PAKISTAN: APCMA seeks govt’s help to save cement industry

KARACHI: All Pakistan Cement Manufacturers Association (APCMA) has appealed to government to remove bottlenecks impacting cement industry—as 4 out of 22 units have been shut down and the rest are on the verge of collapse due to mounting losses.

APCMA spokesman Wednesday said cement manufacturers have yet to pass on large impact of rapidly increasing input costs in coal, electricity, diesel, paper sacks and transportation cost. Current cement rates range from Rs 340 to Rs 355 per bag in different markets. Inflationary pressures in the past three years impacted rates of every item but cement industry has not been able to pass on impact of increased cost to consumers due to stiff competition among manufacturers and surplus capacity particularly in north of the country. 

He said construction activity has come to a standstill due to a drastic cut in development expenditure and increase in cement rates would further impact whatever activities are taking place. Government levies account for 30% of price of 50 kg cement bag. “These levies are highest in the region. They include federal, provincial excise duties amounting to Rs 37 per bag which is unjustified, over and above GST @17% i.e. Rs 45 per bag. In total government levies exceed Rs 80 per bag.”

He said excise duties are levied around the world to curb use of injurious or luxury items like liquor, cigarettes or high-end passenger cars, cosmetics etc. Governments world over encourage use of cement as it is major component in construction activities and construction sector is biggest employer of semi and unskilled labor force of any economy. The removal of excise duty would improve viability of industry, as instead of raising cement rates, industry will be able to maintain prevailing rates and give boost to construction business.

Spokesman warned that highly capital-intensive industry would not be able to survive unless at least reasonable profitability is assured. “More industries would close down in a year time if remedial measures are not announced immediately resulting in skyrocketing of product prices. The allegation of engineered production by certain quarters at low levels is absurd. No unit posting regular losses would like to withhold production if it could sell its product. These are testing times for cement industry and it needs all possible help, facilitation from government.”