Fitch: Pakistan Construction Industry to Grow 8.9% Yearly Over Next 5 Years

Fitch Solutions, a global company focused on credit, economic, and political research, says in its latest report that the China-Pakistan Economic Corridor (CPEC) will drive Pakistan's construction industry in the next decade, as the risks associated with CPEC projects recede. Fitch forecasts that the real annual growth rate of Pakistan's construction industry will average 8.9% over the next 5 years. "We will adjust our forecasts to account for possible positive ripple effects across the economy, including the construction industry, in the event an IMF bailout is secured", the report adds.

Fitch Solutions' report titled "Industry Trend Analysis - CPEC to Remain a Primary Driver of Pakistan's Construction Industry" says: "We expect debt concerns surrounding CPEC projects to ease after financial details are released. In addition, we believe political risks associated with CPEC projects have diminished since the 2018 Pakistani general election. These factors will reduce overall risk profile of CPEC projects."

The Fitch report acknowledges the completion of eleven CPEC projects termed "early harvest". It says that despite major media and political scrutiny regarding CPEC, this progress on projects highlights Beijing’s improving track record in project execution and its commitment to infrastructure development in Pakistan. As a result of CPEC progress, a total of 3,240MW of capacity has been added to the country’s national grid, constituting over 11% of total installed capacity in Pakistan. Also highlighted in the report is the 392 kilometer Multan to Sukkur section of the Peshawar-Karachi motorway, a key CPEC project which is over 80% complete and is slated to finish by August this year.

Fitch believes political risks associated with CPEC projects have diminished. "Previously, we noted that the transition in power from Pakistan Muslim League (Nawaz) to Pakistan Tehreek-e-Insaf (PTI) posed a downside risk to the Pakistani construction industry as new Prime Minister Imran Khan pledged to review Chinese-backed projects, which could potentially have led to project delays and cancellations. However, the political situation in Pakistan has since stabilized and Prime Minister Imran Khan has demonstrated willingness to cooperate with China on multiple issues including CPEC. As such, we are in the view that downside risks stemming from political uncertainty are diminishing, and bilateral projects spearheaded by CPEC, will receive a boost in terms of policy implementation and project continuity," maintained the report.

In another recent report, Fitch's competitor Moody's has acknowledged that rermittances from Pakistan diaspora rose by 10% year on year to $10.71 billion in the first half of fiscal 2019, while goods imports slowed sharply to around 3% year on year as non-energy imports contracted.

Moody's expects "the current-account deficit to narrow to 4.7% of GDP in fiscal 2019 and to 4.2% in fiscal 2020 from 6.1% in fiscal 2018, it will remain sizable and wider than in 2013-16, driving Pakistan’s external financing needs. The government has secured $12 billion in financing from Saudi Arabia and the United Arab Emirates – in each case amounting to $6 billion and divided equally between deposits and deferred oil payments – which is likely to largely cover the country’s net financing needs for fiscal 2019".

Construction industry is a major driver of economies. The sector creates new jobs, builds housing and infrastructure, drives economic growth, and provides solutions to address social, climate and energy challenges, according to the World Economic Forum. The construction industry has important linkages with other sectors such as cement, steel, energy, furniture, household appliances, etc.  The construction industry's impact on GDP and economic development goes well beyond the direct contribution of construction activities.

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Comment by Riaz Haq on July 13, 2020 at 6:09pm

#PAKISTAN - #Cement price up by Rs55/bag in Punjab, KP. Big difference in prices in north (Rs 505-525/bag) & south (Rs. 650/bag) regions..."we can call it that the cement sector has reached up to its old price level from where it declined.” #construction https://www.intercem.com/Intercem-Insights/News/ArtMID/683/ArticleI...

Pakistan cement manufacturers on Wednesday increased cement wholesale prices by upto Rs55/bag (or $0.375) in northern region (Punjab and Khyber Pakhtunkhwa), cement dealers confirmed to The News.



