Pakistan to Become World's 6th Largest Cement Producer By 2030

Pakistan's rank as world's leading cement producer will rise from 16th in 2018 to 6th by 2030. It will replace Japan among the world's top 10 cement producing nations in 2030, according to World Cement Association forecast. Cement consumption is an important indicator of development activity and economic growth. Pakistan's domestic cement sales are continuing to grow, up 9.2% in October, 2019 from the same month last year. Total sales (local and export) in 4-month period between July and October 2019 stood at 16.117 million tons, 4.5 per cent higher than 15.419 million tons during the same period last year.

Source: World Cement Association

Last year, Pakistan produced 41.14 million tons of cement, according to International Cement Review. The country's cement industry has already built capacity to produce 59.5 million tons in anticipation of future demand for housing and infrastructure.  World Cement Association expects Pakistan to produce 85 million tons, 2% of the world's cement production in 2030.

Currently, China produces more than half of all the cement used in the world. India produces 8% and  and European Union 3%. The three will continue to be at the top in 2030. However, China's share will drop to 35% while India's share will double to 16%.

Top Cement Producing Countries in 2019


Pakistan's domestic cement sales grew 9.2% in October, 2019 from the same month last year. Total sales (local and export) in 4 months period between July and October 2019 stood at 16.117 million tons, 4.5 per cent higher than 15.419 million tons during the same period last year.  Cement consumption is an important indicator of the state of economy. It is the most important construction material. It drives construction industry that is among the biggest employers in the world. Cement is used to build homes, factories, schools, hospitals, roads, bridges, ports and all kinds of other infrastructure.

Recent Spike in Public Sector Development Spending (PSDP)

Development of infrastructure under China Pakistan Economic Corridor projects is continuing to drive cement demand in the country. In addition, construction of major new housing communities is underway. One example of such a community is Karachi's Bahria Town. It is being built on the outskirts of Pakistan's financial capital is among the world's largest privately developed and managed cities.  It is spread over an area of a little over 70 square miles, larger than the 49 square miles area of San Francisco. When completed, Bahria Town will house over a million people, more than the entire population of San Francisco.

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Comments

Riaz Haq said…
#Pakistan #cement industry to add another 10 million tons capacity to reach 70 million tons in 2020. #construction #CPEC #NayaPakistan #Housing https://www.cemnet.com/News/story/167897/10mta-of-new-cement-capacity-to-come-on-stream-in-pakistan.html

A big number of capacities will be added in Pakistan's cement industry, later this month and in early next year, according to market analysts. Current capacity projects are forecast to add around 10Mta of extra capacity to the present 59.42Mta. This is expected to lead to higher levels of competition and price wars in the coming year.

According to IMS Research, from December 2019 onwards, the northern market will see multiple expansions with Lucky Cement (2.6Mta in December 2019), Kohat Cement (2.3Mta in December 2019) and Pioneer Cement Ltd (PIOC) (2.6Mta slated for 3QFY20). In the south PIOC is adding 2.5Mta in 3QFY20. The extra output is anticipated to test pricing power, particularly in the north due to limited export opportunities following the suspension of exports to India, although a sustainable growth trend may be able to hold prices at current levels.

Growth in November 2019
While reviewing the dispatch data for November 2019, experts attribute it to the second postponement of CNIC condition on sales (delayed until January 2020) and a pick-up in construction activity (especially on the private side). Disbursements under Public Sector Development Programme (PSDP) have also increased by 64 per cent YoY during FY20TD, to PKR297bn (US$1.79bn).
Riaz Haq said…
91-Kilometer 4-lane #Lahore-#Sialkot #Motorway M11 opened for traffic. M11 has 7 interchanges, 6 flyovers, 24 bridges, 22 underpasses, 13 subways and 274 culverts. Connects #industries in Sialkot, #Gujranwala & #Gujrat to Lahore in a big boost to #exports. https://nation.com.pk/19-Mar-2020/lahore-sialkot-motorway-opened-for-traffic

The project will reduce total distance between both the cities from two and half hours to only 50 minutes.

The project was initiated by the previous government of Pa­kistan Muslim League-Nawaz (PML-N) in 2017. The project is completed by Frontier Works Organisation (FWO) on Built Operate Transfer (BOT) mode. The maintenance and operation of said motorway would remain with FWO for next 25 years after which the road would be hand­ed over to the National High­ways Authority.

