Cement makers demand ban on import from Iran

LAHORE: Cement manufacturers demanded the government to slap a ban on the import of the commodity from Iran via land route as its under-invoicing is rendering massive losses to national exchequer and damaging the local industry.
Muhammad Ali Tabba, chairman of All Pakistan Cement Manufacturers Association (APCMA) said nearly half a million ton of Iranian cement was transported via Taftan border to Balochistan every year.
Tabba said the local industry has been unable to fully utilise its capacity due to smuggling and under-invoicing of Iranian cement, which is causing around half a billion rupees losses to national exchequer.
Local cement industry is operating at a production capacity of around 76 percent, which translates into an idle capacity of 8.94 million tons. Sale rose 7.97 percent during July-April of the current 2014/15 fiscal year, while exports fell 9.09 percent in this period. Cement industry dispatched 29.07 million tons of cement in the 10 months of this fiscal year versus the total dispatches of 27.98 million tons in the same period last fiscal year. The local demand kept the mills operating.
A tax official said the Federal Board of Revenue (FBR) has taken actions against the officials involved in under-invoicing at various Balochistan’s check points of entry and exit of consignments. He added that while APCMA chief had recently met with the FBR chairman, he did not request for putting Iranian cement coming through land route in the negative list.
Tabba told The News that he had requested actions against the customs officials abetting under-invoicing in his meeting with the FBR chief. “However, this is not a permanent solution. Everyone knows that the impact of any action lasts for only few months and then the situation comes back to square one,” he said. “The ban on Iranian cement (coming) through land route is a permanent solution of the problem (under-invoicing and smuggling).”
The association chief said the cost of Iranian cement is much lower than the Pakistani one due to cheap energy available to Iranian cement makers.
“The cost of furnace oil, gas and other fuels for them is one-third of the cost borne by us,” he added. This means that the price of Iranian cement bag is Rs50 to Rs100 less than the Pakistani one. This price difference comes to Rs150/bag if the impact of smuggling and duty evasion is included.
Currently, Iranian cement is fetching a maximum price of Rs450/bag in Balochistan’s markets, while minimum rate of Pakistani cement is Rs500/bag.