This increase would be effective from the today (Thursday). In South regions (Sindh and Balochistan) the prices have been kept unchanged, the reason being its prices are already much higher than north region. With this hike, cement prices in north region stands at average of Rs505-525 per bag.



Mohammad Ali Tabba, Chief Executive Officer of the Lucky Cement Limited, when contacted said, “Since start of March 2020, and after approval of the Ordinance, cement demand has recovered up to 90 percent, and in the north region it has recovered full demand and has even achieved 10 percent more over the last year.”



Regarding the price hike, he said that since demand for cement had eroded in first two months (Jan-Feb), while at the same time, three manufacturers including our company had made expansion in their capacities, this pushed the prices to as low as Rs450/bag in north region from earlier Rs550 to 600/bag.



He said, “We cannot say it an increase in prices, but we can call it that the cement sector has reached up to its old price level from where it declined.” He said that the manufacturers have increased the prices in the range of Rs45 to 55/bag. Our company has increased the price by Rs50 in north region.



It is worth mentioning that there is a huge difference in the prices of cement in north and south regions. Average price in south is Rs650/bag, while in north region it is now around Rs505 t0 525/bag.



A cement dealer in Islamabad told The News that the senior companies’ representatives held the meeting and they have decided the price hike. He said that Fauji cement has increased its price by Rs45/bag while all other brands including Lucky Cement, Cherat Cement, DG Khan Cement and other producers in north region have increased the prices by Rs55/bag each. He said, “After this package, the demand for construction materials has increased.”

Comment by Riaz Haq on July 27, 2020 at 11:59am

Pakistan is facing a shortfall of ten (10) million housing units growing at a rate of 0.35 million per year.

https://www.tabadlab.com/wp-content/uploads/2019/05/Tabadlab_Mortga...


The
government has announced the Naya Pakistan Housing Program (NPHP) to facilitate the construction of
five (5) million units. To assist buyers with home ownership, the State Bank of Pakistan (SBP) has relaxed
the prudential regulations that govern lending in the housing sector. The SBP policy allows for low-income
households to purchase housing units against a self-amortizing fixed rate mortgage (FRM) for a period of
12.5 years. Khalil and Nadeem (2019b) have shown that announced prices for housing units under NPHP
(Phase I), and the prevailing income levels amongst the low-income target segments, the SBP policy is not
likely to achieve its objectives.
This paper reviews international literature analyzing various mortgage designs, followed by an overview of
two options that may provide the optimum model of mortgages for low-cost units in Pakistan. A proposal for
a low-cost housing finance scheme, in light of local characteristics, is then presented along with a
framework for managing and measuring the scheme.
Instead of encouraging self-liquidating fixed rate mortgages for low-cost housing units (as recommended by
the SBP policy), the government should provide outside equity in the form of shared equity mortgages
(SEMs) to assist prospective buyers to become home owners. The joint equity in this proposed path forward
will maximize initial down payment and thus reduce the amount to be financed by banks. This will limit the
debt incidence for the borrower. Studies show that such mortgage structures increase affordability, and limit
the losses of borrowers, as well as losses to the wider economy under recessionary conditions. Additionally,
based on practices in developed mortgage markets, the amortization period of the mortgage should be
doubled from 12.5 years to 25 years. The paper concludes with a discussion on implementation modalities
and discussion points pertaining to the proposals presented.

Comment by Riaz Haq on July 27, 2020 at 12:05pm

Property rights for world's poor could unlock trillions in 'dead capital': economist

https://www.reuters.com/article/us-global-landrights-desoto/propert...

RIO DE JANEIRO (Thomson Reuters Foundation) - When it comes to alleviating poverty and allowing people to live up to their potential, prize-winning Peruvian economist Hernando de Soto divides the world into two groups: the ones who have defined property rights and those who do not.

About two billion people have full rights to the property they live in and the land they farm, according to the director of the Lima-based Institute for Liberty and Democracy.

