ISLAMABAD: Pakistan cement manufacturers on Wednesday increased cement wholesale prices by upto Rs55/bag (or $0.375) in northern region (Punjab and Khyber Pakhtunkhwa), cement dealers confirmed to The News.
This increase would be effective from the today (Thursday). In South regions (Sindh and Balochistan) the prices have been kept unchanged, the reason being its prices are already much higher than north region. With this hike, cement prices in north region stands at average of Rs505-525 per bag.
Mohammad Ali Tabba, Chief Executive Officer of the Lucky Cement Limited, when contacted said, “Since start of March 2020, and after approval of the Ordinance, cement demand has recovered up to 90 percent, and in the north region it has recovered full demand and has even achieved 10 percent more over the last year.”
Regarding the price hike, he said that since demand for cement had eroded in first two months (Jan-Feb), while at the same time, three manufacturers including our company had made expansion in their capacities, this pushed the prices to as low as Rs450/bag in north region from earlier Rs550 to 600/bag.
He said, “We cannot say it an increase in prices, but we can call it that the cement sector has reached up to its old price level from where it declined.” He said that the manufacturers have increased the prices in the range of Rs45 to 55/bag. Our company has increased the price by Rs50 in north region.
It is worth mentioning that there is a huge difference in the prices of cement in north and south regions. Average price in south is Rs650/bag, while in north region it is now around Rs505 t0 525/bag.
A cement dealer in Islamabad told The News that the senior companies’ representatives held the meeting and they have decided the price hike. He said that Fauji cement has increased its price by Rs45/bag while all other brands including Lucky Cement, Cherat Cement, DG Khan Cement and other producers in north region have increased the prices by Rs55/bag each. He said, “After this package, the demand for construction materials has increased.”
It is worth mentioning that last Friday, the federal government also approved an Ordinance for construction industry having tax breaks and exemption from explaining income sources to builders and land developers. The ordinance aimed at boosting construction activities that would ultimately add to the economy and help creation of jobs at a time when COVID-19 is affecting the economy. In this ordinance fixed-tax regime was introduced for builders and developers for residential, commercial and industrial plots and buildings.
A source in the Cement Manufacturing Association told this scribe that as the demand for cement will increase in near future, prices are much lower in north than south region and top of that all, cost of production is also high. He said that the government in the recent Ordinance had exempted other construction materials and provision of services from withholding tax, except cement and steel.