Investor Presentaiton
Cement
Supply Side | Cost Break up
.
Major raw materials used in cement manufacturing process are limestone, clay
and gypsum. These raw materials, however, constitute a very small portion of
the production cost - 4% (as represented in the adjacent pie chart) due to the
energy intensive nature of the process, which majorly constitutes fuel and
energy cost.
PACRA
Manufacturing Cost Break up.
Raw Material,
4%
•
Coal, being a cheap source of energy, is extensively used by the cement
companies in their manufacturing process and accounts for ~40% of the total
production cost of cement. Meanwhile, fuel & power costs also contribute a
prominent portion of the total cost of production (~20%).
Imported Coal,
39%
.
Majority of the cement manufacturers rely on imported coal to meet their
energy needs, which implies their exposure to exchange rate movements as
well as fluctuations in international coal prices.
Other Fuel &
Power, 20%
Fixed Cost &
Overheads,
22%
Packing
Material, 10%
Stores &
Spares, 4%
Source: APCMA, PACRA Internal Database, Companies FinancialsView entire presentation