Potential Of Cement Industry In The Economic Development Of The County
Potential Of Cement Industry In The Economic Development Of The County Cement industry is progressing at a very fast pace in Pakistan. At the time of inception, there were only four cement plants in Pakistan with an annual capacity of 300,000 Metric tons. Presently the industry has grown to 29 units with an annual capacity of 45 million tons.
China’s Investment in Infrastructure development of Pakistan (CPEC)
China has agreed to invest 42 billion US $in infrastructure development of Pakistan. The major projects include roads (Khanjar – Gwadar Highway – 2,400 KM), (Karachi – Lahore motorway – 1,060 KM), rails, ports (Gwadar port), Dams (Dash & Bhasha dam), energy, and special economic zones.
CPEC will have a positive impact on the country’s economy and it would transform our country into investment heaven. It will benefit all the areas of Pakistan and it will also provide enormous employment opportunities to the local residents. Gilgit Baltistan along with its around 50,000 MW capacity can help the country to overcome the energy crises. It will be the cheapest and pollution-free source of electricity. Dassu and Bhasha Dams are the main projects in the pipeline. This is the time for Government as well as the private sector to exploit the enormous power production potential in Pakistan.
Fauji Cement operates a cement plant at Jhang Bahtar, Tehsil Fateh Jang, and District Attock in the province of Punjab and started its commercial production in November 1997. The Company has a strong and longstanding tradition of service, reliability, and quality. Currently, Fauji Cement is a prime brand in the market and is suitable for all types of construction activities.
Fauji Cement is operating two Cement Plants, one each from FLS Denmark & TKIS (Thyssen Krupp industrial solutions) Germany. The plants are well known for their high efficiencies, best quality products with an annual total production capacity of 3.43 million tons of cement–Contribution/Importance of Fauji Cement Company Limited (FCCL) in the Infrastructure development of Pakistan
Fauji Cement enjoys the reputation of being the best Quality Cement in the country and is preferred in the construction of Mega Projects like Dams, Bridges, Highways & Motor-ways, Commercial/Indus-trial Complexes, Residential Housing Societies, and the myriad of other structures that need speedy strengthening bond, fundamental to Pakistan’s Economic betterment and quality of life.
The Cement sector of Pakistan which was more or less showing an increasing trend from the last few decades is, unfortunately, posing a decline from the last few years. Many things, variables, and aspects have contributed to the negative trend of its growth. A holistic view of the cement sector in totality could have given many different pictures but given our localized view of the economic growth of the sector; we found out that it has suffered a lot. The economic situation also exacerbated, collectively resulting in a decline in production and exports. The analysis of this sector from various perspectives through our research and consultation of available research verified and to some extent endorsed the causes which were sorted out and listed down in the literature review by the group. These causes are high cost of energy, heavy taxation, high freight charge, low spending upon PSDP, fluctuating interest rates, declining international market share political instability, law and order situation, economic constraints to retrieve back to the original situation, and international market competitiveness. Looking into all major causes, recommendations are given in the way forward which is to the best of our understanding and capacity for the Cement Sector.
The cement industry in Pakistan has come a long way since independence when the country had less than half a million tones per annum production capacity. Privatization and effective price decontrol in 1991-92 heralded a new era in which the industry had reached a level where surplus production was achieved after meeting local demand in 1997. Due to this positive development, it attracted many investors due to cheap and abundant availability of raw materials and increasing local demand for cement consumption also encouraged investment for further expansion of production capacity of their respective units. Currently, the cement sector is utilizing only fifty percent of its installed production capacity of 45 million tonnes approximately since the local consumption of cement is stagnant for the last several years. Cement sales have been dormant at 22 million tons per year for the last three years against a production capacity of over 43 million tons. The low domestic demand has caused the industry to be unable to absorb the total installed capacity. This is forcing manufacturers to dispose of their products at loss in the domestic market. So, there is a need to explore foreign markets to utilize their full capacity. As of the last quarter of FY 12, only two cement mills that are located near seaport are exporting cement and earning a profit of Rs 4 billion while the remaining mills that are unable to export through sea have booked a loss of over Rs 10 billion during last fiscal.