Strength through experience

Pakistan’s Thatta Cement Company continues to grow in a responsible and sustained manner as market conditions pick up

Thatta Cement Company Ltd was first incorporated in 1980 as a wholly owned subsidiary of the State Cement Corporation of Pakistan Ltd, and was supported by the Overseas Economic Cooperation Fund (OECF) from Japan. By 1982, the company’s manufacturing facility, which initially operated with a capacity of 1000 tonnes per day of clinker, was commissioned 110km north east of Karachi in the Thatta District. In 2004 a consortium of Mr Arif Habib and Al-Abbas Group acquired 100 per cent of the company from the privatisation commission and since taking over full management control have led the facility through vital expansion and economic upgrades.

“Today, the company can derive its strength from a highly competent board of directors who collectively have a diverse and vast range of experience in the fields of engineering, finance, banking, trade and commerce,” begins CEO Muhammad Fazlullah Shariff. “The board oversees all aspects of the company’s affairs, ensuring that it remains a going concern, and is supported by a highly professional management team.”

One of Thatta’s key competitive distinctions in the Pakistani market is its wide range of products. OPC, SRC, slag cement plus class-G oil well cement all feature in its portfolio, the latter making it the only company in the country API-certified to produce oil well cement. “Oil well cement remains our strategic product, contributing to the enhanced profit margins of the company,” comments Muhammad Fazlullah. “Crucially, we are in the process of establishing this brand overseas once the oil exploration sector stabilises.”

Also enabling the company to maintain this edge is its close proximity to the major cities of Karachi, Hyderabad and Thatta, all of which are located within 110km of the plant. Running close to a national highway, the plant also has direct access to a key road network and two seaports, Bin Qasim and Karachi Sea Port, which support its distribution and export activities. Muhammad Fazlullah highlights that domestic consumption of cement has recently seen phenomenal growth of 17 per cent and is likely to gain even more momentum as Pakistan’s government continues to invest in major public sector development programmes.

Spread over 236 acres of freehold land consisting of factory and commercial buildings, facilities for its workers and officers, and its own water reserves, Thatta’s manufacturing plant is the heart of the company’s operations. Quarry deposits are in close proximity to the plant and with current mining rights for limestone from over 3500 acres, shale and clay from 1212 acres and silica sand from 1239 acres of land, it is estimated that limestone and clay reserves are sufficient for about 100 years. Thanks to this rich source of raw materials, the cement produced by Thatta demonstrates a low alkali content making it the preferred choice for the construction of dams and bridges.

The plant itself was designed and supplied by Mitsubishi Heavy Industries of Japan, following a two-stage crushing format of primary jaw crusher and secondary impact crusher, followed by a double rotator grinding mill. “The original capacity of 1000 tonnes per day of clinker was based on a dry process,” outlines Muhammad Fazlullah. “However, since the cement plant has suffered on account of economies of scale with issues of low capacity, frequent stoppages, high consumption of energy and so on, the management has instigated a multi-phase upgrade programme.

“Phase one of the upgrade was successfully completed in 2006 carrying out suitable modifications to increase clinker production to 1550 tonnes per day on a more sustainable basis. This project cost the business Pak Rs. 800 million. The completion of the second phase followed in 2015 seeing further upgrades and improvements in plant efficiencies through cutting edge technologies at a cost of Pak Rs. 1.4 billion. We now have a daily production capacity of 1800 tonnes.”

On top of demonstrating a clear focus on improving its production facilities, Thatta Cement also displays an exemplary attention to corporate social responsibility. In fact, in 2016 it has been recognised by the National Forum of Environment and Health (NFEH) with its annual Corporate Social Responsibility award. The award comes in response to the company consistently going above and beyond to provide much needed support to both its employees and its surrounding communities. “In addition to our quality management system and ISO 9001 certification, Thatta operates a health and safety scheme that is designed to ensure the highest standards of product quality while protecting workers, the surrounding population and the environment,” explains Muhammad Fazlullah.

Funded by a one per cent allocation of profit earnings, Thatta has set up a medical centre and school, both open to the company’s staff and the facility’s surrounding communities. It also arranges regular Medical Camps, inviting experts to treat large numbers of poor patients, who are unable to afford medical expenses. The service is provided free of charge including the provision of medicines. The school is equipped to educate up to secondary level and provides scholarships to all deserving applicants. “Furthermore, we hold an equally firm belief in sustainability,” adds Muhammad Fazlullah. “For example, we operate a containment system to catch and bag all dust for recycling. We have also installed more efficient motors and insulation, together with measures to minimise carbon emissions. Further projects to achieve a substantial reduction in carbon emissions are ongoing.”

One of the biggest challenges facing Thatta at present is how to best manage its economies of scale, and focusing on the production capacity and efficiency of its plant is key to this. Over the course of 2016 plans to install a five mega-watt waste heat recovery plant to produce electricity from flue gases will be implemented. Beyond this, Muhammad Fazlullah highlights longer term plans to upgrade the facility to 3000 tonnes per day, and install a Greenfield plant with an annual capacity of two million tonnes.

Thatta Cement Company Ltd

Services: Major Pakistani cement producer