Pakistan’s DG Khan Cement to establish subsidiary in US

DG Khan Cement, one of Pakistan’s largest cement manufacturers, has announced to establish a wholly-owned subsidiary in the United States.

The cement maker shared the development in its notice to the Pakistan Stock Exchange (PSX) on Friday.

“The Board of Directors of DG Khan Cement Company Limited has accorded approval to management to explore the opportunity to establish a wholly owned subsidiary of the company in Houston, Texas, United States of America (USA) under the proposed name of “DG CEMENT USA LLC,” the cement maker said in a statement.

The development is subject to all applicable regulatory approvals under the laws of Pakistan and USA, the company added.

Earlier this year, DGKC informed that the company would export 600,000 tons of low-alkali cement to the US per year, which will fetch approximately $360 million for the country.

Executive Director DGKC Farid Fazal said back then that the company is in talks with buyers from London, France, and Germany and soon the company will be entering the European market after getting CE certification.

“We have surplus cement and as the supply is much greater than the demand, manufacturers are not utilising their full capacity, hence we need to explore new markets,” said Farid, back then.

He added that the country needs to expand its exports to big markets like the USA as the demand for construction materials in the USA has increased manifold with buyers looking for new sources of supply.

However, capacity utilisation of Pakistan’s cement industry has gradually dropped and stood at 54.64% during FY24 (July-April), its lowest level on record, revealed the Economic Survey 2023-24.

Pakistan’s cement industry has an overall production capacity of 82.25 million tonnes, but local dispatches and exports totalled a paltry 37.45 million tonnes during the 10 months of the outgoing fiscal year.

It is pertinent to mention here the DGKC is among the largest manufacturers of Pakistan with a production capacity of 25,000 tons cement per day (7.500 million tons/annum).

The DGKC has three cement plants located at Dora Ghazi Khan, Kalar Kahar and Hub.

Last month, Ismail Industries Limited, a manufacturer of confectionary items, shared the company’s plans to set up a subsidiary in Abu Dhabi, UAE.