Pakistan cement sector hopes for relief measures under Budget FY18

Pakistan cement producers are hoping that Budget FY17-18, due to be presented by the country’s Minister of Finance on Friday, will include relief measures to protect the local industry from the alleged smuggling of cement from Iran, help arrest the decline in exports and reduce the cost of doing business.

The All Pakistan Cement Manufacturers Association (APCMA) has urged the government to increase the duty on imported clinker from 10 to 20 per cent to support local manufacturers. It also argues that cement imports should not be allowed to enter the country until the respective exporters have registered with the Pakistan Standards and Quality Control Authority (PSQCA) and the quality of their cement is certified by the national standardisation body. A spokesman stated that if the right steps are taken, the industry could see a revival in Pakistan cement exports which are a cushion in times of lower domestic demand. 

Expected measures
According to a report by Arif Habib Ltd, for FY18 the government is expected to announce a higher budgetary allocation under its Public Sector Development Program (PSDP). The PSDP allocation for the forthcoming Pakistan fiscal is expected to be around PKR1001bn, an increase of 25 per cent on the PKR800bn assigned in FY17. The research house also anticipates a reduction in corporate tax of one per cent to 30 per cent. Analysts at Arif Habib note that a higher PSDP allocation would be pivotal in generating an increase in domestic demand and a reduction in tax should improve the bottom line for Pakistan cement companies across the sector.