Cement despatches increase 13.91pc in July-Nov

LAHORE: Pakistan’s cement industry despatched 2.261 million tons in the first five months of fiscal year 2018, which is 13.91 percent higher compared to the corresponding period of the last fiscal.

The All Pakistan Cement Manufacturers Association (APCMA) data released on Wednesday said the industry utilised 94.65 percent of its capacity during the July-November period of FY18.

The increase recorded in domestic consumption in November 2017 was 9.89 percent, but the overall growth of the sector stood at 5.16 percent, as it was negatively impacted by a steep decline in exports that went down by 27.11 percent.

In November 2017, the mills situated in the northern part of the country despatched 2.967 million tons cement locally, which is 10.2 percent higher than 2.692 million tons despatched in the same month last year, the APCMA data revealed.

The local despatches in the southern region rose by 8.4 percent from 0.578 million tons in November 2016 to 0.626 million tons in November 2017.

Export from mills located in the south took a major hit, as it went down by 45.4 percent from 0.129 million tons in November 2016 to 0.070 million tons in November 2017. Exports from the northern region also decreased by eight percent to 0.278 million tons last month from 0.350 million tons in the same month last year.

Exports continued to drop in the July-November period this fiscal, as cement despatches fell by 18.22 percent to 2.079 million tons from 2.542 million tons during the corresponding period of fiscal year 2017.

The cement industry is worried about the complacency of the economic planners towards the sector. “Robust growth in the domestic market has helped the sector withstood the impact of decline in exports so far, however, the current political uncertainty may impact domestic growth as well,” APCMA spokesman said.

He said the worries were compounded by the fact that more capacities were expected to be commissioned in the next three years, starting from January 2018. “While all the previous issues raised by the cement manufacturers in the last few months remained unaddressed, increase in duties on coal has amplified the cost of production,” the spokesman said.

The increased consumption of cement does not mean that government imposes duties on its inputs instead of providing relief to the industry which was badly hit by the decline in exports, the APCMA spokesman said, and added that the government should honour the commitment it made about withdrawing excise duty in a phased manner. “The government can generate revenue by curbing the smuggling of cement from Iran and under-invoicing, as the inaction against culprits is not only disturbing the industry but eating up a major chunk of the revenue,” he said.