DG Khan Cement well-positioned
This week, Pakistani cement producer DG Khan Cement launched the largest cement plant in the country as it commissioned its greenfield project at Hub, in Balochistan province, southern Pakistan. The project represents an investment of PKR40bn (US$345.3m).
The project's main EPC supplier was FLSmidth, who started work on the project in 2015 through a US$62m equipment supply contract. FLSmidth provided three crushers for raw material handling, which included two TST jaw crushers (TST 1900) and a Raptor® XL1100CE cone crusher, plus two EH 150 x 120 crushers for clay and additives.
Loesche supplied the vertical roller mill for raw material grinding with a COPE drive for the project. With a capacity of 654tph (4.7Mta), the Hub plant has the world’s largest raw material grinding mill, which began trial operations this week. The line's cement mill, also supplied by the Germany-based grinding specialist, has a capacity of 445tph for OPC production and is again equipped with a COPE drive.
The main pyro-processing equipment included a six-stage, two-string preheater, a two-pier kiln and a Cross-bar® cooler (18x70m) plus a 5.75x69m kiln. The plant's main storage capacity includes equipment for limestone, clay and coal and a 26,400t CF silo. The expansion at Hub has boosted the capacity of DG Khan by 2.2Mta of clinker and 2.8Mta of cement. The facility will make it easier for DG Khan to export from the nearby port.
There are only five cement units currently operating in the deep south provinces of Sindh and Balochistan with a total cement capacity of 8.5Mta, but the expansion of Hub will improve DG Khan's foothold in the south, where Lucky Cement has the largest capacity.
At the end of 2017, DG Khan Cement had 4.2Mta of production capacity, which represented nine per cent of the domestic production. The company is now the third-largest cement producer in the country with the second-largest market share. DG Khan has two cement plants located at Dera Ghazi Khan and one at Khairpur District, Chakwal.
The cement producer has been working simultaneously on its northern and southern expansions. However, the 2.8Mta northern brownfield project at Dera Ghazi Khan, Punjab, has been delayed and is expected to be commissioned in 2HFY19. This project is estimated to cost US$150m.
Capacity additions to continue 2018-21
It is a good time to be in the Pakistan cement sector with approximately 26.25Mta of cement capacity coming on-stream between FY18-FY20, which will take the country's total cement capacity up from 46.92Mta to 73.12Mta – a growth of 56 per cent, claims Abba Securities. Northern capacity expansions between 2019-21 will add 17.83Mta of cement production to the country.
By 2021, when most expansion projects in the south have been completed, DG Khan Cement is forecast have a market share of approximately 16 per cent in the south, making it the fourth-largest producer in the region. This will be behind Attock Cement (18 per cent), Power Cement (20 per cent) and Lucky Cement (30 per cent). Attock Cement is in the process of adding 1.2Mta cement capacity in the south and Lucky Cement will also add a further 1.8Mta cement capacity in the south by mid-2018. Power Cement has also announced plans for a 2.3Mta capacity addition in the south by 2021.
The government also granted licences to 14 prospective cement manufacturers in March 2017, while six more licences are in the pipeline. Areas identified by the government to build further cement plants include Dera Ismai Khan, Kohat and Hairpur, which are rich in limestone reserves.
