GWLC Corp Bf.

Corporate Briefing Report of Gharibwal Cement Limited (GWLC)
Prepared by Kamran Ahmed, ACCA
Project Updates and Expansion Initiatives
10,000 TPD Expansion Project
Gharibwal Cement Limited is making significant progress on its 10,000 tons per day
(TPD) capacity expansion project, which aims to increase the company's clinker
production capabilities substantially. Management confirmed that the pyro-process
plant equipment has been received, and civil construction work on the site has
commenced. However, they noted that the pace of expansion may accelerate if interest
rates decline, allowing better access to affordable financing. The estimated capital
expenditure (capex) for completing the project is around PKR 16-17 billion. While no
definitive completion date was provided, the company remains optimistic about
completing the expansion as market conditions stabilize.
Cooler Retrofit Project
GWLC is also in the final stages of a cooler retrofit initiative aimed at improving kiln
efficiency. This project is expected to be completed by the end of December 2024,
resulting in an increase in clinker production capacity from 6,700 TPD to 7,500 TPD.
Additionally, the retrofit is projected to yield a 3-4% reduction in coal consumption,
which will positively impact production costs by lowering dependency on coal, a
major expense in cement manufacturing.
10 MW Solar Power Plant
The company’s efforts toward sustainable and cost-effective energy sources have led
to the installation of a 10 MW solar power plant, which became operational during
FY24. This solar installation is anticipated to reduce GWLC’s reliance on the
national grid and conventional power sources, enhancing its power cost structure. To
further increase renewable capacity, an additional 8 MW is scheduled to become
operational by the third quarter of FY25. The total capital investment for this solar
project stands at PKR 550 million, underscoring GWLC’s commitment to integrating
green energy solutions to curb operational costs.
10 MW Multi-Fuel Power Plant
GWLC has acquired a turbine for its upcoming 10 MW multi-fuel power plant, which
will allow the plant to operate on various fuel sources. This power plant is expected
to enhance energy security and reduce dependency on single energy sources, making
production operations more resilient to price fluctuations in the energy market.
However, management has not provided a timeline for when the multi-fuel plant will
commence operations.
Financial Performance and Market Position
FY24 Financial Overview
 Net Profit: Gharibwal Cement reported an impressive 41% year-on-year (YoY) increase in
net profit for FY24, reaching PKR 1.74 billion. This reflects an earnings per share (EPS) of
PKR 4.35, compared to PKR 3.08 in FY23.
 Revenue: Revenue saw a slight YoY decrease of 0.8%, amounting to PKR 18.17 billion in
FY24. Management attributes this minor dip to fluctuating demand in the local market,
mitigated by higher retention prices.
 Cost of Sales: The cost of sales also declined marginally by 0.9% YoY to PKR 14.39 billion,
driven by improvements in cost efficiencies and energy utilization.
 Finance Costs: Finance expenses fell by 13% YoY, standing at PKR 279.38 million, down
from PKR 320.23 million in FY23. This reduction reflects effective management of the
company’s financing structure amidst high-interest environments.
FY23 Performance Recap
In FY23, Gharibwal Cement achieved a 13% YoY growth in net sales, reaching PKR
18.32 billion. This growth was largely driven by a 41% YoY increase in the average
selling price per ton. However, dispatch volumes dropped by 20% YoY to 1.35 million
tons, impacted by lower capacity utilization, which was 61% in FY23 compared to
76% in FY22. Consequently, FY23 net profit decreased by 9% YoY, resulting in PKR
1.23 billion in net profit (EPS: PKR 3.08), down from PKR 1.36 billion (EPS: PKR
3.38) in the same period last year.
Operational Insights and Market Strategy
Current Market and Pricing Strategy
The management revealed that the market retail price (MRP) for cement currently
stands at PKR 1,430 per bag, while GWLC’s retention price is PKR 850 per bag. The
company temporarily suspended cement exports to Afghanistan, attributing this
decision to unfavorable market prices and export economics in the region.
Fuel and Power Mix
GWLC operates with a diversified fuel mix to optimize energy costs and reduce
exposure to volatility in any single fuel market. Their current fuel sourcing strategy
includes:
 Local Coal: 20%

 Afghan Coal: 58%
 Imported Coal: 22%
The average coal cost incurred by the company is PKR 48,000 per ton. Additionally,
GWLC’s power mix includes:
 Waste Heat Recovery (WHR) & Circulating Fluidized Bed (CFB): 50%
 National Grid: 31%
 Heavy Fuel Oil (HFO): 19%
Due to high costs and limited availability, the company has opted not to use gas as a
production fuel. Currently, the average power cost per unit is PKR 23, which GWLC
aims to lower through ongoing solar and multi-fuel power projects.
Competitive Landscape and Forward Outlook
Management voiced concerns regarding competitor Flying Cement Company’s

expansion plans, which could potentially impact regional market dynamics. However,
GWLC does not anticipate an imminent price war, as both companies appear focused
on maintaining market stability. Going forward, management expects cement prices
to remain stable, with a slight increase in demand anticipated in the near term, driven
by local construction projects.
Summary of Key Points
 10,000 TPD Expansion: Pyro-process plant received; civil work underway; estimated cost
PKR 16-17 billion.
 Cooler Retrofit: On track for Dec 2024 completion; projected to raise capacity to 7,500 TPD
and reduce coal usage by 3-4%.
 10 MW Solar Power Project: Operational since FY24, with an additional 8 MW planned by
3QFY25 (capex PKR 550 million).
 10 MW Multi-Fuel Power Plant: Turbine acquired, expected to improve fuel flexibility.
 FY24 Financial Performance: Net profit increased by 41% YoY to PKR 1.74 billion; revenue
slightly decreased by 0.8%.
 FY23 Recap: Net sales increased by 13% YoY, although net profit declined by 9% due to
lower dispatches.
 Pricing Strategy: Current retention price at PKR 850/bag; MRP at PKR 1,430/bag; exports
to Afghanistan suspended.
 Fuel Mix: Local, Afghan, and imported coal; average coal cost PKR 48,000/ton.
 Power Mix: 50% WHR & CFB, 31% National Grid, 19% HFO; average power cost PKR 23
per unit.
 Market Outlook: Stable prices expected with a slight uptick in demand; no anticipated price
war with competitors.
Disclaimer: This report is based on information presented during GWLC's corporate

briefing and reflects the views of Kamran Ahmed, ACCA. While every effort has been
made to ensure accuracy, the analyst assumes no responsibility for projections or
statements contained herein.

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Corporate Briefing Report of Gharibwal Cement Limited (GWLC)

Prepared by Kamran Ahmed, ACCA

Project Updates and Expansion Initiatives

10,000 TPD Expansion Project

Cooler Retrofit Project

10 MW Solar Power Plant

10 MW Multi-Fuel Power Plant

FY24 Financial Overview

FY23 Performance Recap

Operational Insights and Market Strategy

Current Market and Pricing Strategy

Fuel and Power Mix

 Local Coal: 20%

Competitive Landscape and Forward Outlook

Management voiced concerns regarding competitor Flying Cement Company’s

Summary of Key Points

Disclaimer: This report is based on information presented during GWLC's corporate

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