Possible acquisition: Fecto Cement eyes interest in DCL
KARACHI: After Lucky Cement and a Chinese investor, Fecto Cement has now shown seductiveness in appropriation stakes in Dewan Cement Limited.
According to a association notice sent to a Pakistan Stock Exchange (PSX) on Tuesday, a Board of Directors during Fecto Cement has motionless to attend in a behest of sale of resources of Dewan Cement (north plant).
Analysts contend domestic concrete players have been handling during their best capacities, though a flourishing concrete direct is now pulling them to enhance their operations to accommodate stream as good as destiny demand.
Fecto Cement has transposed certain apparatus that has resulted in augmenting prolongation of bust from existent 2,600 metric tons per day to 2,760 metric tons per day while concrete prolongation as augmenting to 2,900 metric tons per day from 2,730 metric tons per day, a notice added.
Last week, Lucky Cement announced that it is deliberation to trigger due attention to weigh intensity merger of north plant of Dewan Cement that is located in Hattar, district Haripur, Kyber PakhtunKhwa.
Moreover, on Sep 23, Dewan Cement announced that a Chinese financier had shown seductiveness in due attention to acquire seductiveness in a company.
“Lucky and Fecto Cement’s seductiveness in Dewan Cement shows that domestic players wish to keep internal marketplace in their hands instead of vouchsafing it go to a Chinese financier since it might harm a existent conglomeration of concrete companies,” Sherman Securities researcher Sadiq Samin told The Express Tribune.
Dewan Cement
Dewan Cement has a prolongation ability of around 2.88 million tons per annum, forming 6.1% of a sum commissioned ability of 45.6 million tons of a concrete industry. It has dual production units including Pakland Cement and Saadi Cement.
Dewan Cement plants are aged and analysts contend a new investors would need to implement new machine that would take a year or two. Analysts advise that a conditions would have been opposite if Dewan Cement had new plants and a new association could immediately start production concrete after holding it over.
Pakland Cement was determined in 1981 during Deh Dhando in Malir district, Karachi. The plant was entirely operational by 1985 and producing Ordinary Portland Cement.
Anticipating serve enlargement in demand, concrete companies are aggressively intent in enlargement of their plants.
Cherat Cement, Attock Cement, DG Khan Cement and Lucky Cement have already announced enlargement skeleton and these plants will come online over a subsequent 3 years. The total investment by these players is approaching to be in a operation of $700 million to $1 billion.
The construction sector, a vital consumer of cement, posted an glorious 13% enlargement in mercantile year 2015-16 compared to normal enlargement of 4% in a past 4 years due to mercantile liberation and a sepulchral genuine estate sector, according to a Pakistan Economic Survey 2016.
The supervision expects construction-related activities to collect serve movement on a behind of augmenting open zone growth spending joined with large infrastructure and energy projects underneath a China-Pakistan Economic Corridor (CPEC).
Published in The Express Tribune, Dec 14th, 2016.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay sensitive and join in a conversation.
Article source: http://tribune.com.pk/story/1262295/possible-acquisition-fecto-cement-eyes-stake-dcl/