LAHORE, July 14: The total cement production capacity is projected by the industry to grow to 33.802 million tons by the end of the current fiscal year and to 42 million tons by 2009-10.

The total production capacity of the cement industry grew by 17 per cent to 21.641 million tons in 2005-06 million from 17.908 million tons the previous year. The growth during the current financial year is projected to be 36 per cent over the last fiscal ending on June 30, 2006.

“The current dynamics and trends of the market require such commitment and the all cement manufacturers have responded with the plans to enhance their production capacities,” Brig (retd) Asmat Ullah Khan Niazi, acting chairman of the All Pakistan Cement Manufacturing Association (APCMA), said in a news release on Friday.

“The demand of cement has surged enormously due to an unprecedented increase in the construction activity. The rise in the manufacturing cost of cement, that is, the increase in fuel prices, taxes that in some cases are unique to the cement industry, only resulted in the rise in cement prices. Coupled with demand upsurge, retailers’ manipulation of the market further increased the consumer prices. In order to counter these problems, cement manufacturers had decided to enhance their production capacities so that these problems could be managed,” he said.

He pointed out that excessive duties and taxes had also played a very important role in the cement price crisis. He argued that after the hike in fuel prices, the increase in cement prices was inevitable. “Cement manufactures have opted for more economical fuel by shifting to coal fired and gas fired furnaces with additional investments,” he said.

He opposed the decision to import cement, saying it was substandard because laboratory tests had yielded that MGO in the imported cement did not meet the PSQA standards. Besides, the import decision was made to control prices of cement.

“It is important to note that the imported cement never hit the market in large quantities as the customs authorities have confiscated two shipments because of poor quality. The local cement manufacturers are single-handedly responsible for averting the cement price crisis because of their increased supply in the market,” the release said.