For the 5.3 billion who do not have such rights, the implications are stark: people are unable to leverage their resources to create wealth, and their assets become “dead capital” which cannot be used to generate income or growth.

As a result, the poor remain trapped by the “tragedy of the commons” where their unregistered assets can be stolen by powerful interests, hurting individuals and broader economic development, de Soto said.

Legally protected property rights are the key source of the developed world’s prosperity, and the lack thereof is the reason why many nations remain mired in poverty, de Soto argued.

Providing the world’s poor with titles for their land, homes and unregistered businesses would unlock $9.3 trillion in assets, de Soto estimates, an unprecedented sum to reduce poverty.

Property titles would allow the poor to use their small homes or land in order to borrow money and start businesses, he said, unlocking the entrepreneurial potential of billions of people.

“There is no such thing as an investment without property rights that are negotiable and transferable,” de Soto told the Thomson Reuters Foundation in a phone interview.

“The question is: do people own things in such a way that they can be brought into the global market and make us wealthier?”

Political leaders preparing a new 20-year development plan for urban areas, to be agreed at a U.N. conference in October, will be addressing the challenge of unequal property rights as they face demands for better living standards from a growing global urban population.

HIDDEN CONNECTIONS

In the United States, the world’s largest economy, the most important source of funds for new businesses is a mortgage on the entrepreneur’s house, de Soto wrote in his book “The Mystery of Capital”.

Small business people in Haiti, the poorest country in the Americas, in contrast, normally cannot leverage the value of their homes or land to create businesses because they lack secure property rights.

An adviser to more than 30 heads of state from South Africa to the Philippines, the 75-year-old economist said there is no clear data on whether property rights are improving or receding globally.

But a lack of these rights underpins seemingly disparate international events from the rise of religious extremism in the Middle East, to rural land rights protests in China and conflicts over “blood diamonds” in central Africa, de Soto said.

Comment by Riaz Haq on July 27, 2020 at 12:22pm

Are insecure property rights holding back Pakistan’s economy?
We need to attempt to reform the institutions which govern us, better property rights might be a good place to start.

https://www.dawn.com/news/1457900

Let’s start with the basics. Property rights refer to an owners right to consume, use or even sell, barter, or gift, of an asset.

Think about this way: when you buy a plot of land, you acquire right to that property. You have the right to use it, build on it, exchange it for something else, sell it or gift it.

You can legally exclude other people from using your plot of land.

The same logic can be applied to intellectual property — if you come up with an idea, access to secure property rights would give you the ability to own that idea and benefit from it.

This has enormous benefits. It incentivises people to invest in the accumulation of assets — whether it is plots of land or ideas. Because these rights are tradable, they can be marketed and efficiently allocated within the economy.

Unreal estate: The boom in Gwadar’s property market

Consider a rather common anecdotal scenario which I have often heard a version of in Pakistan.

Imagine you own an undeveloped plot of land in the centre of Lahore. From your perspective, you want to sell the land to a buyer who has the capital to invest in it, but you cannot because your property rights aren’t secure. Perhaps the ownership over the land is contested and the courts have blocked its sale.

From the larger market perspective, that land acts as dead capital. It has an opportunity to be used for an economic activity, which would generate growth, but it cannot because the property rights are insecure.

When you drive around the centre of a bustling city like Lahore or Karachi and see some plots lying empty despite economic growth, it might be a reflection of insecure private property rights.

Going away from the analogy of plots, let’s briefly talk about something which is even more critical to economic development: ideas.

Ideas reflect innovation. If you come up with something new — perhaps a smartphone application or a new way of manufacturing something — and your ideas can be stolen, you have less incentive to spend time and energy in developing them.

In this way, lack of property rights ends up disincentivising innovation.

Copycat fashion: Can we police the line between imitation and inspiration?

