KARACHI: Bulk clinker exports will resume after over a decade as one of the leading south-based cement manufacturers has received export order from West African countries and Kenya.

Sources in the cement sector said Attock Cement would export 150,000 tonnes of clinker from Pakistan International Bulk Terminal Ltd (PIBTL), where a ship carrying clinker would sail out next week. They added that another major southern player of south is also in the process of finalising the export of clinker.

The same company had last exported 105,000 tonnes of the product in 2003 to the growing market of UAE.

Some cement players had been exporting small cargoes of 2,000-5,000 tonnes of clinker in containers for the last two to three years. However, bulk movement of clinker would restart after 14 years.

With the state of the art loading facility at PIBTL and competitive rates offered by the terminal operator, more international buyers would now look towards the country.

A cement maker said the government and the Port Qasim Authority should consider the abolishment of royalty rate on export of clinker from Pakistan in order to make the product more attractive for foreign buyers.

He said the excess cement capacity, coupled with devaluation of the rupee against the dollar, can be attributed to the recent export order. The participants in the recently concluded cement conferences (CEMTECH and INTERCEM) held in Dubai in February and March also took strong interest in Pakistan’s cement sector’s changing dynamics, especially with reference to growing demand and huge incoming capacities. The industry supply would increase by 20 million tonnes in the next three years and reach 70m tonnes in 2020, he added.

Clinker is a semi-finished product which is grinded with gypsum and iron ore in the cement mill.

Cement price: In the current month, brokerage houses have been running reports regarding the frequent increase in cement price in March, while industry participants offered a different view.

According to Nabeel Khursheed of Topline Securities, north producers increased the cement price by a cumulative Rs40 per bag with another Rs10 per bag expected in the next one to two days which would take north prices to Rs520-530 per 50kg bag. However, prices in the southern region have thus far remained intact. An analyst at Shajar Research said cement prices had recovered by Rs40-50 per bag in the north which would improve margins of manufacturers.

A cement maker in south contradicted, saying the actual rise in cement price in March was Rs20 per bag. Another noted that there has been an unprecedented surge in demand which has forced the market to adjust and in some cases withdrawn the concessions on maximum retail price (MRP) while one or two companies had raised MRP.

He said the prices are still below last year’s level despite the increase in federal excise duty (FED) by Rs15 per bag, followed by increase in coal and diesel prices. He added the price trend in North is still lower than South and the industry is continuously increasing its capacity.

Rise in the cement demand was predicted long ago and the government was asked to review some of its policies as input cost was being pushed up due to the surging coal prices, he continued. The industry had urged the government to abolish FED and import duty on coal to bring down the cost of production.

Published in Dawn, April 1st, 2018