The parent company of Attock Cement Pakistan Limited (ACPL), Pharaoh Investment Group Limited (Holdings) SAL, is exploring strategic options, including the potential sale of its investments in the cement sector in Pakistan. This development was disclosed by ACPL in a notification to the Pakistan Stock Exchange (PSX) on Wednesday.
ACPL said in its letter to the stock exchange: “We hereby notify you that we have received a letter from Pharaoh Investment Group Limited (Holdings) S.A.L., Lebanon, the parent company of Attock Cement Company Pakistan Limited, informing us of their intention to re-evaluate their long-term strategic options, including In that potential sale, in connection with their investments in cement business in Pakistan a copy of the letter was also shared with PSX.
The Pharaoh Investment Group’s letter stated that no official decision has been taken yet. “We will carefully consider various options including a potential sale taking into account appropriate pricing, timelines and wider market conditions before making a final decision,” the statement read.
The Group has appointed Standard Chartered Bank as its international financial advisor to assist with this strategic assessment. The company confirmed that stakeholders will be informed of any important developments during the process.
Following this announcement, ACPL share price rose to Rs 259.27, hitting its upper lock with an increase of Rs 23.57 or 10% over PSX.
Attock Cement Company Pakistan Limited, a subsidiary of Lebanon-based Pharaoh Investment Group, was established on October 14, 1981, and is primarily engaged in the manufacture and sale of cement. Known for its Falcon Cement brand, the company operates a manufacturing plant in Hub, Balochistan, with a production capacity of 3 million tons per year. It exports clinker and cement to markets including the United Arab Emirates, Africa, Iraq and Sri Lanka.
Despite its strong presence in the market, ACPL has faced challenges recently. The company expects a 10% decline in cement despatches for fiscal 2025. During the first quarter ending September 30, 2024, domestic despatches declined 20% year-on-year to 7.91 million tons, while exports grew 22% to 2.14 million tons. Sales and profits also declined during this period, highlighting the impact of lower demand, particularly in southern Pakistan.
To mitigate rising costs, ACPL is investing $4.5 million in a 4.8 MW wind project scheduled to become operational in January 2025. In addition, the company plans to increase its use of alternative fuels to further reduce production costs.
Previously, ACPL liquidated its Iraqi milling unit in May 2023, selling its 60% stake in the operation to local interests. The capacity of the Iraqi unit is 0.9 million tons annually.
The strategic review conducted by Pharaoh Investment Group comes amid a changing landscape for the cement industry in Pakistan. Any decision regarding a potential sale could have significant implications for the sector, given ACPL’s well-established market footprint and export capabilities.