Cement sector set to benefit from Pakistan FY13-14 budget

Pakistan’s cement sector has welcomed the new Pakistan federal budget for FY13-14, presented by the country’s finance minister Ishaq Dar to parliament.

The budget includes the National Economic Council’s approval of PKR1155bn (US$11.7bn) in development projects, including the PKR540bn Federal and the PKR615bn Provincial Public Sector Development Programmes, which will see considerable investment in water, energy, road, rail as well as transport and communication networks. Water projects will include the Katchi and Rainee Canals and the Kurram Tangi Dam while in the power sector the 4500MW Diamir Basha Dam and Hydropower Project and various other hydro power projects are expected to raise demand for cement significantly.

Although a one per cent increase in sales to 17 per cent is expected to raise cement production costs and prices in the country, the cement industry saw the budget as positive.

However, the industry’s wish to see the Gas Infrastructure Development Cess removed was not granted. The cess is currently levied on gas supplied to cement companies for power generation.