Rebate on cement exports may be allowed, Pakistan

Rebate on cement exports may be allowed, Pakistan
Published: 22 August 2006

Cement manufacturers have approached the government to allow rebate on cement export as prices in the country stabilised and rising demand is being met accordingly. According to sources close to the industry, manufacturers are expecting the government would allow rebate or duty drawback on cement after prices stabilised in the country.

Sources added the government would discuss this matter in the economic co-ordination committee meeting scheduled for this week. The government had allowed Rs60 per bag subsidy on cement import to check price hike.

Decline in demand may be attributed to engagement of several thousand workers in wheat harvest, slow down in the construction work, price stabilisation and, moreover, enhanced supply following completion of expansion work in companies.

Cement dispatches showed strong growth of 18 percent to reach at 1.69Mt during July 2006. Domestic sales increased by 16 per cent while exports soared by 45 per cent during the month.

Sales growth in domestic market was led by 21 per cent increase in the northern zone on the back of rising reconstruction activities in earthquake-hit areas whereas demand in the southern zone declined by two per cent. Exports , on the other hand, were driven by the southern zone that exported some 62,000t during the month, indicating a rise in exports through sea routes.

Capacity additions of Pakistan cement amounting to 7,000tpd; Lucky cement, 4000tpd, in south; and Attock cement, 3300tpd, would start commercial operations during the month that will reduce utilisation levels for the industry. Cement prices are expected to show downward trend in coming months, the analyst added.