Displaying items by tag: DG Khan

Pakistan: DG Khan Cement has asked the government of Punjab province if it can expand the production capacity at one of its cement plants by 12,000t/day. Bloomberg said that it had seen a letter sent to the local government and that Javed Iqbal Malik, a senior economic adviser at Punjab province's industries department, had confirmed receiving it. The approval process could take up to 12 months. If accepted the upgrade could see DG Khan Cement surpass Bestway Cement to become the country’s largest cement producer with a production capacity of 10.7Mt/yr.

Pakistan: DG Khan has signed a deal with Sinoma Energy Conservation for upgrades at the integrated Hub cement plant in Baluchistan. The agreement includes a 10MW waste heat recovery (WHR) unit and a 30MW coal power plant. No cost of the project or date of completion has been disclosed.

Pakistan: DG Khan’s sales rose by 30% to US$215m in the nine months to 31 March 2019 from US$165m in the same period in 2018. However, its profit dropped by nearly half to US$18.5m from US$35.1m. Its cost of sales increased by 56% in the reporting period.

Pakistan: DG Khan Cement’s sales rose by 26% year-on-year to US$154m in the six months to 31 December 2018 from US$122m in the same period in 2017. Its net profit more than halved to US$12m from US$24.8m. However, its net profit fell by 7% to US$10.9m from US$11.8m.

Pakistan: Two employees of DG Khan Cement have been killed in a gun attack. A third worker was seriously injured in the incident, according to the Dawn newspaper. Police report that unidentified motorcyclists in Dera Ghazi Khan opened fire on a company security van whilst it was transporting workers to a nearby plant. The victims died at the DG Khan Medical College.

Pakistan: GE says it has delivered a turnkey power grid to DG Khan Cement’s Hub plant in Baluchistan. The grid includes a 132/6.3kV gas-insulated switchgear (GIS), 40MVA power transformers and other related auxiliary equipment. The power solution also includes an extension at K-Electric’s Hub Chowki grid station with a 132kV AIS bay connecting it to the DG Khan Cement grid station. GE also supplied engineering, procurement and construction (EPC) of the 132/6.3kV grid station.

“As one of the largest cement producers in Pakistan, our aim is to create a facility for the future, not only to meet local demand but also to serve the international market. To support these efforts, we needed a field-proven stable and reliable grid solution and therefore after thorough evaluation we selected GE’s solutions. Given GE’s experience spanning across a wide range of industries and applications, we are pleased to work with the team on this critical project,” said Arif Bashir, Director (Tech & Ops) at DG Khan Cement.

DG Khan Cement officially opened the Hub plant in July 2018. The unit has a cement production capacity of 2.8Mt/yr.

Pakistan: The Supreme Court has ordered DG Khan Cement to pay nearly US$0.6m into a dam fund in relation to falling water levels at the Katas Raj Temples in Chakwal, Punjab. The cement producer must make a deposit of US$0.5m as payment for water it used and US$0.1m as a penalty for ‘misleading’ the court, according to the Nation newspaper. The court has accused the company of pumping water from boreholes leading to water loss at a pond at the temples.

Pakistan: The Supreme Court has appointed a special committee to visit the DG Khan’s cement plant in Chakwal to investigate how it stores water. The committee will report back to the court about the capacity of the reservoirs built by the plant as well as whether they were filled by extracting water from the aquifer or from rainwater, according to the Dawn newspaper. The committee will also take samples of water from the reservoirs.

The court has been looking into how DG Khan and Bestway Cement set up cement plants in the Potohar region related to water issues at the nearby Katas Raj Temples. Previously, the court was told that the DG Khan Cement was only operating tube-wells for domestic use by its workers but a witness alleged that the plants were extracting water for industrial use from the water table.

Pakistan: The Supreme Court has restrained the Punjab Anti-Corruption Department from launching criminal proceedings against the heads of DG Khan and Bestway Cement. The decision was made following a review petition filed by DG Khan Cement, according to the Statesman newspaper. It follows an investigation initiated by the Supreme Court to look into the setting up of cement plants in the Potohar region. The probe alleges government and corporate corruption.

As ever, there have been plenty of news stories from Pakistan recently covering the on-going fallout of the water shortage at the Katas Raj Temples in Chakwal, Punjab and an update on new production line at Maple Leaf Cement’s Iskanderabad plant. The two stories present two sides to the furious pace of the local industry and the potential price this growth might entail.

Graph 1: Cement despatches in Pakistan, 2012 - 2017. Source: All Pakistan Cement Manufacturers Association.

Graph 1 above sets the scene with an industry that has seen total despatches grow by nearly 30% to 42.8Mt in 2017 from 33.1Mt in 2012. About four-fifths of this is based in the north of the county. The big sub-story alongside this is that exports have fallen by half to 4.2Mt in 2017 from a high of 8.3Mt in 2013. The cause of this appears to be a decline in the Afghan market and a similar drop in waterborne clinker exports. Given the higher proportion of exports to the southern market this change has likely hit the industry in south harder despite overall depatches there rising. So far in 2018 similar trends are holding, except for exports, where the clinker export market has rallied significantly in the south.

The background to all this growth domestically is Chinese investment in the form of the China-Pakistan Economic Corridor (CPEC). CPEC-related project include integrated road infrastructure, the modernisation of railways and the development of the city of Gwadar and its related infrastructure. In addition the local Public Sector Development Programme (PSDP) is also having an effect and demographic pressures, such as a housing shortage, are also expected to support the construction market.

Data from the All Pakistan Cement Manufacturers Association (APCMA) placed cement production capacity at 54Mt/yr in September 2018 compared to 66Mt/yr in the Global Cement Directory 2018, which includes new capacity being built. This compares to around 10Mt/yr in the 1995 local financial year to an estimated 73Mt/yr by the State Bank of Pakistan in its third quarter report for 2017 - 2018. This rapid growth can be seen in recent stories such as the Iskanderabad plant expansion, Flying Cement’s mill order from Loesche, Kohat Cement’s mill order also from Loesche, a new solar plant at Fauji Cement at its Attock plant and the commissioning of DG Khan’s new plant at Hub. These stories are all from the last three months! The State Bank of Pakistan estimated that 11 producers hare now investing US$2.12bn on capacity expansions to add over 23Mt/yr by the end of the 2021 financial year.

One potential price for all of this growth is currently being illustrated in the ongoing legal wrangles about the use of water by cement plants near the Katas Raj Temples. What started as an investigation into why water levels were dropping at a pond at a Hindu heritage site seems to have transformed into a full scale inquiry into alleged corruption by local government around the setting up of cement plants. A report by the Punjab Anti-Corruption Establishment Lahore to the Supreme Court has found irregularities committed by government departments in connection to the setting up of cement plants by DG Khan and Bestway Cement in Chakwal. It seems unlikely at this stage that this inquiry will cause too much trouble for the local cement industry but it will certainly make it more complicated and potentially more expensive to st up new plants in the future.

Read Global Cement’s plant report from the DG Khan’s Khairpur cement plant in Chakwal