Lucky’s new line starts work

Plant has capacity of 3.15m tons per annum

KARACHI:

Despite an economic downturn, Lucky Cement has completed the construction of an additional production line with capacity of 3.15 million tons per annum (MTPA), which may lead to a price war among cement producers as demand remains sluggish.

The construction and installation work under the brownfield expansion of Lucky Cement’s additional line of 3.15 million tons per annum at the manufacturing site at Pezu, Khyber-Pakhtunkhwa has been successfully completed within the planned project timelines, the company said in a notice to the Pakistan Stock Exchange (PSX) on Thursday.

“The new line is now operational and production of clinker has commenced from December 22, 2022,” the notice stated.

With this addition, the total production capacity of the company, including north and south plants, now stands at 15.3 MTPA compared to the previous capacity of 12.15 MTPA.

“Post-successful completion of the brownfield expansion, Lucky Cement holds its rank and prominence as the largest manufacturer and exporter of cement and clinker in Pakistan.”

Lucky Cement, in a separate notice, announced the buyback of its shares. The company bought 220,000 shares at a weighted average price of Rs431.38 on December 21.

“Lucky Cement in compliance with Regulation 6(e) of Listed Companies (Buyback of Shares) Regulations 2019, has purchased its own shares,” the notice read.

“The buyback shows that Lucky is confident; the depressed equity prices make sense for them to repurchase their shares,” said Optimus Capital Management Senior Research Analyst Mehroz Khan.

“Pakistan continues to experience boom and bust cycles. However, when the economic cycle reverses, the demand will be obviously strong and Lucky Cement will reap the benefit of higher capacity with a large market share,” the analyst said.

Earlier, the company’s share price was around Rs940 in 2017 and declined over the years to Rs438.92, as per the analyst.

“The company believes that the real price of its shares is higher. Within due course and improvement in the macroeconomic situation, it will bounce back and there is no better avenue to make investment than its own shares,” he maintained.

Published in The Express Tribune, December 23^rd, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.