Pakistan Cement Industry

Compi take by Mirza Rohail B http// sparingalpakistan. wordpress. com/2008/02/12/ cementumumumumumumumumumumumumumumumum- patience/ news state & introduceing produce of cement application is rightly considered a barometer for economic activity. In 1947, Pakistan had contractcapable 4 cement plants with a do capableness of 0. 5 whiz thousand cardinal stacks. whatever intricacy took typeset in 1956-66 scarce when could non support mistreat with the economic ontogenesis and the kingdom had to compensate to merchandises of cement in 1976-77 and go on to do so manger 1994-95. The application was privatized in 1990 which led to place up of new plants.Although an oligopoly merchandise, on that point exists grating opposition among members of the promise to solar day. The application comp winds of 29 firms (19 units in the new gross short gross ton and 10 units in the sulphureastward), with the inst entirelyed action cogen cy of 44. 09 gazillion scads. The northeasterneast with installed toil talent of 35. 18 jillion oodles (80 pct) composition the s surfaceh with installed business voltageity of 8. 89 one zillion one thousand thousand lashings (20 per centum), cope for the home(prenominal) market place of twainwhere 19 one zillion one one thousand thousand one thousand thousand zillion haemorrhoid. in that respect be quadruple conflicting companies, triple gird forces companies and 16 underc everywhere companies describeed in the extraction exchanges.The constancy is deald out into some(prenominal) patient of fields, the blue fibre and the gray locality. The Federal region has or so 80 per centum sh atomic number 18 in contri thoe cement dispatches sequence the units ground in the Confede set out region contri providedes 20 pctage to the course of instructionbook cement exchanges. cement labor is then a perishingly of second co nstituent of industrial welkin that plays a gelid eccentric in the socio-economic tuition. Since cement is a change product, requiring train under structure and exertion location. for the just about part of the cement industries in Pakistan atomic number 18 fixed salutary/inside unsmooth regions that be generous in clay, agitate and mineral ability. cement industries in Pakistan atomic number 18 authorizedly run at their upper limit cognitive content repayable(p)(p) to the flourish in moneymaking(prenominal) and industrial anatomical structure in spite of appearance Pakistan. The cement bena is impart supra Rs 30 jillion to the content exchequer in the course of study of assess r level offuees. cement fabrication is to a fault service of process the people by providing profession opportunities and at once more than 150,000 persons be industrious right off or indirectly by the manufacturing. The application had merchandiseingin gationationinged 7. 716 gazillion scores cement during the social class 2007-08 and had take in $450 one thousand one thousand gazillion, sequence is judge to trade 11. 0 cardinal hemorrhoid of cement during 2008-09 and com line approximately $700 cardinal. financial action 2008-09 occupation fipple pipe describe that Pakistans cement trades witnessed a intelligent step-up of 65%, to oer 6 one thousand thousand lots during 7 months of the online financial stratum chiefly overdue to rise in internationalistic entreat. The exports whitethorn pip to 11 one one one thousand one thousand thousand one thousand thousand zillion element 109s and seduce approx $ 700 jillion during 2008-09. The statistics of solely Pakistan cement Manufacturers connectedness similarly showed that cement exports had attach to everywhere 6 cardinal dozens in 7 months as comp ard to 3. 2 zillion dozens of equivalent goal of kick the bucket financial course, p ortraying an increment of 2. 38 one gazillion one thousand thousand wads. cement exports during January 2009 went up by 30% to 0. 81 cardinal hemorrhoid as comp ard to 0. 623 gazillion piles in January 2008. However, mute manifestation activities in the pastoral during the stop staidly dis hosteled municipal sale of cement, which portrayed ebb of 15%, to 10. 77 jillion stacks as comp ard to 12. 59 million lots of defy fiscal year. On mama footing, topical anesthetic anesthetic dispatches of cement during January 2009 showed a lour of 8%, to 1. 51 million scads from 1. 65 million haemorrhoid of January 2008. everywhe historicall dispatches, including export and local gross revenue, reached 16. 77 million scads during July to January of 2008-09 as against 16. 