Demand for cement has shown a robust growth of 24 per cent during the last fiscal year ended June, 2007. The growth momentum in the demand which started in the year 2002-03 at 12 per cent, kept on accelerating till it culminated at 24 per cent – reports the Business Recorder.
Domestic sales have moved up from 10.98Mt in 2002-03 to 21.03Mt for the2006-07 while cement exports have increased from 0.43Mt to 3.19Mt over this same time frame.
Currently Pakistani clinker is being exported to Qatar, and the FOB prices have increased from US $40 per ton to US $48/49 per ton for supplies to be made towards the end of the year 2007.
India is currently short of cement According to a recent study, if Indian cement industry doubles its existing capacity, the limestone deposit in India would be exhausted by the year 2030. Pakistan currently has around 12 million tons of surplus capacity which can be exported to earn foreign exchange of approximately US $750 million.
This startling discovery bodes well for the future of cement industry in Pakistan which will have such a large market in its neighbourhood with thriving demand of cement. This scenario may also attract big international cement groups to invest in cement industry in Pakistan.
Domestic cement prices have gone down enormously despite substantial escalations in the prices of major inputs items like coal, electricity, paper bags and mark-up rates. The current price of cement is much lower than its historical prices with 50kg bagged cement now falling to around the Rs200 level as at July 2007
According to the Business Recorder prices in US$ equivalent for a 50kg bag indicates that Pakistani prices are now US$3.69 compared to 4.87 for India, 4.63 for Dubai, 5.06 for Sri Lanka and 4.87 for Iran.