Cement producers asked to build up stocks ahead of mega projects

PM adviser on commerce says demand will come from housing scheme, dam construction

KARACHI: While the country is gearing up for mega-infrastructure projects, Adviser to Prime Minister on Textile, Commerce, Industry, Production and Investment Abdul Razak Dawood has asked cement producers - the major stakeholders - to build up their stocks.

Dawood held a meeting with the cement industries’ association - the All Pakistan Cement Manufacturers Association (APCMA) - in Islamabad to review the supply and demand situation and prices of cement in Pakistan. Cement companies’ executives told Dawood that the cement industry was fulfilling the country’s needs, while exports were also rising. Pakistani companies are exporting clinker to Bangladesh via the sea route. Both the demand and prices of clinker in Bangladesh have gone up.



They said they were exporting only the surplus clinker to Bangladesh and other parts of the world. Dawood said the cement industry should be ready to increase its production capacity on the back of higher demand from the prime minister’s housing scheme and construction of dams. According to an official of the commerce ministry, Dawood was concerned about the fall in cement production in recent months, but the industry players assured him that they would increase the production as soon as demand rose, which had declined due to inflationary pressures.



The industry has asked for tax reduction as coal and fuel prices are increasing, which has jacked up the cost of production. According to industry officials, the industry has been absorbing the impact of the cost increase without transferring it to consumers. An official of a major cement company, while talking to The Express Tribune, said they were already expanding and producing at the optimum level.

According to Elixir Securities’ research analyst Farheen Irfan, the industry would not be able to sell cement at a price higher than the present one, since the demand is not picking up. If the industry increases the price, the demand will further decline. Companies were exporting cement at low prices, even at break-even prices in some cases, she added.