When contacted, a spokesper­son for NHA Muhammad Saleem confirmed that the motorway has been opened for commut­ers on Wednesday. He informed that the inauguration ceremony of this project could not be ar­ranged due to the emergence of corona virus.

According to the NHA docu­ments, the four-lane motorway having two lanes on each side has been completed at the cost of around Rs.43 billion. There are 7 interchanges, 6 flyovers, 24 bridges, 22 underpasses, 13 subways and 274 culverts have been included in this project.
The motorway starts from La­hore where it is connected with eastern bypass and Ring Road while its first interchange is sit­uated at Kala Shah Kaku which joins it with N-5, commonly known as GT Road as well as the Lahore-Islamabad Motorway (M-2).

Its second interchange links Muridke and Narowal while third interchange connects Aimanabad and Wando. The fourth interchange links district Gujranwala and Pasroor while the fifth one is between Daska and Pasroor.

The sixth interchange falls be­tween the Daska and Sialkot while the last interchange is sit­uated around 15km in the west of Sialkot city.

It is pertinent to mention here that this is the place which is considered as a gateway to Sialkot, Kharian and Wazirabad.

When contacted by The Na­tion, MNA from Sialkot and a senior leader of PML-N Kha­waja Muhammad Asif main­tained that the completion of Lahore-Sialkot Motorway is the fulfilment of another promise made by his leader Nawaz Sha­rif — the former prime minister.

“It was the vision of Nawaz Sha­rif to connect all regions through infrastructure to strengthen the federation of Pakistan”, he said, adding; “We had the plan to ex­tend said motorway from Sialkot to Dina via Kharian and then it was to be linked with proposed Mirpur to Muzaffarabad Motor­way and Lahore-Islamabad Mo­torway (M-2) by crossing Rawat at Rawalpindi.

He criticised by saying that the incumbent government is visionless and its agenda is de­struction not the development.

The completion of this long-awaited project will im­prove connectivity of industri­al triangle of Sialkot, Gujranwa­la, Gujrat-Wazirabad to the rest of the country especially Lahore — resulting in a big boost to exports.

The area was a key manufac­turing part of the country, ac­counting for about 15 percent of Pakistan’s annual exports. Exports from Sialkot included sports goods, surgical equip­ment, leather garments, riding gear, polo equipment, badges, motorbike accessories and ag­ricultural products including the world-famous Basmati rice. The neighbouring Gujranwala is the center of ceramics and tex­tile products, while Wazirabad and Gujrat provide a big share of cutlery.
Riaz Haq said…
#Pakistan records 28% growth in #export of #cement/clinker in 8 months of fiscal year. It reached 5.94 million tons in 8MFY19-20 & can be attributed to an increase in cement exports to #Afghanistan & unprecedented surge in clinker exports to world #market https://www.cemnet.com/News/story/168502/pakistan-records-28-growth-in-export-of-cement-clinker-8mfy20.html#.XnVW9qlWhdY.twitter

All Pakistan Cement Manufacturers' Association (APCMA) has reported that country saw a growth of 28 per cent in cement and clinker exports during first eight months of the ongoing financial year 2019-20. It reached 5.939Mt in 8MFY19-20 and can be attributed to an increase in cement exports to Afghanistan and unprecedented surge in clinker exports to the global market.

However, Pakistan's Federal Bureau of Statistics is yet to release official data for the export of cement and clinker from Pakistan for the period of February/July – February 2019-29.

According to APCMA, cement exports to Afghanistan rose by 54.8 per cent to 1.737Mt 8MFY20, but exports to India remain suspended since last year. Cement exports from Pakistan to other international markets fell by three per cent to 1.297Mt. However, clinker exports continued to bode well, recording growth of 100 per cent with dispatches of over 2.904Mt clinker.

Outlook
Moving forward, the corona virus pandemic has engulfed global trade and industry. Pakistan has closed its borders with Afghanistan and Iran in a bid to stop spread of virus and this has also suspended export of cement from Pakistan to Afghanistan.

