KARACHI: Total cement despatches grew six per cent in the first eight months of 2016-17 to 26.339 million tonnes, according to the All Pakistan Cement Manufacturers Association (APCMA). Domestic consumption increased 9pc, but exports fell 8.54pc over the same period.
Cement consumption in July-Feb went up 8pc in the north region and 13.15pc in the south region. Exports from the north region declined 3pc as opposed to a fall of 18pc from the south region.
A spokesman for the APCMA said it should be a matter of concern for the authorities as mills in the south region were leading cement exporters because of their proximity to the port.
Total cement consumption in February was 3.4m tonnes, down 0.41pc from a year ago. Domestic consumption in February was 3.181m tonnes. As much as 2.580m tonnes were despatched by mills based in the north region while 0.601m tonnes were despatched by those located in the south region. The increase in domestic consumption was around 7pc. Exports in February stood at 0.254m tonnes, down 46pc from a year ago.
The spokesman said clinker and cement are being manufactured locally and are abundantly available. It is surprising to note that the list of locally manufactured goods notified by the Federal Board of Revenue (FBR) does not include cement, he said.
Secondly, the import of clinker and cement is liable to a customs duty of 10pc and 20pc, respectively. Substandard cement is being dumped in the Pakistani market due to the low energy cost in neighbouring countries, he said.
He urged the government to increase the customs duty on the import of clinker and cement to 35pc in order to support local manufacturers.
He added that imports of cement should not be allowed until exporters register themselves with the Pakistan Standards and Quality Control Authority (PSQCA) and it certifies the quality of their cement. He said Pakistan has already lost a major chunk of its market in Afghanistan to Iranian cement.
The high energy cost has made cement more expensive as it is an energy-intensive commodity, he said. Electricity and gas costs in Pakistan are the highest in the region, he claimed, while additional duties on coal imports have nullified the effect of low-cost coal in the global markets.
On the domestic front, high government levies have encouraged some unscrupulous elements to smuggle or import under-invoiced Iranian cement, he said.
He demanded that the government should stop the penetration of Iranian cement in Pakistani markets. A vigilance and accountability system should be put in place to stop cement smuggling into the country, he said. The government should also increase the duty on the import of clinker and cement in order to protect the local industry, he added.
