Cement dispatches post 3.55pc growth

LAHORE: Cement dispatches were limited to a mere 3.55 percent growth for the month of September 2016 due to slack demand in domestic markets. On the other hand, cement exports registered double digit growth during the same period.

According to All Pakistan Cement Manufactures Association (APCMA) data released on Thursday, domestic dispatches in September 2016 were 2.536 million tons, registering a growth of two percent, while exports were 0.523 million tons, reflecting growth of 11.79 percent compared to September 2015. Total cement dispatches in September amounted to 3.059 million tons, depicting a growth of 3.55 percent.

During the month of September 2016, exports to Afghanistan increased nominally from 0.223 million tons in September 2015 to 0.228 million tons, showing a growth of two percent. However, exports to India registered healthy increase from 0.055 million tons in September last year to 0.112 million tons during the same month this year, showing growth of 101 percent. Exports to India are mainly through Wagah border and the southern coast of India.

According to a spokesperson of the APCMA, the reason for slowdown in domestic growth is mainly due to holidays for Eid-ul-Azha. It was the first time in more than 15 months that growth in exports exceeded growth in domestic consumption, he said.

However, data revealed that during the first quarter of the current fiscal year, the cement industry posted a growth of 9.50 percent in local dispatches compared with local dispatches during the first quarter of the last fiscal year. Exports also recorded a growth of 3.03 percent compared with exports during the first quarter of last year.

The overall situation during the first quarter of the current fiscal year showed an 8.33 percent growth compared to the same period last fiscal.

During the first quarter, July-September 2016, the cement industry dispatched 8.976 million tons of cement, while during the corresponding period of July-September 2015 the total dispatches were 8.286 million tons.

Capacity utilisation during the first quarter of this fiscal was 79 percent, an increase of seven percent compared with the corresponding period last year.

Industry hopes that the slow growth in domestic consumption was a one off phenomenon, triggered by the new property valuation policy of the government. They expect the domestic consumption to pick up once the valuation issue settled or was factored in by the investors.

The growth in demand on infrastructure projects continued unabated, however, the government should avoid disruptive policies that impact construction growth in the country.

The association urged the government to take further measures to encourage domestic construction sector which was the main source of employment to the non-skilled workforce of the country.