Karachi: Mr. Aizaz Mansoor Shaikh, Chairman All Pakistan Cement Manufacturers Association (APCMA) has said that Cement price compared with other building material and essential commodities showed much lower increase in last few years.
On average, cement price increase of 6.28 percent compared with steel rates raised by 15.90 percent while bricks cost up by 13.14 percent since the year 2000 till the first half of the current fiscal. Similarly, the cost of other commodities including urea and sugar also grew by 14.95 and 12.29 percent respectively in the same period, he mentioned.
APCMA chief said that the input cost over the years has raised tremendously as diesel prices increased by 94.3 percent in 2011-12, 81.4 percent in 2010-11, 69.3 percent in 209-10, 60.6 percent in 2008-9, 40.8 percent in 2007-8. Power rates went up by 8.74 percent in 2011-12, compared to 5.18 percent in 2007-8 while coal jumped up by 111.2 percent in 2011-12.
On the contrary, cement per bag rates rose by just 6.28 percent from Rs328.5 in 2008-9 to Rs350 in 2011-12. If we see further past four years the cement prices registered growth of 23.1 percent in four years i.e. from 2005-6 to 2008-9, as it rose to Rs328.5 from Rs252.1.
Shaikh said that the industry produced 17.94 million ton of cement in the first seven months of this fiscal ending on January 2012. This, he informed, is only 3.94 percent higher than the production during corresponding period of last fiscal. He said that the surge of 7.21 percent in domestic demand of cement was offset by 3.59 percent decline in exports.
He pointed out that the cement sector continues to operate below 70 percent installed capacity in January 2012 while most of the manufacturers are not recovering even full input cost. He said that the cement industry paid heavy price for the expansion in production capacity that was planned on the assumption that the economy would grow at an average of 6 percent or above. Unfortunately, he added, the economic growth has averaged 2.5 percent during past four years that suppressed the demand for cement in the local market.
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