Pakistan: cement industry demands export incentives

Pakistan: cement industry demands export incentives
Published: 13 November 2015

Tagged Under: Exports Pakistan 

As Pakistan reports a decline in cement export sales over the first quarter of FY16, the local industry body is calling on the government to provide relief measures and incentives to facilitate exports going forward.

During first three months of the current fiscal Pakistan exported 1.52Mt of cement and earned export revenue of at US$87.74m compared to 2.42Mt at US$142.78m. This translated to a fall of 36.91 and 38.55 per cent in terms of quantity and value in dollar respectively over 1QFY15.
 
In September 2015 alone, Pakistan exported 501,765t of cement at US$28.13m compared to 558,049t at US$32.08m in August 2015, down 10.09 and 12.30 per cent MoM in volume and value terms, respectively.

Compared to September 2014, the decline was 43.92 per cent in terms of export volumes and 46.43 per cent in dollar value.
 
Calls for government support
A spokesman of the All Pakistan Cement Manufacturers Association (APCMA) attributed the decline to a number of factors including stiff competition due to the high cost of doing business. He further urged the government to take effective steps to stop the penetration of Iranian cement into Pakistani markets on the strength of massive 'under invoicing' and/or alleged mis-declarations.

Moreover, he emphasised that there is enough idle domestic capacity, adding that the government should step in to support the industry in exporting surplus volumes otherwise cement exports would continue to decline in the coming months. "We need government to announce export incentives for cement industry," he added.
 
To improve exports, the association suggested abolishing Gas Infrastructure Development Cess (GIDC) and import duty on coal to reduce energy costs. Meanwhile incentives such as a freight subsidy or direct subsidy should be given to facilitate exports. Exports by sea should be given additional incentive of five per cent, it suggested.