|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.
|Cement Sales in Pakistan. Source: Bloomberg|
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.
South Asia Investor Review
Karachi's Bahria Town
M5 Motorway to Boost Pakistan's Transport Sector
Pakistan is World's Fastest Growing Steel Producer
South Asia Investor Review
Karachi's Bahria Town
M5 Motorway to Boost Pakistan's Transport Sector
Pakistan is World's Fastest Growing Steel Producer
Despite a decade of much slower economic growth than the previous one, Pakistan continues to make economic progress. You note household car ownership is now at 9%, up from 6% a few years ago. Now that the exchange rate has settled at fair market value, I expect exports to start rising sharply. The Economist just reported their year end numbers and show Indian GDP per capita as 25% higher than Pakistan, but I think much of that gap is due to bad statistics. PAkistan's GDP has not been rebased since 2006, it was supposed to rebased in 2018, but the PMLN government didnt accomplish that. At this point, the PBS has not clarified when a rebasing can or will be done. My guess is that the GDP is 20% higher than the current reported figure, which would put Pakistani and Indian GDP per capita about even.
#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).
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.
#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.
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.
#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.
#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.”
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.
Pakistan is facing a shortfall of ten (10) million housing units growing at a rate of 0.35 million per year.
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.
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.
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.
Homeownership is the Top Contributor to Household Wealth
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.
#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
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.
#Steel bars get pricier amid #construction boom in #Pakistan. Price hikes came at a time when #economic activities worth Rs1 trillion & Rs100 billion had been generated in Punjab & Khyber Pakhtunkhwa, respectively, in housing and construction projects. https://www.dawn.com/news/1593040
Manufacturers of quality steel bars increased their prices by up to Rs3,000 per tonne in November on the back of rising raw material costs in world markets and growing strength of the rupee against the dollar.
On Friday, Prime Minister Imran Khan was informed in a meeting of the National Coordination Committee on Housing Construction and Development that 6,000 apartments would be constructed in Karachi under a project called Pakistan Quarters. In the first phase, work would start on 700 residential units at a cost of Rs4 billion over the next three months.
Another meeting on the Karachi Transformation Plan (KTP) presided over by the premier was informed that more than 100 projects worth Rs1.1 trillion have been planned under the programme.
Mughal Iron and Steel Industries Chief Operating Officer Shakeel Ahmed said the company pushed up the price of good quality steel bars by Rs3,000 per tonne in November to Rs114,500-115,000 per tonne.
Ruling out the possibility of increasing the price of long-steel product to cash in on the rising demand in the northern areas owing to construction activities, he said raw material prices have risen to $370 per tonne from $330 per tonne in the last one month. It happened due to various reasons like port congestion and the fear of further lockdowns in world markets.
The management of Mughal Iron and Steel Industries had informed analysts of brokerage houses that the Naya Pakistan Housing Programme (NPHP) can potentially create 6-7m tonnes demand for long steel assuming the government builds 50 per cent of the promised houses.
The company views future demand to come from the China-Pakistan Economic Corridor (CPEC) and the five hydro dam projects. It has already won a contract for three dams. It estimates steel demand of 350,000 tonnes from Bhasha Dam and 250,000 tonnes from Mohmand Dam in the first phase.
Razaque Steels Managing Director Irshad Mowjee, who also serves as general secretary of the National Steel Advisory Council (NSAC), said his company has increased the price by Rs3,000 on two kinds of quality steel bars, which now cost Rs111,500 and Rs116,500 per tonne.
Shredded scrap prices in world markets have risen due to lockdowns in Europe and the United States. The supply of scrap has become scarce, resulting in a hike in international prices. Yards do not have materials and the incoming supply is limited, resulting in the prices going up by $40 per tonne within the last three weeks, he added.
Fearing a further increase in steel bar prices if scrap rates do not come down, he suggested that the regulatory duty on raw materials should be abolished. The duty is not justified on raw materials used in a basic industry as industrialisation is the government’s top priority.
If it is not removed, it will affect the viability of CPEC projects. Cost overruns will happen as steel is a major component, he said.
Mr Mowjee urged the government to remove the additional customs duty of 2pc as competing raw materials are exempted from it. At present, the incidence of tax is around Rs23,000 per tonne, which needs to be reduced, he added.
Shredded scrap is used for manufacturing good quality bars for infrastructure projects. Increasing prices will affect the viability of CPEC projects, he said.
Gadani supplies ship plates that are used as raw material for lower-quality steel bars. Their prices have not increased, thus making bars made from steel billets uncompetitive. This may cause a drop in the production of good quality bars for infrastructure projects, he said.