In England, it has been argued, though with significant detractors, that the Glorious Revolution of 1688 led to the strengthening of private property rights. Due to the the monarch's shrinking power and the strengthening of the parliament, the state's power to expropriate property was reduced.

This security incentivised commercial expansion, with people theoretically more willing to invest, take the risk and acquire more assets.

It is hard to empirically prove that property rights were the most important determinant which led to this commercial expansion. However, it is likely that it is part of the story.

Even those who disagree that property rights were at the core of the Great Divergence and part of the growth story of many other countries since then, do not argue that secure, marketable private property rights are not conducive to economic growth.

This is more than reason enough for Pakistan to strongly consider how to strengthen private property rights.

How to establish secure property rights?
There are four interlinked features suggested which would allow such protection to emerge.

First, property rights need to be well-defined. This would deter the emergence of disputes and create a common stock of knowledge on who owns what.

For example, Pakistan's notorious patwari system is essentially a manifestation of badly-defined property rights.

The system empowers a person — a land record officer — to maintain large records of property owners. These officers are ill-famed for seeking bribes to grant the right to property, creating unnecessary costs.

Comment by Riaz Haq on July 27, 2020 at 12:26pm

Homeownership is the Top Contributor to Household Wealth

http://www.mortgagenewsdaily.com/08282019_homeownership.asp

In 2015, 37 percent of households did not own a home and 47.1 percent did not have a retirement account.  For those who had both, the home equity and savings accounted for 62.9 percent of the household's net worth. Equity provided 34.1 percent and retirement accounts made up 28.8 percent

From there, the percentage of assets contributing to wealth drops off sharply. The third and fourth categories, stocks/mutual funds and bank accounts made up about 8.5 percent each.  Some of the most commonly held assets made up only a small portion of wealth, for example, 91 percent of households hold those fourth-ranked bank accounts while the largest contributor to wealth, home ownership was the third most commonly held asset. While the median amount of home equity was $95,800, the median value of assets at financial institutions was $4,600.

There were significant differences in worth within categories of age, gender, race, education, and employment. Having health insurance also appears to be a factor although it would be a result rather than a cause.

Unmarried female householders between the ages of 35 and 54 had a median wealth of $14,860.  That was 39.5 percent of the median wealth held by unmarried males of the same age.  That difference, however, disappeared in the 55- to 64-year old group; both unmarried women and their male counterparts had grown their net worth to about $60,000.

Non-Hispanic white and Asian householders had more household wealth by far than black and Hispanic householders.  Non-Hispanic whites had a median household wealth of $139,300 and Asians $156,300 compared with $12,780 for black and $19,990 for Hispanic householders.

Households in which the most educated member held a bachelor's degree had a median wealth of $163,700, compared with $38,900 for households where the most educated member had a high school diploma.

Not surprisingly, those households in which at least one person had a full-time job for the entire year had a higher net worth ($101,000) than those where all members had a part-time job ($61,690) or were unemployed ($22,100). Households in which people were without health insurance all or part of the year had dramatically lower median wealth: $16,860, compared with $114,000 for households in which all members had health insurance for the entire year.

Comment by Riaz Haq on December 9, 2020 at 10:23am

#Steel bars get pricier amid #construction boom in #Pakistan. Price hikes came at a time when #economic activities worth Rs1 trillion & Rs100 billion had been generated in Punjab & Khyber Pakhtunkhwa, respectively, in housing and construction projects. https://www.dawn.com/news/1593040

Manufacturers of quality steel bars increased their prices by up to Rs3,000 per tonne in November on the back of rising raw material costs in world markets and growing strength of the rupee against the dollar.

--
On Friday, Prime Minister Imran Khan was informed in a meeting of the National Coordination Committee on Housing Construction and Development that 6,000 apartments would be constructed in Karachi under a project called Pakistan Quarters. In the first phase, work would start on 700 residential units at a cost of Rs4 billion over the next three months.

