A new study by the Competition Commission of Pakistan has highlighted the need for major reforms in Pakistan’s cement industry, focusing on tax structure, logistics, energy pricing, and mineral sector development. The report aims to improve competition, reduce market distortions, and support long-term industrial growth.
According to the study, the cement sector plays a vital role in the country’s economy, contributing around 1% to GDP and serving as a key input for infrastructure and housing development. However, the sector has recently faced a slowdown due to declining domestic demand and broader macroeconomic challenges.
The report identifies several structural issues affecting the industry, including high transportation costs, inconsistent enforcement of axle-load limits, water shortages in mineral areas, and reliance on limited port infrastructure. It also highlights policy-related concerns such as varying provincial royalty systems, heavy taxation, and rising energy costs.
Additionally, challenges like smuggling and counterfeit cement have been flagged as factors undermining fair competition and harming compliant businesses. These issues not only affect industry growth but also raise concerns about quality and safety standards.
To address these challenges, the CCP has proposed a comprehensive reform strategy. Key recommendations include harmonising tax policies, improving logistics systems, ensuring uniform mineral regulations, and introducing competition in coal-handling infrastructure. The report also stresses the need for stable energy pricing and a predictable policy framework to attract investment.
Experts believe that implementing these reforms could significantly boost efficiency, competitiveness, and sustainability in Pakistan’s cement sector.
