Lucky Cement Limited (PSX: LUCK) will enhance its clinker production capacity with its Joint Venture (JV) partner in Samawah, Iraq, by adding a new line of 1.82 million tons per annum (MTPA), the company informed the Pakistan Stock Exchange on Thursday.
Keeping in pace with the increasing demand for cement in Iraq and to secure the supply of clinker for the JV cement grinding facility in Basra, the other JV Company of Lucky Cement Limited and Al-Shumookh group, Iraq (Najmat-Al-Samawah or NAS), has resolved to enhance its production capacity of clinker in Samawah, by adding a new production line of 1.82 MPTA.
According to the stock filing, this capacity expansion will significantly enhance the overall efficiencies of business operations as it will play a crucial role in achieving self-reliance in terms of clinker availability within Iraq.
For the said expansion, NAS has entered into an Engineering & Procurement Contract. The construction activity on the project is expected to commence within Q1 FY24 and is expected to be completed in 18 months.
Subsequent to the above addition, the total domestic and international capacities of Lucky Cement Limited will be as follows:
| Company | Plant Location(s) | Capacity (MTPA) | Type |
| LUCK | Pezu, Lakki Marwat | 10.25 | fully integrated cement plant |
| LUCK | Karachi | 5.05 | fully integrated cement plant |
| Nyumba Ya Akiba | Democratic Republic of Congo | 1.31 | fully integrated cement plant |
| Al-Mabrooka Cement Company | Basra (Iraq) | 1.74 | Cement grinding plant |
| Najmat-Al-Samawah | Samawah (Iraq) | 1.31 | fully integrated cement plant |
| 1.82* | new clinker line | ||
| Total capacity clinker and current | 21.48 | ||
According to Arif Habib Limited (AHL), the company has a 50 percent stake in this JV, and based on the last published accounts (FY22), the company posted margins of 27 percent and improving demand dynamics of Iraq, where margins have risen as high as nearly 30 percent in the past. The impact of PKR 10.42 to 12.88 per share is estimated on the consolidated bottomline of LUCK, which would augment profit after tax by 7-8 percent per annum against the current year’s expected profitability.
This strategic capacity expansion aligns with Lucky Cement’s plan to diversify its portfolio of products and businesses. In addition to cement operations, Lucky Cement has a well-diversified business portfolio encompassing automobiles, chemicals & agri sciences, mobile phone assembling, and energy, including captive power plants. This diversification not only enhances the quality of earnings but also delivers sustainable value to its shareholders.
