KARACHI: All-Pakistan Cement Manufacturers Association chairman Aizaz Mansoor Sheikh has said the industry produced 17.94 million tons of cement in the first seven months of this fiscal year ending on January 2012.
This year’s production is four per cent higher than the production achieved during the corresponding period of last fiscal year, he said.
In a statement issued on Tuesday, he said that 7.21 per cent increase in domestic demand of cement was offset by 3.59pc decline in exports.
He, however, said that cement makers continue to operate below 70pc installed capacity in January 2012.
During the past four years, both inflation and mark-up have remained in double digits, forcing producers of most of the items, except cement, to increase rates according to increase in input costs.
He stated that cement rates increased from Rs252 per bag in December 2006 to Rs293 per bag in June 2011, up by only 13 per cent.
Compared with nominal increase in cement rates, urea prices increased from Rs530 per bag in December 2006 to Rs1,407 per bag by June 2011, up by over 275 per cent.
In the same way, rates of DAP fertiliser shot up from Rs871 per bag on December 2006 to Rs4031 per bag by June 2011, showing a rise of over 410 per cent during the last five years.
He said that the increase in rates of different items were due to abnormal increase in input costs which affected the entire manufacturing sector.
However, since cement demand remained below production capacity, manufacturers were unable to pass on the impact of high cost of production to consumers. Most of them, he claimed, were posting losses and two units have closed down.
The association chief said that electricity, coal, gas and diesel are main inputs of the cement industry, and rate of electricity increased from Rs1.87 per unit in June 2006 to Rs10.69 per unit. Even off-peak rates increased from Rs1.11 per unit to Rs5.97per unit.
He said that gas that was available to captive power units at Rs241per mmbtu in June 2011 and it increased to Rs382.37 per mmbtu in June 2011.
Aizaz Shaikh said that light diesel prices jumped from Rs33 per litre in March 2007 to Rs88 per litre in June 2011. Coal rates increased from $51 per ton in December 2006 to $111 in December 2011.