LAHORE - There are signs of recovery of cement industry, presently working with low capacity utilisation, following the announcement of Abu Dhabi Group that it would invest $45 billion in Pakistan mostly in construction projects.

Industry experts said that as the investment will be made in various construction projects, which is the biggest-ever foreign investment in Pakistan, it will give a strong boost to cement manufacturing in the country.

They said that out of the total investment value, $10 billion will be invested in Islamabad and Lahore whereas $35 billion will be invested in Sindh. These projects also include the construction of the tallest building of the world (Taller than Burj Khalifa, Dubai) in Karachi, facilitating the cement industry the most.

Moreover, the project encompasses sports city, educational and medical city, international city and media city. The project also includes the construction of miniatures of the Seven Wonders of the World. These projects will employ more than 2.5 million people and will boost more than 55 industries like cement, bricks, iron, steel and glass. Moreover these projects are expected to represent all the social classes of society and middle-class and lower-middle class will have equal representation. The agreement will have a revolutionary impact on not only Pakistan’s economy but also the tourism of the country and will be a milestone in reviving the lights of Karachi.

Industry experts expressed their pleasure and said that it was a matter of great pride as such a huge amount of foreign investment has never been made before. A distinguished feature of this project is the utilisation of seawater to produce electricity. The projects will have their own grid station. Moreover, a separate modern water treatment plant will be established to convert seawater into drinking water. These features make this a landmark project in Pakistan, which addresses the current water and electricity issues of the country.

It is to be noted that cement industry had generally recorded stagnant sales for the past four years or so, resulting in huge financial losses. The industry suffered a net loss of Rs337 million in the first half of 2011 but earned a net profit of Rs4,300 million in the first half of 2011-12. According to latest reports, total sales during fiscal year 2011-12 increased to a record level of 32.515 million tons, showing an increase of 8.84% in domestic sales and overall 3.45% increase compared to previous year as exports declined by 9.12%. Experts said that trend of domestic sales is expected to remain in momentum in future, given the present conditions.

They said that cement demand in any country is inextricably linked to the growth in GDP.