[Original] Pakistan Cement Market Full of Business Opportunities

Just like the ups and downs of the stock market, the development of Pakistan's cement industry has also experienced ups and downs. At first, Pakistan had only four cement plants in the whole country, with an annual production capacity of only 500000 tons. Today, there are 24 cement plants with an annual production capacity of 44.64 million tons.

In the 1950s, there were only five cement plants in Pakistan, with a combined cement capacity of 2.8 million tons. By 1969, the number of cement plants had rapidly increased to 14. But in 1972, nationalization of cement works and economic reforms led to the establishment of the Pakistan National Cement Works. As a result, the development of the cement market has been hindered.

Fortunately, political reforms in the 1980s brought new hope to the cement industry. The development of the real estate industry has led to a wave of private owners investing in cement plants, which have been established one after another, with an annual cement production capacity of 2.54 million tons. At the same time, four cement grinding stations invested and developed by state-owned cement plants have also promoted the growth of cement production capacity.

But the real golden age of the cement industry was after 2000, when the cement production capacity increased rapidly from 16 million tons to 44 million tons today.

Today, the cement industry in Pakistan employs 150,000 people. The cement plant department is fine, which consists of construction, shipping, packaging and logistics departments. The cement industry has contributed significantly to the national fiscal revenue, and the export of cement has also introduced a large amount of foreign exchange reserves.

In the first eight months of fiscal year 2014, Pakistan exported 6.017 million tons of cement and clinker. The domestic cement market is mainly in the northern and southern regions, and cement is mainly sold to these two regions. The surplus cement will be exported to countries such as Afghanistan, South Africa, Iraq, India, Sri Lanka, Tanzania, Djibouti, Mozambique, Sudan and Kenya.

Lucky Cement Company.

Lucky Cement is one of the largest cement companies in Pakistan and the Lucky brand of cement is the only brand of cement sold in both the south and north of Pakistan. Its five cement brands are Lucky Cement, Lucky Star, Lucky Gold, Lucky Block Cement and Lucky Sulfate resistant Cement. While producing and selling cement at home, the company will also export surplus cement to 11 other countries, including Kenya, Tanzania, South Africa, Sri Lanka and India. As a pioneer of innovation and technological progress, the company has built its own power plants, which can not only meet its own production and operation needs, but also be sold to other local companies to meet their electricity needs.

In 2002, Lucky's annual production capacity reached 7.75 million tons, creating a milestone in the cement industry. At the same time, the company is the first cement enterprise in Pakistan with considerable export volume of bulk cement. The cement export business has not only increased the country's foreign exchange reserves, but also avoided further devaluation of the national currency, the rupee. Today, Lucky is the only cement company with its own loading and storage terminal at Karachi Port. The company has also successfully listed on the Karachi, Lahore, Islamabad and London Stock Exchanges.

Tomorrow's Cement Market in Pakistan

Pakistan is one of the world's top 20 cement producers and the eighth largest cement exporter. The favorable situation in the international cement market has created more opportunities for the country's cement producers to export to the Middle East, Africa and other developing countries.

Lucky has recently taken advantage of the reconstruction of infrastructure in Iraq, which will create a huge demand for cement. Lucky has set up Al Mabrooka Cement Grinding Joint Stock Company, which specializes in cement production, near the port of Basra in Pakistan. It plans to open up cement business in Congo in 2016 and establish another joint venture cement plant in the Nyumba Ya Akiba.

In addition, the free-trade port city of Gwadar, in Pakistan's Baluchistan province on the Arabian Sea coast, will drive export growth. At the same time, domestic plans to upgrade infrastructure, build dams and provide housing for the poor require the participation of the cement industry.

From the above analysis, we can see that the investment environment of the cement industry in Pakistan is favorable. Especially at present, the Pakistani government actively encourages and promotes foreign investment, and has formulated a series of relevant policies to ensure the investment rights and interests of foreign investors. Specific policies include:

(1) Opening all economic sectors to foreign direct investment (FDI);

(2) equal treatment for foreign and local investors;

(3) Allow 100% foreign equity;

(4) No government approval is required;

(5) attractive tax and tariff preferences;

(6) The outward remittance of all capital, earnings, profits, dividends, royalties and technology use fees is permitted.

Foreign investment is also fully protected, as follows:

(1) Foreign Private Investment (Promotion and Protection) Act 1976;

(2) The Economic Reform Protection Act of 1992;

(3) Foreign Exchange Accounts (Protection) Act 2001.

Pakistan also has investment protection agreements with 46 countries (including China) and double taxation avoidance agreements with 52 countries (including China). These policies are conducive to foreign investment in Pakistan.

At present, under the guidance of the "the Belt and Road" development policy, China and Brazil continue to promote trade exchanges. Pakistani officials are ready to implement a series of major projects in energy and infrastructure construction. At the same time, Pakistan has also launched an economic reconstruction plan. This will create a huge demand for cement.

Summary:

The development potential of Pakistan's cement industry is huge, both in terms of policy and economic environment. China's leading position in the world cement industry proves the competitive advantage of China's cement enterprises in the world cement industry, so Chinese enterprises can consider investing in Pakistan. At present, the domestic cement market in Pakistan is far in short supply. In the fiscal year of 2012-2013, 33.43 million tons of cement were delivered from the warehouse in Pakistan, accounting for 75% of domestic consumption. The per capita consumption of cement in Pakistan is only 131 kg, which is far below the global average. Pakistan needs to invest heavily in infrastructure to ensure future economic growth. There is great potential for growth in cement consumption in Pakistan. Pakistan's geological conditions determine that it is rich in coal, various metals and other mineral resources, which have created convenience for domestic cement enterprises to invest in Pakistan.

But domestic cement companies also have to consider the complex and unstable security situation in Pakistan. The unstable situation in the Middle East, especially in Pakistan, may affect the development of investment. Risk should also be measured before investing. When conducting cement trade or cement investment in Pakistan, security issues should also be fully taken into account. Do a good job of safety cost budget and safety precautions. Only by doing a good job in safety work can we truly promote the development of enterprises and achieve a "win-win" situation between China and Pakistan.