Power Cement Limited, a renowned cement producer of Pakistan, has signed an agreement with Burj Solar Energy (Private) Limited for the procurement of electricity on a fixed tariff, around 40 percent lower than the existing grid tariff, for the next twenty (20) years.
Burj Solar Energy will set up a dedicated 7MW Solar Power Plant by its own investment at existing site of the cement production company. The plant is expected to be operational within the next six to eight years.
In the first quarter of FY2021-22, the cement industry sales volume declined by 5.7 percent to 12.9 million tons during the period under review as compared to 13.6 million tons during the same period last year.
In order to boost liquidity and profitability, the management of the cement production company is focused on cost control measures and has adopted strategies accordingly. The cement production company has been working in all relevant areas including the use of alternative fuels. However, the ever-swelling input costs continue to pose a serious challenge.
Construction package announced by the Federal Government, including Naya Pakistan Housing scheme, coupled with overall effective management of COVID by the Government, significant reduction in policy rate and multiple incentive schemes (subsidized Housing plants/Expansion/BMR) has seeded the groundwork for robust economic growth and suggests a positive outlook for the Cement Industry in Pakistan. However, the escalation in current account deficit and downward pressure on currency present downside risks to growth outlook.
The cement industry sales volume declined by 5.7 percent to 12.9 million tons during the period under review as compared to 13.6 million tons during the same period last year. The domestic dispatches registered a growth of 3.9 percent to 11.3 million tons during the period under review as compared to 10.9 million tons during the same period last year. The exports, however, registered a decline of 43.6 percent to 1.54 million tons from 2.74 million tons during the same period last year.
The purpose of this partnership is to curtail the impact of swelling electricity expense for Power Cement, which is a material component of cement manufacturing cost. Keeping in view the current situation, the producer decided to explore environment friendly renewable energy solutions without incurring any major capital expenditure.