In addition, State Bank of Pakistan (SBP) is scheduled to announce its monetary policy today. The industry, including cement, is desperately expecting reduction in interest rate from 13.25 per annum following the impact of the corona virus, slowdown in the world economy, little fall in inflation, etc. If is reduced, it would greatly benefit the industry on financing front in Pakistan.
Riaz Haq said…
#Pakistan moves to save face as #coronavirus hits Belt and Road. "The world....will be a different place by the time the pandemic is over. Investment flows will shrink, and China will be one of the very few countries with available capital" #China #CPEC https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-moves-to-save-face-as-coronavirus-hits-Belt-and-Road2

The government of Pakistan has ordered the resumption of all infrastructure and energy projects that are part of China's Belt and Road Initiative, but experts believe the move is a matter of face-saving.

Work on the China-Pakistan Economic Corridor, a major piece of the Belt and Road, stopped when the novel coronavirus started to spread in Pakistan in February. According to Johns Hopkins University data, Pakistan has confirmed 9,216 cases as of Tuesday, including 192 deaths.

Naghmana Hashmi, Pakistan's ambassador in Beijing, told Pakistani media on Sunday that a number of mechanisms have been established to complete all corridor projects within the prescribed time frame. But analysts say restarting the projects at the height of the pandemic is meant to spare Beijing and Islamabad embarrassment.

----------------

Amid the economic crisis, some have questioned the economic viability of Belt and Road projects. According to the Planning Commission of Pakistan, the country's top development planning body, Chinese skilled laborers are paid 1,300% more than Pakistani laborers for the Main Line 1 (ML-1) railway project, a discrepancy it says must be rationalized.

The commission has also asked Pakistan Railways to evaluate the impact of a huge Chinese loan of almost $9 billion for the ML-1, which is the single largest infrastructure project for the corridor in the country. Pakistan expects 90% of the funding for the ML-1 to come from the Chinese loan. The commission fears the terms may saddle the country with heavy debt if it is not looked into now.

On the other hand, there are bullish voices who say that resuming Belt and Road projects is worth the risk.

Hasaan Khawar, a public policy analyst based in Islamabad, believes the corridor's special economic zones can help Pakistan solve its economic woes. "The world is changing fast, and it will be a different place by the time the pandemic is over. Investment flows will shrink, and China will be one of the very few countries with available capital," Khawar said. He added that the corridor and the zones provide a ready framework for Pakistan to attract Chinese capital and should, therefore, be a priority for Pakistan.

Malik believes that the aftermath of the COVID-19 crisis will leave China better positioned as a global power and savior of a world in deep crisis. After this, the world will see a continuation and expansion of Belt and Road projects, he says.

Kugelman sees the corridor as the most concrete and active part of the Belt and Road and says its trajectory will be shaped to a great extent by how the corridor develops. He adds that if corridor projects are put on hold until the pandemic has ended, the Belt and Road as a whole could take a pause. If they move ahead, that portends more forward movement for the initiative in the near future, Kugelman says.
Riaz Haq said…
#PAKISTAN - #Cement price up by Rs55/bag in Punjab, KP. Big difference in prices in north (Rs 505-525/bag) & south (Rs. 650/bag) regions..."we can call it that the cement sector has reached up to its old price level from where it declined.” #construction https://www.intercem.com/Intercem-Insights/News/ArtMID/683/ArticleID/1851/PAKISTAN-Cement-prices-raised-by-Rs55-per-bag-in-Punjab-KP#.Xw0C0wBNcFA.twitter

Pakistan cement manufacturers on Wednesday increased cement wholesale prices by upto Rs55/bag (or $0.375) in northern region (Punjab and Khyber Pakhtunkhwa), cement dealers confirmed to The News.



This increase would be effective from the today (Thursday). In South regions (Sindh and Balochistan) the prices have been kept unchanged, the reason being its prices are already much higher than north region. With this hike, cement prices in north region stands at average of Rs505-525 per bag.



Mohammad Ali Tabba, Chief Executive Officer of the Lucky Cement Limited, when contacted said, “Since start of March 2020, and after approval of the Ordinance, cement demand has recovered up to 90 percent, and in the north region it has recovered full demand and has even achieved 10 percent more over the last year.”



