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February 24, 2021

Maple Leaf Cement mulls expansion after tax perk for housing sector

Business

February 24, 2021

KARACHI: Maple Leaf Cement Factory Ltd, a Pakistani maker of the construction material, is considering boosting capacity by almost a third to tap demand as the economy recovers, people with knowledge of the matter told Bloomberg.

The Lahore-based company plans to increase its capacity by about 7,000 tons a day at its current facility, the people said, asking not to be identified citing a private matter. The proposal is in final stages and the company is discussing the plan with banks and machinery suppliers, the people said.

Prime Minister Imran Khan’s move to offer tax cheats amnesty for investing in building homes has spurred a construction boom and is helping revive economic growth. Local sales for the building material is expected to rise 17 percent in the year ending June, the most in five years, according to Insight Securities Pvt.

The company’s shares rose 1.2 percent at the Pakistan Stock Market after jumping as much as 2.3 percent. The stock has almost doubled in the past year compared with 14 percent gain in the nation’s benchmark KSE-100 Index.

The South Asian nation is witnessing a wave of expansions in the cement industry with Lucky Cement Ltd, Kohat Cement Company, and Fauji Cement Company deciding to increase capacity, while DG Khan Cement is expected to take a final decision by the end of this month.

Maple Leaf will use internal funds to finance the expansion and won’t sell additional shares, one of the people said. The company did not respond to a request for comment.

With cement, fuel and car sales rising to levels before the pandemic, Khan’s government is targeting a growth of 2.1 percent in the current financial year, after the first contraction in 68 years in the year ended June.