Cement Industry Of Pakistan
EXECUTIVE SUMMARY
In Pakistan, there are more than 25 small and large cement manufacturers operating within the country producing ordinary grey Portland, white, slag and sulphate resistant varieties of cements. This industry has an oligopolistic structure because the product is homogenous.
There is a cartel in the cement sector and that regulate the production of cement in the country. The cartel restricts the quota of each manufacturer to sell in the domestic market based on its market share, which in turn is derived from the available installed capacity. After analyzing the industry it is found that no manufacturers commanding a market share over 10%. Some manufacturer are enjoying the brand equity and charging higher prices over other manufacturers.
Pakistan currently has a per capita consumption of 120kg of cement, which is comparable to that for India at 135kg per capita but substantially below the World Average 270kg and the regional average of over 400kg for peers in Asia and over 600kg in the Middle East. Over the years a number of tax policy and administrative measures have been introduced to attract investment and facilitate growth of the cement industry. The Government has reduced central excise duty (CED) on cement in the budget for 2007-08 in order to boost construction activity.
In Pakistan APCMA plays a significant role in projecting the cement industry to the Government and coordinating various activities in respect of formulation of Government policies for the cement industry. Cement demand is significantly affected by the Public Sector Development Program (PSDP), construction of dams, elevated and concrete roadways, residential construction as well as exports.
As far as exports are concerned majority of or export heading for Afghanistan (about 95%) and the remainder towards Iraq and UAE. Deregulation after accession of Pakistan to WTO is expected to open the window of competition from cheaper...
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