DG Khan: southern expansion progressing well

DG Khan:  southern expansion progressing well
Published: 15 March 2016


Pakistan producer DG Khan Cement has reported that its southern expansion project is progressing well and is scheduled for commissioning in 2QFY18. The 2.7Mta plant, which will involve an investment of US$275m, is being established in the Balochistan province of Pakistan.
 
According to the company's half-year results, a letter of credit for the mills and and packing plant has been opened in favour of Loesche GmbH and Haver & Boecker of Germany. Civil work contracts for the project have been awarded and mobilisation executed at the site. Machinery will start to arrive in the first quarter of FY17.

Results for the first half of the current fiscal show that the company achieved a profit after tax of PKR4080m versus PKR3394m a year earlier, translating into a 20 per cent YoY increase. Company officials attribute the increase to more plant operational days, increased cement production, higher cement sales and stable cement prices, as well as a decline coal prices and low oil prices which led to low-cost captive electricity.
 
Cement production totalled 2.01Mt in 1HFY16, around seven per cent higher than the comparative period of the previous year. Local sales climbed by 14 per cent YoY in 1HFY16, but exports fell 22 per cent. 
 
Net sales increased by about 7.75 per cent while cost of sales decreased by about 4.4 per cent thereby stretching gross profit by about 32.8 per cent over the comparative half year. The gross profit margin for 1HFY16 was 40 per cent compared to 32 per cent in 1HFY15.