Pakistan’s Potential: Part One

Being the seventh most populous country, with a large proportion of young people, and one of the biggest economies in emerging Asia, Pakistan holds immense potential due to its human capital, natural resources and geopolitical location. The country is identified as one of the rapidly emerging markets, which is further reaffirmed by the fact that Pakistan has the 27^th largest purchasing power parity in the world. It is also the 15^th largest trader of goods and seventh largest trader of services.

The Ministry of Finance in Pakistan conducts an annual economic survey, and according to the survey for the year 2012 – 2013, the ‘manufacturing sector accounts for 13.2% of Gross Domestic Product (GDP) and 13.8% of the total employed labour force. Large Scale Manufacturing (LSM), at 10.6% of GDP, dominates the overall sector, accounting for 81% of the sectoral share.’ The manufacturing industry is considered to be the backbone of economic prosperity for any country and, therefore, growth of the sector itself is very important.

Pakistan’s cement industry – yesterday

With the industry facing its own share of ups and downs, the history of the cement sector in Pakistan has been an eventful one. The industry, which started with only four plants and a production capacity of 0.5 million t, now boasts 24 integrated facilities and an installed production capacity of 44.64 million t.

During the 1950s, five cement plants were set up with a combined capacity of 2.8 million t. This number soared to 14 operational plants by the end of 1969. However, setbacks such as the nationalisation of state-owned plants, to form the State Cement Corporation of Pakistan following the Economic Reforms Era in 1972, hampered growth.

Nevertheless, policy changes in the late 1980s and ever increasing demand for housing encouraged the private sector to step forward. Seven more plants were set up with a combined capacity of 2.54 million t. The public sector also invested in four new cement grinding units, thereby increasing the total production capacity. However, it was not until the year 2000 that the country’s cement industry began to experience rapid expansion, with production capacity increasing from 16 million t to over 44 million t today.

Pakistan’s cement industry – today

At present, the cement industry directly and indirectly employs over 150 000 people and supports a host of subsectors, including the construction, shipping, packaging and logistic industries. The industry contributes handsomely to the national exchequer in the form of duties and taxes, and is bringing in foreign reserves through exports.

In the first nine months of FY14, the cement sector exported 6.017 million t of cement and clinker. The domestic cement market is divided into two large clusters, namely the North and the South regions, which absorb a large portion of local production. The remaining portion is exported to countries such as Afghanistan, South Africa, Iraq, India, Sri Lanka, Tanzania, Djibouti, Mozambique, Sudan and Kenya, among many others.

Read Part Two of this article here.

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

Sources

• http://www.slideshare.net/aliamjad42/analysis-on-the-cement-industry-in-pakistan
• http://www.finance.gov.pk/survey_1213.html
• http://www.adb.org/countries/pakistan/economy
• http://www.apcma.com/data_productioncapacity.html
• http://www.apcma.com/data_export.html
• https://www.worldcement.com/news/cement/articles/FY13_good_year_for_Pakistan_cement_industry_224.aspx#.U0vN-VWSymE

Read the article online at: https://www.worldcement.com/asia-pacific-rim/08102014/pakistans-potential-part-one-628/