KARACHI, April 8: The cement manufacturers in Sindh and Balochistan have increased cement prices by Rs10 per 50-kilogram bag and the new price will be effective from Monday, Dawn learnt on Sunday.

This is the second increase in less than 15 days after the manufacturers had increased the prices by Rs10 to Rs15 per 50kg bag on March 26 citing a rising demand in the summer as a reason.

In January 2012, the manufacturers raised the cement prices by Rs2.5 on a 50kg bag.

Analysts said repeated hikes in cement prices would affect construction activities as the construction cost of many projects would go up. They said that it remained to be seen how cement dealers would charge their profit margin from the next week as earlier they had been demanding Rs425 for a 50kg Falcon cement bag and Rs415 for a 50kg Lucky cement bag.

Southern Region Association of Builders and Developers chairman Saleem Kassim Patel said that in any construction project the cement cost was around 10-15 per cent, while 30-40 per cent of the total expenditure on construction was spent on steel.

He said a 50kg cement bag in 2010 was available at Rs270 and after the latest increase it would be sold at Rs435 as compared to its current price of Rs425.

The government had yet to take action against the powerful cartel of cement manufacturers for frequently increasing the prices, he said, adding that cement manufacturers were fully cashing in on the rising demand of cement owing to large-scale construction activities that picked up pace from mid-February to June every year.

Meanwhile, a leading cement maker said all the five cement makers in the southern region had increased the prices “because of rising input cost caused by the recent hike in diesel price”.

He said cement demand had been increasing because of improvement in construction activities.

Head of Research Top Line Securities Farhan Mahmood said: “The total cement sale is expected to increase by four per cent in 2011-2012 after a decline of seven per cent in 2010-2011 amid the rebound in local sales, thanks to a gradual pickup in construction activities and a low base effect of last year due to the floods.”

He said that in the first nine months of 2011-2012, the total cement sales were recorded at 23.6 million tonnes, which was up by two per cent on a year basis. He said the export of cement, which is 26 per cent of the total cement sales, fell from eight million tonnes to 6.2 million tonnes through sea routes, especially to African countries.

However, he added that local sales remained higher by 6.6 per cent due to an increased demand after the last year’s devastating floods.

He said: “Recent numbers suggest that currently cement plants are running above 85 per cent capacity utilisation.”