KARACHI, March 2: Cement manufacturers are all set to further push up prices of their product as they complain of increase in input and fuel cost mainly because of the rise in gas tariff in February and transportation charges are up because of the upward fortnightly revision of petroleum products by the oil marketing companies.

"The government raised gas tariff by over 8pc in early February. The imported coal price went up from $40 a ton to $78 a ton. Transportation cost is up because of hike in diesel and petrol prices," Mr Tariq Sayeed Saigol, the Chairman of the All Pakistan Cement Manufacturers Association (APCMA) justified the expected price push of cement.

An increase in the cement price is being contemplated at a time when the cement companies are declaring, one after the other, handsome profits and offering attractive dividends. In fact cement sector has now become one of the most attractive investors' puller in the stock exchange.

Amin Dadabhoy, the cement sector leader in Sindh and Balochistan looks next four or five years with hope and confidence. "After four or five years of distress during nineties, the next five years offer bright prospects in domestic and export market," Dadabhoy said while disclosing that an investment of Rs75 billion will double the local cement production from 18 million tons at present to 35 to 36 million tons before 2010.

Saigol, however, pointed out that the cement off-take in last six and eight weeks "has somewhat slowed down." He believed that it was a temporary slump caused by incessant rains which slowed the construction activities and hence a fall in demand. "There were too many holidays and extended holidays," he mentioned another factor.

He blamed the rise in construction cost mainly because of increase in steel and bricks prices to be another factor that affect cement business. Notwithstanding this temporary slump, both Saigol and Dadabhoy were confident of ending up the year with impressive results.

"We now operate on more than 90 per cent capacity," Dadabhoy said who pointed out that cement export to Afghanistan would exceed one million tons before June this year.

He said that all the cement factories have shed off their drag of bad loans after swapping these with much less expensive loans about a year ago. This has reduced the financial cost and with gradual increase in domestic sale and exports the cash flow has too shown impressive improvement.

Saigol said that the money earned in last two or three years is being ploughed back in the expansion and installation of new projects in anticipation of rise in demand.

Amin expects cement demand in Afghanistan will increase to four and five million tons a year in coming years. Reports suggest that Iran is also coming up with infrastructure investment plans which will result in suspension of cement supply to Afghanistan.

According to Dadabhoy, the increasing demand of cement would have to be met from Pakistan. There is also a hope that construction would also pick up in Pakistan and even 36 million tons production after four or five years may prove insufficient to meet the growing domestic and export demands. But there are many "ifs" and "buts" attached to this emerging scenario of cement production and sale. There has to be stability in the region.