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News Pakistani cement exports fell by 26% in May 2015

Pakistani cement exports fell by 26% in May 2015

Written by Global Cement staff 08 June 2015
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Pakistan: Cement exports fell by 26.1% to 560,000t in May 2015 as cheap Iranian cement is eating Pakistan's market share in Afghanistan, according to the All Pakistan Cement Manufacturers Association (APCMA). Pakistan exported 750,000t of cement in May 2014.

"Iranian cement is fast making inroads into Afghanistan," said an APCMA spokesperson. APCMA data showed that exports dropped by 10.8% to 6.64Mt between July 2014 and May 2015. Cement makers exported 7.44Mt in the same period of the 2013 – 2014 financial year.

The APCMA appealed to the government to support local manufacturers in winning back the Afghan market by withdrawing duties, which would enable them to compete with highly-subsidised Iranian cement. There is a 5% federal excise duty and a 17% general sales tax on the retail price of cement. "The taxes are equal to around US$1.56/bag," said the spokesperson. "The incidence of high taxation encourages evasion and negatively impacts consumption." He added that the government should gradually bring federal excise duty to zero, as announced by the previous government.

Exports from the south increased by 4.5% in the July 2014 to May 2015 period. These exports go via the sea. However, exports from the north decreased by 18.3% due to the Iranian cement factor, as exports from the north usually go to Afghanistan. The spokesperson said that Iran is also dumping its cement in Balochistan, Pakistan and that cement smuggling from Iran to Balochistan is resulting in substantial losses to national exchequer. "Policy makers ignored warnings from the cement industry over the inundation of Iranian cement in Afghanistan," he said. "It has penetrated our local market." He said that full taxes are not paid on Iranian cement imports.

A road trailer entering Pakistan from the Taftan border carries up to 60t of cement. A transporter issues two different weight loads receipts, one for the customs department and another one for freight purposes. The APCMA said that if taxes are fully paid, the price of Iranian cement is equal to that of domestic cement.

Pakistani cement manufacturers dispatched 2.49Mt of cement in May 2015 compared to 2.3Mt in May 2014, up by 8%. Cement sales were 25.5Mt in the 11 months that ended on 31 May 2015, compared to 23.6Mt in the corresponding 2013 – 2014 period, depicting over 8% growth.

Last modified on 09 June 2015
Published in Global Cement News
Tagged under
  • Pakistan
  • Export
  • All Pakistan Cement Manufacturers Association
  • APCMA
  • Afghanistan
  • Iran
  • GCW204

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