LAHORE: Cement sector growth fell 7.91 percent during fiscal year 2021-22 mainly due to sharp decline in exports and stagnant domestic intake with no major new construction and development activity in the country during the last year.
Exports declined due to the high cost of production, which made Pakistani cement uncompetitive in the regional international markets. However, a ray of hope emerged with the beginning of cement exports to the US by DG Khan Cement. The cement maker sent a maiden consignment of cement to US in June 2022.
According to the data released by All Pakistan Cement Manufacturers Association (APCMA) on Monday, total cement despatches (domestic and exports) were 52.89 million tonnes, 7.91 percent lower than 57.43 million tonnes despatched during the last fiscal year. Domestic uptake marginally reduced by 1 percent to 47.63 million tonnes from 48.11 million tonnes during July. However, a huge decline of 43.57 percent recorded in cement exports, as 5.25 million tonnes were exported compared to 9.31 million tonnes during the last fiscal year.
Last month ended on a positive note, with June uptake increasing 1.01 percent to 5.26 million tonnes against 5.21 million tonnes in the corresponding month last year. Domestic sales in June 2022 were 4.97 million tonnes up from 4.66 million tonnes in June 2021, showing an increase of 6.66 percent. Exports declined 47.57 percent as volumes reduced to 284,471 tonnes from 542,622 tonnes.
Units up north sold 4.12 million tonnes domestically, up 6.8 percent from 3.85 million tonnes in June 2021. Units down south despatched 856,863 tonnes in local markets during June 2022, up 5.98 percent from 808,490 tonnes in June 2021.
Similarly, exports from the north-based units posted massive decline of 51.79 percent, with volumes clocking in at 97,163 tonnes in June 2022, down from 201,540 tonnes in June 2021. Exports from the south also reduced by 45.08 percent to 187,308 tonnes in June 2022 from 341,082 tonnes during the same month last year.
Domestically, north-based units despatched 39.44 million tonnes cement during FY22, down 2.81 percent from 40.58 million tonnes in FY21. Exports from the north declined 64.52 percent to 910,685 tonnes during FY22 compared with 2.56 million tonnes exported in FY21. Locally, southern units sold 9.19 million tonnes, up 8.74 percent during the year under review, above 7.53 million tonnes despatched in FY21. There was however substantial decline of around 35.6 percent in exports from the south zone as volumes reduced to 4.34 million tonnes in FY22 from 6.74 million tonnes in FY21. APCMA spokesman expressed serious concerns over the uncertainty in government’s policies. He indicated that the industry was going through difficult times due to the historical high prices of fuel, electricity, coal and other raw materials.
“Due to high cost of production, the prices of cement will continue to increase in the local market. The export of cement has declined massively during the ongoing financial year due to high cost of production.” He urged the government to devise a policy to help the cement industry export to global markets.