The upward trends in cement prices and new taxes that the government of Pakistan included in its budget have emerged as challenges that construction businesses have to tackle. Cement prices have risen by close to Rs200 per bag in the last couple of weeks and may go up, even more, should the cement manufacturers court a case on new royalties that will be charged on the raw materials they use. The sales of cement in the following fiscal year starting in July 2024 were around 3 million tons, this is a slow growth in cement sales. Nevertheless, the exports have slightly increased to a level that constitutes near about 18% of total sales while it was 16% in FY24 and only 10% in FY23.
Modern cement producers are expanding internationally and DG Khan Cement (DGKC) is exporting to the US while scouting Mexico and Europe. These include better currency relations, low cost of coal,, and better economic environment of earlier markets like Sri Lanka &Apghanistan.
At home, therefore, the demand is still subdued by increasingly prohibitive construction costs, taxes, and general economic conditions for the users. Most homeowners are charged an unreasonable amount of money, which in many cases is even higher than the area of their plots, meanwhile,, owners of apartments, whose costs are relatively low, receive poor-quality housing without water and gas supply. It has also been used interchangeably and the term ‘affordable housing’ has turned out to be a polite way of referring to squalor.
Correspondingly, there are many unethical issues in the construction area, the builders seeking to offer their own advantage maximum and save on quality and necessity parameters. Count on being charged more for the services that are rarely provided in the first place, while tall and filled-to-the-brim apartment buildings do not allow for any open spaces, which makes for a rather cramped city life.
Still,, cement firms have not been able to fold up as they are keen on exports and efficiency in production. As infrastructure projects and transport and energy, for that matter, remain under government spending, the need for construction materials will remain high, albeit the housing sector is in rather a terrible state. Indeed, the dream of owning a home has become a mirage for many of Pakistan’s citizens because wages have not risen to the challenge.