Lucky Cement has managed to double its half-yearly profits despite production levels remaining virtually unchanged.
Net profit rose 107% to Rs3.02 billion during July to December 2011 against Rs1.46 billion in the same period a year back, according to a notice sent to the Karachi Stock Exchange on Tuesday.
“Earnings growth resulted from a 24% uptick in cement prices and the company’s shift in focus to the local market. Consequently, gross margin increased to 38% in the period under review against the preceding year’s 33%”.
The country’s second largest cement manufacturer has gradually increased its local share rather than exports as all-time high local cement prices make it a more lucrative destination.
Net sales rose by 28% to Rs15.37 billion in the first half of 2012 against Rs12.03 billion posted in the same period last year. The stunning boost in monetary sales was mainly because of higher retention prices.
Volumetric sales grew by meagre 2% to 2.87 million tons against 2.81 million in the same period last year, whereas price surged 25% to Rs423 per bag against Rs339 per bag during the same period last year, according to Summit Capital.
The company’s tire derived fuel plant has started trial operations in December and should start operating commercially by next month, adds the notice. The plant would utilise disposed shredded tires as a replacement of coal for cement production.
The plants costing Rs1 billion is capable of producing cheaper cement along with reducing significant carbon emissions in the environment.
Furthermore, the work on installation of grid station and interconnection with distribution network of Hyderabad Electric Supply Company is in progress and is expected to be completed within July to September 2012.
The main reasons behind the shifting of textile industry to Bangladesh are not electricity and gas outages and power tariffs in Pakistan, but the preferential treatment of Dhaka in the European Union and the United States, says Textile Minister Makhdoom Shahabuddin.
“Bangladesh is a privileged country as it has been counted among least developed nations by the EU and US. It has been given facilities and its textile sector has been sponsored and supported financially by the big economic powers,” said Shahabuddin while talking to the media about the condition of Pakistan’s textile sector here on Monday.
“This is the reason for shifting the textile industry from Pakistan to Bangladesh,” he said, adding businessmen were able to capitalise on this advantage.
According to the minister, more than 40% of the textile industry and around 200,000 power looms have been shifted to Bangladesh in the last five years, causing employment problems. In southern Punjab, more than 60,000 families, who were dependent on daily wages, are finding it difficult to make both ends meet due to job losses. In the whole Punjab, 200,000 families have been directly and indirectly affected.
Defending the tariffs and electricity and gas outages, he said the government was not charging extraordinary tariffs while energy shortage was not restricted to Pakistan. “This is a major challenge as well for the industrial sector in Southeast Asia.”
He said load-shedding would be minimised this year and subsequently power tariffs would be brought down according to the demand in the country.
He said the government would create a tax-free zone for the textile sector in southern Punjab, which is considered a hub of textile industry.
The minister said the government was taking all steps to attract foreign investment and improve the economy, which would solve the problem of unemployment.
Despite facing challenges, Descon Chemicals hopes that the company will overcome these with the support of the Descon group, which has helped turn around the company in difficult times.
Descon Chemicals Chief Executive Officer Taimur Saeed, while speaking to investors and analysts at a corporate briefing at the Lahore Stock Exchange (LSE) on Monday, said another group company Descon Oxychem “is operating at 101% capacity” after starting commercial production just three years ago in December 2008.
The company manufactures and markets hydrogen peroxide to cater to demand in local and international markets. With a European plant and modern technology, the company has a capacity to produce 30,000 tons of hydrogen peroxide per year.
The first quarterly report of the State Bank of Pakistan (SBP) said that despite adverse business conditions, the investment appeal of the textile sector has been sustained in recent years; however, the dynamics of new investments have changed.
An alarming situation has emerged in textiles where investment has been switched to services instead of manufacturing, but the home industry has flourished, said the SBP report on Saturday.
More disturbing was investors’ disinterest in textile manufacturing which called for drastic steps to encourage them, said the report. “Certainly pessimism regarding global demand is a major issue hurting investment prospects in textiles; we believe that energy supplies is the most dominant factor in discouraging additional investments in the sector, as well as disinvestments,” it said.
A small survey of a sample of textile firms registered with Securities and Exchange Commission of Pakistan (SECP) during 2007-2011 shows that most of the new investments are self funded, smaller in size and largely concentrated in the retailing business.
“The attractive margins in the retail business are in fact pulling in other businessmen, besides manufacturers,” it said.
One obvious reason for the greater interest in retail business, besides low capital expenditures, is the disincentive that the textile manufacturers face due to persistent energy shortages and lackluster global demand.
“In addition, a growing population with increasing awareness and brand consciousness is a major incentive for a thriving retail business in recent years,” the report said.
The market for used textile products has also grown in recent years. Growth of clothing import increased tremendously during the period 2006-2010. As a result, Pakistan had become the second largest importer of used clothing after Russia by December 2010.
