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From Subcontinent to Sub-Saharan Africa: Part One

World Cement,

The economic development of any country and the growth of its cement industry are intrinsically linked. The share of cement market revenue is small in comparison to total industry revenue, but cement has witnessed an overall consistent growth pattern in recent years.

The cement industry in the sub-continent is a booming sector and has promising future prospects in the domestic and export markets. The USGS Mineral Programme Cement Report (February 2014) highlights India as the second largest cement producing country, while Pakistan ranks as the 16th largest manufacturer of cement worldwide.

According to the International Trade Centre, a total of 10 million t of exports worldwide originate from the subcontinent and of these, 25% are sent to Sub-Saharan Africa. India and Pakistan are the only cement exporting countries in the subcontinent, while the rest are importers. Although the majority of the cement produced is consumed domestically, around 2.43 million t of cement from Pakistan and 0.18 million t from India are exported to the Sub-Saharan African region annually.

Salient features of the Indian cement industry

Among all the countries in the subcontinent, India has the largest production capacity at 336 million t, of which it utilises 272 million t. India’s production base consists of 140 integrated units and 45 grinding plants. Due to the vast geographical area and increased pattern of infrastructure advancement, India consumed around 265 million t of cement in 2013. The radical increase in domestic consumption is due to the approval of new developmental projects and construction of around 100 km of road on a daily basis. India’s main export markets are Sri Lanka, Nepal, the Maldives, Bhutan and Africa.

Salient features of Pakistan’s cement industry

In Pakistan, there are a total of 24 integrated cement plants in the North Zone and South Zone. According to the All Pakistan Cement Manufacturers Association (APCMA), the installed cement production capacity is 44.77 million t with a surplus capacity of 11.17 million t, employing 75% of its total capacity. The total local consumption for 2013 was 25.3 million t with total exports of 8.29 million t for the same year. The main export markets are Afghanistan by road and Sri Lanka and Sub-Saharan Africa by sea.

Lucky Cement Limited (Pezu and Karachi) is one of the country’s leading cement manufacturers, with cement capacity of 7.512 million t. Other significant players in the Pakistani industry are Bestway Cement (Hattar and Chakwal) and D.G. Khan Cement (D.G. Khan and Chakwal).

Salient features of North Africa and Sub-Saharan Africa

The emerging markets, such as India and China, represent an estimated 90% of the global cement industry. The developed nations, such as America and Europe, make up the remaining share. The imminent future of the cement sector looks auspicious for the emerging and developing countries. According to the statistics shared by IMF in the World Economic Outlook Database April 2013, it is predicted that the emerging and developing regions will witness economic growth of 4.5% and 5.1% in 2013 and 2014, respectively.

Africa is sub-divided into two regions, namely North Africa and Sub-Saharan Africa. According to the article “The last cement frontier” published by Africa Consulting Services AS Norway and ICR Research, Africa is highlighted as a fast-growing continent as local and international investors seek opportunities to capitalise on the economic and industrial progress of the region. Overall, the cement consumption in 2010 was 175 million t, with over 50% of the volume coming from Sub-Saharan Africa.

Read Part Two of this article here.

Written by Faheem Ahmed, Lucky Cement Limited. This is an abridged version of the full article, which appeared in the September 2014 issue of World Cement. Subscribers can view the full article by logging in.

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