Dandot Cement Company Ltd has announced to shut its 504,000tpa of cement plant at Jehlum, Punjab province, Pakistan, due to various reasons, according to company notification to the Pakistan Stock Exchange (PSX).
Dandot’s Company Secretary, Muhammad Kamran, said the company has been facing serious challenges with respect to maintaining viable operations at the plant, adequate liquidity and has incurred huge financial losses in recent years.
Furthermore, the current operations of the existing plant are unable to meet environmental standards as stipulated by the law. As a result, the company would need to make considerable investments for a comprehensive balancing, modernisation and replacement (BMR) of the project to achieve environmental standards. Investments would also improve energy efficiency and cost effectiveness, as well as automate processes at the plant to make this company financially viable and legally compliant.
As the cement producer currently has not sufficient finances of its own, it needs to raise fresh capital to invest in the BMR project. After the relevant finances have been arranged, the project execution will also take more than 12 months, as the current plant needs to be dismantled before new equipment can be installed therein. This entire process will take an indefinite period of time to complete before operation can resume.
Therefore, Dandot Cement’s Board of Directors has unanimously decided through its resolution dated 30 October 2019 to ‘close down’ the factory completely while complying with all relevant laws in this respect.