Regarding the price hike, he said that since demand for cement had eroded in first two months (Jan-Feb), while at the same time, three manufacturers including our company had made expansion in their capacities, this pushed the prices to as low as Rs450/bag in north region from earlier Rs550 to 600/bag.



He said, “We cannot say it an increase in prices, but we can call it that the cement sector has reached up to its old price level from where it declined.” He said that the manufacturers have increased the prices in the range of Rs45 to 55/bag. Our company has increased the price by Rs50 in north region.



It is worth mentioning that there is a huge difference in the prices of cement in north and south regions. Average price in south is Rs650/bag, while in north region it is now around Rs505 t0 525/bag.



A cement dealer in Islamabad told The News that the senior companies’ representatives held the meeting and they have decided the price hike. He said that Fauji cement has increased its price by Rs45/bag while all other brands including Lucky Cement, Cherat Cement, DG Khan Cement and other producers in north region have increased the prices by Rs55/bag each. He said, “After this package, the demand for construction materials has increased.”
Riaz Haq said…
306 Km #Sukkur-#Hyderabad Motorway in #Pakistan to revolutionize interior #Sindh. It will be constructed on a build-operate-transfer (BOT) basis. It will complete #CPEC eastern route from #Khunjarab Pass to #Gwadar via #Karachi - Profit by Pakistan Today https://profit.pakistantoday.com.pk/2020/07/18/sukkur-hyderabad-motorway-to-revolutionise-interior-sindh-bajwa/#.Xxh85hpt-VA.twitter

Lt Gen (r) Asim Saleem Bajwa, chairman of the China-Pakistan Economic Corridor (CPEC) Authority, said on Saturday that the Sukkur-Hyderabad (M-6) Motorway project will bring a development revolution in interior Sindh.

In a tweet, Bajwa, who is also the prime minister’s special assistant on information and broadcast, said that the 306-kilometre highway was approved in a meeting of the executive committee of the National Economic Council (NEC) which will be constructed on a build-operate-transfer (BOT) basis. BOT is a model for large-scale infrastructure projects, wherein a private entity receives a concession from the public sector to finance, design, construct, own, and operate a facility.

He said following the construction of the project, the eastern route of the CPEC (Peshawar-Karachi) will also be completed

Bajwa added that the project would also connect eastern Balochistan to the countrywide network of motorways.
Riaz Haq said…
Pakistan is facing a shortfall of ten (10) million housing units growing at a rate of 0.35 million per year.

https://www.tabadlab.com/wp-content/uploads/2019/05/Tabadlab_Mortgage-Design-Low-Cost-Housing_Working-Paper-02.pdf


The
government has announced the Naya Pakistan Housing Program (NPHP) to facilitate the construction of
five (5) million units. To assist buyers with home ownership, the State Bank of Pakistan (SBP) has relaxed
the prudential regulations that govern lending in the housing sector. The SBP policy allows for low-income
households to purchase housing units against a self-amortizing fixed rate mortgage (FRM) for a period of
12.5 years. Khalil and Nadeem (2019b) have shown that announced prices for housing units under NPHP
(Phase I), and the prevailing income levels amongst the low-income target segments, the SBP policy is not
likely to achieve its objectives.
This paper reviews international literature analyzing various mortgage designs, followed by an overview of
two options that may provide the optimum model of mortgages for low-cost units in Pakistan. A proposal for
a low-cost housing finance scheme, in light of local characteristics, is then presented along with a
framework for managing and measuring the scheme.
Instead of encouraging self-liquidating fixed rate mortgages for low-cost housing units (as recommended by
the SBP policy), the government should provide outside equity in the form of shared equity mortgages
(SEMs) to assist prospective buyers to become home owners. The joint equity in this proposed path forward
will maximize initial down payment and thus reduce the amount to be financed by banks. This will limit the
debt incidence for the borrower. Studies show that such mortgage structures increase affordability, and limit
the losses of borrowers, as well as losses to the wider economy under recessionary conditions. Additionally,
based on practices in developed mortgage markets, the amortization period of the mortgage should be
doubled from 12.5 years to 25 years. The paper concludes with a discussion on implementation modalities
and discussion points pertaining to the proposals presented.
Riaz Haq said…
Property rights for world's poor could unlock trillions in 'dead capital': economist


https://www.reuters.com/article/us-global-landrights-desoto/property-rights-for-worlds-poor-could-unlock-trillions-in-dead-capital-economist-idUSKCN10C1C1

RIO DE JANEIRO (Thomson Reuters Foundation) - When it comes to alleviating poverty and allowing people to live up to their potential, prize-winning Peruvian economist Hernando de Soto divides the world into two groups: the ones who have defined property rights and those who do not.

