Cherat Cement announced expansion plan

Cherat Cement, on Monday, announced it would install a third cement production line at its existing site in Nowshera. Cement manufacturers are announcing expansion plans in the wake of growing cement demand.

CPEC is expected to generate additional cement demand of 1.5-3 million tons per annum

The new plant is expected to have an annual production capacity of 2.1 million tons, taking the company’s total output to 4.5 million tons a year. The company’s total production capacity is about 10% of the current installed production capacity in Pakistan.

The company was already working on its second production line, expected to have capacity 1.3 million tons. This plant is expected to come online in the second half of fiscal year 2016-17.

Cherat Cement Company Limited (CHCC) was established in 1981. CHCC started manufacturing, marketing and sale of Ordinary Portland Cement in 1985. At that time, the company had the production capacity of 1,100 tons per day, which was increased to 3,300 tons per day in 2005 after subsequent up gradations earlier.

The company supplies cement to the northern block; Punjab, KP, FATA and adjoining areas and exports its cement to Afghanistan and Indian Punjab. The company’s plant is strategically located, about 52 kilometers away from Peshawar, near the Pak Afghan border and this proximity to the border allows for lower distribution costs than its competitors.

Cherat Cement’s latest expansion plan will be entirely financed by debt, costing close to Rs13 billion, according to JS Research. This production line may become operational by year 2020. The company also intends to bring another Waste Heat Recovery along with the new line, according to the JS Research report.

The establishment of its first Waste Heat Recovery (WHR) in 2010, a Tyre Derived Fuel Processing Plant in 2012 and a Refuse Derived Fuel Processing Plant in 2013 helped company achieve fuel efficiency—now company is deriving more than one-third of its energy free of costs.