#Pakistan’s #cement sales in the 2nd quarter of fiscal year 2020-21 touched an all-time high of 15.1 million tons, up 11% quarter-on-quarter as well as year-on-year. In the first half of FY21, cement sales rose 16% year-on-year to record 28.6 million tons
Pakistan’s cement sales in the second quarter of fiscal year 2020-21 touched an all-time high of 15.1 million tons, up 11% quarter-on-quarter as well as year-on-year, according to a report of Topline Securities.
In the first half of FY21, cement sales rose 16% year-on-year to 28.6 million tons, it revealed.
“Cement prices will register a further hike as capacity utilisation is increasing robustly,” Topline Securities’ Deputy Head of Research Shankar Talreja told The Express Tribune. “The power to influence prices is with manufacturers at present.”
Industry utilisation based on total sales came in at 91%, adjusted for closed capacities, in the second quarter (Oct-Dec) of FY21. Based on just local sales, the utilisation stood at around 77% with 86% in the northern region and 48% in the southern region.
The strong growth in cement sales could be attributed to economic recovery in the face of low interest rates, announcement of a construction package, allocation of banking sector liquidity to the construction and housing sector and beginning of construction of dams, he said. In the last three months, housing loans increased by Rs43 billion, he added.
“During the outgoing quarter, coal prices surged to an average of $60 per ton compared to $55 per ton about six months ago,” he said. “As a result, fuel cost per ton for major cement companies is expected to increase by 10% quarter-on-quarter.”
To pass on the impact to consumers, the cement producers hiked prices in December 2020 by around Rs20 per bag in the north to Rs570. JS Global analyst Arsalan Ahmed told The Express Tribune that steel prices were on the rising trend.
Pakistan Large-Scale Steel Producers (PALSP) Secretary General Syed Wajid Bukhari said due to shortage of scrap globally, its price had risen above $500 per ton and as a result, rebar rates were increasing in Pakistan. “Local companies, however, are working at margins of less than 5%,” he said.
He added that Pakistan was almost totally dependent on imported raw material for producing steel and requested the government to take urgent measures to contain the impact of price hike on the mega infrastructure projects as well as other ongoing construction projects.
The industry suggested to the government to remove sales tax for some time and reduce the cost of electricity to offset the impact of soaring raw material prices, which was a global phenomenon, he said.
However, the government did not take any measures to address the situation, he lamented.
“We believe that the steel sector has been ignored as it is not receiving much-needed attention from the government,” he said.
Recently, the demand for steel picked up but margins remained very low and most of the large units were working at 50-60% of their capacity, he said.
“In recent months, steel prices have increased by 55% in India,” he said. “In the US, prices are likely to touch $1,000 per ton, which is twice the rate being charged a few months ago.”
#Pakistan #Cement sales jump 44.4% in March to 5.773 million tons from 3.722 million tons in the same period last year with huge increase in domestic consumption and exports. Total cement sales in July20-March21 were 43.325m tons, up 17% from last year. https://profit.pakistantoday.com.pk/2021/04/03/cement-sales-grow-record-44-4pc-in-march/#.YGh4wYZSux8.twitter
The cement sector posted the highest-ever monthly growth of 44.39 per cent in March at 5.773 million tonnes from 3.722m tonnes in the corresponding period last year due to a massive increase in domestic consumption and exports.
According to a local media report that compiled data released by the All Pakistan Cement Manufacturers Association (APCMA), local cement dispatches in March 2021 stood at 4.563m tonnes, up by 42pc compared to 3.214m tonnes in the same period last year whereas, exports surged by 60pc from 507,480 tonnes in March 2020 to 810,962 tonnes in March 2021.
During the month under review, cement mills in the North dispatched 3.809m tonnes to local markets against 2.749m tonnes in March 2020, up by 38.52pc. In March 2021, south-based mills dispatched 753,704 tonnes in domestic markets, which was 62.28pc higher than 464,440 tonnes in the same period last year.
Exports from North-based mills registered an enormous increase of 162.58pc as the volumes increased from 106,759 tonnes in March 2020 to 280,330 tonnes in March 2021.
Exports from the South rose by 32.42pc to 530,632 tonnes in March 2021 from 400,721 tonnes during the same month last year.
During the first nine months of the current fiscal year (9MFY21), total cement dispatches (domestic and exports) were 43.325m tonnes that was 17pc higher than 37.035m tonnes during the corresponding period of last fiscal year.
