Abstract of cement industry

Sales volume was also impacted owing to non-availability of clinker and

exports were hampered due to working capital constraints. Lower sales
enhanced the losses owing to increase in overhead costs. In addition, huge
penalties had to be incurred by the company due to late or deferred payment
of government dues to the FBR and the PEPCO. Losses during the quarter on
this alone amounted to Rs 60 million. As the plant had to be operated on low
feed owing to shortage of coal, the cost per ton of energy increased by Rs
100 and a further loss of Rs 100 million had to be incurred by the company
owing to inability to establish import letters of credit for coal owing to
suspension of working capital facilities by some of the banks.
It was not until March 31, 2010 after the restructuring arrangements had
been signed that the working capital facilities were reinstated but by this
time an extra loss of over Rs 300 million had been incurred owing to the
intransigence of some of the lenders. The management was unable to
appreciate this unfortunate stance by these institutions as all that has
happened, the problems of the company have been exacerbated which could
have been avoided. The operation of the waste heat recovery project has
also been delayed as a consequence which otherwise could have improved
the strained cash flow of the company by lower energy costs