Cement production in Pakistan will be around 47Mt by 2009 with the expansion in production capacity of the existing 28 units, which will be enough to meet both domestic and export needs, it is learnt.
Sources said that three investors, from the UAE, Egypt and Qatar, are also considering setting up cement plants here. However, they said, the final decision to this effect would be taken by January next year whether to set up these plants in Sindh or Balochistan. The production from these units would be in addition to 47Mt that is anticipated from the present 28 units.
The biggest export market of Pakistan’s cement is Afghanistan, where competition is growing among the Central Asian States, Iran and Pakistan. However, Pakistan is in a better position because of low freight charges. The cement sector has seen production of 6.32Mt during the last four months, bringing total production till October to 33Mt from 21Mt during January 2006.
This production is expected to rise to 38Mt by the end of December as a result of on-going capacity enhancement by existing units. Attock Cement has completed its expansion project and the expansion program of Bestway Cement would be completed soon. D G Khan Cement’s new unit in Chakwal is likely to start production soon, whereas the other units have either started their capacity enhancement program or are planning.
Cement manufacturers see growing demand of the commodity at home due to planned construction of dams and increase in reconstruction activities in Afghanistan.
Cement crisis last year had forced the government to intervene. As a result, the government allowed import of unlimited quantities of cement without any customs duty and withholding tax through the private sector to meet the growing demand. The government had also earmarked an amount of Rs 720 million in the budget to arrest cement price hike.
The government has been paying substantial subsidy to cement importers to stabilise the prices.
Sources said that cement import has already been stopped because of much reduced prices in the domestic market. The government hopes that cement prices will remain under control because of the commitment of local manufacturers to raise the level of production and increase production capacity.