KARACHI - Finance Minister Syed Naveed Qamar has announced to increase the Central Excise Duty (CED) from Rs750 per ton to Rs900 per ton in the budget speech, which will compel the cement manufacturers to pass on the impact on the consumers to mitigate the rise in the CED. "On the light of current prices of per bag cement ranging between Rs285-325, manufacturers of cement will have to increase the cement prices by Rs7.5 per bag," Bilal Hameed at JS Global said. "Increase in CED will raise the revenues of the government, while cement manufacturers will focus on export because CED is not applicable on export," Bilal said. A record Public Sector Development Program (PSDP) target of Rs549.7 billion for Budget FY09, an increase of 5.7 per cent from last year's Rs520 billion including Rs75 billions for much needed dams will significantly boost cement sales in the long run. "The demand of cement is already being largely generated by private sectors projects and exports, so there was no concern that cement sales will be reduced," he said.   "In view of the country's rising fiscal deficit, we have already predicted that government will not opt for such steps, which will lead to outflow and steps taken by the government in budget 2008-9 suggested that government's steps will pave the way for more inflows," Bilal said. "It was being anticipated by the manufacturers that government will cutting CED into half in the budget, as done in India last year, to provide relief to the end-consumer amid the commodity boom and high production costs but contrary to their anticipation CED has been increased, which will further increase ex-factory prices,"  analysts said. "Higher PSDP allocation with rising exports, support cement sector's volume growth in FY09," they maintained In addition to that cement dispatches have increased from 22 million tons to 27.2mn tons, up by 24% during July-May FY08. Local sales rose by 7% from 19.2mn tons to 20.5mn tones while exports grew by a massive 143% to land at 6.8mn tons, data released by All Pakistan Cement Manufacturers Association (APCMA) said. According to the data released by APCMA, in the month of 2008 alone, sales of cement have shot up by 21 per cent on Year on Year basis, and 3 per cent on Month on Month basis. Analysts attributed the growth in the cement sales to the peak demand season, rising private construction activities and regional cement shortage led to this considerable climb in cement sales. Shortage of cement in regional countries like India, Afghanistan, South Africa, Sri Lanka and Middle East will keep the export markets strong. It may be noted here that cement sales during first 10 months (July-April) of FY08 depicted an increase of 24% to stand at 24.5mn tons, owing to the expanding local demand and growing cement shortage in the region leading to higher exports. Export sales thus had shown a commendable increase of 142% while local dispatches saw a rise of 8% during the period. Similarly, a 23% growth was witnessed in April 2008 on a year on year basis mainly driven by a 157% surge in exports and 1% increase in local cement sales. On the contrary, on a Month on Month basis (April 2008 over March 2008), total cement sales have shown a decline of 16% in April 2008. Exports have decreased by 11% and local sales have shown a dip of 17%. This considerable decline in cement dispatches during April 2008 is attributed to the seasonal slow down in construction activities during the harvesting season. Labor force as well as transportation is not available in the harvesting period that causes construction activities to decline negatively impacting cement demand.