Lucky Cement commissions 28.8MW wind power at Karachi plant

KARACHI: Lucky Cement (LUCK) has said that with the commissioning of 28.8 megawatts (MW) of wind power at its south Karachi plant in the second quarter of FY25, the company’s renewable portfolio has reached 160MW — comprising 74MW solar and 56MW waste heat recovery (WHR).

These renewable sources now meet more than 55 per cent of the company’s cement operations’ power needs.

Lucky Cement held its FY25 analyst briefing on Friday to discuss business performance and future outlook, according to a report by Topline Securities.

The company has also installed a battery energy storage system to optimise renewable energy use, with an estimated payback period of four to five years. For the remaining 45 per cent of its power requirement, Lucky will continue to rely on the national grid.

Management said cement dispatches rose 8 per cent year-on-year in FY25, driven largely by stronger exports. Lucky retained its position as the country’s largest exporter, with African markets accounting for most of the volumes.

Average domestic retention prices in FY25 stood at Rs15,500–16,000 per ton, while average export prices were $41 per ton for cement and $31 per ton for clinker.

Improvement in unconsolidated gross margins was supported by stable coal prices and the addition of the new wind power project at the Karachi plant, Topline said.

Lucky Cement’s Iraq plant fully functional after minor damage

The South plant relies entirely on imported coal, costing about Rs33,000 per ton. In the North, the fuel mix comprises 75–80 per cent local coal and the remainder Afghan coal, at an average cost of Rs38,000 per ton.

A surge in other income was attributed to returns on surplus cash maintained for future strategic initiatives, investments, and contingencies.

Capital allocation remains a priority, with management actively evaluating opportunities. An investment in PIA is currently under review at the due diligence stage.

Lucky’s overseas operations also continued to perform strongly, with Iraq-based plants running at 95 per cent utilisation and Congo-based plants at 85 per cent.

Cement sales to dip 5pc in FY25, rebound by 3pc in FY26

Meanwhile, the Lucky Electric Power Company Limited (LEPCL) remains reliant on imported coal. However, with SECMC Phase III expected to come online, local coal availability is set to improve, enabling LEPCL to start using Thar coal in FY26, which management expects will lower costs and boost profitability.

In FY25, the company also announced a 5:1 stock split, which resulted in 65 per cent of shareholders now holding at least 500 shares.

Management projects 5 per cent growth in cement demand in FY25. On Lucky Motors, management sounded upbeat, citing improving economic conditions and a recovery in auto demand.