Pakistan’s cement production capacity to increase to 99Mt/yr
The All Pakistan Cement Manufacturers Association (APCMA) says that the country’s installed cement production capacity will reach 99Mt/yr within the next few years, with most of the planned work to be completed by mid-2023. The Dawn newspaper has reported that producers are launching new cement plant projects and expanding existing plants with a total new capacity of 18Mt/yr. Upon completion, the current projects will increase domestic cement production capacity by 43% to 99Mt/yr from 69Mt/yr. 94Mt/yr of the new capacity is situated in Northern Pakistan and 5.0Mt/yr in Southern Pakistan.
APCMA says that the reason behind the new expansion cycle is estimated annual sales growth of 10 – 15% from 2021.
Cement makers to expand production capacity by 40pc
Pakistan’s cement producers plan to expand their capacity by more than 40 per cent from nearly 69 million tonnes to nearly 99m tonnes over the next several years in anticipation of 10-15pc growth in their sales every year, claims an All Pakistan Cement Manufacturers Association (APCMA) official.
Speaking with Dawn, the APCMA official, who requested anonymity, said almost every cement manufacturer had planned to increase their production capacity through greenfield and brownfield projects. Many projects, especially the brownfield ones, are expected to come on line in the next two years, adding nearly 18m tonnes to the existing capacity.
“Almost 95pc of the new capacity is being planned in the north – mostly in Punjab – where the most growth in demand is coming,” he said.
According to him, the industry was of the view that cement sales will spike as construction activity picks up further going forward on the back of a generous housing package announced last year by the prime minister to help the economy to recover from the Covid-19 pandemic impact. The announcement of mega infrastructure schemes and resumption of work on CPEC related projects and dams too are driving the industry sentiment.
The massive reduction of 625bps in the central bank’s policy rate from 13.25pc to 7pc during March and June last year to offset the impact of the Covid-19 pandemic as well as the availability of cheaper long-term financing for new and old projects under the Temporary Economic Refinance Facility (TERF) initiative, which has diluted the borrowing cost of the industry across different sectors, have also contributed to the cement producers’ decision to undertake expansions.
Most cement makers have already disclosed their expansion plans through bourse filings over the last few months.
The new investments represent the fourth expansion cycle by the cement industry.
Cement dispatches have consistently been rising since the resumption of economic activities last summer ever since the Covid-19 curbs on the construction industry, and other businesses, were lifted. Total cement dispatches – domestic and exports both – jumped 19pc to 48.3m tonnes during the period between July and April from 40.5m tonnes a year ago. Domestic sales are up by almost 19pc to 40.2m tonnes and exports by about 20pc to 8m tonnes.
#Pakistan #cement consumption grows by 13% in June to 5.211 million tons from 4.623Mt in June 2020. Cement sales jumped 20% to 48.119Mt in 11MFY21 from 39.96Mt from 11MFY20. #ImranKhan's #NayaPakistan Housing & PSDP allocation boosted #construction.
Pakistan’s cement sector posted a robust YoY growth of 12.73 per cent in June 2021, as total dispatches rose to 5.211Mt against 4.623Mt in June 2020. Cement dispatches rose by 20.40 per cent to 48.119Mt in 11MFY21 from 39.96Mt during the eleven months of the last financial year 2019-20, according to data released by the All Pakistan Cement Manufacturers Association (APCMA).
The rise is attributed to construction activities under the Naya Pakistan Housing Scheme (NPHS), vital government initiatives, and in anticipation of higher Public Sector Development Program (PSDP) allocation for the year 2021-22.
Intermarket Securities Ltd also supported the same growth sentiment and argued that the construction sector will remain in the limelight as cement dispatches continue to grow on the back of a normalisation of construction activities. This has been led by the relief package announced by the government coupled with progress on the NPHS.
An APCMA spokesman said that FY20-21 had been a good year for cement, as demand has grown considerably. The cement industry is expanding its capacity from 70Mt to around 100Mt. The expectation is that the market will increase by 15 per cent annually for the next three years due to an increase in projects funded by the PSDP and China-Pakistan Economic Corridor (CPEC), as well as expanding housing and industrial demand.
According to APCMA, exports also increased from 7.847Mt during the financial year 2019-20 to 9.314Mt during the outgoing financial year 2020-21, showing a growth of 18.69 per cent. Pakistan usually exports cement overland to Afghanistan and by sea to the Middle East, Africa, and South and Central Asia.