The report said that the higher demand for used clothing was expected from low-income segment of the society as they were burdened more due to rising inflation and escalating cost of fabrics. Middle to high income groups were also buying used clothing.
The report observed that growth in basic textile services including dyeing and printing followed by embroidery and tailoring services. For instance, tailoring charges alone have inflated by 30 percent in previous 3 years as per a Federal Bureau of Statistics (FBS) data that signifies strong demand. Similarly, new firms focusing exclusively on embroidery are opening up.
On a more macro level, the growing liaison of textile and domestic fashion industry has added tremendous business for domestic advertising and event management industry.
The bank concluded that the domestic textile industry had been reshaped in recent years with growing scope and depth in terms of products, business strategies and penetration in services industry.
“Given a larger employment intensity of services sector, we believe that the sector’s contribution in domestic economy and employment has further increased,” said the report. However, it said that it could not be measured as the large part of the sector was undocumented.
The SECP Chairman, Mr. Muhammad Ali, met the outgoing and newly constituted Board of Directors of the Karachi Stock Exchange on Thursday. In his address to the Board members he appreciated the valuable services rendered by the utgoing
He expressed the belief that the new Board would deliver in the best interest of the capital market adopting a coherent approach and discouraging any compartmentalization of the Board while benefiting from the extensive knowledge and expertise of individual members.
He emphasized that the investors’ interest should be supreme, over and above members’ interest and the management and Board are jointly responsible for the protection of investors.
The SECP Chairman gave an overview of the financial landscape of the country and the capital market. He mentioned that in Pakistan the banking sector continues to dominate overall financial industry and enjoying confidence of the general public. He viewed that the existing fiscal structure works against corporatization as income tax rate on companies is higher than other business structures like partnership or proprietorship.
This discourages documentation and general culture of corporatization. The non-banking financial sector presents a bleak picture not only in terms of financial assets, but also with regards to participation and outreach to general public. He emphasized upon the need for creating awareness amongst the masses about the capital market and restoration of investors’ confidence.
For achieving a vibrant capital market his speech focused on various areas
including (i) investor education and awareness, (ii) market surveillance,(iii) automation, (iv) debt market development, (v) resolution of investor complaints, (vi) image building and legal and structural reforms.
In relation to automation, the need for enhanced internet trading module was emphasized to bring our market to international level and expand the existing narrow outreach. The SECP also discussed the envisaged augmentation of business structure of brokers to allow them to function on lines of an NBFC with certain restructuring. This will provide opportunity to pool resources to have financially strong entities with ability to offer diversified financial services.
The Chairman reiterated that globally only after demutualization, the exchanges have succeeded in giving competition to banks for public’s savings, maximize brokers’ business by achieving mass outreach and eventually lead to wealth creation for all market participants and investors.
Brokers must let loose on their control over the exchange exercised traditionally, and forgo on the membership card value which is meager as compared to the benefits that would be reaped in the medium and long term.
Besides demutualization for effective market regulation and investor protection, the promulgation of Securities Act and Futures Trading Act was in pipeline. All these laws are vital for strengthening our capital market, increasing business of market participants and attracting new investors.
The KSE Board was also briefed on some other key SECP initiatives in process which include introduction of the revised Code of Corporate Governance, allowing takaful window to insurance companies, establishment of centralized KYC Registration Agency, fiscal reforms in coordination with the FBR and development of a long term Financial Market Development Plan.
This year Bonanza has stayed true to its name, and plans to bring lawn back with a bang!
This year, Bonanza and Catalyst PR and Marketing brainstormed together to find one of the best designers to create the best lawn this year.
After a long period of deliberation, the decision was unanimous to choose the blue eyed boy of the Pakistani fashion industry, Kamiar Rokni!
Kamiar Rokni and Bonanza have a great 20 design two color way collection lined up for this year’s lawn season.
Rokni has envisioned a three story collection for Bonanza Lawn 2012
The CEO of Karachi Electric Supply Company, Tabish Gauhar distributed certificates among ACCA high achievers at a ceremony held here on Thursday.
Speaking on the occasion, he said that he was happy on being a part of this celebration of achievement since the country does not have much to celebrate otherwise. He said the only way to overcome hard luck was hard work and the successful students were there because of hard work and not luck.
Mr. Gauhar emphasized that luck does play an important role but students must do their best and leave the rest to Allah as there is no shortcut in life. On a lighter note, he remarked that the students had excelled in their
exams despite all the power cuts! He said it was KESC’s resolve to not only enlighten Karachi but to enlighten the future of the youth as well.
Gauhar remarked that the passing out students were making a giant leap from being students to professionals and it was now a different world that they were entering. He emphasized that in reaching a position of leadership,
young people don’t turn to textbooks but to experiences at their educational institutions. Such people are never afraid to ask questions as that was what he had learned in life. He urged the qualifying students not to be afraid of
asking questions as leadership was all about integrity and passion, something that cannot be bought.
