INFRASTRUCTURE

In order to incentivize the Construction & Material industry and to promote construction activities across the country, the government in recent Budget announcement 2012-2013, has reduced FED (Federal Excise Duty) on cement by PkR 100 per ton in budget FY13, thereby fixing the applicable FED at PkR 400 per ton. The government has taken an initiative to completely phase out FED on cement and other items gradually hence, a further reduction in FED on cement is likely to be made in the future.

In addition to imported lumber which had shown phenomenal growth in past few years, the building material index at 10.6 percent of large-scale manufacturing (cement, steel, paints, glass, and plywood) is yet another indication of the consumption pattern of five major building materials used in the construction industry.

Despite disastrous floods in 2009 and 2010, slower economic growth, energy crises, and fluid political situation, this sector has shown some growth signs and import of Canadian lumber is rising. In 2008 the local market intake of Canadian lumber was less than 20 containers a month which according to KTMG recent estimates, has now reached to more than 200 containers a month. This is an encouraging sign.