Another meeting on the Karachi Transformation Plan (KTP) presided over by the premier was informed that more than 100 projects worth Rs1.1 trillion have been planned under the programme.

Mughal Iron and Steel Industries Chief Operating Officer Shakeel Ahmed said the company pushed up the price of good quality steel bars by Rs3,000 per tonne in November to Rs114,500-115,000 per tonne.

Ruling out the possibility of increasing the price of long-steel product to cash in on the rising demand in the northern areas owing to construction activities, he said raw material prices have risen to $370 per tonne from $330 per tonne in the last one month. It happened due to various reasons like port congestion and the fear of further lockdowns in world markets.

The management of Mughal Iron and Steel Industries had informed analysts of brokerage houses that the Naya Pakistan Housing Programme (NPHP) can potentially create 6-7m tonnes demand for long steel assuming the government builds 50 per cent of the promised houses.

The company views future demand to come from the China-Pakistan Economic Corridor (CPEC) and the five hydro dam projects. It has already won a contract for three dams. It estimates steel demand of 350,000 tonnes from Bhasha Dam and 250,000 tonnes from Mohmand Dam in the first phase.

Razaque Steels Managing Director Irshad Mowjee, who also serves as general secretary of the National Steel Advisory Council (NSAC), said his company has increased the price by Rs3,000 on two kinds of quality steel bars, which now cost Rs111,500 and Rs116,500 per tonne.

Shredded scrap prices in world markets have risen due to lockdowns in Europe and the United States. The supply of scrap has become scarce, resulting in a hike in international prices. Yards do not have materials and the incoming supply is limited, resulting in the prices going up by $40 per tonne within the last three weeks, he added.

Fearing a further increase in steel bar prices if scrap rates do not come down, he suggested that the regulatory duty on raw materials should be abolished. The duty is not justified on raw materials used in a basic industry as industrialisation is the government’s top priority.

If it is not removed, it will affect the viability of CPEC projects. Cost overruns will happen as steel is a major component, he said.

Mr Mowjee urged the government to remove the additional customs duty of 2pc as competing raw materials are exempted from it. At present, the incidence of tax is around Rs23,000 per tonne, which needs to be reduced, he added.

Shredded scrap is used for manufacturing good quality bars for infrastructure projects. Increasing prices will affect the viability of CPEC projects, he said.

Gadani supplies ship plates that are used as raw material for lower-quality steel bars. Their prices have not increased, thus making bars made from steel billets uncompetitive. This may cause a drop in the production of good quality bars for infrastructure projects, he said.

Comment by Riaz Haq on January 6, 2021 at 7:06pm

“The natural, geographical and cultural environments of China and Pakistan are very different from each other, so during construction, we worked out measures to adapt to local conditions and shared our construction experience with our Pakistani friends.”

https://www.thenews.com.pk/print/770493-china-s-construction-giant-...

This was stated by Dong Zhihong, deputy general manager of Asia Pacific Division, China Civil Engineering Construction Corporation (CCECC), in an interview with China Economic Net (CEN).

Take the mountainous areas in Pakistan as an example. “It is difficult to conduct construction work there as the geological conditions are not that favorable.”

Therefore, “blasting, protection, and support of high slope, tunneling and excavation technologies are applied to the construction project site after certain improvement and optimization,” Mr. Dong added.

At present, the commencement order was issued by the employer, and work including the take over of the site, the construction of temporary camps for administration office and dormitory, the construction of temporary facilities (batch plant, canteen), and the removal of existing avionics facilities on the runway was completed.

Comment by Riaz Haq on August 12, 2021 at 7:22am

Govt To Provide Loan To Deserving People Under Kamyab Pakistan Programme: Tarin

https://www.urdupoint.com/en/pakistan/govt-to-provide-loan-to-deser...

:Federal Minister for Finance and Revenue Shaukat Tarin Wednesday said the government would provide loan to deserving people to set up their business or purchase house through transparent process.

