Cement firms yet to capitalise on Gulf demand

Cement firms yet to capitalise on Gulf demand
Published: 01 December 2004

Northern Pakistan manufacturers have not been able to capitalise on rising cement demand from the UAE and other Gulf states as they are not quoting competitive prices which they claim is on account of high costs of transportation and lack of bulk handling facilities, industry officials said. Demand for cement is continuously rising in the Gulf states for the last five months but only a few of Pakistan’s cement manufacturers have been able to strike export deals for the region and that too not in bulk. But industry officials and sector analysts are expecting that Pakistan’s cement exports would touch 1.5Mt in the calendar year 2005 mainly on the back of Afghan demand. Khalid Iqbal Siddiqui, analyst at Investcap Securities, said this will be possible because Iranian cement factories are facing local problems of cement shortage and will not be in a position to export heavily to Afghanistan. During the first four months of the current fiscal year, local cement manufacturers have exported 587,879t of cement, mostly to Afghanistan through land-routes while very little quantity was shipped to Dubai and other Gulf states.

Tariq Saigol, chairman of the All Pakistan Cement Manufactu-rers Association (APCMA) told the Daily Times that cement manufacturers located in the northern region do not have bulk handling facilities for cement exports. “These manufacturers are exporting their products to Afghanistan via land routes.” He said exports to Gulf states are viable for those factories located near the ports and added that cement manufacturers like Lucky Cement, Attock Cement and a few others are getting export orders.
Mr Saigol said the industry is receiving export inquiries but transportation charges and others expenses are the main hurdles to export cement to the Gulf states.

He said Attock Cement and Lucky Cement are installing plants in the Hub industrial area for export purposes added that these plants are expected to be commissioned in 2006-07 after which they would be able to meet overseas cement demand. Mr Saigol said cement export is possible only to Afghanistan for factories located in the northern region and added that in order to diversify their exports they require bulk transportation and handling facilities.

“Local manufacturers are not properly dealing with foreign parties nor do they do proper ground work before quoting rates,” said an official at a cement company asking not to be named. He said export inquiries are still coming from Dubai, Abu Dhabi, Muscat and adjoining countries and added that they require general quality cement for routine construction. The cement factories of Arab countries are already producing high quality cement for multi-storied buildings, he said. He said the export of cement to the Gulf states is not likely to rise in the near term but exports to Afghanistan are expected double by 2005, while local demand is easing ahead of the winter, especially in the northern areas. In October, local consumption of cement dropped 4.7 per cent to 1,197,103t from 1,254,096t in September.