Lucky Core Industries to expand soda ash capacity by 200,000 tons per annum

Lucky Core Industries (LCI) announced plans on Thursday to expand its soda ash capacity by 200,000 to 760,000 tons per annum with an estimated cost of $115 million.

Moreover, LCI is also establishing a greenfield veterinary medicine manufacturing facility in Sheikhupura with an investment of PKR 725 million ($2.58 million). This plant is expected to start functioning by 2026.

In a briefing to analysts, LCI CFO Atif Aboobukar announced that the company has signed an asset purchase agreement with Pfizer to acquire its plant and seven brands in Pakistan.

The company management also expressed concerns over slowdown in downstream demand of soda ash due to inflationary pressures and slowdown in construction activities. Soda ash is the main ingredient in glass manufacturing and primarily used in construction. To mitigate slower local demand, LCI is exploring export markets and last year, company exported 150,000 tons of soda ash fetching $40 million.

LCI posted a net profit of PKR 11.14 billion in fiscal year 2023-24, down 18.6% compared to the profit of PKR 13.77 billion in FY23.

Talking about its pharmaceutical business, the management communicated that 65% of the current portfolio comprises non-essential drugs, which will further increase by approximately 10% after the addition of Pfizer's portfolio.

Pfizer's acquisition, which has already been approved by the Competition Commission of Pakistan, is expected to conclude in two months.

Pakistan de-regularized the pricing of non-essential medicines in May, and companies that have mainly produce non-essential medicines are likely to benefit the most.

To recall, at the start of FY24, the company increased non-essential drug prices by around 20% and later again in April-May. The full impact of deregulation will be seen in FY25's results.