Economy, Business And Markets

Plan to Produce 90m Tons of Cement p.a. by March 2016

Plan to Produce 90m Tons of Cement p.a. by March 2016Plan to Produce 90m Tons of Cement p.a. by March 2016

Deputy minister of industry, mine, and trade, Mohsen Salehinia, says the cement sector is to increase the annual production to 90 million metric tons this Iranian calendar year (started March 21), the daily Ta’adol reported.

“Last year, 70 million tons of cement was produced thanks to the northeastern Province of Khorasan Razavi with the highest production,” he noted.

During the past two years, the cement sector has faced a sharp decline in demands caused by the unprecedented downturn in domestic construction sector.  Currently, the most serious problem faced by the cement manufacturers is overproduction as a result of the downturn in the economy.

Over the past years, cement exports to the neighboring countries have decreased mainly due to security concerns in Iraq and the higher protective tariffs imposed by both Tehran and Baghdad. The cement manufacturers in Pakistan, as another export market for Iranian cement, are also trying to limit the import of the mineral to their country. Since the cement quality in Pakistan is not as high as the Iranian product, they occasionally make false claims about the volume of smuggled cement into their country in an attempt to curb the import of cement from Iran.

 Dumping Charges

In the latest such move, the All-Pakistan Cement Manufacturers Association (APCMA) urged Islamabad to either blacklist Iranian cement or press dumping charges to help the local industry regain its share.

A spokesman for APCMA claimed in a statement that cement smuggling from Iran to Balochistan is causing substantial loss to Pakistan’s cement sector. “The government has to take immediate steps to curb this threat,” said the spokesman, adding that the average imports of Iranian cement into Balochistan from March 15 to April 16 stood at around 500-600 metric tons on a daily basis.

The APCMA claims the illegal import of cement from Iran is detrimental to the Pakistani cement sector as on the one hand the idle capacity is increasing due to foreign imports and on the other, prices in different markets are being negatively affected due to tax evasions and misdeclarations.

Pakistan’s cement industry suffers from expensive electricity and fuel and naturally the prices are higher than the Iranian product. Lack of utility and high energy prices is not limited to the country’s cement sector but the entire manufacturing sector deals with the menace.

Cement producers in Iran are seriously trying to enter the export trading floor of the Iran Mercantile Exchange (IME) since there is no price restriction contrary to the domestic market. Iran is the fourth global cement producer and the biggest producer in Middle East. Pakistan, Turkmenistan, Afghanistan and Iraq are the main target export markets for the Iranian cement.