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KARACHI: Cement companies are exploring new markets to sustain the plant expansion after losing market in South Africa, Kenya, Tanzania and Mozambique.
South Africa imposed an anti-dumping duty on Pakistani cement one and a half years ago.
Cement makers also used to export large quantities to India’s Punjab state through the Wagah border and Mumbai via sea route. Currently they are exporting 250,000 to 300,000 tonnes of cement to the state of Tamil Nadu via sea.
Annual cement exports to India is around one million tonnes. During the first nine months of the current year exports to the neighbouring country have already hit 920,349 tonnes.
A cement company official said Pakistani cement makers are competing with Iranian, Indian and East Asian cement makers in the Sri Lankan market where Pakistan’s current exports stand at around one million tonnes.
Exporters are also exploring possibilities in the Philippines, whose economy is showing signs of recovery, the official said. But he added that exports would only become feasible when overall bilateral trade improves.
Pakistan’s cement export to countries other than India and Afghanistan was more than 6m tonnes in 2008-09, but they have been in decline since then.
Annual cement export to Afghanistan has also come down to 2m tonnes from nearly 5m tonnes a few years back. Exports to Afghanistan stood at 1.47m tonnes in July-March and 2.44m tonnes in the entire 2015-16.
Pakistan overall cement exports were more than 10m tonnes some seven years ago, but since then they have been going down. Reasons mentioned include unrealistically high exchange rate of the rupee to major global currencies and absence of incentives to the cement sector. The official said that other countries have devalued their currencies to compete in the world market.
Total cement exports fell to 3.64m tonnes fetching $191.5m (or $52.5 a tonne) in July-March compared to 4.56m tonnes earning $248m ($54.4 a tonne) a year ago, according to the Pakistan Bureau of Statistics. The exports are expected to remain between 5m and 6m tonnes in the current fiscal year.
On prices, he said cement makers have cut wholesale rates by Rs15-20 on a bag in Punjab due to lower demand and capacity expansion, however, retail prices printed on the bag remained unchanged.
He said construction has also slowed down, especially in Punjab where most of the labourers have gone for wheat harvesting.
Published in Dawn, April 27th, 2017
