Mustehkam Cement and Bestway Cement to merge, Pakistan
Two Pakistan-based cement producers, Mustehkam Cement and Bestway Cement, have informed the Karachi Stock Exchange (KSE) of their intention to merge and operate as a single company. The board of directors of both companies are scheduled to meet on 6 May to approve the amalgamation.
Mustehkam Cement has been a subsidiary of Bestway Cement (and part of the Bestway Group) since in 1995. Therefore, the main objective of the merger is to operate the businesses under one management to achieve economies of scale.
The merger would result in administrative and procurement savings and reduce marketing costs leading to enhanced profitability. Administration, human resource, treasury and other departments will fall under one set of management and staff.
The majority of directors on the respective boards are common and as such, the interest of shareholders will not be affected.
Bestway Cement operates a 1.228Mta cement plant in the under developed area of Hattar, Haripur in the North West Frontier Province (NWFP) and another 3.6Mta cement plant near Village Tatral of District Chakwal, Punjab Province. Mustehkum Cement, meanwhile, operates a 1.087Mta plant in Hattar (NWFP).
Following the merger, Bestway’s Cement capacity will be lifted to almost 6Mta.