It seems that Pakistan is moving up the in the world as many foreign investors have started taking interest in investing the country. The biggest cement manufacturer in Pakistan, Lucky Cement, yesterday outlined its plans to bring the South Korean car manufacturer, Kia Motors, in Pakistan. The company also announced it currently has two investment plans in its pipeline.
The move has ignited excitement among the investors as the company experienced its share price to experience a surge by 1% and closed at new record high near PKR 856 per share. It is worth mentioning that the company is planning to invest PKR 12 billion in a bid to set up a new company to manufacture and assemble Kia vehicles. Many experts believe that the move will help in increasing competition in the auto industry of Pakistan.
“We believe that this move will further diversify the revenue line of Lucky and strengthen the profits considering robust auto demand outlook in Pakistan,” said an analyst at Insight Securities. “At present, Pakistan is witnessing a growth in demand of auto cars.” Adding to that, the analyst said the automakers in the country generated 27% of average return on equity in the past three years.
Interestingly enough, the French automaker, Renault SA is also planning to set up an assembly plant in the country by 2018, in partnership with Dubai based Al Futtaim Groups and Ghandhara Nissan, with plans to set up a manufacturing plant in Karachi on the Ghandhara site.
Lucky Cements also plans to sell and market Kia vehicles besides just export and import all types of Kia accessories, parts and cars. The move clearly indicates that Lucky Cement is pretty serious towards achieving its market venture. The company issued the notice to Pakistan Stock Exchange (PSX) that it will also start due diligence of Dewan Cement (Hattar), and grinding plant (Basra, Iraq). The company believes that both projects will help boost production capacity from 870,000 tons to 1.74 million tons. We at BizUpdate also believe that the share prices of Lucky Cement will experience a hike in near future when its plans start materializing.