Finance Videos

Pacific Lime & Cement (ASX:PLA) - 'Undervalued?' Investment Series, with Paul Mulder

Pacific Lime & Cement (ASX:PLA) outlined its flagship Central Cement and Lime project, a vertically integrated facility that aims to supply all of Papua New Guinea's lime and cement needs while also targeting export markets such as Australia. The company highlighted that the project remains on time and on budget, with first production slated for February next year, and that a cornerstone off‑take agreement with Newmont will secure roughly a third of the initial order book. Key data points include a government‑backed project development agreement that gives the PNG state up to 30% equity in both the lime and cement special‑purpose vehicles, effectively valuing the business at about A$700 million. The firm operates from a private wharf just 700 m from a high‑grade limestone deposit, eliminating the costly logistics that competitors face. With a market cap of roughly A$250 million, the company projects EBITDA multiples of 11‑15×, comparable to global building‑materials peers, and it carries no debt, benefiting from a ten‑year tax‑free special economic zone. Mulder emphasized the strategic advantage of domestic supply, noting that "we will provide all of the lime and cement for PNG" and that the SEZ status removes import, export, corporate and payroll taxes for a decade. He also pointed to secure land tenure—mining licence, SEZ licence and a 99‑year state lease—providing a foundation for long‑term stability and community partnership. The implications are significant: investors are presented with a rare pure‑play industrial asset in a market dominated by imports, offering high‑margin domestic sales and export upside. The debt‑free capital structure, government equity participation, and tax incentives lower financial risk, suggesting the stock may be materially undervalued relative to its growth potential and strategic importance for PNG's infrastructure development.