#imrankhanPTI's #NayaPakistan #Construction Bet Boosts Investment. #Pakistan’s cement production capacity to grow by 31% to 91 million tons a year after announced expansions are completed. Pak home mortgage grew by 18% to a record Rs. 97.8 billion in May https://www.bloomberg.com/news/articles/2021-07-13/khan-s-construction-bet-sees-cement-firms-boosting-investment
#imrankhanPTI's #NayaPakistan #Construction Bet Sees #Cement Firms Boosting #Investment. #Pakistan’s cement production capacity will increase by 31% to 91 million tons a year after the announced expansions are completed. #economy https://www.bloomberg.com/news/articles/2021-07-13/khan-s-construction-bet-sees-cement-firms-boosting-investment
A group of 19 cement manufacturers have seen their shares rise 67% in the past year, compared with the KSE-100 Index’s 30% gain. About 1,000 projects have registered under the government initiative with the boom just about to start on the ground, according to Mohammed Hassan Bakshi, a member of Khan’s Naya Pakistan Housing Program.
Pakistani cement companies are investing to expand capacity a year after Prime Minister Imran Khan chose the construction sector to stimulate the economy.
Lucky Cement Ltd., Bestway Cement Ltd., and D.G. Khan Cement Co. are among more than half-a-dozen firms to announce plans in recent months. Pakistan’s cement production capacity will increase by 31% to 91 million tons after the announced expansions are completed, according to Insight Securities Pvt.
Khan’s government last year said it will subsidize low-cost housing and forgive tax evaders if they invest in construction projects. Banks have also been asked to increase their outstanding mortgages by at least 5% by December. Cement stocks have outpaced the nation’s benchmark index.
“Construction-related activities have a very, very big multiplier effect in emerging economies,” said Waleed Saigol, director at Maple Leaf Cement Factory Ltd. “The government has realized that the private sector has to play a leading role in getting the wheels turning again.”
The construction boom is also having other effects. Pakistan’s consumer home finance, which is one of the lowest in South Asia, has increased by 18% to a record 97.8 billion rupees in May, according to Foundation Securities Pvt. The country has also seen its first real estate investment trust in more than six years.
The nation’s economic growth is “supported by a continued strengthening of domestic consumption and resilient manufacturing and construction activity,” Fitch Ratings Ltd. said in May. However, a fresh wave of Covid-19 cases “could disrupt the positive momentum.”
#Pakistan #cement industry's total capacity is currently at 69 million tons, and a further 18 million tons of capacity is in the pipeline. This will take total production capacity to 87 million tons by FY24. #construction #infrastructure #housing #economy https://www.cemnet.com/News/story/171425/pakistan-is-entering-a-new-cement-capacity-expansion-phase.html
In a cement conference, conducted by AKD Securities Ltd CEO, Muhammad Farid Alam, on 15 September 2021, Pakistan's cement industry producers confirmed that the country has entered another expansion phase. The total installed capacity of the cement industry in Pakistan is currently at 69Mta, and a further 18Mta of capacity is in the pipeline. This will take total production capacity to 87Mta by FY24.
Atif Kaludi, CFO of Lucky Cement Ltd, Muhammad Rehan, CFO at Attock Cement Pakistan Ltd, Shamail Javed, CFO at Gharibwal Cement Ltd, and Inayatullah Niazi, CFO at DG Khan Cement Ltd verified that the next expansion phase was imminent.
In FY21 Pakistan's cement sales grew by 20 per cent YoY to 57.4Mt. For FY22 experts expect demand to grow by 10 per cent YoY. They estimated that if demand continues to increase by 10 per cent each year, the industry will reach 100 per cent capacity utilisation by FY26.
Lucky will incur capex of PKR23bn (US$136.99m) for its upcoming cement expansion, of which approximately 50 per cent is funded through Temporary Economic Relief Financing (TERF) and Long Term Financing Facility (LTFF) facilities. The development is expected to commence operations by December 2022, Atif Kaludi added.
Cement expansion of 4250tpd is expected to come online by January 2024. Similarly, a solar plant of 20MW is expected to go online by October 2021, said Muhammad Rehan.
According to Shamail Javed, GWLC's announced expansion is subject to board approval. If the board approves, it will take two years to start commercial production.
DG Khan Cement
The company is expected to start construction of a project from next year. The 10,000-14,000tpd is expected to come online by FY25. The total cost of the project is expected to be US$250m and will be financed through a combination of debt and equity, said Inayatullah Niazi.
#Pakistan domestic #cement sales during August 2021 increased to 3.814 million tons from 2.805 million tons in August 2020, showing a healthy increase of 35.98%. #construction #infrastructure #housing https://tribune.com.pk/story/2318570/cement-sales-surge-228-in-august
The cement sector posted a growth of 22.77% in August 2021 as total cement dispatches were recorded at 4.336 million tons against 3.531 million tons in the same month of previous year.
According to data released by the All Pakistan Cement Manufacturers Association (APCMA), local cement sales during August 2021 increased to 3.814 million tons from 2.805 million tons in August 2020, showing a healthy increase of 35.98%.
