Pakistan resumes cement and construction activities

Pakistan’s government has taken the bold decisions to open selected local and export-oriented industries (including cement) in a meeting of the National Command and Operation Centre (NCOC), headed by Prime Minister Imran Khan on 14 April. However, the lockdown period for other industries has been  extended until 30 April, says the official notification.

It was felt that the restrictions need to be extended, but certain relaxations related to low-risk economic activities should also be considered. The transport of all goods in the country will also continue to take place without interruption. However, the existing closure/ban on areas of congregation such as schools, marriage halls, cinemas and restaurants will remain in place.

On the recommendation of NCOC, a number of industries will be allowed to operate subject to adherence of SOPs and will include cement plants, mines and minerals.

In terms of the construction sector, NCOC has recommended that the sector be opened in phases with  low-risk activities being recommended to start up in the first phase from 15 April 2020. It has been recommended and agreed upon in the meeting that the following supply chain of construction can be opened from the 15 April:
1. cement plants (already open)
2. brick kilns
3. stone quarries
4. bitumen plants
5. prefab material manufacturers.

In the light of the variety of opinions on resumption of construction activities and also the phasing/sequencing of this exercise, it has been recommended that the provinces should exercise their own judgment, as per their own circumstances and conditions, on the opening of construction sites in the public or private sector and its sequencing and geographical locations.

The opening of the retail outlets/stores of the essential construction materials will naturally be associated with the specific decision by each province to open the construction sites. The construction activities related to the federal PSDP will be reactivated.

Local research house Intermarket Securities Ltd has given a mixed reaction to the partial relaxation of the lockdown. One of its analysts has stated that there is an emphasis on reopening the construction and allied sectors, but the decision on which construction activities to resume have been left to the provinces. However, provinces have the option to make their own decisions and it is possible that Sindh – not ruled by Prime Minister Imran Khan’s party – may continue with its tougher stance on the lockdown. But all PSDP-related activities (public projects) will be resumed by the federal government authorities. As a result, there will likely be an immediate pick-up in construction activities, in the research house’s views.

During the lockdown, which has been in place since late March, while some cement plants were operating and selling, cement was mostly being stockpiled by dealers or projects. Since transport activity related to the number of sectors is also allowed, there will be a recovery in demands for products of different categories.