Karachi: Maple Leaf Cement (MLCF) is navigating economic challenges with strategic initiatives, as it prepares for the amalgamation with Pioneer Cement and adapts to fluctuating coal and gas supply conditions. Key takeaways from the company's Annual General Meeting reveal a focus on cost-efficiency and renewable energy investments.
According to JS Global, MLCF management disclosed that the total royalty provision stands at approximately Rs6 billion, with the potential reversal contingent on a decision by the Federal Constitutional Court. The timing and amount of any reversal remain uncertain. The amalgamation with Pioneer Cement is expected to be reflected in MLCF's financials between December 2026 and March 2027.
MLCF's current fuel mix includes 60% local coal, 20% pet coke, and 40% alternative fuels. The company has reduced its reliance on imported coal, with only 10% of coal requirements imported last year. Despite a 20%-30% increase in freight and shipping costs, MLCF is mitigating impacts through higher cement prices and cost-efficiency measures. The fuel cost per ton increase is only 2% year-over-year, less than inflation.
Addressing gas supply concerns at Agritech, MLCF management indicated a shift toward the Mari gas network, expected to ease pressure on gas availability. Winter gas shortages are anticipated to be partly offset by the urea turnaround cycle and existing inventories. Gas supply to Agritech will be sourced from the nearby Shewa field, reducing the risk of severe gas curtailments.
In renewable energy, PIOC's solar capacity is set to rise from 28MW to approximately 31MW, while MLCF maintains around 20MW of solar capacity. The combined solar capacity is expected to reach 51MW. Additionally, MLCF has 200 acres of land available for further solar capacity expansion of 80-100MW, focusing on infrastructure improvements like Battery Energy Storage Systems (BESS).
Management plans to shut down one of PIOC's two coal plants by the end of the year, following the commissioning of a new coal plant. Initiatives to enhance energy efficiency and utilization of renewable energy capacity, including potential BESS deployment, were also highlighted as part of the company's strategic roadmap.