Lucky Cement to set up $175m cement manufacturing plant in Africa

The shareholders of Lucky Cement may see their gains hitting new highs as the cement giant is all set to become part of a $175 million joint venture to be undertaken by setting up a green field cement manufacturing plant in an African country, the Democratic Republic of Congo. Lucky Cement along with a “local partner” would be developing the proposed cement plant on 50-50 share basis with the former contributing some $40 million in the joint venture. “The management of your company has decided to set up a one million tonnes per annum green field cement manufacturing plant in the Democratic Republic of Congo as a joint venture project with a local partner subject to all regulatory and statutory approvals required under the law,” Muhammad Yunus Tabba, chairman director Lucky Cement, told the company’s shareholders at the country’s three stock exchanges in Karachi, Lahore and Islamabad in a Directors’ Report on Monday. The proposed plant is envisaged to have an annual production capacity of one million tonnes. According to the chairman, the total project cost was estimated at $175 million which would be financed through 46 per cent equity to be contributed equally by both the partners and 54 per cent debt. The debt financing, Tabba said, would be raised from the multilateral institutions or international Development Finance Institutions (DFIs). “Your company would contribute $40 million towards 50 per cent share of equity in the proposed project,” he added. The Lucky Cement chief said that a technical and financial evaluation of the proposed project had been carried out both from international consultants and the team of experienced experts within the company. “The management is hopeful that this investment would pave long term benefits for the shareholders of our company,” Tabba expressed the hope. Lucky Cement being one of the country’s leading cement manufacturing and supplying firms declared a 40 per cent cash dividend in its Board of Directors’ meeting held last Saturday in this metropolis. For the fiscal year that ended on June 30 2011, the company declared that its total comprehensive income stood at Rs3.97 billion against last year’s Rs3.137 billion with its basic and diluted earnings per share accumulating to of Rs12.28. Last year in FY10 the company’s earnings per share was Rs9.70.