About two billion people have full rights to the property they live in and the land they farm, according to the director of the Lima-based Institute for Liberty and Democracy.

For the 5.3 billion who do not have such rights, the implications are stark: people are unable to leverage their resources to create wealth, and their assets become “dead capital” which cannot be used to generate income or growth.

As a result, the poor remain trapped by the “tragedy of the commons” where their unregistered assets can be stolen by powerful interests, hurting individuals and broader economic development, de Soto said.

Legally protected property rights are the key source of the developed world’s prosperity, and the lack thereof is the reason why many nations remain mired in poverty, de Soto argued.

Providing the world’s poor with titles for their land, homes and unregistered businesses would unlock $9.3 trillion in assets, de Soto estimates, an unprecedented sum to reduce poverty.

Property titles would allow the poor to use their small homes or land in order to borrow money and start businesses, he said, unlocking the entrepreneurial potential of billions of people.

“There is no such thing as an investment without property rights that are negotiable and transferable,” de Soto told the Thomson Reuters Foundation in a phone interview.


“The question is: do people own things in such a way that they can be brought into the global market and make us wealthier?”

Political leaders preparing a new 20-year development plan for urban areas, to be agreed at a U.N. conference in October, will be addressing the challenge of unequal property rights as they face demands for better living standards from a growing global urban population.

HIDDEN CONNECTIONS
In the United States, the world’s largest economy, the most important source of funds for new businesses is a mortgage on the entrepreneur’s house, de Soto wrote in his book “The Mystery of Capital”.

Small business people in Haiti, the poorest country in the Americas, in contrast, normally cannot leverage the value of their homes or land to create businesses because they lack secure property rights.

An adviser to more than 30 heads of state from South Africa to the Philippines, the 75-year-old economist said there is no clear data on whether property rights are improving or receding globally.

But a lack of these rights underpins seemingly disparate international events from the rise of religious extremism in the Middle East, to rural land rights protests in China and conflicts over “blood diamonds” in central Africa, de Soto said.

Riaz Haq said…
Are insecure property rights holding back Pakistan’s economy?
We need to attempt to reform the institutions which govern us, better property rights might be a good place to start.

https://www.dawn.com/news/1457900

Let’s start with the basics. Property rights refer to an owners right to consume, use or even sell, barter, or gift, of an asset.

Think about this way: when you buy a plot of land, you acquire right to that property. You have the right to use it, build on it, exchange it for something else, sell it or gift it.

You can legally exclude other people from using your plot of land.

The same logic can be applied to intellectual property — if you come up with an idea, access to secure property rights would give you the ability to own that idea and benefit from it.

This has enormous benefits. It incentivises people to invest in the accumulation of assets — whether it is plots of land or ideas. Because these rights are tradable, they can be marketed and efficiently allocated within the economy.

Unreal estate: The boom in Gwadar’s property market

Consider a rather common anecdotal scenario which I have often heard a version of in Pakistan.

Imagine you own an undeveloped plot of land in the centre of Lahore. From your perspective, you want to sell the land to a buyer who has the capital to invest in it, but you cannot because your property rights aren’t secure. Perhaps the ownership over the land is contested and the courts have blocked its sale.

From the larger market perspective, that land acts as dead capital. It has an opportunity to be used for an economic activity, which would generate growth, but it cannot because the property rights are insecure.

When you drive around the centre of a bustling city like Lahore or Karachi and see some plots lying empty despite economic growth, it might be a reflection of insecure private property rights.

Going away from the analogy of plots, let’s briefly talk about something which is even more critical to economic development: ideas.

Ideas reflect innovation. If you come up with something new — perhaps a smartphone application or a new way of manufacturing something — and your ideas can be stolen, you have less incentive to spend time and energy in developing them.

