Displaying items by tag: Afghanistan

Iran/Afghanistan: Exports of cement from Iran to Afghanistan have increased following the resumption of US-led sanctions on Iran. Speaking on Afghanistan’s Tolo News TV, Janagha Navid, the spokesman of Afghanistan's Chamber of Commerce and Industries, said that Afghanistan imports 80,000t/yr of cement, while stressing that the country’s domestic cement production capacity could increase to 420,000t/yr.

Navid added that cement imports from Pakistan had decreased, while imports from Iran had risen, due to depreciation of the Iranian Rial against foreign currencies. He further highlighted that Afghan customers prefer Iranian cement over Pakistani cement, citing quality considerations. In 2018, Iran exported US$127m-worth of cement to Afghanistan, broadly similar to imports from Pakistan, which came to US$132m.

Tajikistan: The Ministry of Industry and New Technologies (MOINT) says that Tajik-Chinese joint ventures Chzhungtsai Mohir Cement, Huaxin Gayur Cement, and Huaxin Gayur Sughd Cement accounted for nearly 85% of local cement production in the first three months of 2019. Overall production grew by 9% year-on-year to 0.84Mt from 0.75Mt in the same period in 2018, according to the Asia-Plus News Agency. Around 36% of production was exported with more than 150,000t of cement to Uzbekistan, more than 140,000t of cement to Afghanistan and nearly 12,000t of cement to Kyrgyzstan. Tajikistan has 13 cement plants with a total production capacity of 4.7Mt/yr.

Pakistan: Cement despatches fell by 9% year-on-year to 34.6Mt in the nine months to the end of March 2019 from 34.8Mt in the same period to March 2018. Data from the All Pakistan Cement Manufacturers Association (APCMA) shows that despatches and exports fell in both the north of the country but that despatches fell and exports rose in the south. Exports more than doubled in the south to 3.14Mt. This was due to a reported start in seabourne clinker sales in the 2018 – 2019 year. Otherwise, overall cement exports to Afghanistan and India declined.

Afghanistan/Pakistan: The share of exports of cement from Pakistan to Afghanistan fell to 24% in the first eight months of the current 2019 Pakistan financial year compared to 48% in the 2018 period. The Cement Manufacturers And Export Association has blamed this on Afghanistan opening its market to imports from other countries including Iran, according to the Frontier Star newspaper. It has urged the government to take measures to cut local production costs and force anti-dumping tariffs on Iranian cement imports.

The association said that the cement industry in Punjab and Khyber Pakhtunkhwa has been most affected by the decline in exports to Afghanistan. Exports from these regions fell by 16% year-on-year in the first nine months of the current Pakistan financial year to February 2019.

Afghanistan/Uzbekistan: Uzbekistan’s Almalyk Mining and Metallurgical Complex (AMMC) has started exporting cement to Afghanistan. A trial consignment of Ordinary Portland Cement (OPC) was despatched from the company’s new 1.5Mt/yr Sherabad cement plant in Surkhandarya, according to the Trend News Agency. It intends to export 0.5Mt/yr to Afghanistan. As part of a contract signed with the Hamid Company just under 1000t of cement has been sent by train to Mazar-i-Sharif.

Pakistan: Local cement despatches grew by 5.9% year-on-year to 40.9Mt in 2018 from 38.6Mt in 2017. Exports increased by 42% to 5.9Mt from 4.6Mt, according to data from the All Pakistan Cement Manufacturers Association. Overall, all cement despatches rose by 9.4% to 46.8Mt from 42.8Mt. By region, despatches and imports grew faster in the south of the country and exports fell by 7.8% in the north. Exports to Afghanistan fell by 12% but exports to India rose by 2% and overseas exports increased by 155%.

Iran: Abdul Reza Sheikhan, the secretary of the Cement Industry Association, has warned that an increase to maritime shipping rates is further restricting exports in conjunction with US-backed trade sanctions. He said that the country has a production capacity of 87.5Mt/yr, that 48Mt is consumed domestically and that less than 15% is exported, according to the Islamic Republic News Agency. He also identified ‘negative’ competition between cement producers over exports has damaged the industry. To counter this, export teams in the east, west and south of the country have been formed.

