Displaying items by tag: Afghanistan

Afghanistan: A Czech company plans to invest US$70m towards building a cement plant in Zenda Jan district of Herat province. A deal is expected to be signed in early April 2017, according to a Sirus Alaf, an Afghan presidential adviser on the economy, quoted by the 1TV Afghanistan television channel. Local companies are also expected to match the foreign investment. The planned plant will have a cement production capacity of 1600t/day.

Pakistan: Maple Leaf Cement’s sales revenue increased by 11% year-on-year to US$114m in the first half of its financial year to 31 December 2016. Its profit rose by 12% to US$25m, according to the Dawn newspaper. Growth was attributed to cement sales in the local market despite a significant drop in exports to Afghanistan and an increase in the price of coal.

Afghanistan: The Afghan government has cancelled a private contract to run the Ghori cement plant citing irregularities in the ownership of the company in 2016. It said it was not properly notified about a change in ownership and the company also owes it unpaid taxes and fees since it was privatised in 2006, according to Reuters. Zabihullah Sarwari, a spokesman at the Ministry of Mines and Petroleum, said that the government was notified of the sale of the original shareholding after it had been completed.

Local businessman Javid Jaihoon reportedly purchased the business from Afghan Investment Co (AIC), a group of investors including the brother of the former president Hamid Karzai. Jaihoon told Reuters that he had paid all the government fees relating to the company and that he has invested nearly US$60m in the plant.

Operation at the cement pant is expected to continue for the time being. The government now intends to put the company up for international tender.

Pakistan: The All Pakistan Cement Manufacturers Association expects local cement sales to grow by 26 – 28Mt by 2020. It made the forecast as part of a six- month review of the industry. Chairman Sayeed Saigol said that local sales grew by 8.6% year-on-year to 19.8Mt in the first half of the country’s financial year to 30 June 2017 from 18.2Mt in the same period in the previous period. Based on current growth trends he added that the industry would need to increase its production capacity. To this end it is increasing capacity to 72.3Mt/yr from the current capacity of 46Mt/yr.

Despite the anticipated growth in cement sales Saigol defended import duties to the countries on the grounds that the government benefits from taxation of the local industry. He has also urged the government to support the industry by placing an anti-dumping duty on Iranian cement. Exports of cement fell by 3.5% year-on-year to 2.91Mt from 3.02Mt with a particular fall in exports to Afghanistan.

Tajikistan: Tajikistan began to export cement to Uzbekistan in 2016, according to the Ministry of Industry of Tajikistan. 162,000t of cement were sent to the neighbouring country in the first nine months of the year. Cement has also been sold to Afghanistan. Previously Tajikistan exported cement only to Afghanistan and Kyrgyzstan with the majority going to the former. Cement production in Tajikistan has increased by 37% year-on-year to 1.51Mt in the first nine months of 2016.

Pakistan: Total cement despatches in Pakistand during the first two months of the current fiscal year clocked up at 4.9Mt, a 14% increase from 4.3Mt recorded in same period of 2015-16. However, according to data released by the All Pakistan Cement Manufacturers Association (APCMA), overall export despatches have decreased: Exports in July-August were down almost 1% on a year-on-year basis to 1.022Mt. Overall domestic sales in August rose 21% to 3.02Mt from 2.5Mt in August 2015. Cement sales in the north zone were 2.495Mt in August, up 22.6% from a year ago. In the south zone sales recorded an increase of 13.2% at 0.532Mt from the same month of 2015.

Exports to Afghanistan dropped 12% to 346,928t in July-August on an annual basis, APCMA data shows. Exports by sea suffered even more. As opposed to 537,120t exported during the first two months of the preceding fiscal year, exports by sea in July-August 2016 were 407,120t, showing 24% decline on an annual basis.

However, increased exports to India made up for these shortfalls to some extent. Exports to India during the first two months of the current fiscal year grew 167% year on year to 268,230t.

A spokesman for the APCMA said the industry has been doubling its production capacity every seven to eight years. The buoyancy in the sector on the back of healthy domestic consumption during the last 20 months has encouraged the industry players to go for further capacity expansion. He said growth in the sector during the first two months of the fiscal year was in spite of Eid holidays. Growth of domestic consumption in August was also 'impressive,' as consistent rains failed to hurt construction activities, he added. He said upcoming projects along the China-Pakistan Economic Corridor (CPEC) will further boost cement consumption.

