Construction Giant Mulls Expansion After Imran Khan's Tax Perk for Pakistan Housing
(Bloomberg) -- 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 said.
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% in the year ending June, the most in five years, according to Insight Securities Pvt.
Read more: Tax Cheats Get Free Pass If They Invest in Pakistan Housing
The company’s shares rose 1.2% at 1:30 p.m. in Karachi after jumping as much as 2.3%. The stock has almost doubled in the past year compared with 14% 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 Co. and Fauji Cement Co. deciding to increase capacity, while D.G. Khan Cement Co. 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% in the current financial year, after the first contraction in 68 years in the year ended June.
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