LAHORE - While the world is strengthening barriers on import to promote the local industries, it is surprising that some quarters in Pakistan are going against this global practice.
Those demanding zero duty on cement imports should see the fate of other energy intensive industries like tiles and tyres after reduction in duties because energy cost in Pakistan is highest in the region, cement industry stakeholders said.
They said that in order to meet massive demand for cement in the country due to various government-run and upcoming CPEC projects, the industry has gone for an expansion in its capacity from 44 million tonnes to 60 million tonnes within two to three years. In this scenario it would be foolish to even think of importing cement, they argued.
Moreover, to discourage imports, the tariff is around 19 percent in India, which makes it difficult to compete with other exporting countries which have lesser input cost, they added.
The factors contributing to decline in exports include increase in fuel prices and other input cost, and the most damaging was the barriers erected by the countries we export to, such as anti-dumping duty imposed by South Africa to protect its local industry,” industry stakeholders said.
In the first eight months of this fiscal, the country dispatched 26.339 million tonnes of cement, showing an overall growth of 6.36 percent over the corresponding period of the last fiscal year.
During this period the domestic consumption increased by 9.12 percent, but exports declined by 8.54 percent.
It is worth noting that the cement consumption during July-February period of this fiscal year increased by 8.26 percent in the north and by 13.15 percent in the southern part of the country.
In contrast the exports from north declined by only 2.98 percent compared with a decline of 18.21 percent in the south. This should be a matter of concern for the authorities because in the past, the South-based mills being nearer to sea were leading cement exporters.
It is urged to increase the customs duty on import of clinker and cement from 10% & 20% to 35% in order to support the local manufacturers.