In this way, lack of property rights ends up disincentivising innovation.

Copycat fashion: Can we police the line between imitation and inspiration?

In England, it has been argued, though with significant detractors, that the Glorious Revolution of 1688 led to the strengthening of private property rights. Due to the the monarch's shrinking power and the strengthening of the parliament, the state's power to expropriate property was reduced.

This security incentivised commercial expansion, with people theoretically more willing to invest, take the risk and acquire more assets.

It is hard to empirically prove that property rights were the most important determinant which led to this commercial expansion. However, it is likely that it is part of the story.

Even those who disagree that property rights were at the core of the Great Divergence and part of the growth story of many other countries since then, do not argue that secure, marketable private property rights are not conducive to economic growth.

This is more than reason enough for Pakistan to strongly consider how to strengthen private property rights.

How to establish secure property rights?
There are four interlinked features suggested which would allow such protection to emerge.

First, property rights need to be well-defined. This would deter the emergence of disputes and create a common stock of knowledge on who owns what.

For example, Pakistan's notorious patwari system is essentially a manifestation of badly-defined property rights.

The system empowers a person — a land record officer — to maintain large records of property owners. These officers are ill-famed for seeking bribes to grant the right to property, creating unnecessary costs.
Riaz Haq said…
Homeownership is the Top Contributor to Household Wealth

http://www.mortgagenewsdaily.com/08282019_homeownership.asp



In 2015, 37 percent of households did not own a home and 47.1 percent did not have a retirement account.  For those who had both, the home equity and savings accounted for 62.9 percent of the household's net worth. Equity provided 34.1 percent and retirement accounts made up 28.8 percent

From there, the percentage of assets contributing to wealth drops off sharply. The third and fourth categories, stocks/mutual funds and bank accounts made up about 8.5 percent each.  Some of the most commonly held assets made up only a small portion of wealth, for example, 91 percent of households hold those fourth-ranked bank accounts while the largest contributor to wealth, home ownership was the third most commonly held asset. While the median amount of home equity was $95,800, the median value of assets at financial institutions was $4,600.

There were significant differences in worth within categories of age, gender, race, education, and employment. Having health insurance also appears to be a factor although it would be a result rather than a cause.

Unmarried female householders between the ages of 35 and 54 had a median wealth of $14,860.  That was 39.5 percent of the median wealth held by unmarried males of the same age.  That difference, however, disappeared in the 55- to 64-year old group; both unmarried women and their male counterparts had grown their net worth to about $60,000.

Non-Hispanic white and Asian householders had more household wealth by far than black and Hispanic householders.  Non-Hispanic whites had a median household wealth of $139,300 and Asians $156,300 compared with $12,780 for black and $19,990 for Hispanic householders.

Households in which the most educated member held a bachelor's degree had a median wealth of $163,700, compared with $38,900 for households where the most educated member had a high school diploma.

Not surprisingly, those households in which at least one person had a full-time job for the entire year had a higher net worth ($101,000) than those where all members had a part-time job ($61,690) or were unemployed ($22,100). Households in which people were without health insurance all or part of the year had dramatically lower median wealth: $16,860, compared with $114,000 for households in which all members had health insurance for the entire year.
Riaz Haq said…
#Pakistan #cement sales grow 33% year over year to a new monthly record 5.7 million tons in October, up from 4.4Mt in September 2020. Increased domestic and export demand as well as the speedy momentum in Pakistan's #economy. #COVID19 #construction https://www.cemnet.com/News/story/169795/pakistan-records-33-growth-in-october-cement-dispatches.html#.X6VrKNh6r18.twitter

Pakistan's domestic and overseas cement dispatches figures for October 2020 are officially yet to be released by the All Pakistan Cement Manufacturer Association (APCMA), but Lucky Cement Ltd's CEO, Mohammad Ali Tabba, has estimated a record growth to 5.7Mt, increasing from 4.4Mt in September 2020. The MoM rise of 29.5 per cent in dispatches in October was possible due to the increase in domestic and export demand as well as the speedy momentum in Pakistan's economy.

