Cement sales up 14 percent; exports complement growth

LAHORE: The growth in domestic cement demand has been complemented by surging exports for the second month, as cement exports from Pakistan increased by a whopping 85 percent in March 2018.

According to the figures released by the All Pakistan Cement Manufacturers Association (APCMA), the total cement sales in March 2018 were 4.652 million tons, the highest ever in the history of the cement industry.

This was 17.33 percent higher than the sales of 3.965 million tons achieved in March 2017. Domestic consumption was 4.260 million tons out of which 3.543 million tons was consumed in the northern part and 0.717 million tons was consumed in the southern part of the country, reflecting a growth of 13.52 percent.

Cement exports surged to 0.392 million tons that was 85 percent higher than the exports during the corresponding period of the last year.

During the first nine months of this year, the industry sold 34.758 million tons of cement which was 14.70 percent higher than 30.304 million tons despatched during the corresponding period last year. In the July-March period, domestic cement sales from the north were 25.881 million tons, up 19.3 percent, while exports were 2.431 million tons, down 3.78 percent.

Domestic cement sales from the south were 5.426 million tons, up 11.83 percent, while exports were 1.014 million tons, down 17.38 percent. According to APCMA, exports started improving in February 2018 and have continued to improve in March 2018 as well. Exports from the north increased mainly due to the sudden surge in exports to Afghanistan that increased from 0.037 million tons in March 2017 to 0.106 million tons in March 2018.

The capacity utilisation of the industry for the nine months of the current fiscal is 93.74 percent, the highest ever in the history of the industry. The monthly cement production capacity of the industry is 4.120 million tons while in March 2018, the industry despatched 4.652 million tons, posting a capacity utilisation of 112.91 percent for the month. The spokesman of APCMA hoped that going forward the country would continue to post healthy growth in the cement sector, which is the only industry in Pakistan that has shown faith in Pakistan’s economy and has continued to enhance its capacities.

“The local despatches have increased considerably due to construction activities and could further increase substantially if smuggling of Iranian cement into the country is curbed. Moreover, customs duty on import of both clinker and cement should increase to a uniform rate of 35 percent and only be allowed if Pakistan Standards and Quality Control Authority certifies the quality,” the spokesman added.

He said the cement industry was among the highest contributors to the national exchequer over the last few years with a contribution of Rs110 billion in 2016-17. Currently, federal excise duty (FED) on cement is Rs1,250/ton, which is Rs62.5/bag. “We appeal the government to reduce FED to ‘zero’ to cut the per bag price of cement and encourage cement consumption which is affected by high taxation,” he added.