Pakistan can earn additional $6.5m in cement exports to Afghanistan

[Lahore_Real_Estate]

LAHORE: Pakistan can earn additional $6.5 million through cement exports to Afghanistan if it fixed the minimum export price at $55 per ton instead of existing $42, which will still be less than other countries, an official of the industry said on Thursday.

Even if the minimum export price is fixed at $55 per ton the country would earn $50-60 million additional foreign exchange annually, the official said.

In an SOS to the economic planners, he said that the cement industry is in dire need of immediate government action.

He said cement would cost $60 per ton in Afghanistan if imported from any other country. “We are exporting cement at $42 per ton due to competition between cement plants situated in the Northern parts of the country,” he said.

Operational capacity of cement mills situated in the North is 34.26 million tons (2.855 million tons per month) and the operational capacity of cement units in South is 6.97 million tons (580,875 tons per month).

Saigol said that the mills in the Northern Region of the country exported 372,048 tons of cement to Afghanistan in February, which was 13 percent of their operational monthly capacity of 2.855 million tons. The total production of the North-based mills in February was 1.385 million tons.

The total production of cement in the North in February was seven percent less than 1.494 million tons production recorded in the corresponding month last year.

He said declining uptake in the domestic market was the main reason for decline in cement production in the North.

Another Cement mill-owner said that in order to maintain minimum production level, a few North-based mills have been forced to export cement by sea though it is not a commercially viable option due to high transportation cost.

According to APCMA, cement units situated in the South exported bulk of 337,476 tons of cement through sea, which was over 40 percent of their monthly operational capacity of 580,875 tons.

The South-based mills produced 393,287 tons of cement in February. The mills in South, he said, would have caved in without exports as the demand in the local market, which picked up in February, was still very low.

The cement units in South posted a production increase of 37 percent over 283,395 tons they produced in February 2010.

A spokesman of APCMA said that the cement production declined by 8.49 percent during the first eight months of this fiscal year, ending in February.

During July-Feb, the cement production was 15.073 million tons.

Cement exports declined during the same period by 14.81 percent from 6.930 tons in July-Feb 2010 to 5.904 million tons during July-Feb 2011.

However exports during February increased by 6.22 percent that helped the industry post a nominal growth of 0.04 percent, he added.