The News reported that the cement exports of Pakistan declined by 4.58% YoY in the first six months of 2011-12.
The official figures released by the All Pakistan Cement Manufacturers Association showed that export by sea fell by 22.73% YoY. The export fell mainly because of increase in freight charges, following 16% increase in domestic diesel prices during this period.
Export to India and Afghanistan, the two major markets for Pakistani cement, rose by 62.64% and 10.35%, respectively.
An official of the cement industry said that over 4% decline in overall cement export in the first half of the fiscal year was only due to sharp increase in the local freight cost.
The decline of cement export by sea was seen because the north zone cement manufacturers failed to cope up with the rising freight charges. Increase in freight charges after diesel price hike of PKR 13 per liter made them uncompetitive in Middle East markets which are now being captured by Saudi Arabian and Iranian manufacturers.
The south zone plants are still managing to compete with Saudi Arabian and Iranian manufacturers, while north zone units are depending only on Indian and Afghan markets. The total exports to Afghanistan during the first six months rose to 2,501,165 tonnes from 2,266,496 tonnes. Export to India surged to 350,059 tonnes from 215,235 tonnes.
The industry official said that at present the cost of freight per tonne cement to seaport was PKR 2,000 which means PKR 100 per 50 kilogram bag. Brining imported coal from the seaports to north zone unit costs PKR 3,000 per ton to which cost of transportation is added. Thus the north zone operating units face additional PKR 5,100 per tonne freight cost as compared to the south zone manufacturers.
He further said that the Federal Board of Revenue had announced Inland Freight Subsidy for cement industry in March 2010, but not a single penny had been paid to any manufacturer. FBR owes PKR 335 million to cement industry under the head of inland freight subsidy.
(Sourced from www.thenews.com.pk)