The industry has yet to realise its export potential due to the lack of support from the government. The loss of the Afghanistan market is a matter of concern for the industry, which has been marginalised there because of subsidised Iranian exports.

Afghanistan: The Jabal Saraj cement plant in Parwan has reopened after 20 years. The plant originally closed in 1996 due to the civil war in the country. Local officials have stated that the plant can now produce 100t/day of cement. Provincial governor’s spokesman Wahid Sediqi said the government has invested more than US$1m to help restart operations at the plant, according to the Khaama Press. More investment will be required to increase the plant’s production output.

Afghanistan: The Jabalo Saraj cement plant will reopen in early 2017 according to the ministry of mines and petroleum. A spokesman for the ministry said that the plant is being rebuilt to local media, reported by BBC Monitoring.

The Jabalo Saraj cement plant closed in 1996. The ministry of mines and petroleum has allocated US$1.5m for the reconstruction effort using local engineers.

At present only the Ghori cement plant is operational in the country. According to the ministry it produces up to 420,000t/yr and it only meets 6% of the country's demand.

Tajikistan: Tajikistan has reportedly started to export cement to neighbouring Afghanistan.

According to the press centre of the Customs Service under the Government of Tajikistan, 12 trucks carrying 370t of cement proceeded via the Panji Poyon border crossing on the Tajik-Afghan border in late December 2015.

Huaxin Gayur Cement Co., Ltd in Yovon, Khatlon reportedly signed an agreement with Afghanistan's construction company Shamal Sharq in early December 2015 to supply 500t of cement to Afghanistan.

South African cement producers may be cheered this week with the news that Iranian cement is causing grief in Pakistan once more. Imported cement from Iran is allegedly undercutting local product in Pakistan through massive 'under-invoicing.' Sources quoted in Pakistan – itself a cement exporter (!) – described the situation as 'incomprehensible.'

The issue here is that Iran is doing to South Africa what Pakistan is doing to South Africa: selling cement cheaper than locally produced product. It's especially ironic this week because one Pakistani cement producer, Lucky Cement, is taking the fight against South African anti-dumping duties to the courts.

A report from July 2015 reckoned that Pakistan's cement exports might drop by 10 – 15% at the start of 2016 as economic sanctions on Iran are lifted. The report had a bit more sense than the usual scaremongering. It predicted that removing sanctions in Iran would not affect competition in Afghanistan as Iranian producers generally targeted Kandahar.

Despite this, cement exports to Afghanistan from Pakistan hit a high of 4.73Mt in the 2010 – 2011 financial year, according to All Pakistan Cement Manufacturers Association (APCMA) data. Since then they dwindled slightly for the next couple of years before decreasing more sharply from mid-2013. Overall exports fell by 11.57% to 7.2Mt in the 2014 – 2015 period. Pakistan's exports to Afghanistan may have been hit by the departure of North Atlantic Treaty Organisation (NATO) forces and a new cement plant in neighbouring Tajikistan.

In part the battle seems to be about tax. In June 2015 the APCMA lobbied the Pakistan government to cut duties. At the time these included a 5% federal excise duty and a 17% general sales tax on the retail price of cement. One APCMA spokesman reckoned that these taxes added US$1.56 per bag of cement. More recently the APCMA rallied against a tax on cement exports and an increase in import duties on coal. In this climate, repeated news stories on Iranian exports to Pakistan dodging taxes don't sound so good.

Meanwhile, back in South Africa, Lucky Cement has started to take legal action against anti-dumping duties imposed upon its cement exports by the International Trade Administration Commission of South Africa (ITAC). The ITAC imposed provisional anti-dumping duties of 14.3 – 77.2% on Portland Cement originating in or imported from Pakistan from 15 May 2015 for six months. The duty was imposed on bagged cement. Pakistan-based cement producers may defend themselves by saying that they are following the laws of the countries they are exporting to. In theory Iranian exports to Pakistan that pay the correct taxes should be the same price as Pakistani products.

What this debacle shows is that things could get a whole lot worse for coastal cement markets within easy reach of Iran once the sanctions fall. National bodies like the ITAC across the Middle East, South Asia and East Africa should start tightening up their import policies now.