Cement manufacturers jack up prices by Rs15-20 per bag in northern region

As global prices of coal have surged, the cement manufacturers to protect their bottom lines passed on the impact to the consumers by raising prices in the region of Rs15-20 per bag

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KARACHI: The prices of cement have been raised by manufacturers by Rs15-20 per bag in the northern region because of increase in global coal prices and the diminishing value of rupee.

As global prices of coal have surged, the cement manufacturers to protect their bottom lines passed on the impact to the consumers by raising prices in the region of Rs15-20 per bag.

As per JS Research analyst Arsalan Ahmed, prices of coal have risen 35 percent to $108 per ton, which has caused production cost of the cement to industry to go up, reported Express Tribune.

Mr Ahmed said if the cement companies wanted to touch the previous profit margin before the rise in international coal prices and rupee depreciation, they would have to increase the prices by Rs100.

He added at the present juncture, this doesn’t seem possible.

Although the prices were unchanged, the discount being offered by cement companies had been adjusted, said Ahmed.

JS Research analyst said prices of cement had been raised twice in past few months in the northern region, resulting in a cumulative hike of Rs30-40 per bag.

On the other hand, Elixir Securities Farheen Irfan shared cement companies were readjusting their prices and had been raised by Rs15-20 per bag and dealers had been apprised about the price increase.

She said cement manufacturers in the north were bracing for a difficult period ahead as Pakistan could seek a bailout from the IMF and whenever that occurs, spending under the Public-Sector Development Programme (PSDP) would start dwindling.

Also, the cement industry was vulnerable to any decrease in PSDP spending, since lower expenditure on infrastructure and other projects would contribute to a fall in demand of the commodity.