Pakistan: Dewan Cement denies Anhui Conch interest

Pakistan: Dewan Cement denies Anhui Conch interest
16 September 2016

China's Anhui Cement Co Ltd is reported by Pakistan's local media to have set its eyes on Dewan Cement Ltd (DCL) as it seeks business opportunities in Pakistan. While DCL shares have been trading heavily as a result in the past few months, DCL has denied rumours of a takeover.

DCL Director, Haroon Iqbal, and Company Secretary, Muhammad Hanif German, said in response to a Pakistan Stock Exchange (PSE) query whether any Chinese company is buying a substantial stake in the company, "Chinese companies have been exploring invest opportunities in various sectors of Pakistan’s economy. In our case also, some Chinese investors informally touched base with us, but neither any proposal was floated for our consideration, nor were there any expressions of interest."

DCL has a cement and clinker capacity of 2.89Mta and 2.76Mta, respectively with a market share of six per cent. The company operates two production facilities – one in southern Pakistan, near Karachi at Deh Dhando, Dhabeji, Sindh and the other in northern Pakistan, near Kamilpur Hattar Industrial Estate, district Hattar Khyber Pakhtunkhwa.

Financial standing in 9MFY16 and 3QFY16
DCL's 9M performance ending March 2016 showed an upward trend in the top and bottom lines. Net sales grew by 11 per cent in YoY growth between 9MFY16 and 9MFY15, while after tax profit grew by 19 per cent. However, higher operational costs led to a fall in gross margins from 15 per cent in 9MFY15 to 13 per cent in 9MFY16. Quarterly margins were equally disappointing: 14 per cent in 3QFY16 against 16 per cent in 3QFY15.

DCL is in the process of commissioning a 6MW waste heat recovery plant for its Karachi plant and may also be working on adding captive power generation plant and alternate fuel energies, although no formal announcements have been made as to the timeline of these plants.

Published under Cement News