The cement industry of Pakistan has seen immense growth over the years. Starting from just 4 plants with a production capacity of 300,000 tones, today it has grown to 29 plants with almost 40 million tones production capacity, with plans in the pipeline to expand production capacity to nearly 70 million tones, through an investment of almost PKR 280 billion, in near future.
Cement industry has seen a recent spike in demand due to the CPEC project, where billions of dollars’ worth of infrastructure projects are being executed.
Internationally, Pakistan’s cement industry is far behind in production quantity. For instance, countries like Iran, Indonesia, and India, produce 80 million tones, 75 million tones, and 502 million tones, respectively. But, Pakistan’s cement is among the best quality cement in the world.
Pakistan exports it’s cement to many countries including Afghanistan, South Africa, and India. Due to its high quality, Indian builders often chose Pakistani cement over Indian counterparts.
Recently, the exports of Pakistan’s cement have decreased because Afghanistan is now buying comparatively cheaper cement from Iran and due to the tensions between India and Pakistan the exports of cement to India have taken a hit.
In the cement industry, the profit margins are thin. Companies outperform each other by factors such as their location to the nearest limestone sight, or the nearest market for cheap transportation, or the number of limestone reserves a company has.
The domestic market has also seen a decrease in demand, as the economy of Pakistan suffers and as PKR continues to depreciate against the USD, the cement prices are gradually increasing outside the reach of most of Pakistan’s domestic consumers.
But, as the economy of Pakistan gets stable the inflow of FDIs increase and as projects under CPEC pick-up pace, the demand for cement will definitely rise. Hence, we can predict a pleasant future ahead for Pakistan’s cement industry.