DG Khan eyes new Pakistan plant construction

DG Khan plans to build a US$300m near Karachi as economic growth boosts cement demand in Pakistan.

“There will be a shortage domestically in three years if there is 10 per cent growth in demand each year,”  Inayat Ullah Niazi, CEO of DG Khan, told Bloomberg in an interview.

The new plant near Hub, a city west of Karachi will produce about 2-2.5Mta of cement, Niazi said. Construction is slated for completion in late 2018. Some 40 per cent of the project will be financed through internal cash and the remainder through debt.

DG Khan currently operates 4.2Mta of domestic cement capacity from two cement plants. Both plants have been operating at “near full capacity” for the past two years, according to the report. Its DG Khan and Chakwal facilities each have cement capacities of 2.1Mta.

Cement sales in Pakistan rose to a record 34.3Mt in the year ended 30 June 2014, according to the cement manufacturers’ association. Over the first seven months of the current fiscal, domestic dispatches rose by a strong 9.45 per cent YoY, according to the latest ACPMA data.