Exports, however, continued to decline as the volumes fell from 726,687 tons in August 2020 to 521,468 tons in August 2021, decreasing by 28.24%.
During August 2021, the north-based cement mills dispatched 3.141 million tons to domestic markets, an increase of 25.42% over 2.504 million tons in August 2020.
South-based mills dispatched 673,572 tons of cement to local markets during August 2021, registering a robust increase of almost 124% compared to sales of 300,750 tons in August 2020.
Exports from north-based mills declined 33.14% as shipments dropped from 212,076 tons in August 2020 to 141,804 tons in August 2021. Exports from south decreased 26.22% to 379,664 tons in August 2021 from 514,611 tons in the same month of last year.
Read Cement, steel price hike worries construction sector
During the first two months of current fiscal year, total cement dispatches (domestic and overseas) were 8.235 million tons, which were 1.61% lower than the 8.37 million tons dispatched during the corresponding period of last fiscal year.
North-based mills sold 6.033 million tons of cement in domestic markets during the first two months of current fiscal year, showing a slight increase of 1.57% than the dispatches of 5.939 million tons during July-August 2020.
Exports from north declined by 17.16% to 277,422 tons during July-August 2021 compared with 334,899 tons exported during the same period of last year.
Domestic dispatches by south-based mills during July-August 2021 were 1.228 million tons, showing a healthy increase of 50.01% over 818,600 tons dispatched during the same period of last fiscal year.
There was, however, a massive decline of around 45% in exports from the south zone as the volumes reduced to 696,823 tons in the first two months of current fiscal year from over 1.277 million tons during the corresponding period of last fiscal year.
An APCMA spokesperson said that the landed price of coal, a major input for the cement mills, which cost around Rs18,000 per ton in August 2018 has increased multiple times since then and the current landed cost comes to around Rs31,500 per ton, increasing the cost of production by approximately Rs90 per bag.
Similarly, the electricity rate, which was Rs11.68 per unit in August 2018, is now Rs19.40 per unit. This has impacted the cost of production by around Rs35 per bag.
Read more Tarin stresses need for cut in cement prices
Other input costs like packing material, provincial taxes on raw material and fuel prices have also gone up, which has increased the overall cost of production.
He emphasised that the current demand for imported coal from the cement sector is around 8.120 million tons but there is only one terminal in the country to handle all coal shipments.
Due to this, the cement industry is continuously facing delays in unloading coal shipments, resultantly paying demurrages and incurring extra costs on its operations.
#Pakistan #cement production has grown from 35 million metric tons in 2015 to 55 million metric tons in 2021. #CPEC #NayaPakistan #housing #infrastructure #construction #exports https://www.globalcement.com/news/item/13839-update-on-pakistan-march-2022
Update on Pakistan, March 2022 - Cement industry news from Global Cement
(Graph in the article shows Pakistan cement production growth from 35 million tons in 2015 to 55 million tons in 2021)
Data from the All Pakistan Cement Manufacturers Association (APCMA) shows that cement despatches have been steadily growing since the mid-2010s with a blip in 2020 caused by the start of the Covid-19 pandemic. The upward trend has been driven by local sales. Exports have generally grown at the same time, with more variance, but they are yet to regain the high of nearly 11Mt reported in 2009. On a rolling annual basis, local sales have remained steady since mid-2021 but exports have been slowly falling. In April 2021 they were 9.17Mt but by February 2022 they were 7.33Mt. For the February 2022 figures APCMA blamed this on the growing cost of production, rising international freight rates, mounting coal prices and a trade ban with India. On that last point for example, Pakistan-based producers exported 1.21Mt of cement to India in the 2017 – 2018 financial year before exports stopped after February 2019. Despite a brief respite in the spring of 2021 talks are still ongoing to resume trade with India.
On the corporate side the country’s largest cement producer by capacity, Lucky Cement, drew the same conclusion as the APCMA with its half-year results to 31 December 2021. Its local sales volumes were down a little but its exports were down a lot. It noted that the reason its local sales were falling but national industry local sales were up slightly was due to some competitor plants being non-operational in the previous year. However, the company managed to keep sales revenue and earnings increasing year-on-year by successfully combating growing input costs with price rises. Bestway Cement, the country’s other large producer, reported a tougher situation in the second half of 2021, with both local sales and export volumes down. This was attributed to a boom in construction activity in the second half of 2020 as Covid-19 lockdowns were eased. Demand for cement since then was said to be ‘sluggish’ due to inflation and high commodity prices. It also pinned its marked fall in exports on political and economic instability in Afghanistan. However, turnover and operating profit were both up due to higher selling prices.
