In the past two years, the company has invested in BMR activities as well as installing waste heat recovery plants as well as a downhill conveyor belt and a new vertical cement mill which optimize the grinding capacity. Moreover, a clinker storage silo was also installed to enhance clinker storage and reduce the handling and transportation cost of clinker stock.

Gharibwal also provides loan facilities to its associate company Balochistan Glass Limited (PSX: BGL). Gharibwal earns a mark-up of 1 percent above the rate charged by banks and financial institutions for this loan.

Operational and financial performance

Being a small capacity manufacturer, Gharibwal has tried to improve its production by optimizing the capacity as it was quite low toward the beginning. The company's plant was old which led to compromised capacity utilization. Once the new plant was running however, the company discarded its old plant. By FY14, capacity utilization grew to 66 percent, and 85 percent by FY17. The company grew its revenues during this time as domestic demand and retention prices improved. Revenues have grown by 5 times since FY10.

During FY18 and FY19, higher international coal prices as well as rising gas, furnace oil and grid electricity prices brought margins further down only exacerbated by rupee depreciation. During FY19, other expenses also grew due to which profits declined substantially. However, the company still earned a profit.

Latest financials and outlook

As the economy entered austerity, and IMF bailout took over, the government adopted contractionary policies characterized by PSDP cuts, restriction on non-filers to purchase property of over Rs4 million and overall economic downturn which led to reduced demand from commercial and housing development. These dynamics were coming into play during FY19. Now the first quarter of FY20 has passed by and dynamics have not changed too much.

Perhaps, only worsened. Price competition is higher, domestic demand is low while exporting markets such as India have closed doors on Pakistani cement. These factors led to the company incurring a loss in the first quarter of FY20. In September 2019, the tide seems to be turning as dispatches in the north have improved while prices have also come up. If Gharibwal retains its market share, it will be able to grasp enough revenue streams as before. But inflationary pressures for fuels and financial expenditures due to tighter monetary policy will both determine the bottom line which until the outgoing quarter was in red and maybe continue in at least the upcoming quarter as well.