Arif Habib Group to invest Rs25b in new cement plant

Published: January 18, 2017

KARACHI: Arif Habib Group, one of the largest private-sector conglomerates in Pakistan, has said that it is going to invest Rs25 billion (or $235 million) in a new cement plant that will be completed in the next two years.

The new plant will take the installed capacity of Power Cement to 3.37 million tons from its current capacity of just 0.9 million tons.

“Cement demand is growing in Pakistan and it is expected that the China-Pakistan Economic Corridor (CPEC) will further increase its pace,” Power Cement Chairman Nasim Beg said on Wednesday.

Owing to energy shortages, Pakistan’s gross domestic product (GDP) is not growing at the pace it should. Some experts believe economic growth can increase by an additional 2% annually if Pakistan is able to manage its energy problem.

“We believe CPEC is going to help reduce the energy crisis in the next two years and this will translate into a healthy economic growth as well as higher cement consumption,” Beg told reporters during a visit to the cement plant.

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“Cement demand was already growing before the launch of CPEC, which means that demand is there fundamentally, and that it’s not a one-off because of CPEC-related infrastructure projects,” he stressed.

Power Cement’s share price closed at Rs13.61, up 2.4% on Wednesday with the KSE-100 index finishing at 48,642, down 36 points.

Environment degradation

Meanwhile, Sindh Environmental Protection Agency (SEPA) Director General Naeem Ahmed Mughal commented that environment degradation has now become a big problem for Pakistan.

He urged industries in Sindh, especially in Hyderabad and Karachi, to invest in environment protection initiatives or get ready to face government crackdown.

“We have given so much time to industries but now we have no margin. SEPA has no option but to act according to the law,” he stressed.

Quoting different studies, Mughal said Pakistan was losing over Rs359 billion annually in 2006 due to environment degradation. He said a recent study shows that only Sindh is losing over $1 billion annually mainly due to polluting factories and vehicles.

Installation of filter bag house equipment

Power Cement has recently invested Rs350 million in installing environment friendly bag house equipment to reduce dust emissions during which the company had to significantly reduce its cement production.

Company officials say the plant is now capable of reducing dust emissions to just 17 milligrams per cubic metre (mg/Nm3), which is much lower than 300 mg/Nm3 – the specified Environment Quality Standards applicable in Pakistan, and the World Bank’s 100mg/Nm3 for old cement plants.

A hopeful mogul: Arif Habib remains upbeat on corporate Pakistan’s future

The company has a very old plant, but it was taken over by AHG in 2012. Power Cement was established as Private Limited Company on December 1, 1981 and converted into a Public Limited Company on July 9, 1987.

It is one of the smallest cement companies with an installed capacity of 0.9 million tons, a tiny fraction of over 45-million-ton installed capacity of the cement industry as a whole, according to the All Pakistan Cement Manufacturers Association, a lobbying group.

The company’s plant is in Nooriabad Industrial Estate, District Dadu, Sindh, which is about 95 kilometres north east of Karachi.

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