SMUGGLING OF IRANIAN CEMENT AFFECTING LOCAL INDUSTRY


Lahore: During the first four months of current fiscal year, cement despatches in the country stood at 11.398 million tons against despatches of 10.981 million tons during the same period of last fiscal year depicting a growth of 3.79 percent.

Domestic sales during this period were 9.370 million tons against 8.192 million tons during July-Oct 2014. Domestic sales during first four months of current fiscal year increased by 14.38 percent, this is one of the fastest growth in domestic cement consumption in last eight years. However in the same period, exports were only 2.028 million tons against 2.790 million tons during the same period last year showing massive decline of 27.31 percent. This decline in exports has limited the growth of the cement industry to only 3.79 percent during July 15 to Oct 15 period.

Analyzing zone wise despatches, north based mills despatched 7.803 million tons to the domestic markets during July to October 15 that was 13.65 percent higher than the despatches during same period of last fiscal. Exports from north declined during this period to 1.292 million tons i.e. by 25.85 percent over last fiscal year.

In southern region, the mills experienced even more growth in domestic markets as against despatches of 1.325 million tons during July-Oct 2014, the domestic dispatches increased by 18.21 percent to 1.566 million tons. However there was a massive reduction in exports that declined by 29.74 percent to 0.736 million tons from 1.048 million tons during the corresponding period last year.

Cement despatches to domestic markets during the month of October 15 were 2.595 Million Tons compared with 2.095 Million Tons during same month last year showing an increase of 23.89%. Exports during October 15 were 528,000 Tons against 729,000 Tons during October, 14 showing decline of 27.52%. Total despatches during October, 15 were 3.124 Million Tons compared to 2.824 Million Tons during same month last year showing an increase of 10.61 percent.

Statistics indicate that cement sector is now almost completely dependent on domestic sales, the share of which has increased to over 80 percent in total cement sales compared to around 50 percent in 2008-09, as domestic sales continue to increase while exports are showing constant decline.

A spokesman of APCMA said that that the growth in the domestic economy has supported overall growth in the cement industry. He said that the industry has approached various decision makers to stop influx of Iranian cement into Pakistan from Balochistan by road and railway. The industry needs mechanism of safeguard to be put in place to protect the cement smuggling into the country. Government should also impose 20% Regulatory Duty for import of cement in addition to custom duty.

He added that 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 industry has appealed for reduction in energy costs, removal of GIDC imposed on gas, reduction of custom duty on coal to 0% and additional incentive of 5% on export of cement by sea.