DG Khan Cement Company Limited. A Nishat Group Company

Transcription

1 DG Khan Cement Company Limited A Nishat Group Company

2 Nishat Group Nishat Mills Ltd. Nishat (Chunian) Ltd. MCB Bank Ltd. Adamjee Insurance Co. Ltd. D.G. Khan Cement Co. Ltd

3 DG Khan Cement Company Ltd (DGC) Nishat Group acquired DGC in May 1992 as a consequence of the Government of Pakistan s privatization program Installed capacity at the time of acquisition was 2,000 tons/day of Clinker. Total current production capacity of 13,400 tons/day compared with Pakistan's total capacity of (approx.) 122,800 tons/day of Clinker. DGC has 2 different production locations: An old cement plant at Dera Ghazi Khan having 2 installed cement plants with a total capacity of 6,700 tons/day of Clinker. A new state-of of-the-art Greenfield cement plant has been set up at Khairpur Village, District Chakwal (KHP) with an installed capacity of 6,700 tons/day of Clinker. The project has started trial operation on in May Increase in installed capacity by 570% by Nishat Group since DG Khan Cement is now one of the largest cement projects in Pakistan

4 DG Khan Cement Company Ltd (DGC) (contd.) Vertical Integration by investment in Paper Sack manufacturing plant at Khairpur village District Chakwal having capacity of 120 million bags annually. Captive Power Generation plant of 82MW, Fuel, Gas and duel fuel at both production location viz. DGC site and KHP site. Environmental & Quality Concerns Plant at DGC sites complies with World Bank Environmental Standards Only Cement plant (DGC Site) in Pakistan which is ISO Certified for Environmental Management System ISO Certified for Quality Management System (DGC Site) Environmental Certification of New Cement plant at KHP site are underway. 4

5 Pakistan s s Cement Industry 29 Cement Plants divided into 2 geographical zones viz. North and South. Current Installed Capacity of million tons as against million tons in June 2006 Demand grew by 32.6% in July-May 2007 and exports by 106% during the same period, as against the demand growth of 12.6% in FY 2006 Sales prices of Cement are governed by the market mechanisms of Demand and Supply. The growth in cement sales surpassed GDP growth during last couple of years. Future Outlook is directly correlated with GDP growth.

6 Financial Performance of DGC in FY06 Market Capitalization (as of June 07) Book Value of Equity Gross Sales Profit before Tax Total Assets Exports EPS Market Share 13% Capacity Utilization 112% Portfolio Investments (as of June 07) Dividend Income Quarrying Reserves USD 487 million USD 318 million USD 181 million USD 57 million USD 567 million 166,000 metric tons PKR per share USD 414 million USD 8 million 150 years

7 Total Assets Net Sales P K R in M illions 35,000 30,000 25,000 20,000 15,000 10,000 5, Year P K R in M illio n s 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Year

8 3 year share price performance of DGC 3 year share price performance of DGC Jul-04 9-Sep Nov-04 7-Feb Apr Jun-05 8-Sep Nov Feb Apr-06 6-Jul Sep-06 5-Dec Feb-07 4-May-07 Volume (mn shares) Price Volume (mn) Price

9 Top Performers of KSE100 Index in 1H-07 S. No. Name of Company Return Performance Relative to Index 1 NIB Bank 236% 199% 2 Pakistan Reinsurance 130% 93% 3 Lucky Cement 130% 93% 4 Adamjee Insurance 118% 81% 5 Bank Al-Falah 102% 65% 6 D.G. Khan Cement 85% 48% 7 United Bank Ltd. 81% 44% 8 Allied Bank 81% 35% 9 MCB Bank 72% 31% 10 Pioneer Cement 68% 26%

10 DGC s Achievements Sales and Profits have increased by 362% and 505% respectively since s 1995 Vertical Integration with Investment in a Paper Sack manufacturing plant at Khairpur Village, District Chakwal having a capacity of 120 million bags annually. Captive Power Generation plant of 82 MW Fuel, Gas and Duel Fuel at both production locations Environmental & Quality Concerns Plant at the DGC site complies with World Bank Environmental Standards Only Cement plant (The DGC Site) in Pakistan which is ISO Certified for Environmental Management System ISO Certified for Quality Management System (The DGC Site) Environmental Certification of New Cement plant at the KHP site is underway.

11 Future Plans of DGC Sales Forecast During FY DGC is expected to sell nearly 3.7 million tons, which will further grow inline with cement growth in local and export markets

12 Future Plans of DGC (contd.) New vertical cement grinding mill at the DGC site of 230 tons/hour. Replacement of the Clinker Hammer Crusher with Roller Crusher at Unit-2 at DGC site which will save maintenance costs Optimization Plan under study for the KHP project, expected to increase the production capacity by 15% and help reduce operating costs Gas firing Station at Unit-2 at the DGC site which will replace 60% of rising Coal Fuel with Gas Up-gradation of the PLC system at Unit-2 at the DGC site which will decrease downtime of plant and help increase annual production and reduce maintenance costs New Greenfield cement plant in the South Zone (Near Karachi) of about 6,700 to 12,000 tons/day Lease Land for the new plant has been approved Land acquisition for the new plant is underway

13 JS Valuation Snapshot July 2007 Index Weight age Mkt Cap Paid-up Cap PER PKR bn PKR mn FY07E FY08F FY09F DG Khan Cement 0.9% JS Cement Sector 2.3% JS Universe 79.1%