KARACHI, Aug 29: As the government is considering allowing the import of cement, dealers are optimistic that the proposed move will bring the soaring cement prices down. A leading cement maker and exporter, however, feels that the import of cement will not be feasible.
“Imported cement will cost more than Rs300 per bag,” the executive director, Lucky Cement Limited, Abdul Razzak Thaplawala, said.
Due higher cement prices in other countries and landing cost, there was a little possibility for it to be cheaper than local brands, he observed.
“We are ready to provide cement at Rs260 per 50-kg bag at utility stores and fair price shops, but the government is reportedly considering some other options which are highly disturbing for local manufacturers,” he maintained.
“When the imported cement is going to cost more than Rs300 per bag, I see no wisdom in allowing its import,” Mr Thaplawala said. “Local cement is selling below Rs300 in the local market.”
Karachi Cement Dealers Association Chairman Shaukat Hussain suggested that the government should not hesitate in allowing the import of cement. “It will break the cartel of cement makers who raise prices at their will.”
He said that in India a 50-kg cement bag was being sold for Rs150, and there was a possibility to import the commodity at an affordable rate from the South Asian nation if the government gives a go-ahead signal. “Import from Iran is also feasible. A duty-free import will prove beneficial to the end-users,” he noted.
Cement produced by local manufacturers is selling between Rs245 and Rs290 per bag. A dealer said that in case imported cement from China arrives, there was a possibility that consumers will pay Rs30-40 less. “We are making calculations to identify the best source for the import of cement,” the dealer said.
Market sources said the demand for cement was expected to rise as many mega projects like flats, apartments and residential housing schemes were being launched in big cities. Besides, people are renovating their houses to match with designs and looks of new constructions being taken place in posh areas.
The sources said that builders’ mafia was pressurizing the government to allow duty-free import of cement. “It can be evident from the mega projects being launched by the builders with fanfare, which are coming at tremendous pace.”
Mr Thaplawala said the cement industry was surprised at the government’s proposed move of liberalizing imports aimed at destroying the entire cement industry, which was quite a replica of the move initiated recently to jeopardize the industrial base of sugar and auto industry by opening ways for imports.
He said the general wholesale price index in the country increased to 127.3 in March 2005. Similarly, the wholesale price index of building material went up to 145.18 in March 2005. The wholesale price index of cement industry, however, increased to 104.91 only in March 2005. The index of iron bars and sheets rose by 82.38 per cent, that of timber by 41 per cent, fittings by 26 per cent and cement by five per cent only.
The cost of input for the cement industry has been rising for the last three years. The price of fuel oil, which was Rs8,800-9,680 per ton in 2000-01, rose to Rs13,000 in 2003, and to Rs14,000 per ton in 2003-04. The current price is Rs18,622 per ton. This had increased the power generation cost of cement plants, which had their own captive power plants, he added.