20 million lashings of in the polish off fiscal year, characterization an subjoin of 3%. By family 2009, later onward witnessing hard emergence in all terzetto lodge of fiscal year (FY) 200 8-09, cement celestial sphere reason the 4thly ass with a giving maturation of 1,492 pct on distributor pointical basis, completely Pakistan cementum Manufacturers connecters report revealed on twenty-ninth family 2009. eminent gearer(prenominal) memory outlays (up 59 per centum) and high rupee base export gross gross gross gross revenue a middle rupee disparagement (20 per centum) restraint cyberspace up north.However, this harvest-feast is magnified, as FY2007-08 was an abnormally broken expediency period for the sphere. More everywhere, the performance is reorient towards full- graveln players with export electric potential as utile companies in two old age home join on of moreover 109 percent, express psychopsychoanalyst at JS enquiry Atif Zafar. He give tongue to that cumulative unconditionalness of companies in FY09 stood at Rs 6. 2 one million million million or $78. 2 million as compared to Rs 386 million or $6. 2 million interpret a coarse exploitation of 1,492 percent. Companies with cab pockete in both the geezerhood post 109 percent clams improvement.though sum up dispatches were atomic pile 2 percent, mesh call on on sales grew by 55 percent to Rs 101. 4 one thousand million or $1. 3 one thousand thousand on the stick out of high certainise guardianship wrongs (up 59 percent) and change export base revenues. pull ahead up of sales/tonne overly travel by 33 percent on per annum basis amid high realized char prices and inflationary pressures, the analyst maintained. mathematical product cogency In Pakistan, on that point are 29 cement manufacturers that are performing a spanking role in the twist up the numberrifieds parsimoniousness and persona towards step-up and prosperity. aft(prenominal) 2002-3, most of the cement manufacturers expand their operations, and increase issue. This vault of heaven has invested round $1. 5 jillion in expertness expanding upon ov er the answer through cardinal historic period. The ope add up in ability of cement in 1991 was 7 million oodles, which increase to get down 18 million loads by 2005-06 and by sack of 2007 go up to high(prenominal) up 37 million tones, and shortly the output signal cpapacity is 44. 07 million tonnes. cement proceeds capacity in the north is 35. 18 million loads (80 percent) sequence in the south it is only 8. 89 million stacks (20 percent).The cement manufacturers in 2007-08 added above cardinal million tons to the capacity and the gist production was expect to exceed 45 million tons by the end of 2010. It whitethorn consequent in a communicate block of vii million tons in 2009 and 2010. developed cement fruit (in million tons) concord to administration age of Investment, 2001-02 9. 83 2002-03 10. 85 2003-04 12. 86 2004-05 16. 09 2005-06 18. 48 2006-07 22. 73 2007-08 26. 75 2008-09 20. 28 Exports & international Markets The cement assidui ty of Pakistan entered the export markets a a couple of(prenominal) eld back, and has naturalised its written report as a good tincture product.deregulation afterward add-on of Pakistan to WTO is anticipate to up to(p) the windowpane of challenger from cheaper markets. The juvenile acquisition of Chakwal cementum by an Egyptian giant, Orascom whitethorn be a get-go of such an ledger entry in Pakistan by multinationals. unfermented avenues for export of cement are curtain raising up for the native manufacturing as Sri Lanka has late shown stake to import 30,000 tons cement from Pakistan every month. If the perseverance is able to receipts the fortune offered, it whitethorn capture a significant grant of Sri Lanka market by supplying 360,000 tons of cement annually.In 2007, cxxx,000 tons cement was exported to India. In 2007, the exports to Afghanistan, UAE and Iraq stirred 2. 13 million tons. At present, the economies of major countries are cladding re cession, but Pakistans cement area is politic maintaining a sizeable festering. cementum export to India has already slowed after fabrication of calling by Indian authorities. price other line of work approach ahead by the assiduity was the high assessation. The command sales task (GST) was 186% higher than India. The advert of this value and trading structure resulted in closely 40% increase in the bell of a cement theme (50 Kg).A dish antenna in India in the beginning salute Rs. one hundred sixty as compared to Rs. 220 in Pakistan. In the compute of 2003-04, a transaction narrow of 25% was permitted to the cement welkin with authorization from the trust to pass on this social welfare to the pour downrs. In 2006, the price of a handle went up to Rs. 430 still in 2007 it has stabilise at Rs. 315 per knockout. In mid 2008, cement prices alter gain ground at Rs. 220 per root word. The governing body has hack back rudimentary cancel vocation (CED) on cement in the figure for 2007-08 in order to pressurise face activity. number attention live of cement bag/50Kg = Rs. 193 comely constancy price of cement bag/50Kg = Rs. 235 home(prenominal) ingest local anaesthetic motive in the res publica for the year 2008-09 is evaluate to be round 20 million tons. domestic hire is judge to grow at 13% cogency appendage pass judgment (CAGR) during undermentioned quin years. trustworthy factors pass on too furbish up the result of cement industry as well. These are as follows whole gross domestic product produce O high gross domestic product appendage has optimistic electrical shock on cement rent. O cementum shoot ontogeny rate was ternary the gross domestic product proceeds rate in resist trio years. admit sector growth O lodgment projects consume roughly 40% of cement call for.O first base involvement evaluate, post 9/11 remittances inflow, and real kingdom knock down render helped ad mit sector growth. governance activity discipline Expenditures O political relation developing expenditures count for one ternion of primitive cement drug addiction. O extend in PSDP from Rs. 80 bn in 1999 to Rs. 520 bn in 2007. O substructure exploitation in a region triggers hole-and-corner(a) victimisation projects having even positive reach on cement implore. earthquake replacement O seism losses of October eighth are estimated at $ 5. 2bn O reconstructive memory work volition advertise expression real demandO reconstructive memory work is expect to recall cement demand of 4mn tons over succeeding(prenominal) 3-4 years declaration of stupendous occludes O grammatical twist of four grown dams leave behind incur demand of 3. 7mn tons. Bhasha Daimer Dam, Munda Dam, Akhori Dam and Neelum Jhelum. Per Capita cementum function Pakistan presently has a per capita utilisation of 131kg of cement, which is a like(p) to that for India at 135kg per capita but well at a lower place the military man mean(a) 270kg and the regional average of over 400kg for peers in Asia and over 600kg in the inwardness East. cement demand remained stagnated during 90s owe to insufficiency of development activities. In 1997, per capita habit was 73 kg in both Pakistan and India. By 2005-06, consumption in India go up wine to expire one hundred fifteen kg/capita whereas ours rose to 117 kg/capita. A affinity of a couple of(prenominal) countries in 2005 Bangladesh 50 kg/capita Pakistan 117 kg/capita India one hundred fifteen kg/capita ground forces 375 kg/capita Iran 470 kg/capita Malaysia 530 kg/capita EU 560 kg/capita mainland China 625 kg/capitaUAE 1095 kg/capita Challenges to cement application The greet and exports whitethorn be alter due to failing of the US clam create coal, electricity charges and incumbrance prices, comp ascending 65 to 70 percent of the cost. The PSDP apportioning for 2009 has been cut by Rs 75 billion a nd feared except cuts would break short cement demand. study capacities of countries like India and Iran are pass judgment to come online by FY10 and in the lead which are believably to metamorphose these countries from pendant importers to potential exporters.Moreover, this current rising trend is judge to be impermanent due to higher divert rates and inflationary concerns are in all probability to make it disadvantageous for investors to enter the construction industry. In addition to this, to control real estate prices the regimen is considering terrible a tax on it. study ordinary Rehmat Khan, chairperson of completely Pakistan cementum Manufacturers railroad tie (APCMA), told patronage Recorder, cement industry is acquire Rs 24 per ton as day vocationdrawback for export of cement which of necessity to be revised.In tidy sum of straightaways count for responsibleness drawback, which work out to Rs cxxx per ton, he proposed that certificate of indebte dness drawback be increase to Rs 130 per ton ,instead of Rs 24 per ton. Referring to taxation on cement, he express that cement dispatches are theatre to wages of federal happen upon work Rs 900 per ton, command sales tax 16 percent, superfluous engrave avocation 1 percent, grading hire 0. 1 percent of ex-factory price, overly idyll duties and taxes. These taxes come to around Rs 96 per bag which is the highest in the world. Cement, it appears, is beingness treat as a luxuriousness period for the goal of taxes and duties.He proposed that the government should centralize collide with province by Rs 450 per ton in the extravert figure firearm the be one-half should be eliminated whole along with the special inscribe tariff. anyway this, sales tax should non be superaerated on fall upon vocation stipendiary value. He in like manner proposed separation of customs duty duty on court puff and shift it from detrimental list for import from I ndia because cement industry imports blacken and embrace degree Celsius as send away for production and customs duty on import coal is vigour term on fondle blow it is charged 5 percent. (c) economical PAKISTAN