Riding the wave of an uptick in construction activity, Fauji Cement Company Limited (FCCL) has decided to invest in additional cement capacity.

“Consequent to construction activity picking up and significant spend on infrastructure, expected to continue, the Board of Directors of the company have decided to invest in additional cement capacity,” announced the company on Friday.

The BoD of the company in its meeting held today, has approved the setting up of Greenfield Cement Manufacturing Plant of 2.05 million tonnes per annum at Dera Ghazi Khan, Punjab.

The company informed that the equity portion of the expansion will be funded through Internal Cash Generation.

The total project cost will be announced after conclusion on negotiation with the suppliers and contractors. The construction work on the project is expected to commence within current financial year and is expected to have a construction period of about 2.5 years.

Fauji Cement Company Limited was set up as a public limited company and commenced operation in 1997. It began with a production capacity of 3700 tons per day that grew to 11000 tons per day.

The company’s revenue rose by nearly 30 percent during 1QFY21 year on year. The company managed to curtail its cost of production that reduced to 78.4 percent, compared to 86 percent seen in 1QFY20. This was achieved through “maximising its own power generation from its gas engines and solar plants to rationalise the power cost which is one of the major cost components”. Thus, the company managed to double its net margin during 1QFY21 year on year to 12.7 percent.