A new study has highlighted key challenges in Pakistan’s cement industry and called for wide-ranging reforms in taxes, logistics, energy, and mineral policies to improve competition and support long-term growth.
According to Beyond Time News, the Competition Commission of Pakistan (CCP) released a report titled “Competition Assessment Study of the Cement Sector in Pakistan,” which outlines structural issues limiting efficiency and market competition.
Cement Sector’s Role in the Economy
The cement industry remains a critical part of Pakistan’s industrial base. The manufacturing sector contributes around 8% to GDP, while cement alone accounts for about 1%, making it essential for infrastructure and housing development.
However, the report notes a recent slowdown in demand. During FY2025, domestic cement consumption declined in both northern and southern regions due to weaker construction activity and broader economic pressure.
CCP releases cement sector study, calls for reforms
Low Consumption, High Growth Potential
Despite its importance, Pakistan’s per capita cement consumption remains below global averages, indicating significant room for future growth if structural barriers are addressed.
Key Challenges Identified
The study highlights several constraints affecting the sector, including:
- High transportation and logistics costs
- Energy price pressures and fuel-related levies
- Uneven provincial regulations on axle-load limits
- Different royalty rates for limestone extraction
- Dependence on limited coal-handling infrastructure at ports
- Weak border controls leading to smuggling and counterfeit products
These issues, according to the report, reduce competitiveness and increase production costs.
Proposed Reform Measures
To address these challenges, the CCP recommends a coordinated reform strategy focused on improving efficiency and fairness in the market.
Key proposals include:
- Harmonizing axle-load regulations across provinces
- Modernizing transport and logistics systems
- Creating uniform limestone royalty frameworks
- Introducing competition in coal handling at ports
- Ensuring a stable, medium-term tax policy
- Adopting cost-reflective energy pricing structures
Focus on Long-Term Growth
The report also emphasizes expanding the mineral sector to support new cement capacity and reduce supply constraints. Officials say these reforms could improve productivity, attract investment, and strengthen overall industrial growth.
