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Pakistan's cement exports set to touch $1bn by 2010

( [2008-7-18] )

Pakistan cement exports after earning a historical level of $435 million foreign
exchange during financial year 2007-08, is all set to touch one billion dollar mark by
2010, industry sources told Daily Times Thursday.

During fiscal year 2007-08, country exports stood at 7.712 million tones ($435
million) and Pakistan has already established its position as an exporter of
cement and clinker in the region, sources added. Sources said the industry
projections suggested that the cement industry exports would reach to $735
million by the end of 2008-09 and it would touch $1.043 billion by the end of

Pakistan's cement industry started exporting cement in the year 2001 and it has
increased its compatibility gradually, as significant improvement has been taking
place with every passing day.

Cement industry's installed capacity had more than doubled during the last five
years, which helped the industry to touch all time high dispatch mark during the
last fiscal year, they said.

The cement industry in Pakistan has expanded capacity from 17.8 million metric
tonnes in 2003 to 39 million metric tonnes in 2008 and is expected to rise further
to 50 million metric tonnes in 2010. They said the cement manufacturers were
enhancing their role among competitors and at present, regional countries were
facing huge shortage of cement, which had played a key role in achieving
landmark cement exports during the last fiscal year.

"During the last fiscal year, strong external demands from the Gulf countries have
continued pushing local companies to invest more in the cement sector, besides
utilising their maximum capacity to meet international demand," they said.

Pakistan has been exporting cement to Middle East, India, Afghanistan, Central
Asian States, South Africa, Switzerland, Sudan, Egypt and Iraq. Some more
destinations are likely to add up in the next two years, thus helping the cement
industry to touch the level of one billion dollars accordingly. The industry circles
have pointed out that the industry has achieved this startling exports level single-
handedly and no tangible policy support from the government has so far been
extended to the cement exporters. According to them, the cement industry could
boost the exports further in case government comes up with appropriate
infrastructural measures.

(From Daily Times)

Monsoon affects Pakistan`s cement exports to India

( [2008-8-12] )

Pakistani cement dispatches to India have declined by about 50 per cent owing to
monsoon, which has affected demand from Indian buyers. According to the All Pakistan
Cement Manufacturers' Association (APCMA), the average daily cement export to India
has come down from 4,000 tonnes in June to 2,000-2,500 tonnes now.

"Cement dispatches to India through the sea route have been significantly
affected by the rains. Moreover, there has been a slackening of demand due to
rains," said Shahzad Ahmed, secretary, APCMA.

Pakistan has exported about one million tonnes of cement to India since
September 2007.

However, this is an insignificant quantity, in view of the Indian market size of

about 170 million tonnes. It has, therefore, failed to impact prices except in
certain pockets. The price realisation for Pakistani companies on cement export
to India is $52 a tonne, whereas the delivered cost to Indian buyers at Mumbai
port/Wagah is $72-73 a tonne. This translates into Rs 153 every 50-kg bag,
which is significantly cheaper than Rs 235-250 per 50-kg bag of Indian cement.

"The companies are incurring loss with exports to India since the cost of
production is about $68 a tonne. However, there is a surplus after meeting
domestic demand and it needs to be exported. Companies may look at a price
hike if Indian manufacturers raise prices," he said.

Ahmed said the Pakistani cement industry is going through a tough time owing to
sharp jumps in input costs of coal, electricity and packaging bags. "The industry
has suffered a loss of nearly $70 million in the July-March period owing to high
input cost and low price realisation," he said.

In April 2007, the Indian government had scrapped the 16 per cent countervailing
duty on cement imports to facilitate imports and augment availability.

It also withdrew the 4 per cent special additional customs duty. In January 2007,
it announced zero duty on cement imports. All these measures have rendered
cement imports duty free. The Bureau of Indian Standards (BIS) has granted
quality licences to 15 cement firms in Pakistan after the Indian government
relaxed cement import norms in 2007.

Manufacturers based outside India need to conform to BIS-certified quality

standards before supplying cement.

(From Business Standard)

Cost of cement production soars in Pakistan [2008-8-6]

All Pakistan Cement Manufacturers Association (APCMA) has claimed that any
setback to the cement industry will hit general consumers hard.

In a statement issued here on Tuesday, a spokesman for the association said

that APCMA had repeatedly been pointing out that the cost to make and sell
cement has shot up to Rs375.60 per bag in 2008, compared to Rs228.21 per bag
in 2007.

He said that the main component of the cost is fuel. Pakistan's cement industry
has converted their plants to coal considering it to be the cheapest fuel, but its
price in international markets has gone up by more than 300 per cent in the last
one year.

The spokesman said that the demand of cement falls heavily during rainy
weather in the country, which directly affects the running cost of a unit. It is only
the rising levels of cement exports, which are sustaining the industry.

Instead of appreciating the marketing skills of cement entrepreneurs to explore

new markets for cement, the industry is being pressurised constantly without
realising that any reduction in cement exports from Pakistan will not only deprive
the country of foreign exchange ($2 billion this year), but will also result in losses
to the industry.

Unfortunately, the spokesman said that the burden of increased input costs has
to be borne by the consumers. It is only the government, which can provide relief
to the consumers by cutting down or abolishing the central excise duty.

He also mentioned that in spite of escalation in input costs, cement in Pakistan is

still the cheapest in the region.

(From The International Times)

• India's cement prices likely to go up on high input costs
• [2008-8-18]

In India, cement prices are likely to go up in the next one or two months due to
increasing input costs, especially in wages, salaries and coal prices.

"During the last one year (from first quarter last year to the same period this
year ), almost all companies incurred about 40 per cent increase in wages and
salary costs and this is continuing due to an inflationary effect. This is bound to
have an impact on the pricing as this will be passed on to the consumers," Mr
Ramesh Chandro, Managing Director Ckoramaandel Cements Ltd, told Business

In July alone, the southern States had witnessed an increase of Rs 10-15 a bag
of cement and the upward trend is likely to continue in the days to come, say
industry experts. The price of cement was in the range of Rs 205-235 by the end
of first quarter of current fiscal year and in July it had gone up to Rs 215-260.

The industry expects a slackening of demand due to the monsoon and is worried
about a further increase in salaries and wages due to inflation .

"This is an issue for the entire industry and has the potential to trigger a hike in
prices," Mr K.C. Jain, Senior President, Kesoram Cements Ltd, said.

Coal Price

While the Government had ruled out any further hike in domestic coal prices, the
cement industry is likely to be hit by the e-auction of coal by the Government. As
of now, 64 per cent of industry's coal requirement is met by allocation while 34
per cent is being met by the e-auction. "In July alone, we had to pay 100 per cent
premium on normal price in the e-auction," Mr Chandro said.

On the import front, the imported coal was priced at $140 a tonne in the first
quarter of the current fiscal year. "Now there are indications that the price would
go to $175-190 bracket in the next one month. If it happens, the cost of
production will increase," a senior official of UltraTech Cement said.

However, some feel that the impact of the hike in the imported coal price could
only be marginal. "There is a link between the crude oil prices and imported coal
price. When the former is actually coming down, it may not be totally wise to
expect increase in imported coal prices," observed Mr Jain.

(From Hindu Business Line)