Elsewhere in the sector news since the start of 2021, Pakistan’s exports to South Africa remained stymied in early 2020 due to a review of ongoing tariffs and the government decision to restrict infrastructure projects to only using locally produced cement. On the sustainability front the APCMA started to set out its decarbonisation strategy in November 2021. It may have a long way to go given that a think tank reported earlier in the year that the cement sector was the largest emitter of coal-related CO2 emissions in the country, even more than power generation. Alongside this plenty of capacity additions have been announced. Lucky Cement started commercial cement production at its 1.2Mt/yr integrated Samawah cement plant in March 2021. Various new cement plants and upgrades to existing plants have been proposed by Bestway Cement, Cherat Cement, Fauji Cement, Kohat Cement Company, Lucky Cement and Maple Leaf Cement. Finally of note to a sector troubled by energy prices, in September 2021 the Pakistan International Bulk Terminal said it was going to upgrade its coal handling capacity to around 17Mt/yr by 2024.
Since the 1990s, the federal and provincial governments in Pakistan have sought to encourage private sector participation in development projects and in the provision of public infrastructure and related services in Pakistan. Beginning in the 2000s, several legal and regulatory changes have been made to expand the use of public–private partnerships.
As of 2020, the federal government and all four provincial governments have passed PPP-specific legislation, formalising and enabling the regime, including by creating independent statutory bodies to facilitate, support and promote PPPs. At the federal level, the Public Private Partnership Authority (the PPP Authority) was set up in 2017 under the Public Private Partnership Authority Act, No. VIII of 2017 (the 2017 PPP Act). The PPP Authority replaced the Infrastructure Project Development Facility (IPDF), formed by the federal government in 2006 to facilitate PPPs. The 2017 PPP Act was subsequently amended through the Public Private Partnership Authority (Amendment) Act, 2021 (the 2021 Amendment Act), to create a more facilitative PPP regulatory framework and make it more amenable to private investment in development projects.
Traditionally, PPPs in Pakistan have been particularly common in the energy, power generation and transportation sectors. In fiscal year 2019–2020, 17 infrastructure projects involving private investment reached financial closure.2 The power sector made up the largest investment share with a total investment amount of US$5 billion.3 In recent years, though, the government has expressed a commitment to using PPPs in many more sectors including aviation, technology, healthcare, tourism and others. In late 2019, the Prime Minister approved a development plan, expected to run from fiscal years 2020 to 2023, termed the Public Sector Development Programme Plus (PSDP+) initiative, firmly orienting the government towards PPPs across sectors.4
In addition to the federal initiative, each of the four provinces – Sindh, Punjab, Balochistan and Khyber Pakhtunkhwa – has its own specific roster of projects and policies to promote PPPs. In accordance with the Constitution, PPPs in the areas enumerated in the Federal Legislative List fall within the domain of the federal government, while other areas generally fall under the domain of the provinces. This chapter focuses on the federal regime as exemplary of other models, but where relevant, also references the provincial regimes.
The year in review
According to information available on the PPP Authority's official website, at the federal level, 47 PPP projects are in the pipeline across sectors out of the 105 PSDP+ portfolio federal projects.5 Additionally, the PPP Authority lists a number of 'early harvest' projects that it is assisting with, including:
the construction of the Sukkur Hyderabad Motorway (expected cost around US$1.2 billion);
the construction of the Sialkot Kharian Motorway (expected cost around US$225 million);
the construction of a teaching and research hospital;
the construction of an innovations ecosystem (science and technology park);
the conversion of a guesthouse located in Lahore (the provincial capital of Punjab province) into a hotel;
the creation of a mass transit facility in a major city, the Karachi Circular Railway; and
the modernisation of the current Karachi–Pipri Rail Track.6
Previous projects finalised by the IPDF include:
the overlay and modernisation of the Lahore Islamabad Motorway (investment of US$460 million), which has been in operation since 2016;
the construction of the Lahore Sialkot Motorway (investment of US$438 million), which is in operation now;
the conversion of an existing four-lane super highway into a six-lane Karachi Hyderabad highway (investment of US$430 million), which has been in operation since 2017; and
the construction of the Habibabad Flyover (investment of US$8 million), which has been in operation since 2014.7
Pakistan - Operational Design for the Project Development Fund and for the Viability Gap Fund
This final report is the fifth deliverable for the World Bank funded project 'operational design for the project development fund and for the viability gap fund'. Taking into account feedback and further consideration of issues rose in the previous Reports, it aims to: provide high level recommendations on the overall Public Private Partnership (PPP) framework in Pakistan, recognizing international best practice but also taking into account the specific Pakistan context and the challenges faced their-in; provide the analysis of the project pipeline for PPP projects in Pakistan, on the basis of consultations undertaken in Islamabad in May 2009; and design possible structures for the Project Development Fund (PDF) and for the Viability Gap Fund (VGF), that is informed by the current local enabling environment for PPPs, including the institutional capabilities and the existing pipeline of PPP projects. This final report incorporates feedback from the World Bank and the Government of Pakistan on each of the above-listed issues, which were set out and discussed in details in previous reports.
