Pakistan unlike China, India, United States, Iran, Turkey, Brazil, Russia, Saudi Arabia, Indonesia and Vietnam may not be among the top ten cement producing countries in the world. However, it is widely accepted in the world that the quality of Pakistani cement is second to none. Pakistan is the country, which has been exporting cement to the cement manufacturing countries such as India. It is a fact that the Indians appreciate the quality of the Pakistani cement compared to their own.
The recent skirmishes between Pakistan and India halted the cement exports from Pakistan to India since the Indian government imposed taxes to the hilt. Pakistan, a cement exporter to South Africa, Iraq, India, Afghanistan etc., does not heavily rely on export of cement since the domestic requirement is more than sufficient to make the Pakistani cement manufacturers go for more and more investment and expansion plans. At the same time, export is an advantage never to be missed. Out of 159 cement producing countries and territories, Pakistan is one of the leading manufacturers in terms of quality.
Local demand of cement in Pakistan could never be satiated since urbanization is quite rapid and the infrastructure development plans are on the go due to burgeoning population. China is the largest cement producer in the world by installed capacity and production with over 2,500 million metric tonnes of cement. India produces over 280 million metric tonnes of cement. The USA being the third largest cement produces over 83 million metric tonnes. Iran is one the leading global cement producers with over 80 million metric tons. Pakistan is also considered one of the leading cement manufacturers with around 49 million tonnes and the expansion plans do suggest that Pakistan would be producing over 70 million tonnes in a couple of years.
Pakistan’s housing backlog reaching ten million suggests that there are promising prospects for the cement industry to grow in the days to come since houses in Pakistan are made of concrete unlike some countries where houses are built of wood, the USA being the prime instance. In addition to it, the infrastructure development plans of the incumbent government along with the industrialization process bode well for the cement manufacturers. The only hitch for the local manufacturers is the smuggling or the under-invoicing of the imported cement.
Approximately 24 cement plants in Pakistan contribute billion of rupees to the national exchequer. If smuggling is controlled, the government may get even higher amount which would be beneficial for both the government coffers as well as for the manufacturers whereby promoting the local industry. Over 50% of the demand for cement is by the builders for multifarious housing projects whereas the rest comes for infrastructure development. Pakistan’s road network and its development is of core significance since over 90% national passenger traffic and freight movement takes place by land so the requirement of more and more roads is always there. Pakistan’s domestic consumption stands at 41.147 metric tonnes currently, which is set to witness a surge owing to CPEC in particular and investment from the Gulf countries in general.
Pakistan’s per capita cement consumption is far lower than the world average of 400 kgs per capita. It is expected that the current 170 kgs per capita cement consumption in Pakistan might witness spike due to overwhelming foreign investment in a couple of years.
The economic slowdown in China, which consumes over 60 percent of the world’s cement may bring export opportunities for the Pakistani cement manufacturers. Further, the US economic sanctions on Iran might open doors for the Pakistani cement manufacturers to export cement in substantial quantity to Afghanistan and the African countries.
Pakistan, the world’s 14th largest cement producer, has promising business opportunities in the days to come since the investors from across the world are eyeing Pakistan for the hitherto untapped opportunities.