Pakistan’s DG Khan plans expansion

Pakistan’s DG Khan plans expansion
Published: 12 November 2009

DG Khan Cement Ltd., Pakistan’s second-biggest producer, plans to invest PKR30bn (US$360m) to build a factory at home and in Sri Lanka, aiming to double capacity and tap demand in South Asia and East Africa.

The company plans to invest as much as PKR10bn to build a 2Mt plant in Sri Lanka in partnership with the government, Chief Executive Officer Mian Raza Mansha said in an interview in Lahore today. Another 20 billion rupees will be spent to build a 3Mt factory at Hub near Karachi to increase sales to East African nations, he said.

DG Khan Cement expects to capture demand for cement as South Asian and African nations, which produce less cement than they need, spend more on building roads, bridges and power plants. The South Asian region is forecast to expand 7.8 per cent in 2011, according to the World Bank.

“This is a brilliant strategy to find new markets and place production capacity according to the regional requirements,” said Rehan Khan, research analyst at First Capital Equities Ltd. in Karachi, who has a “buy” recommendation on the stock.