KARACHI, Feb 1: Cement industries expect a sharp pick-up in demand from Afghanistan, and have already received several large export orders, industry officials said on Friday.

They said that at least three cement manufacturers have clinched export orders totalling around 2,500 tons, representing a major boost for the struggling industry.

“The industry has got initial orders of around 2,500 tons...transportation to Afghanistan has started from last week,” said Abdur Razzak Thaplawala, a senior official at Lucky Cement.

He said it was the first time that formal export deals had been made with Afghan traders, adding that so far there was no demand from international donor agencies.

International donors pledged more than $4.5 billion for Afghan rebuilding at a conference at Tokyo earlier this month.

More than $1.8 billion of the total pledged will be provided in the first crucial year — broadly in line with estimates by the United Nations and others.

Pakistan has around 22 cement plants with an estimated annual production capacity of 19 million tons, but they are using only about half that capacity, mainly to supply domestic consumption of nine to 10 million tons.

High local taxes and other costs have left the industry unable to compete effectively in international markets.

Pakistan’s cement industry officials said demand would gradually increase from Afghanistan.

“Significant demand will not come in the first year. It will depend on fund inflows and how much time is taken to distribute those funds for various projects,” said Farid Fazal, director of marketing at DG Khan Cement.

“It will be a slow start, but we expect Afghanistan’s annual demand will increase to five million tons by next year,” Fazal added.

Industry officials said competition would probably come from companies in Iran, China and India.

“Our export shipments to Afghanistan cost $40 per ton, including the freight cost...We will face tough competition from Iranian cement, which costs $22 per ton,” Fazal said.—Reuters