African cement makers in a stew

Pakistans name in international media appears often but mostly for negative reasons. The countrys cement makers, however, have brought about a change as they are in the limelight in international media these days.
African market is now an established export market for Pakistani cement manufacturers, but never before has it bothered the regional competitors as much as today.
The East African cement producers are finding it difficult to compete with Pakistani counterparts, as things both at home and away have swung in favour of Pakistani cement producers, enough to create panic among African competitors.
This has made them demand an increase in cement import duty upped to 35 percent from the existing 25 percent. Adding to their worries is the inland freight subsidy of 35 percent that the Pakistani cement makers are benefiting from, making African players uneasy.
African markets which absorb around one-third of cement exports from Pakistan, are somewhat special for domestic cement exporters.
For southern cement producers, the strategic importance of the African market is even higher, as they are currently looking forward to further increase their market share in the African continent through increasing domestic production capacity.
Cement players in Africa have previously enjoyed a high tariff regime, but two years ago the East African community cut down common external tariffs from 40 per cent to 25 per cent, in order to facilitate low cost imports commensurate to growing construction demand.
Cement prices in Africa are as high as $180-120 per ton, whereas cement from Pakistan reaches there at a price of around $75~85 per ton, according to local manufacturers. Therefore, even if duty is increased by 10 percent, domestic producers will continue to enjoy a competitive advantage, due to availability of low cost inputs and inland freight subsidy.
Moreover, cement demand in the African region is likely to grow further as major developed and developing countries are eyeing massive investments in Africa.

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MAJOR DESTINATIONS IN AFRICA

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Country               Export USD 00

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Djibouti                       36,472

Sudan                          22,629

Tanzania                        6,773

Somalia                         4,788

Mozambique                      3,492

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