Talking to a private news channel, he said under Kamyab Pakistan Programme, low-cost housing scheme would be launched for lower income groups enabling them to own their houses.

Tarin said the data of deserving beneficiaries was available with department concerned in that regard.

The minister further said the incumbent government was providing loan on easy conditions and Kamyab Pakistan Programme beneficiaries could easily access to agriculture and business loans at zero-mark up without collateral.

He said the government under visionary leadership of Prime Minister Imran Khan had strengthened and stabled the national economy through prudent economic policies.

-------------------------------

Kamyab Pakistan Program to bring 3 million families out of poverty: Shaukat Tarin


https://dunyanews.tv/en/Business/614415-Kamyab-Pakistan-Program-to-...


Finance Minister Shaukat Tarin has said that beneficiaries of Kamyab Pakistan Program would enjoy easy access to agricultural and business loans at zero-mark up without collateral.

He was talking to Prime Minister s Special Assistant on Social Protection and Poverty Alleviation Dr. Sania Nishtar in Islamabad.

The Finance Minister said Kamyab Pakistan Program will provide low-cost housing scheme for lower income groups enabling them to own their houses.

He said the program will bring at least three million families out of the vicious cycle of poverty in the next three to five years.

Comment by Riaz Haq on February 11, 2022 at 10:59am

#imrankhanPTI: over 70,000 #housing projects worth Rs1.4 trillion have been approved, which will have an overall impact of Rs 7.3 trillion on the #construction industry, and 1.2 million new #jobs will be created. #Pakistan #NayaPakistan https://www.brecorder.com/news/40153680

Prime Minister Imran Khan said that over 70,000 housing projects worth Rs1.4 trillion have been approved, which will have an overall impact of Rs7.3 trillion on the construction industry, and 1.2 million new jobs will be created.

“It is our government’s huge achievement that out of the total 80,000 applications, 35,420 applications amounting to Rs130 billion have been approved. A total of Rs46 billion has been disbursed to 13,407 applicants so far,” he said, while chairing a meeting of the NCC on Housing, Construction and Development, here on Thursday.

He added that applications worth Rs7 billion are being received weekly out of which Rs4 billion are approved and Rs2 billion is being disbursed every week, which shows that the devised system is working efficiently. “PTI’s government has achieved huge milestones regarding provision of low-cost housing to lower and middle-income class,” he added. He further said the government’s biggest challenge was to change the elitist mindset of financial institutions and ensure facilitation of common people in getting loans.

Average loan worth 36 lakhs in the approved and disbursed loans figure shows that the biggest beneficiary of subsidized loans is the middle- and lower-income class, he said.

In the last three years of the government, a 148 percent increase in housing finance and expected approval of Rs517 billion till December 2022, reflects the steps taken by the government to facilitate low-cost housing and construction industry, he added.

Housing Finance: Growth, but!

The prime minister said that in line with the manifesto of the PTI, the government is moving in the direction to add one percent every year in the housing finance against our GDP that will result in a construction boom and provision of houses to the lower and middle income class.

The meeting was briefed that for the very first time in the history of Pakistan, a sustainable ecosystem for low-cost housing has been developed and implemented, which has enabled the sector to achieve exponential growth.

The Foreclosure Law has been implemented in letter and spirit and long-term loans (up to 20 years) with subsidized mark-up (as low as only two percent) are being given. In addition to that a cost subsidy of Rs300,000 for low-income housing schemes and 90 percent tax waiver has resulted in encouraging the private sector, which is actively participating in the construction of housing units under the schemes.

The projects include urban, peri-urban, urban regeneration, government-funded and private sector projects.

The meeting was also briefed about the transparent and automated process to receive and process the applications, which has resulted in targeting the needful lower and middle-income class.

This is being ensured by the development of one-window digital portal with automated application tracking system by development authorities.

