Power Cement Finalizes $205 Million for Plant Expansion

According to media reports, one of the Pakistan’s leading cement producers, Power Cement Ltd has completed financing arrangements of PKR25 billion (US$205m) for the 2.5Mta expansion of its cement plant Nooriabad Industrial Area, Kalo Kohar District, Jamshoro, Sindh.

On completion of this expansion, Power Cement will be the second-largest producer in the Southern Region by May 2019, with the total capacity of 3.4Mta.

Breakdown of Funds

The breakdown of financing includes equity of PKR 1.3 billion by foreign investors such as The Investment Fund for Developing countries (IFU), IFU Investment Partner K/S and SL Smidth.  Equity of PKR 7.4 billion has been retained by local shareholders for subscribing to right shares.

Other than equity, local investment includes PKR 12.1 billion, financed by National Bank of Pakistan, Habib Bank Ltd, Faisal Bank, Bank of Punjab, Al Baraka Pakistan Ltd, Bank Alfalah, Dubai Islamic Bank, Askari Bank, First Oman Investment Co and First Credit and Investment Pakistan Ltd.


Bestway Cement Completes Brownfield Expansion Project in Record Time

Investment worth PKR4.1 billion is being financed by overseas organisations, including the Islamic Corporation for the Development of the Private Sector (Saudi Arabia), OFID, OPEC Fund for International Development (Austria) and DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbh (Germany).

Equipment for the plant is being supplied by SL Smidth Europe while TEPC China is working as construction contractor.

Time period and Production

The expansion plan is most likely to complete by early 2019. Currently Power Cement plant with two production lines has a combined production capacity of 3,000 tons per day, ie, 900,000 tons annually. It caters for the southern market domestically and exports to South and East Africa, India, UAE and Afghanistan.

Agreement Signed

The company offices have accepted Arif Habib Equity (Pvt.) limited as the guarantee of the loan agreement with DEG – Deutsche Investitions-Und Entwicklungsgesellschaft MBH, a financial institution incorporated in Germany.

Power Cement Board has also decided to make Power Cement a Sharia Compliant Company by raising the debt amount completely under Islamic modes of financing (either borrowed from Local Lenders or Foreign Lenders). For this purpose PCL has selected one of the world’s renowned Danish Cement Plant Supplier M/S. F. l. Smidth (“FLS”).

At the time of opening of LCs in favor of FLS, the SBP has laid a condition on PCL that at-least Euro 46 million are to be arranged by PCL through foreign sources whether Debt or Equity, the same shall be used in retirement of the said LC.

Furthermore, Power Cement has borrowed 30 million euros from DEG Germany to expand clinker production.

About the Group

Power Cement Limited manufactures, markets, and sells cement under the Power Cement, Black Bull Cement, Blue Star Cement, and Estate Cement brand names in Pakistan. Its product portfolio includes ordinary Portland cement, sulphate resistant cement, Portland blast furnace slag cement, and grounded granulated blast furnace slag.

Ltd feature videos

Watch more at LTD