Lucky Cement regains status as largest producer in country

New line commences production at Karachi plant, taking overall capacity to 9.35 million tons

KARACHI: Lucky Cement has once again become the largest cement-maker in Pakistan after its new line started production at the start of this month.

This increased the company’s annual production capacity by 1.3 million tons, helping it overtake Bestway Cement, which became the largest cement-maker in July 2014 after it acquired Lafarge Pakistan. Its annual production capacity was 8.3 million tons per annum at the time.

However, Lucky’s capacity has now surpassed Bestway’s and touches 9.35 million tons, which is close to 20% of the total installed production capacity of the cement industry.



The country’s total installed capacity was 46.94 million tons per annum as of November 2017, according to All Pakistan Cement Manufacturers Association (APCMA). The new line has started producing clinker December 2017 onwards, according to a company notice sent to the Pakistan Stock Exchange (PSX).

The company installed a Brownfield plant - a production facility that is added to expand existing manufacturing operations - at its Karachi plant. Prior to the expansion at its Karachi plant, total capacity of the company was 7.75 million tons per annum.

Moreover, 0.30 million tons per annum has also been added through efficiency improvement at its two production lines in the north plant which is situated in Lakki Marwat, Khyber-Pakhtunkhwa (K-P), taking its total capacity to 9.35 million tons.

Thanks to growing domestic demand, cement companies in Pakistan are on an expansion spree. Almost all major cement producers are either adding new production lines or making investments in Greenfield plants - an altogether new investment to erect a new production facility.

More than half a dozen cement companies are making new investments of over $1.5 billion to add about 10 million tons per annum capacity.

However, some industry officials believe this could go up to 65 million tons per annum in the next few years. Improving macroeconomic indicators and the launch of the China-Pakistan Economic Corridor (CPEC) have boosted investors’ sentiments in the industry.



Lucky Cement is also venturing into the automobile industry in partnership with South Korean giant Kia Motor Co to install an auto assembling plant in Karachi. Increasing its initial investment of Rs12 billon, the company announced to add another Rs2 billion in the project in October 2017.

Industry officials say the company is completing all necessary preparations for its car plant on a fast track to benefit from the expanding automobile industry of the country.

Analysts say the re-entry of Korean brands (Kia and Hyundai) into Pakistan will not only help fulfill the government’s plans to increase competition, but will also help customers in terms of providing new choices.  Currently, the country has only three Japanese players Honda, Toyota and Suzuki. Meanwhile, European brands like Volkswagen and Renault are also going to venture into Pakistan.

Published in The Express Tribune, December 19^th, 2017.

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