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KARACHI: Manufacturers have been exporting cement at an average price of Rs300 (excluding local taxes and duties) per 50 kg bag since July 2012 while charging local consumers up to Rs540 (including taxes and duties) for the same bag.
Cement exports stood at Rs5,894 per tonne or $58.6 per tonne in the first quarter of the current fiscal year which was Rs5,989 per tonne or $58.2 per tonne in the corresponding period of last fiscal year. Cement exports earned Rs14.362 billion or $143 million (2.436m tonnes) in July-September 2014-15 as compared to Rs15.17bn or $147.5m (2.534m tonnes) in same period last fiscal year.
According to figures of Pakistan Bureau of Statistics (PBS), the local industry exported cement at Rs5,986 per tonne or $58 per tonne in 2013-14 as compared to Rs6,142 per tonne or $63.5 per tonne in 2012-13. Cement exports fetched Rs52bn or $509m (8.73m tonnes) in 2013-14 as compared to Rs56bn or $577m (9.09m tonnes) in 2012-13.
In contrast, consumers are now paying Rs520-540 per 50 kg bag at retail level including taxes and duties. Two years ago, the retail price of cement was Rs400 per 50 kg bag.
As cement export is being carried out excluding taxes and duties, officials in cement industry gave different figures.
Some said that around Rs120 per 50 kg bag is deducted under various taxes and duties including freight charges for cement export, while others in the industry estimate Rs155 per 50 kg bag.
The manufacturers must be earning through exporters but have maintained export price for years when prices of everything have gone up.
A cement maker said that in view of stiff competition with Taiwan, China, Iran, South Korea etc, the exporters have kept a competition rate to stay in the export market.
He said in the last three to four years, power rate for cement makers have gone up to Rs15 per KW as compared to Rs eight but a steep drop was recorded in coal prices.
The price of coal had fallen to $80 per tonne from $150 per tonne in 2007 but rupee devaluation made imported good costlier. Coal and power hold 55-60 per cent share in total cost of cement.
Local cement exporters are already facing a probe in South Africa where it is alleged that Portland Cement imported from Pakistan is being dumped on the South African Customs Union (SACU) market.
A cement manufacturer and exporter said that official export figures provided by PBS is conveniently ignoring the cost which is incurred because of sea freight, discharge port charges, inland freight and VAT of importing country.
If it adds all these costs then prices will be more than the local prices, he explained.
He said that currently the local cement industry is defending the case before regulatory authority in South Africa and as against their claim of 48pc dumping margin, as per our calculation the effective differential is not more than 10pc which is standard difference between local and imported cement anywhere in the world.
The manufacturer pointed out that landed prices of the cement of importing countries and comparing the same with local prices of cement in Pakistan, the rates are still cheaper here than cement in South Africa, India, Sri Lanka, Bangladesh, Egypt, UAE and other gulf countries.
Published in Dawn, October 31st, 2014
