KARACHI, Dec 3: After an increase of Rs10 to 15 per 50kg bag made by the Punjab-based cement makers a few days back, producers in Karachi and other parts of Sindh also followed the suit by enhancing the rate by Rs5 per 50 kg bag on Monday.

Builders and dealers see the increase in prices as an artificial move initiated by cement producers at a time when construction activities have slowed down all over Pakistan, especially in Punjab and northern areas because of cold weather and rains.

The maker of Falcon cement has increased the rate by Rs100 per ton and it is now being quoted at Rs260 to 265 at retail as compared with Rs250 to 255 while Pak Land Cement is tagged at Rs255 as compared with Rs250.

Almost all varieties of cement in Punjab were being sold at Rs200 to 205 per 50 kg bag a few days back. Now they are available at Rs220-225 at retail level.

Chairman, Association of Builders and Developers (ABAD), Hafizur Rahman Butt, said construction activities have come down by 30 to 40 per cent, especially in Punjab and upper Punjab after the start of winter season and there was no justification of increasing the rate.

He said cement mafia was trying to create an artificial demand in the market by curtailing productions and supplies to justify increase in prices.

Butt said cement makers are increasing prices to bring in line their products with other items whose prices have also been rising in the markets.

“We have been taking up the matter with the government from time to time, but no fruitful results have arrived,” he said.

President, Karachi Cement Dealers Action Committee (KCDAC), Wali Bhai Patel, said cement makers know that the demand in winter remains laggard owing to slowdown in construction activities, but they have formed a cartel to push up rates without any reason.“The government should check artificial increase in prices and make efforts to regulate cement prices on the pattern of regulating petroleum and gas prices,” Patel said.

Meanwhile, in a letter sent to President Pervaiz Musharraf, a few days back, he said that the 50kg bag of cement, produced by cement makers in Punjab, is available at Rs220-225, while the cement produced by Sindh and Karachi-based factories is available between Rs240-265 per 50kg bag despite an increase in prices made by Punjab producers.

The producers of Punjab are producing lower rate cement despite adding godown and labor expenses which amount to Rs30 per 50kg bag.

In the letter, he said cement producers in Sindh and Karachi have been producing costlier cement from their factories as compared to Punjab, and this practice had been in vogue for the last one year.

He said these companies also create shortage in the market. Whenever they get handsome export orders, they start creating supply problem in Karachi to meet the export demand.

He said Punjab-based companies also export cement, but big province do not see any big demand and supply gap or shortage in the market as compared with Karachi.

Patel said that the federal government used to charge excise duty on total production capacity during 1991-1993 which had bound the cement makers to keep capacity at 100 per cent, thus keeping supply at par with demand in the markets.

At that time cement prices were also under control.

Currently, there is hardly any cement factory in Sindh which keeps its production capacity at 100 per cent.

He asked the government to take immediate measures to force cement makers to ensure 100 per cent plant capacity so that prices could remain stable, and that there are no shortages in the market.