Due to high cost of doing business in Pakistan, Pakistani cement industry is losing competitiveness to other countries such as Iran, UAE and India.
The All Pakistan Cement Manufacturers Association (APCMA) has appealed the ministry of industries and production (MoIP) to give incentives to the sector to increase its exports which are facing decline since 2008-09 and take concrete measures to check smuggling of Iranian cement.
APCMA Secretary General Shahzad Ahmed in a letter to MoIP Secretary Muhammad Arif Azim drew his attention towards the gradual decline in the exports of the sector to different countries while the sector continues to face challenge of Iranian cement’s smuggling also.
“In order to improve exports, we suggest the abolishment of import duty on coal to reduce the energy cost. Also, the IDC should be abolished, while incentives like freight subsidy or direct subsidy should be given to facilitate exports,” he stated in the letter. The secretary demanded of additional incentive of 5 percent on exports through sea. “This would enable the sector to at least maintain its export volume which otherwise has declined by 27% during first four months of this fiscal year that means the cement export volume would be approximately 5.25 million tons.”
He said the decline in exports was absorbed by increase in local dispatches but the industry faced double jeopardy due to foreign cement being dumped in Balochistan in huge quantities.
He said cement production capacity in Pakistan had touched 45.620 million tons per annum, and out of this capacity 81 percent is situated in the North and 19 percent in the South. “During the last financial year 2014-2015, domestic demand for cement was merely 28.206 million tons – 61.82 percent capacity utilization – leaving surplus unutilised capacity of 17.414 million tons available for exports,” he added.
The APCMA secretary said the cement industry exported 4.727 million tons of cement to Afghanistan during the year 2011-2012 while cement exports to Afghanistan decreased to 2.873 million tons during the year 2014-15.
Similarly, he added, cement industry exported 6.061 million tons of cement through sea during the year 2008-2009 while cement exports by sea decreased to 3.625 million tons during the year 2014-15. The major cement importing countries from Pakistan are South Africa, Mozambique, Sri Lanka and Iraq.
