Pakistan’s government has allowed Attock Cement Pakistan Limited (ACPL) to set up a cement grinding unit in Iraq.
The company has been allowed to remit $24 million for the production plant in Basra on account of equity investment starting from this month, according to an official announcement by the government.
The joint venture is expected to bring the much needed foreign exchange to Pakistan through dividends repatriation and growth in clinker export. ACPL intends to hire 50 percent of labor for the plant from outside Iraq.
ACPL said last year that it had signed an agreement for setting up the plant in a joint venture with Al-Keetan Trading and Commercial Agencies Limited, a private limited liability company. The plant will produce 3,000 tons cement per day.
A Pak-Saudi venture, ACPL is a public limited company, listed on the Karachi Stock Exchange with manufacturing and sales of cement as its main business. The company is part of the Pharaon Group, which also has states in Pakistan’s oil and gas sector, power and real estate sector, according to the company’s official website.
Pakistan’s listed cement sector posted 40 percent growth in earnings for the quarter that ended Dec, 2014, with a net profit of 12.7 billion rupees (US$ 124 million approx.) compared with 9 billion rupees in the preceding quarter, according to a report by Topline Securities, a Karachi-based brokerage house.
Topline Securities has forecast cement companies to post 29 percent Quarter-on-Quarter growth in the second quarter of FY15.
Declining international oil and coal prices have contributed to the improved gross margins for the cement companies through lower manufacturing cost as energy constitutes up to 60 percent of total cost of goods manufactured.