Pakistan expansion update

Pakistan expansion update
Published: 07 June 2004

During the fiscal year 2003-04 the Pakistani cement industry expects to
achieve about 82 per cent capacity utilisation, resulting in a growth rate
of 15 per cent compared to last year. A number of factors are attributed to
this tremendous growth represented by various indicators. Cement exports,
mainly to Afghanistan, doubled during the three-quarter period of the
current year, attaining a level of 0.78Mt but that accounts for only eight
percent of the total production by the industry.

In fact, high rise in demand for cement has been due to improved economic
scenario, massive undertaking of various development and infrastructure
projects at national level, and the growth of housing activities and civic
facilities in public as well as private sector.

The industry has embarked upon an ambitious plan to expand its present
production capacity. Out of a total of 24 cement plants, currently 22 units
are operative, 17 companies being listed on the Karachi Stock Exchange.
The country at present has an installed capacity of producing 17.55Mt of
cement per annum, mainly portland cement. It is envisaged to increase
installed capacity to 28.21Mta, by the year 2008. Orders for procurement of
machinery have been placed in some cases whereas in others, the contracts
are in the offing.

One of the major companies, Lucky Cement Ltd has already awarded contract to
a Chinese trading company for installation of an additional line of 3800tpd
capacity that is scheduled to go into production by the year 2005.

The Bestway Cement Ltd is currently negotiating with a European manufacturer
to set up a new unit of 3300tpd at the same location. Similarly, the D G
Khan Cement Co Ltd plans to enhance its present capacity by putting
up another line of 3800tpd capacity, in the first phase.

The Dadabhoy Cement Industries Ltd, which in fact created the confidence in
local industry by placing order on HMC for the first ever locally-
manufactured cement plant, are now negotiating with the Western suppliers
for increasing their installed capacity from 1800tpd to 2800tpd.

Also, the Pioneer Cement Ltd, for which the HMC was the prime contractor for
setting up its plant in 1980s, has plans to go shortly for capacity
expansion, most likely through a foreign supplier. Other cement companies
also have expansion plan on cards.


The competitiveness and capability of the local engineering group HMC to
undertake implementation of these schemes is re-affirmed from the fact that
the Galadary Group of the UAE is buying machinery and equipment from the HMC
for its 2000tpd cement plant, currently under installation.

Also, the existing Pak-China cement plant is being converted by the HMC to a
white cement plant of 500tpd capacity. When the plant goes into production,
under the name Maple Leaf White Cement, it would be the largest
plant for producing white cement in the country.