Pakistan allocates Rs800 billion for FY23 PSDP
June 11, 2022
The country presented the federal budget 2022/2023, which envisages PSDP worth 800 billion rupees for the next fiscal year.
It has been centered on improvement in sectors such as water resources, transport and communication, energy, higher education, health, science and technology, and balanced regional development.
The emphasis of PSDP is also on revival of CPEC and related projects for inter-provincial and regional connectivity with equal importance to Special Economic Zones to promote trade, industrialization and create job opportunities.
The major thrust in the Information and Communication Technology sector including establishment and operations of Special Technology Zones.
Under the PSDP, the government has allocated 44.179 billion rupees including foreign aid of 1.3 billion rupees to the Higher Education Commission for implementation of 151 development projects.
The allocation indicates an increase of one hundred percent over the last year.
An allocation of over 197 billion rupees has been made for 117 power related projects.
These include hydro power generation projects such as Diamer-Bhasha, Mohmand, Nai Gaj and the fifth extension of Tarbela. Initiatives like developing water storages, automatic telemetry system, rainwater harvesting, decreasing water losses, ground water regulation and management would be undertaken in consultation with the stakeholders.
Over nine billion rupees have been earmarked for Ten Billion Trees Tsunami Programme Phase-I to achieve the target of planting 500 million trees.
Similarly, over 563 million rupees and over 1.2 billion rupees have been allocated for installation of weather surveillance radars at Multan and Sukkur respectively.
The Federal PSDP has also proposed an amount of 1.5 billion rupees to complete the emergent nature of small flood schemes all over Pakistan.
An allocation of 227 billion rupees has been made for strengthening efficiency of transport and logistics for domestic commerce and regional connectivity.
The high impact infrastructure projects to be completed under Public Private Partnership mode include Sukkur-Hyderabad Motorway, Sialkot-Kharian Motorway, Kharian-Rawalpindi Motorway, and Karachi Circular Railway. Under the CPEC, D I Khan-Zhob section is under discussion with the Chinese side for financing and it is expected to be launched in the next financial year.
The concessional financing agreement for landmark ML-1 project is to be finalized in the second quarter of the next fiscal year and subsequently arrangements will be made for groundbreaking of the project.
A comprehensive National Action Plan for agriculture modernization has been prepared in terms of capacity building, agricultural product processing technology extension, fishery science and technology, aquaculture and aquatic products processing.
Cement production & sales in FY 2021-22
Total local dispatches during July-March FY2022 slightly decreased by 0.03 percent to
36.17 mt from 36.18 mt last year. While, total exports clocked in at 4.64 mt (-35.04
percent) against 7.15 mt during the same period last year. Local dispatches from the
northern region decreased by 2.27 percent, while southern region dispatches surged by
12.3 percent. Exports from the north nosedived by 64.5 percent, while south witnessed
fall of 24.3 percent growth during the period.
Cumulative dispatches (local & exports) posted a decline of 5.8 percent and reached
40.82 mt during July-March FY2022 against 43.32 mt in the corresponding period.
Table 3.9: Cement Production Capacity & Dispatches (Million Tonnes)
2006-07 30.50 79.23 21.03 3.23 24.26
2007-08 37.68 80.14 22.58 7.72 30.30
2008-09 42.28 74.05 20.33 10.98 31.31
2009-10 45.34 75.46 23.57 10.65 34.22
2010-11 42.37 74.17 22.00 9.43 31.43
2011-12 44.64 72.83 23.95 8.57 32.52
2012-13 44.64 74.89 25.06 8.37 33.43
2013-14 44.64 76.79 26.15 8.14 34.28
2014-15 45.62 77.60 28.20 7.20 35.40
2015-16 45.62 85.21 33.00 5.87 38.87
2016-17 46.39 86.90 35.65 4.66 40.32
2017-18 48.66 94.31 41.15 4.75 45.89
2018-19 59.74 78.48 40.34 6.54 46.88
2019-20 63.63 75.14 39.97 7.85 47.81
2020-21 69.26 82.93 48.12 9.31 57.43
2020-21 69.26 83.41 36.18 7.15 43.32
2021-22 51.94 78.58 36.17 4.64 40.82
Source: All Pakistan Cement Manufacturers Association (APCMA)
3.5 Small and Medium Enterprises
Small and Medium Enterprises (SMEs) are indispensable to the progress of the nation as
it contributes significantly to the economic and social development of the country in a
myriad way: create employment opportunities, foster human resource development and
stimulate value addition to the economy.
