Pakistan cement producers deny cartel

Pakistan cement producers deny cartel
01 April 2013

Pakistan cement producers have denied the existence of a cement cartel, telling the Ministry of Industries that they are operating at the lowest rate of return.

The Express Tribune reports that during a meeting with the ministry, the producers in question countered the claims by stating they have passed on the minimum impact of inflation to end-users over the past few years. They highlighted that cement prices, which were PKR320/bag in 2005, currently only stand at PKR425/bag despite input costs increasing at a higher rate. 

The producers noted that the total equity of the industry is PKR128bn and it has a 10 per cent rate of return. In contrast, independent power producers (IPPs) are operating at 18 per cent rate of return. 

“The cement industry is getting the lowest rate of return at 10 per cent on equity of PKR128bn compared to other sectors,” Waleed Sehgal, Director of Maple Leaf Cement Factory Ltd told The Express Tribune. 

Sehgal stressed that prices of electricity, gas, coal and paper bag, labour cost and freight rate had increased manifold. “We have given the rationale behind the increase in cement prices to the Ministry of Industries,” he said, adding that the cost of electricity alone had jumped from PKR2 to PKR10 per unit.

Published under Cement News