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Cement exports from Pakistan up by over 50%

World Cement,

As bilateral relations are improving, cement exports to India from Pakistan have increased 53.8% to 0.16 million t in the first quarter of the financial year 2012.

However, this figure falls short of the expected 1 million t, as a result of a predicted progress in Pakistani export trade, following improving trade relations between Pakistan and India.

According to cement manufacturers, there was no development in cement exports by truck via the Wagha Attari border, which if opened, could substantially boost export volume.

The All Pakistan Cement Manufacturers Association (APCMA) said that local cement sales improved due to increase in local consumption, which witnessed a growth of 12.23% during the first quarter of the current fiscal year 2011-12.

During the July – September 2011 period, cement manufactures in the northern regions sold 4.23 million t cement, while sales stood at 0.945 million t in the south. Exports to different countries via sea have dropped significantly to 0.85 million t, a 24% decrease as compared to the first quarter of the financial year 2011.

According to the manufacturers, a major factor behind limited exports is the sharp increase in input cost, as prices of almost all of major inputs including, furnace oil, coal and electricity etc., have surged during the first quarter of this financial year. The cost of transportation has also increased due to an increase in diesel prices.

Power costs have also increased by 9% during recent months from Rs.7.1/kWh to Rs.7.7/kWh, and the situation seems set to become worse with an expected power tariff of Rs.3.04/kWh.

Diesel, coal and furnace oil rates have also increased by 15, 8 and 28% respectively in this first quarter, and as these fuels have to be transported from Karachi, the impact on the end user will be much higher.

During the financial year 2010 – 2011, 10 cement plants suffered loss before taxation totalling Rs.5.27 billion, while seven plants, of which two are located near Karachi in close proximity to the seaport, earned profits of Rs.5.98 billion. At the end of the last fiscal year, industry debts to financial institutions amounted to more than a staggering Rs.125 billion, while equity is estimated at Rs.116 billion.

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