‘Any setback to cement industry will wreak havoc for consumers’

[LRE]

‘Any setback to cement industry will wreak havoc for consumers’

KARACHI: Any setback to the cement industry will play havoc with consumers, as they may have to face Sudan-like situation where each bag of cement costs $22.5, which translates to Rs 1,620 per bag, a spokesman of All Pakistan Cement Manufacturers Association (APCMA) said Tuesday.

Commenting on builders’ concerns on rising prices of cement in Pakistan, the APCMA’s spokesman pointed out that the cost to make and sell cement has shot up to Rs 375.60 per bag in 2008 compared with Rs 228.21 per bag in 2007.

Pakistan’s cement industry has converted its plants on coal, considering it to be the cheapest fuel. Ironically, its price in international market has gone up by more than 300 percent during the past one year. Electricity rates have also been increased by around 20 percent. The combined cost of fuel and power on one bag of cement comes to Rs 152.28, whereas taxes and levies are Rs 96 per bag and these three items alone amount to Rs 250 per bag.

He also added that cost of transportation, financial charges, cost of imported spare parts (which has increased due to impact of exchange rate), cost of paper/PP bags and sacks (around Rs 17 per bag) and salaries and wages are the other factors contributing to this spike. In this way, the total cost per bag touches Rs 370.

The spokesman said demand for cement plummets during rainy weather in the country, which directly affects the running cost of a unit. It is only the rising levels of cement exports, which are sustaining the industry. staff report

http://www.dailytimes.com.pk/default.asp...2008_pg5_7