LAHORE – The All Pakistan Cement Manufacturers Association (APCMA) has appealed to the government to address hindrances and problems dampening the cement industry. Mounting losses have propelled closure of four out of 22 cement industry units, while others are on the verge of collapse.
APCMA spokesman said that the cement manufacturers are yet to pass on the large impact of rapidly increasing input costs in coal, electricity, diesel, paper sacks and transportation cost. Current cement rates range between Rs 340 and Rs 355 per bag in different markets. He stated that inflationary pressures in the past three years have surged rates of each item; however, the cement industry has not passed the increased cost on the consumers due to stiff competition amongst manufacturers and surplus capacity.
He said that construction activity has slowed to a snail’s pace due to a drastic cut in development expenditure. An increase in cement rates would further dampen construction activities. He said that government levies have impelled plight of the cement sector. The spokesman said that government levies account for 30 percent of the price of a 50 kg cement bag.
“These levies are the highest in the region,” he said, adding that the set includes federal and provincial excise duties amounting to Rs 37 per bag, which is unjustified. He said that excise duties are levied around the world to curb the use of injurious or luxury items like liquor, cigarettes or high end passenger cars, cosmetics etc. The governments, world over, encourage the use of cement as it is a major component in construction activities and the construction sector is the biggest employer of semi and unskilled labor force of any economy.
He said that removal of excise duty would improve viability of the industry as, instead of raising the cement rates; the industry would be able to maintain prevailing cement rates and would be able to boost the construction business.
The spokesman warned that the highly capital intensive industry would not survive unless reasonable profitability is assured. “More industries would close down in a year time if remedial measures are not announced immediately,” he said.
He said that allegation of engineered production by certain quarters at low levels is absurd. He further said that no unit, posting regular losses, would like to withhold production if it could sell its’ product. He maintained that cement market is simply absent, resulting in lower production. He believed that these are testing times for the cement industry.
The industry, he added, needs all possible help and facilitation from the government. He claimed that cement manufacturers have placed facts regarding its capacity, production, domestic sales and exports on its’ web.
APCMA wants govt to salvage cement industry
