registered a fall of 3.53 percent as against with exports during the corresponding period of last year. The entire situation during first half of present fiscal year explained 8.65 percent growth as against to the corresponding period of last fiscal year.

The local dispatches in December 2016 were 3.186 million tons registering a growth of 6.74 percent while the exports amounted to 0.369 million tons reflecting pessimistic growth of 18.98 percent, as against to December 2015.

Total cement dispatches in December amounted to 3.555 million tons depicting a growth of 3.33 percent. Capacity utilization for the month of December 2016 was 90.88 percent. It is believed that the China-Pakistan Economic Corridor (CPEC) a $46 billion portfolio of energy and infrastructure projects, would also raise the cement production in Pakistan.

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