To support SMEs to play their due role in economic development, Small and Medium
Enterprises Development Authority (SMEDA) has taken various initiatives.
Pakistan’s 🇵🇰 D.G. Khan to Export Cement to U.S. for the First Time
The cement maker is in process to ship 50,000 tons of the building material to the US 🚢
In a first: Pakistan's D.G. Khan to export cement to US: report
Ship is being loaded at Karachi port for delivery to Houston, says CFO
D.G. Khan Cement Company is in process to ship 50,000 tons of cement to the US, reported Bloomberg on Tuesday, a welcome development for Pakistan that is desperately seeking an increase in exports in the face of a widening trade deficit that has pushed the rupee to record lows.
Company CFO Inayat Ullah Niazi stated that a ship was currently loading cement at a port in Karachi for delivery to Houston, added the report.
The development comes at a time when the country's exports registered negative growth of 10.22% on a monthly basis in May 2022, clocking in at $2.6 billion from $2.897 billion in April 2022, according to latest figures released by the Pakistan Bureau of Statistics (PBS).
D.G. Khan Cement, one of Pakistan's largest cement makers, posted a 26% higher profit during the nine-month period that ended March 31, 2022 with earnings amounting to Rs4.1 billion. The company had posted earnings of Rs3.25 billion in the same period of 2020-21.
In 2020, DG Khan Cement won orders for export of cement to the Philippines.
Meanwhile, in a report published earlier, JS Global analyst Muhammad Waqas Ghani stated that continuously rising coal prices and rupee depreciation have led to the procurement of coal at higher rates by cement manufacturers, requiring them to raise domestic prices by Rs40 per bag during the last few weeks.
With an almost 50% (Rs300 per bag) increase in the last 12 months, further price increments would be needed to neutralise the coal cost impact, if prices remain elevated, added Ghani.
"If coal prices stay at these high levels, 4QFY22 profitability will likely be impacted given higher average cost of coal inventory."
Pakistan’s cement dispatches drop in 2022 financial year
According to the dispatch split, northern-based mills shipped 39.44Mt of cement domestically during the FY21–22, which is 2.8% less than the 40.58Mt shipped during the FY20–21. From FY21–22 to FY21–22, the north’s exports decreased by 64.5% to 910,685t, compared to 2.56Mt exported in the prior fiscal year.
Domestic shipments by southern-based mills in FY21–22 totaled 8.19 Mt, up 8.7% from 7.53 Mt of cement in the prior fiscal year. However, exports from the southern zone had a significant reduction of about 35.6%, falling from 6.74Mt in the fiscal year to 4.34Mt in FY21-22.
NHA gears up to link CPEC M-14 with Pakistan-Afghanistan border
ISLAMABAD: The federal government has decided to connect Ghulam Khan in North Waziristan with Motorway 14 (M-14), a project of the western alignment route of China-Pakistan Economic Corridor (CPEC) via a 184km-long Motorway.
According to Gwadar Pro on Tuesday, the National Highway Authority (NHA) on Monday issued a request for proposal (RFP) of consultancy services for the Feasibility Study and Detailed Design for the Construction of the Motorway from Ghulam Khan to Esa Khel Interchange (184km approx).
The project will be financed by the Federal Government through PSDP 2022-23 through separate head/allocation.
In this regard, a pre-proposal conference on the project will be held on July 19, 2022, at NHA headquarters in Islamabad while procurement will be carried out by adopting the “Single Stage Two Envelops” procedure.
The proposals complete in all respects in accordance with the instructions provided in the RFP document in sealed envelopes, which should reach on or before August 10, 2022.
Esa Khel Interchange is located over M-14 in Mianwali district of Punjab, which is in proximity to the Lakki Marwat district of Khyber Pakhtunkhwa (KP). Between Mianwali and Ghulam Khan falls Bannu district of KP. After Torkham and Chaman, Ghulam Khan is the third most important crossing between Pakistan and Afghanistan.
Afghanistan has already started benefiting from Gwadar Port and the country received the first consignment of bulk cargo from the United Arab Emirates in July 2020. Ghulam Khan crossing, at the Pak-Afghan border point, is the shortest route connecting CPEC’s western route with Afghanistan, Central Asian States and beyond.
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