All Pakistan Cement Manufacturers Association (APCMA) has said that the cement industry is gearing up for a major capacity expansion.
Tariq Saigol chairman APCMA said in a statement here on Saturday that the present installed capacity of around 17 million tones cement will rise by over 2 million tones during the current year and as new plants come into operation in 2005-2006, further enhancement in capacity will take place to cope with increasing demand at home and abroad.
'We are confident that the balancing and modernisation efforts under way and the new capacity in the pipeline will ensure that there will be no shortage of this essential commodity', he said.
He said demand continue to surge in the last quarter as a result of positive developments in construction of infrastructure projects and the housing sector. During the last quarter, capacity utilisation including exports to Afghanistan and UAE was recorded at 90.27 percent.
In aggregate terms, total cement sales in the domestic market amounted to 12,516,355 metric tons during the year showing a 14 percent increase over the previous year and export sales amounted to 1,118,108 metric tons recording growth over the previous year of 160 percent.
Total dispatches of cement including exports amounted to 13,634,463 metric tons which aggregates to a percentage growth over the previous year of close to 20 percent.
The total capacity utilisation as predicted exceeded 80 percent at 80.70 percent. This is a most healthy sign and reinforces the Government's claims that the economy is firmly on the move, he added.
He was of the view that budget 2004-05 presented a mixed bag of relief and disappointments.
The long awaited reduction in excise duty did not materialise and remains unchanged at Rs 750 per metric ton.
In the area of positive developments, the finance minister accepted the industry's long-standing demand for reduction in the rate of import duty on plant and machinery and this, if not locally produced, stands reduced to 5 percent which is a most welcome step and will enable the industry to remain competitive.
Import duty on Kraft paper bags was reduced to 10 percent and on imported coal to 5 percent. The anomaly relating to further tax in GST and its abolition will also help in rationalising prices. However, the taxes charged under the two heads, excise duty and GST still amount to Rs 1300 per metric ton or Rs 65 per bag, which is still the highest in the world, he added.
'Buoyant demand, increase in coal and furnace oil prices and shortage of natural gas have produced price pressures but the industry is responding favourably by increasing its output, therefore it is hoped that abundant supplies will keep the price line in control.
He hoped that with the removal of uncertainties relating to the political set up, the pace of GDP growth will continue to accelerate with construction playing the role of engine of growth. 'APCMA takes the opportunity to congratulate Chaudhry Shujaat Hussain on assuming the office of Prime Minister and also wishes a most successful tenure for Shaukat Aziz', he concluded.
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