Two applications for new capacity at Dera Ghazi Khan

Two of Pakistan's leading cement manufacturers are seeking environmental approval from the Environment Protection Department (EPD), Government of Punjab, for setting up a cement plant in Dera Ghazi Khan. According to official communications of the government department, DG Khan Cement Ltd and Pioneer Cement Ltd have both applied to set up new capacity in the same region. The approval is necessary under section 12 of Punjab Environmental Protection Act (1997), amended in 2012.

The government authority has asked all the stakeholders and the general public to submit their comments for/or against the grant of environmental approval at the earliest. They can also participate in the hearing proceeding for DG Khan to be held on 16 October and Pioneer Cement on 11 November, respectively. It is mandatory to hold a special meeting of all stakeholders to discuss in length the environmental concerns if there is any.

Justifying the expansion in cement industry, research house Spectrum Securities Ltd said that extensive housing projects, commercial projects and industrial expansions are driving demand in the private sector. Currently, Pakistan has a shortage of approximately 11m houses, and this gap is expected to grow by 700,000 units each year. At the same time, housing finance contribution to GDP is merely 0.5 per cent which is below the region (India 10 per cent, Bangladesh three per cent). The government plans to provide houses to everyone would accelerate construction activity and therefore fuel cement demand.

DG Khan Cement is planning the installation of Cement Manufacturing Line-III (12000tpd) at DG Khan Cement plant at Mouza Khofli, Dera Ghazi Khan.

Separately, after the installation of 12MW waste heat recovery plant at Khairpur site in December 2019, the DG Khan Cement is installing a 10MW WHR facility and a 30MW coal-fired power plant at its southern plant. The estimated capex for these projects is approximately PKR5-7bn (US$30.5-42.7m), which is expected to be raised through debt. The WHR plant is expected to be commissioned by the 3QFY21, the coal-fired power plant is likely to start operations by the end of the 4QFY21. 

Meanwhile, Pioneer Cement is planning to set up a 7300tpd greenfield cement plant, near ZindaPir, Dera Ghazi Khan. During the year, Pioneer Cement completed the installation of a new state-of-the-art integrated cement plant with an installed cement production capacity of 10,000tpd. The works started trial production in January 2020 and has been fully operational since June 2020. Its total capacity stands at 5.159Mta against 2.195Mta of cement in the June 2019.

Meanwhile, Company Secretary, Abdul Wahab, has informed Pakistan Stock Exchange (PSX) that the company's newly-installed WHR plant has power generation capacity of 12MW and started operations on 7 October 2020.