The cement industry performed well and attained significantly high growth of 12.1 per cent during first half of current fiscal year (2006-07), according to State Bank of Pakistan (SBP) quarterly report.
The report says that the remarkable performance of cement sector was attributable to the enhanced installed capacity, which had more than doubled during last five years, as well as to the rise in local demand. During this period, strong external demand was also another major cause of the growth, the report said.
The recorded figures show that cement sales rose by 26 per cent during July-December against 12 per cent of the same period of last fiscal year. Cement dispatches rose by a remarkable 25 per cent during this period compared with 13.4 per cent growth in the same period of last year. The rise in local demand mirrored the rising activity in the construction sector amid relatively low domestic prices in July-December period.
Similarly, export demand for cement registered a robust increase of 36.8 per cent during first half FY2007 against fall of 0.2 percent during same period of FY2006. Major markets for Pakistan cement exports were Afghanistan and the UAE.
The rise in exports came after government decisions regarding restoration of duty drawback on cement exports, in which the Central Board of Revenue (CBR) allowed duty drawback at the rate of Rs 25.08/t on export of cement. The duty drawback facility was effective from September 27, 2006.
The report says that exemptions from federal excise duty and sales tax on exported cement and lower domestic prices in first half of the current fiscal year were the key factors for the rise in cement exports during the period under review.