The meeting was also briefed on figures regarding the total low-cost housing construction activity so far after 2018. A total of 161,924 low-cost housing units were approved, out of which 45,191 units are under construction and 20,898 units have been completed, which is significant, bearing in mind that before the subsidies by the government, foreclosure law and low-cost housing schemes by the PTI’s government, the sector was in a shambles.

A break-up of the government financed low-cost housing projects was also given according to which 4,000 units in Farash Town, 4,000 units in LDA City, 1,320 units in Jalozai, 245 units in Raiwind, 324 units in Sargodha and Chiniot, and 1,800 units at Angoori Road are being constructed with completion deadlines before the end of 2022.

Comment by Riaz Haq on March 16, 2022 at 12:35pm

#Pakistan #cement production has grown from 35 million metric tons in 2015 to 55 million metric tons in 2021. #CPEC #NayaPakistan #housing #infrastructure #construction #exports https://www.globalcement.com/news/item/13839-update-on-pakistan-mar...

https://twitter.com/haqsmusings/status/1504176499032616960?s=20&...

Update on Pakistan, March 2022 - Cement industry news from Global Cement

https://www.globalcement.com/news/item/13839-update-on-pakistan-mar...

(Graph in the article shows Pakistan cement production growth from 35 million tons in 2015 to 55 million tons in 2021)

Data from the All Pakistan Cement Manufacturers Association (APCMA) shows that cement despatches have been steadily growing since the mid-2010s with a blip in 2020 caused by the start of the Covid-19 pandemic. The upward trend has been driven by local sales. Exports have generally grown at the same time, with more variance, but they are yet to regain the high of nearly 11Mt reported in 2009. On a rolling annual basis, local sales have remained steady since mid-2021 but exports have been slowly falling. In April 2021 they were 9.17Mt but by February 2022 they were 7.33Mt. For the February 2022 figures APCMA blamed this on the growing cost of production, rising international freight rates, mounting coal prices and a trade ban with India. On that last point for example, Pakistan-based producers exported 1.21Mt of cement to India in the 2017 – 2018 financial year before exports stopped after February 2019. Despite a brief respite in the spring of 2021 talks are still ongoing to resume trade with India.

On the corporate side the country’s largest cement producer by capacity, Lucky Cement, drew the same conclusion as the APCMA with its half-year results to 31 December 2021. Its local sales volumes were down a little but its exports were down a lot. It noted that the reason its local sales were falling but national industry local sales were up slightly was due to some competitor plants being non-operational in the previous year. However, the company managed to keep sales revenue and earnings increasing year-on-year by successfully combating growing input costs with price rises. Bestway Cement, the country’s other large producer, reported a tougher situation in the second half of 2021, with both local sales and export volumes down. This was attributed to a boom in construction activity in the second half of 2020 as Covid-19 lockdowns were eased. Demand for cement since then was said to be ‘sluggish’ due to inflation and high commodity prices. It also pinned its marked fall in exports on political and economic instability in Afghanistan. However, turnover and operating profit were both up due to higher selling prices.

Elsewhere in the sector news since the start of 2021, Pakistan’s exports to South Africa remained stymied in early 2020 due to a review of ongoing tariffs and the government decision to restrict infrastructure projects to only using locally produced cement. On the sustainability front the APCMA started to set out its decarbonisation strategy in November 2021. It may have a long way to go given that a think tank reported earlier in the year that the cement sector was the largest emitter of coal-related CO2 emissions in the country, even more than power generation. Alongside this plenty of capacity additions have been announced. Lucky Cement started commercial cement production at its 1.2Mt/yr integrated Samawah cement plant in March 2021. Various new cement plants and upgrades to existing plants have been proposed by Bestway Cement, Cherat Cement, Fauji Cement, Kohat Cement Company, Lucky Cement and Maple Leaf Cement. Finally of note to a sector troubled by energy prices, in September 2021 the Pakistan International Bulk Terminal said it was going to upgrade its coal handling capacity to around 17Mt/yr by 2024.

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