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Cement makers raise price again

Updated October 09, 2013
- File Photo
- File Photo

KARACHI: Cement manufacturers have increased prices by Rs5-15 per 50kg bag in north and south zones.

A retailer said that cement price has been raised by Rs5 for a 50kg bag in Sindh and Balochistan, while in Punjab and Khyber Pakhtunkhwa, the increase is Rs15 per 50kg bag.

This is the second increase in prices by manufacturers from June onwards.

In June, cement was available at Rs460. But after the change in sales tax regime in budget 2013-2014, the price increased to Rs490 from July. Recently manufacturers further jacked up prices to Rs495 in Karachi.

A manufacturer said that since last four months, the industry is slowly passing on the multiple impact of higher transportation cost to consumers after four times rise in diesel prices, rupee devaluation against the dollar and substantial increase in power tariff.

He added that power tariff hike makes an impact of Rs40 per 50kg bag, but the industry has slightly raised prices in view of demand and supply position.

Manufacturers may further recover high cost of production from consumers in the coming months when cement demand goes up.

Senior Vice Chairman Association of Builders and Developers (ABAD) Salim Kassim Patel said that cement price hike would jack up construction cost of every housing and apartment project.

Even people engaged in renovation of houses and flats would have to bear the burden.

He urged the government to check cement price, whether it was being raised artificially on rising demand, or there was a genuine hike due to rising cost of production.

Salim said that demand for cement has improved following rising construction activities after monsoon season.

A number of high-rise projects, which had been announced in the last one and a half years, are nearing completion.

Abad Chairman Mohsin Sheikhani claimed that manufacturers basically take a hit on themselves in case of five to 15pc hike in cement price.

However, in case of over 30pc increase in cement bag price, builders usually apply to Sindh Building Control Authority for price escalation of private projects.

The share of cement hovers between 20-30pc in any housing and apartment project.

As Eid ul Azha approaches, more apartment projects are coming up as people living abroad usually arrive on Eid and save their earnings by purchasing property.

The country received $13.9 billion remittances from overseas Pakistan in 2012-2013 as compared to $13.1bn in 2011-2012. In July-August 2013, Pakistanis remitted $2.6bn as compared to $2.4bn in same period last year.

“Around eight to 10 new high rise apartment projects have been launched by builders,” Mohsin said, adding that some 15-16 projects are pending for the last the three months in various areas due to law and order situation and other reasons.

He, however, said that increase in cement price is a negative development when government plans to launch low-cost housing projects in mid-November.

He said there is a backlog of 7.5 million houses in the country and every year this backlog rises by 200,000-300,000 despite launching of many new projects every year.