ISLAMABAD: DG Khan Cement Ltd of Mian Mansha is planning to build a cement plant worth $300 million near Karachi. The company is the third-largest maker of the construction material.
“There will be a shortage domestically in three years if there is 10 percent growth in demand each year,” Chief Financial Officer Inayat Ullah Niazi said in an interview at the company’s headquarters in Lahore on Thursday. The company’s two cement plants have operated near full capacity in the past two years.
The company is building its first plant since 2007. Pakistan’s output is projected to expand 4.3 percent in the year ending June 30 and 4.75 percent in the following fiscal year by the International Monetary Fund, the news outlet reported.
The new plant near Hub, west of Karachi, will produce about 2 to 2.5 million tons of cement a year, Niazi said. Construction is targeted for completion late in 2018. The plant will be financed 40 percent through internal cash and the rest through debt, Niazi said.
“Expansion means the company will enter the southern region of the country,” Tahir Abbas, an analyst at brokerage Arif Habib Ltd. said by phone in Karachi. “This will impact the entire industry and could start a price war.”