Punjab government approves five cement plants

Punjab government approves five cement plants
09 December 2020


The Punjab Chief Minister Sardar Usman Buzdar has approved setting up five new cement plants by the private sector in Punjab province, Pakistan, at an estimated investment of PKR150bn-200bn (US$0.935bn-1.246bn). The winners' names are yet to be disclosed officially, but the market believes approval was given to Lucky Cement, DG Khan, PIOC, Kohat Cement and Fauji Cement Ltd.

Earlier, the cement industry in Pakistan expects double-digit growth in demand of 12-14 per cent for the current fiscal year. The industry assumption is based on factors mainly driven by private sector demand propelled by government incentives and low-interest rates as well as CPEC-related and dam construction.   

The management of Cherat Cement Co said that the existing players' capacities are so large that the brownfield expansion is unfeasible for several reasons, including marketing strategy and space availability at plant sites. Another point of concern is that the greenfield project requires a time horizon of 4-5 years.

But the leading cement manufacturers announced their proposed expansion programme during several corporate briefings organised by different research houses in Pakistan last month.

Pioneer Cement Ltd (PIOC)
Pioneer Cement is assessing different sites for expansion or a greenfield project having capacity 10,000tpd at PKR35bn. The company's management mentioned that the existing plant's surrounding area is also easy to acquire, but nothing is finalised yet. The 12MW waste heat recovery (WHR) plant has commenced its commercial operations from 20 October at Punjab. Moreover, 12MW of the company's 24MW coal plant has become operational, with the remaining 12MW expected to come online by the end of 2QFY21.

A company official informed CemNet that for expansion of its project, two public hearings were held last month for grant of approval for large-scale mining of limestone and clay/shale at Zindapir Dera Ghazi Khan andthe  installation of cement plant in Punjab. The company assured all stakeholders that it would meet all environmental standards and install the latest equipment to achieve the set standards. The company is currently waiting for further steps from the governments, the official replied.

The DG Khan Cement Co (DGKC)
DG Khan Cement is assessing a 3.6Mta greenfield and a 1.2Mta brownfield expansion. DGKC currently has a total capacity of around 7Mta. The company is in the process of installing 10MW WHR, and 30MW coal-based the power plant in the south, which is expected to come online by the end of FY21 and the total cost of the project will be around PKR9bn.

Kohat Cement Co Ltd
Kohat Cement is expanding by carrying out balancing, modernisation and replacement (BMR) on a coal-fired boiler power plant with the net generation of 16.2MW. It is also setting up an additional cement grinding mill of 300tph. These projects will meaningfully reduce variable cost per tonne. In addition, the management stated that it would announce a greenfield capacity expansion of 7500tpd and is in the process of obtaining a No Objection Certificate (NOC) from the government of Punjab. It is also actively searching for a site. The total cost of the project will be around PKR35bn.

Fauji Cement Company (FFC)
Fauji Cement Co is planning a greenfield expansion of 6500-7000tpd as there is no space is available on the existing plant site. The company has applied for a DG Khan location where FCCL is top of the list among all applicants and the final NOC is expected in three months.

Cherat Cement Company Ltd
Work on installing a 13MW solar power project of Cherat Cement Co has been initiated and is expected to come online in 9-12 months’ time. This PKR4.1bn project is financed by the loans raised from Meehan Bank.

Published under Cement News