LAHORE - With energy contributing a significant portion of around 68 per cent of costs for cement manufacturers, usage of electricity through national grid is costing cement manufacturers around Rs15.5/kwh while cost of power generated through gas based CPP’s stands at Rs5.5/kwh.

Experts said that based on FY13 full year accounts, major companies like Lucky Cement Ltd and DG Khan Cement Ltd lead the pack with the lowest energy cost/bag given their reliance on the national grid is much lower due to the use of CPP’s. In fact, Lucky Cement Ltd is completely dependent on its own CPP for power generation resulting in the company clocking in energy cost of Rs106/bag versus industry average of Rs129/bag. Meanwhile only 35% of DG Khan Cement Ltd’s power usage comes from the National Grid leading to 8% higher energy cost/bag compared to Lucky Cement.

Additional benefit for both these companies stems from the use of the Waste Heat Recovery Plants (WHR). Note that cost for power units recovered through the WHR are 80-90% lower than power used via the CPP or the National Grid. Also note that for heating the kiln, both LUCK and DGKC partially rely (have the capacity to replace coal by 25%) on alternative fuels (i.e. Tyre-Derived Fuel, Refuse Derived Fuel) which provides them a partial cover incase if coal prices rise sharply. Within the second tier group pf companies, Attock Cement and Maple Leaf Cement lead the way with energy cost of Rs124/bag.