Page 37 - CCL AR 2017 Final

Chairman’s Review

The year 2016/17 proved to be a historical year for the Company not only in terms of
achieving highest ever sales revenues along with profitability but also because of the
commissioning of Cement Line II in the month of January 2017. Following this expansion,
the production capacity of the Company has increased to approximately 2.4 million tons
per annum, the full impact of which will be realized in the next financial year.

On the back of greater spending of PSDP by the government for the construction of
infrastructure projects in the country and higher spending by the private sector on housing
and commercial projects, there was 8% increase in the domestic demand for cement
during the year. We anticipate further appreciation in the domestic demand in the coming
days as construction activities are on the rise especially after the initiation of projects
pertaining to CPEC. Due to strong brand reputation and ideal location, your Company
stands to benefit from growth in cement demand both in Pakistan and Afghanistan.

You will be pleased to know that next expansion project for Cement Line III, that will nearly
double the existing capacity, is progressing on schedule and we are confident of
commissioning the Cement Line III by June 2019. With this expansion, the production
capacity of the Company will increase to around 4.5 million tons. Just like second line, we
are confident of completing the expansion within the estimated project costs. The
expansion will allow the Company to meet the additional demand for cement in the
country and further improve its allocation of costs.

Cherat remains a brand of choice for its loyal customers and is considered one of the most
efficient plants in Pakistan. It is our commitment to all our stakeholders to remain on path
to success through hard work and ensure sustainable growth.

Omar Faruque
Karachi: August 23, 2017 Chairman

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Annual
Report 2017