LAHORE, Jan 3: Total cement despatches during the first half of the current fiscal grew to 6.290 million tons from 5.521 million tons in the corresponding period last year.

The industry exported 490,377 tons of cement to Afghanistan in six months compared to 158,866 ton sent last year.

The cement sales for the half year represent total capacity utilization of 75.10 per cent that compares with the last year's 68.76 per cent.

In a statement on Friday, All Pakistan Cement Manufacturers Association chairman Tariq Saigol said the figures for the first two quarters showed that growth in demand had continued during the second quarter of the current fiscal year, although its rate had declined in comparison to the first quarter.

"The decline in the growth rate may possibly be due to impact of the winter season in the Northern Areas, lower demand in Afghanistan and somewhat slackening of development activity in the NWFP," he said.

He said the continual rise in the demand firmly establishes the fact that the economy was finally on a growth path as borne out by the increased spending on infrastructure projects and expanded requirement in the private sector, particularly for housing. "Construction, with its vast backward and forward linkages, must experience vibrant growth if the rate of GDP is to be accelerated and established in the 6 per cent plus per annum bracket."

He said the prices of cement had remained stable with the best brands retailing at around Rs220-225 per bag and certain brands selling as low as Rs200 a bag. However, he said, "an adverse development has been the huge and continuing increase in coal prices which at the international levels has reached $56 per ton and there appears no sign of this trend abating."

He was sorry to note that the local coal mining industry was yet to be developed on sound industrial and scientific lines. "This is an area which the government must focus on so the foreign exchange expenditure on import of coal could be reduced.

The recent rise in the coal prices and high taxation on cement makes it impossible for the manufacturers to reduce the prices. Should the government reduce or abolish the excise duty in the next budget, it would be possible to further bring down the cement prices by passing the benefit on to consumer."

Mr Saigol said the industry's self-policing of despatches from the cement units for sale in domestic and export markets had also led to an increase in the government revenues and it was a source of satisfaction for the APCMA to report that despite reduction in the rate of excise duty by 25 per cent, the government's tax collection from the sector had registered an increase."