Cement Industry

7260 Words Feb 10th, 2013 30 Pages
Investments in the cement industry of Pakistan
The construction and material sector of Pakistan is supporting like the right hand in the economy of Pakistan. Though the cement industry in Pakistan has witnessed its lows and highs in recent past, it has recovered during the last couple of years and is buoyant once again. Pakistan cement factories continue to make significant progress in cement exports. The industry is contributing around Rs. 30 billion per annum to the national exchange in the shape of excise duty and other taxes and is also adding around Rs. 100 billion to the GDP of the country each year. The industry has been offering direct and indirect employment opportunities to more than one lakh people. Total investment in the
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Sources said the consortium of Pakistan banks, which was financing the Dewan Cement, has now approached the Lucky Cement Company and the DG Khan Cement Company with a view to convince them to strike a deal either to acquire the controlling shares of Dewan Cement or at least make a partnership with the said company.
Sources said the consortium is doing so to avoid the losses, which may increase in near future. The company registered a net loss of Rs499 million in fiscal 2008 as compared to a net profit of Rs207 million in fiscal 2007, they added. In June 2008 shareholders’ approval was sought for the possible sale of strategic assets. The management anticipated continued difficult economic conditions giving rise to liquidity shortage in the financial sector, they added. The shareholders of the company in an extraordinary general meeting of the company had passed a special resolution and authorized the Board of Directors of the Company to sell or alienate the company’s North Cement manufacturing unit.
When the Dewan Cement Company was unable to obtain financial support from the financial institutions for commissioning of Line II in South region, it had to divert existing working capital towards completing the project. This further aggravated the cash flow situation forcing the management to call an Extra Ordinary General Meeting to seek permission for the Sale of North Plant. In order to
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