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New dam in Pakistan set to boost cement sector

World Cement,

A new opportunity for cement companies to enhance their local cement dispatches has emerged in the construction of the Diamer Bhasha Dam in Pakistan. It is estimated that building the dam will consume approximately 5 million tpa of cement, boosting the sector.

According to experts, the Asian Development Bank (ADB) has formally informed Pakistan that it is ready to commit US$4.5 billion for the construction of the Dam. This new addition to the country’s energy mix is expected to improve the water storage capacity and enhance the hydropower generation capacity, thereby boosting economic growth.

Local markets have been aiding the cement sector significantly, and the new construction plans will further enable it to augment its existing sales, counteracting the decrease in exports. Experts agree that Islamabad-based Fauji Cement stands to benefit the most, primarily due to the company’s previous ties to Chinese projects, and its proximity to the construction site.

The dam’s 5 million t of cement consumption should be more than sufficient to perk up Fauji Cement Company Limited’s local sales. It is expected that Fauji’s cash base for FY12 will increase as a result of the construction of the dam, and will make the cement producer look more attractive to investors.

Experts anticipate Fauji Cement Company will increase its earnings as a new plant with a clinker capacity of 7200 tpd will also commence its cement section by the end of FY11, almost doubling the company’s capacity.

In addition, it is expected that the cost of production will decrease on account of the refused derived fuel usage, an environmentally and economically friendly implementation that is expected to show results in the coming years.

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