Pakistani cement industry to thrive on export prospects
Sunday, 11 Oct 2009
Daily Times reported that growth prospects for Pakistan’s cement industry are bright as the cement demand is set to increase in importing countries like India, Gulf Cooperation Council countries, South Africa and Sri Lanka.
According to an analysis of the industry, cement export targets for 2009 and 2010 are set to be 9.99 million tonnes and 10 million tonnes respectively. Currently, the export demand is expected to be from new inductee India along with other countries like GCC countries due to rising oil prices led economic growth. More countries like South Africa which is to build football stadiums for the World Cup and Sri Lanka are also expected to approach Pakistani companies for cement imports.
As per report, just when Pakistan is struggling to even maintain the 2007 and 2008 exports mark of around USD 19 billion additions of the cement exports in the last 2 years is a good omen. Pakistan's total exports dropped to USD 17.782 billion in 2008 to 2009. The latest information is that India will import more cement from Pakistan. So far 130,000 tonnes cement has been exported to the neighboring country.
In this backdrop, the cement industry exported 7.7 million tonnes in 2007 to 2008 earning around USD 308.129 million for the country. In 2008 to 2009, cement exports went up by 54.26% to USD 475.327 million. Cement exports thus ranked 10th in the major export list of Pakistan.
What made the cement industry enter in the exports market in the last few years, the answer to this question can be a good case study of the privatization and liberalization of the cement sector.
The major markets opened by the intense marketing for the Pakistani cement sector include Middle East, Sri Lanka, South Africa, Egypt, India etc. India has registered a number of Pakistani cement manufacturers a requirement to facilitate import of cement. Pakistan has already increased the frequency of trains from one to 3 in a week to carry cement from Pakistan to Wagah border. Due to boom in the construction industry, India needs cement in bulk to meet its growing needs. The success of the sector depends on exports, its profitability from depressed local prices and cost appreciation. The exports for FY08 have already surpassed the last whole year's export of 3.19 million tonnes and are likely to reach to 6.67 million tonnes in 2008. The sharp decline in cement prices were due to domestic competition among producers has dampened the profitability of the industry.
