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Cement producers in Pakistan adopt a long-term strategy

ICR, an international news publisher, has reported on the cement sector in Pakistan, where cement producers are vying for increased market share in the north of the country, while dealing with rising costs of raw materials and fuel. As new capacity comes online, cement prices have increased, and many producers have turned to export markets due to stagnant domestic demand.

The article notes that protecting market share in northern Pakistan is becoming increasingly challenging due to recent new capacity projects by cement producers. Maple Leaf Cement has become the fourth-largest cement producer in Pakistan, with a 2.1Mta capacity increase at its Iskanderabad plant and an increased share ownership in Pioneer Cement. Fauji Cement is also expanding its capacity at its Nizampur and Wah plants, while Bestway Cement has opened a new 7200tpd clinker line at its Hattar plant, and Lucky Cement has added 3.15Mt of cement capacity at its Pezu plant.

Despite the need for house building following recent floods, rising construction costs have impacted domestic cement demand in Pakistan. Cement prices have risen by 67%, and there has been an 18% fall in cement dispatches for the 7MFY22-23. Cement producers have passed on raw material and energy costs to consumers by increasing cement prices, and hopes for exports to be a saviour have faded due to Pakistan cement exporters being more expensive than their Iranian and Vietnamese counterparts.

Despite these challenges, Pakistan’s leading cement producers are implementing long-term strategies to ride out the current economic storms and weak demand for their products. They are hoping for an uptick in the domestic construction sector backed by higher government support, while lower production costs should help restore profitability and international competitiveness. Producers have also been cutting energy costs with renewables and completing WHR projects while adding further cement capacity.

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