Can maker wants to grow
In a big change for Pakistan’s manufacturing industry, a well-known company that makes beverage cans has said it wants to raise its production capacity. This is because exports have been going up.
Pakistan Aluminium Beverage Cans (PABC), the biggest and only business in Pakistan that makes beverage cans, is going to make more cans because demand has gone up, the company said in a recent corporate briefing.
In the year 2022, the company that makes cans had an amazing utilisation rate of 88%. This was up from 78% in the year 2021. In August 2022, PABC added 150 million cans to its capacity. This brought the total number of cans it could make each year to 950 million, and it plans to keep adding to that number until it can make 1.2 billion cans.
In CY20, 39% of the company’s sales came from exports. In CY21, that number dropped to 37%. JS Global expert Waqas Ghani Kukaswadia told The Express Tribune that it went up to 42% in CY22.
He said that PABC’s management said that the machinery needed for the growth had already been brought in. “The main goal of the expansion is to meet the growing demand for aluminium cans from consumers, and it should be done by August 2023.”
The company’s management said that the current factory in Faisalabad could be used to make up to 2.5 billion cans per year if the capacity was increased. Since the rule has been changed, it is no longer necessary to have 100% cash margin for raw material purchases.
The company that makes cans expects to sell 750 million cans in CY23, making about Rs18 billion in income and Rs3.5 billion in net profit.
Even though local and international geopolitical factors have caused problems for the economy, the company that makes beverage cans has kept growing. Kukaswadia said that in CY22, it made Rs14.2 billion, which was a 96% rise from the previous year.
The falling value of the rupee has also helped PABC, as more than 40% of its income comes from exports and the rest from the local market.
But gross profit took a hit when margins fell to 33.4% in CY22, which was 2.1 percentage points less than in CY21. Still, the company made Rs2.7 billion after taxes in CY22, which was a 71% increase from the year before.
He also said that the company’s strong growth continued into the first quarter of CY23, when the bottom line grew by 2.2 times compared to the same time last year, leading to a net profit of Rs1.3 billion.