Historical Profile of Cement Industry

The cement industry in Pakistan has grown gradually with the passage of time. At
the time of independence there were only four units with total production capac
ity of nearly half a million tons per annum. By 1972 the number of cement plants
increased to 14 and the production capacity also increased to 2.5 million tons.
Both public and private sectors took initiative to establish new plants. As was
the case for other industries, the cement industry was also nationalized in 197
2 and the State Cement Corporation of Pakistan (SCCP) was established and given
the responsibility to manage the production of cement in the country. Considerin
g the higher cement demand as compared to supply, cement import was also allowed
in FY 76-77 that continued until FY 94-95. With a change in policy of state con
trol over industrial units, the state owned cement plants were also put-up for p
rivatization along with other industries. The private sector was allowed to inve
st in the cement manufacturing. Consequently, the role of SCCP as market leader
vanished gradually and currently it owns only four plants, of which two have bee
n closed down on efficiency and profitability grounds. In view of the higher dem
and during the period of de-regulation and liberalization, a number of new units
were set up and many others invested heavily to increase their existing product
ion capacity. As a result, the production capacity has reached 17.7 million tons
per annum during 2003.
Sector overview
There are 29 cement production units in the country. Up to May 2007, the total i
nstalled cement production capacity is 36.841 million tones. By the end of June
2011, the installed cement production capacity will touch to the level of 49.579
million tones. Due to political instability and lack of allocation of funds for
public sector development program, cement industry of Pakistan was in the reces
sion phase had registered an average growth rate of 2.96% for the period from 19
90 to 2002. For the period from 2003 to 2007 cement industry of Pakistan had reg
istered an average growth rate of
20%. The boost in cement sector is because of the rising construction activity i
n the country, reconstruction activity in Afghanistan and increasing development
expenditure by the government.
There are four foreign companies, three armed forces companies and 16 private co
mpanies listed
in the stock exchanges. The industry is divided into two broad regions, the nort
hern region and
the southern region. The northern region has over 87 percent share in total ceme
nt dispatches
while the units based in the southern region contributes 13 percent to the annua
l cement sales.
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 (July- march)
No. Of
operational
units 22 22 23 24 26
Install
Capacity
(million tons) 15.72 16.32 16.93 17.90 24.30 36.841
Domestic
Consumption
(million tons) 9.83 10.98 12.54 14.78 16.85 16.98
Export
(million tons) 0.107 0.43 1.12 1.57 1.51 3.19
Capacity
Utilization
% 62.5 67.2 74.0 82.5 84 76.38