Ex-Factory Price of One Cement Bag Was Rs179 in 2000-01,and Now It Stands at Rs370

Ex-factory price of one cement bag was Rs179 in the year 2000-01, and now it stands at Rs370. Despite the rapid increase in input costs, cement prices increased only by Rs139 per bag. The compounded annual growth rate of cement prices was 6.28 percent in the last ten years, which is well below the inflation rate. The study revealed that the ex-factory rate of one cement bag has not increased in proportion to the other construction industry inputs during the last ten years, which has rendered the balance sheets of most cement companies impaired and the industry has been recording huge financial losses. During the last financial year i. E. 2010-2011, 11 cement units suffered loss before taxation aggregating to Rs5.681 billion while seven cement units earned profit of Rs5.982 billion. At the end of the last fiscal, industry debts to financial institutions have risen to a massive Rs125.3 billion and cement units located in the North are particularly challenged and are unable to service their debts, it stated. According to the data, the price of bricks has gone up by Rs2, 800 per 1, 000 pieces in just 6 months of the current fiscal, while it increased only by Rs2, 400 per 1, 000 pieces in the 10-year period from 2000 to 2010. The current price of 1, 000 bricks is Rs7, 000 which was Rs4, 200 in the year 2010-11. The price of the same number of bricks was Rs1, 800 in the year 2000 and reached Rs4, 200 by the year 2010. Similarly, steel prices have increased by Rs6, 000 per ton in just 4 years since 2007-08, while the prices witnessed an increase of Rs30, 000 in just one year from Rs40, 000 per ton to Rs70, 000 per ton from 2006-07 to 2007-08. Prior to this massive increase, steel prices increased on average by Rs3, 000 in the 7 year period from 2000 to 2006, the data said. In addition to this, the provincial tax on mining has been at the rate of Rs33 per ton for the last three years, which was Rs18 in the financial year of 2008-09. This almost doubled in just one year. In 2000, this was Rs12 per ton and reached to Rs18 with the increase of Rs6 in the nine years from 2000 to 2008-09. However, there was an increase of Rs15 in 2009-10 alone. The mention of the increase in input cost of packing prices would not be out of place here as it has witnessed an increase of Rs7.54 per bag in the last 4.6 years, while it had increased only by Rs3.11 in 8 years from 2000-01 to 2007-08. Currently, one bag costs Rs20.65, whereas the price of one bag was Rs13.11 in 2007-08, while it was just Rs10 in 2000-01. This means the price of one bag doubled in ten years. Besides all this, the devaluation of Pakistani rupee against the US dollar has played a very negative role for the cement industry by dint of its heavy impact on almost everything. In 2000-01, one US dollar was worth Rs63, and now it is at Rs91. Source: uaecement