The country exports cement to 17 countries including Iraq, Afghanistan, the Commonwealth of Independent States (CIS) region, Bangladesh and countries in Africa. It is the sixth largest exporter in the world.

Tajikistan: Tajikistan exported 1.44Mt of cement in 2018 with a value of US$65.4m. This marks a rise of 48% year-on-year from 0.97Mt in 2017 with a value of US$45.9m, according to the Azernews newspaper. Tajikistan exports cement to Uzbekistan, Afghanistan and Kyrgyzstan.

Iran: Dawood Shahrakyh, the head of the South Khorasan Industry, Mining and Trade Organization, says that the two cement plants in South Khorasan province have produced 0.77Mt of cement in the first nine months of Iranian year that started on 20 March 2018. This represents a rise of 22% year-on-year since the same period in the previous year, according to the SHATA news agency. 0.45Mt of local production was exported. The province lies on the country’s border with Afghanistan.

As ever, there have been plenty of news stories from Pakistan recently covering the on-going fallout of the water shortage at the Katas Raj Temples in Chakwal, Punjab and an update on new production line at Maple Leaf Cement’s Iskanderabad plant. The two stories present two sides to the furious pace of the local industry and the potential price this growth might entail.

Graph 1: Cement despatches in Pakistan, 2012 - 2017. Source: All Pakistan Cement Manufacturers Association.

Graph 1 above sets the scene with an industry that has seen total despatches grow by nearly 30% to 42.8Mt in 2017 from 33.1Mt in 2012. About four-fifths of this is based in the north of the county. The big sub-story alongside this is that exports have fallen by half to 4.2Mt in 2017 from a high of 8.3Mt in 2013. The cause of this appears to be a decline in the Afghan market and a similar drop in waterborne clinker exports. Given the higher proportion of exports to the southern market this change has likely hit the industry in south harder despite overall depatches there rising. So far in 2018 similar trends are holding, except for exports, where the clinker export market has rallied significantly in the south.

The background to all this growth domestically is Chinese investment in the form of the China-Pakistan Economic Corridor (CPEC). CPEC-related project include integrated road infrastructure, the modernisation of railways and the development of the city of Gwadar and its related infrastructure. In addition the local Public Sector Development Programme (PSDP) is also having an effect and demographic pressures, such as a housing shortage, are also expected to support the construction market.

Data from the All Pakistan Cement Manufacturers Association (APCMA) placed cement production capacity at 54Mt/yr in September 2018 compared to 66Mt/yr in the Global Cement Directory 2018, which includes new capacity being built. This compares to around 10Mt/yr in the 1995 local financial year to an estimated 73Mt/yr by the State Bank of Pakistan in its third quarter report for 2017 - 2018. This rapid growth can be seen in recent stories such as the Iskanderabad plant expansion, Flying Cement’s mill order from Loesche, Kohat Cement’s mill order also from Loesche, a new solar plant at Fauji Cement at its Attock plant and the commissioning of DG Khan’s new plant at Hub. These stories are all from the last three months! The State Bank of Pakistan estimated that 11 producers hare now investing US$2.12bn on capacity expansions to add over 23Mt/yr by the end of the 2021 financial year.

One potential price for all of this growth is currently being illustrated in the ongoing legal wrangles about the use of water by cement plants near the Katas Raj Temples. What started as an investigation into why water levels were dropping at a pond at a Hindu heritage site seems to have transformed into a full scale inquiry into alleged corruption by local government around the setting up of cement plants. A report by the Punjab Anti-Corruption Establishment Lahore to the Supreme Court has found irregularities committed by government departments in connection to the setting up of cement plants by DG Khan and Bestway Cement in Chakwal. It seems unlikely at this stage that this inquiry will cause too much trouble for the local cement industry but it will certainly make it more complicated and potentially more expensive to st up new plants in the future.

Read Global Cement’s plant report from the DG Khan’s Khairpur cement plant in Chakwal