The ministry of industries and production is likely to submit a comprehensive cement export plan and industry’s overall capability to the Economic Co-ordination Committee (ECC) of the Cabinet, in its next meeting, official sources told Business Recorder on Thursday.
Sources said the ECC, in its previous meeting, had discussed cement industry’s situation especially after giving permission for subsidised cement import through land and sea routes.
The ministry of industries had painted a very dismal picture of the cement industry just to prepare a strong case for withdrawal of Rs 60 per bag freight subsidy given by the ECC. However, the subsidy would remain applicable to the already opened letters of credit (L/Cs).
Sources said there were also speculations in the government as well as in the private circles that the industry is trying to make a cartel once again to increase prices which, according to them, have gone down to an unreasonable level.
The government had taken certain measures to curb artificial spike in cement prices in the local market, which included provision of Rs 60 per bag subsidy, duty-free import of cement through land, sea and air routes and termination of duty drawback facility on its export.
"We have reviewed cement prices prevailing in the local market, capacity utilisation of units, and future expansion program of the industry to prepare future strategy," the sources added.
The All Pakistan Cement Manufacturers Association (Apcma) fears that there would be glut in the market if the government did not take appropriate measures to increase export.
The production of cement plants will become 33 million tonnes per annum by the end of December 2006 due to commissioning of two new plants and capacity expansion by some existing units.
Sources said that cement export to Afghanistan and Central Asian Republics have reached 0.2 million per month and since the government decided to restore exemptions on CED, sales tax and duty drawback on export of cement, the industry was earning substantial profit.
The government considered all the factors, which include price situation in different parts of the country, capacity utilisation, and the loss inflicted to the local industry due to subsidised import and recommended to the government that in order to protect the hard won cement export market, rebate should be restored.