If young people were not passionate, he said, they would never excel and would never grow and follow their dream.
The ACCA is a 100-year old global body for professional accountants with 424,000 students and 147,000 members in 170 countries. ACCA trainees have been inducted into KESC under a regular program starting in 2007.
The utility’s role in this regard has already been recognized with award of the ACCA Gold Category Employer Certificate. This symbolizes the Company’s attainment of best practice standards relating to development of students
aspiring for professional qualifications.
The high achievers who received certificates at the ceremony had demonstrated their potential to be the future leaders of the accountancy profession as they were equipped with in-depth knowledge and skills underpinned by strong values of professionalism and ethics.
The SECP organized a seminar in collaboration with the Institute of
Chartered Accountants of Pakistan (ICAP) at the ICAP House in Lahore.
The purpose of the seminar was to make practicing members of the ICAP more aware of the corporate compliance requirements in the wake of the modernization in corporate compliance culture for companies operating in the eServices regime.
The keynote address regarding ‘Corporate Compliance & its importance’ was given by Mr. Nazir Ahmed Shaheen, Executive Director (Corporatization & Compliance) Department, SECP, who touched on the governing statute for the companies and the SECP’s role as an apex regulator of corporate sector and capital market.
He highlighted the benefits of corporate compliance followed by a detailed briefing regarding various corporate compliance requirements. He also shared with the participants’ important measures taken by the SECP for the purpose of increasing corporate compliance and encouraging feedback from the members to make the SECP’s existing services more efficient.
Ms. Sidra Mansur, Deputy Registrar of Companies, Company Registration Office (CRO), Lahore, SECP, introduced the participants to eServices project, sharing recent features introduced in eServices to make it more user-friendly for the companies and certain other facilitation measures taken by the SECP for smooth transition from physical system of corporate compliance to compliance through eServices, followed by future plans regarding introduction of new modules in the present e-filing system.
The members actively participated in the seminar, asked various technical questions and gave some useful suggestions for further improvement in eServices system. Mr. Shaheen and Mr. Muzammil answered the questions.
The SECP has always collaborated with the professional bodies in the past, and plans to conduct more seminars and workshops in collaboration with other professional and trade bodies as well, in near future to seek their feedback and to create an environment of mutual trust between the business community and regulator, for enhancing corporate compliance of companies through improvement in its services and by creating awareness in this regard among the stakeholders.
Faysal Bank Limited has signed an agreement with China UnionPay for card issuance and acquisition in Pakistan.
The signing ceremony took place inShanghai, China and was attended by President and CEO, Faysal Bank Limited Naved A. Khan, and First Executive Vice President, UnionPay Cai Jianbo.
According to Faysal Bank here Tuesday, UnionPay is one of the fastest growing payments technology companies in the world.
Its cards are accepted on 1.5 million ATMs and 4.5 million POS terminals, in more than 126 countries.
It has a card base of more than 2.8 billion globally, which makes it one of the largest payment schemes in the world.
The Competition Commission of Pakistan (CCP) has termed the slogan ‘No. 1 in Pakistan’ used by Baygon in advertisements as false, deceptive and misleading.
The CCP disposed of the show cause notice issued to SC Johnsons & Sons, manufacturer of Baygon, on Monday following assurance by the company that the slogan will be withdrawn from its marketing campaign within the next ten days, says a statement issued by the CCP.
The issue was taken by the anti-trust watchdog after a complaint was lodged by competitor Reckitt Benckiser Pakistan Limited, manufacturer of Mortein, alleging that SC Johnsons & Sons’ recently launched marketing campaign through print and electronic media is deceptive and misleading.
Reckitt Benckiser Pakistan submitted that according to a recent survey conducted by AC Nielson Retail Audit, the product of the Reckitt Benckiser Pakistan Limited Mortein has an overall market value share of 39.7% in Pakistan whereas SC Johnsons & Sons’ Baygon has an overall market value share of 5.7% in Pakistan.
During the hearing, the respondents did argue that the claim of being ‘No. 1 in Pakistan’ is ‘puffery’ which is not prohibited. However, the CCP observed that a puffing statement is generally vague and unquantifiable, or is so grossly exaggerated that no ordinary consumer would rely on them.
Puffery in legal term refers to promotional statements and claims that express subjective rather than objective views, which no reasonable person would take literally.
However, in the subject claim, neither the word ‘No. 1’ nor ‘Pakistan’ in any manner suggest a general impression towards the consumers and can be identified and quantified, hence, the claim ‘No. 1 in Pakistan’ cannot be termed puffery, the commission observed.
CCP also observed that Brand of the Year Award 2010 was awarded to the respondent for their ‘aerosol products’ whereas, in the advertisement, the claim of being ‘No. 1 in Pakistan’ is used with reference to all of the products. Just by winning the ‘Award of the Year’ in any particular category from the Brands Foundation, would not entitle any undertaking to make any such absolute claim, adds the statement.