Pakistani cement exporters face several challenges

The exports of cement and clinker from Pakistan have been affected by several factors, including a change in political set-up in Afghanistan, the persistent deadlock in trade between Islamabad and Delhi, anti-dumping duties, and the financial crunch in Sri Lanka, according to Inayat Ullah Niazi, CFO of DG Khan Cement. DG Khan exports its products to Afghanistan, Kenya, Madagascar, Maldives, Mozambique, Seychelles, Sri Lanka and Tanzania.

As a result total cement exports declined by 40.4 per cent to 2.157Mt in July-October 2021 from 3.617Mt in July-October 2020. The cement export price is hovering at US$48-50/t while the clinker export price ranges between US$38-40/t, he added.

While the Afghan market is currently completely frozen, any activity there could also present an incredible opportunity. In addition, cement exports to India have not yet resumed due to higher duty levied by India a few years ago.

Anti-dumping duty of 68 per cent on Pakistani cement placed by South Africa did not solve the African country's import issue as Vietnam started exporting there. The five-year period is over, but the ban has still not been lifted. However, the DGKC management is optimistic.

Sri Lanka has a cement shortage as prices were fixed (maximum MRP), so imports had stopped. Now there is a deficit, but the Sri Lankan central bank does not have US dollars and therefore, letters of credits have not been opened yet. However, DGKC management expects good prospects in the medium- to long term.