The All Pakistan Cement Manufacturers Association has opposed duty-free import of cement and said it would strongly hurt the domestic cement industry which has barely come out of the crisis of excess production and low demand.
Talking to Business Recorder on Saturday cement industry bigwigs expressed surprise over the government''s intention to allow import of cement to bring down cement prices. "Cement prices have already come down from Rs 330 per 50 kg bag to almost pre-budget level of Rs 250 to Rs 270, and the APCMA is ready to discuss the rationale and stability of cement prices with the government," they added.
They said that the Association Chairman had already offered to the government to supply cement for sale to the public at the government outlets like utility stores/canteen stores department and fair price shops which the government might like to open for this purpose to frustrate designs of hoarders, profiteers and market manipulators.
Analysing the cement prices, a senior executive of the cement industry argued that interested elements had started unnecessary controversy. Quoting central Statistical Bulletin, he said that the wholesale price index of building material increased to 145.18 in March 2005 while the wholesale price index of cement industry increased to 104.91 only in March 2005.
Elaborating his analysis about increase in cost of building material, he said that index of iron bars and sheets increased by 82.38 percent that of timber 41.02 percent, pipe fittings by 25.99 percent and cement by 5 percent only.
The cement industrialists said that there had been considerable increase in cost of outputs of the cement sector during the past three years. The price of furnace oil, for example, ranged between Rs 8,800-9680 per ton in 2000-01 but it increased to Rs 13,022 per ton in 2003 to Rs 13,948 per ton in 2003-04 and current price is Rs 18,622 per ton
They said that similarly the rate of power supply has increased from Rs 3.07 per KWH to Rs 4.76 per KWH; the gas price has increased from Rs 138 per Million BTU in 2000 to Rs 240 per million BTU in March 2005; the prices of foreign as well as local coal have also increased substantially.
They said that as an additional burden on the cement industry, the provincial governments increased the provincial excise duty on limestone , clay and gypsum etc by 400 percent. In spite of these price increases, the cement industry kept its profitability at a level enough to wipe off its carried forward losses or to give a nominal dividend to its shareholders.
They said that the dividend declared by some of the cement companies had been much less than declared by other industries quoted on Karachi Stock Exchange.
They said that nearly two dozen cement plants were producing about 9,50,000 tons against monthly domestic requirements of 8,50,000 tons of cement. It was with great marketing skills that Pakistani cement manufacturers were able to make inroads into Afghanistan and Middle East markets to export their surplus cement amid stiff competition from Iran and India which were offering cement at a much lower rate.
They said that All Pakistan Cement Manufacturers Association wanted to keep cement prices within reasonable limit as it had a direct bearing on the construction industry and economic activities in the country.