DG Khan Cement to establish subsidiary in Houston, USA

DG Khan Cement to establish subsidiary in Houston, USA

By: Communicators - Business Team (July 19, 2024)

DG Khan Cement has announced to establish a wholly-owned subsidiary in Houston, Texas, United States of America (USA) under the proposed name of 'DG Cement USA LLC'. Regarded as one of Pakistan’s largest cement manufacturers, the company has shared the development in its notice to the Pakistan Stock Exchange (PSX).

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

DGKC had claimed back then that the company was in talks with buyers from London, France, and Germany and soon the company would enter the European market after getting CE certification. DGKC had surplus cement and as the supply was much greater than the demand, manufacturers were not utilizing their full capacity, hence the company needed to explore new markets.

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

Pakistan’s cement industry has an overall production capacity of 82.25 million tones, but local dispatches and exports totaled a paltry 37.45 million tones 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. DGKC has three cement plants located at Dora Ghazi Khan, Kalar Kahar and Hub.