During an interview to a local broadcasting channel, Mr Tabba requested the government to announce a long-term policy for the manufacturing sector of the county as it has potential, along with textile sector, to earn US$40bn in next 4-5 years. He expressed that Pakistan's cement industry had sustained the impact of COVID-19 due to the smart lockdown policy of the government and a series of incentives announced by the Central Bank of Pakistan for short- and long-term financial support to industrialists during this period. In addition, government provided a unique package for the growth of the construction sector. Mr Tabba was optimistic that growth potential exists in all sectors as the government’s policies are conducive for their development and progress, besides some challenges on energy and agriculture sectors.

On the same lines, Pakistani business tycoon, stock trader and the founder/chairman of the AKD Group (trading and research house), Aqeel Karim Dhedhi, has confirmed the unprecedented growth in cement dispatches in
Riaz Haq said…
With a big part of the fragmented industry operating in the informal sector, it is almost impossible to estimate the exact domestic demand and supply ratio. But the industry estimates that the per capita steel consumption, according to the Pakistan Credit Rating Agency, has increased to over 43kgs (from less than 25kgs a decade back). Yet the per capita consumption remains one of the lowest in the world against the world average of over 240kgs.


https://www.dawn.com/news/1589282/bad-policy-good-intention


The steel demand has picked up sharply since June following the resumption of business activities after the decline in the Covid-19 infections in Pakistan. The unaudited accounts of some of the major companies listed on the Pakistan Stock Exchange (PSX) for the first quarter of the ongoing financial year to September confirm that the industry is on the path of quicker recovery from the severe pressures of the International Monetary Fund mandated economic stabilisation policies exacerbated by the negative impact of the coronavirus pandemic in the last quarter of the previous fiscal year.

The accounts show that the companies have recorded better top-line growth this year so far when compared with their performance during the corresponding period last year. The bottom lines of the steel manufacturers, who had suffered significant losses last year, are also turning green from red. The rebound in the fortunes of the steel firms is ascribed mainly to the pent-up demand unleashed by the Covid-19 economic stimulus package implemented by the State Bank of Pakistan (SBP), including the reduction of 6.25 percentage points in the policy interest rate to seven per cent, to fight off the effects.

“The impact of the construction and housing package announced by the government is yet to come on the steel industry,” Meher Kashif, the managing director of Model Steel, one of the largest steel companies with a manufacturing capacity of 600,000 ton, asserted during an interview with this correspondent. “The demand in the construction sector, which feeds into 35-40 allied manufacturing industries and services, remains subdued so far. The reasons are as clear as day: the public sector development spending has been slashed substantially; no new industrial project is being undertaken, and no large commercial project is coming up,” he elaborated.

Speaking about Prime Minister Imran Khan’s generous housing initiative, Kashif explained that the measures announced favoured the large corporate companies, which do not see much demand for housing in the market at this moment. The smaller contractors, who work with a capital of up to Rs100 million, do not find the package attractive enough because of requirements of documentation, he added.

“The developers and investors have used the construction package to purchase land but nobody has until now announced any major scheme. That’s why you see the land prices falling again. The government needs to find a solution to support the undocumented small builders who operate in the informal economy to construct one or two houses a year and inspire confidence and bridge the trust gap or the success of its housing initiative.”

The raft of lucrative policy, fiscal, and monetary measures announced to push-start construction and housing include no-question-asked-on-source-of-income-amnesty-scheme on the investments made in the construction industry before the end of 2020, and tax cuts and exemptions for real-estate developers and builders. These incentives were topped up later with cash support of Rs300,000 each on the first 100,000 housing units in the price range of under Rs2.5m (this does not include the cost of land) and subsidised mortgage finance for 10 years on the construction of 5-marla and 10-marla housing units.


Riaz Haq said…
Pakistan: Cement producers dispatched a record 5.74Mt in October 2020. Exports rose by 12% to 875,000t from 784,000t. The Nation newspaper has reported that the figure brings Pakistan’s total dispatches for the first four months of the 2021 financial year, from 1 July 2020 to 31 October 2020, to 19.3Mt, up by 20% from 16.1Mt in the first four months of the 2020 financial year.

The All Pakistan Cement Manufacturers Association said that cement consumption may increase further if the government rationalises duties and taxes and withdraws excise duty.

https://www.globalcement.com/news/item/11571-pakistan-dispatches-record-monthly-cement-volumes-in-2020

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