Cement sales fall 5.31pc in July-Aug

LAHORE: The changeover in government likely impacted domestic cement sales, which unexpectedly declined by 5.31 percent in the first two months of the current fiscal year 2018/19, an official of the All Pakistan Cement Manufacturers’ Association (APCMA) said on Wednesday.

In July-August, domestic sales fell 8.80 percent in the north zone, and 10.91 percent in the south zone. However, exports from the north declined 29.66 percent, while the south zone exports grew by 158.40 percent. Domestic cement sales volumes were 2.895 million tons, of which 2.326 million tons were sold in the northern part of the country and 0.569 million tons in the south. During the corresponding month of last year the north and south zone dispatched 2.730 million tons and 0.625 million tons, respectively. However, cement exports increased by 35.82 percent as 0.557 million tons of cement was exported in August 2018, against 0.409 million tons exported in August 2017.

APCMA spokesman said this abrupt decline in domestic cement uptake has taken the cement manufacturers by surprise. The industry was expecting a slower growth as witnessed a month earlier, but never expected negative growth, he added.

“This might be due to change of governments, as pace of ongoing development projects gets affected in the process, though private sector construction of houses seems to be normal,” he said, expressing hope that this was a one off decline and the growth would gather pace in coming months.

The industry was rightly worried because they have made tremendous investment to increase capacity that has now crossed 50 million tons a year. “This expansion was made on the assumption that construction activities would continue to grow at a rapid pace in the long-term,” the spokesman added. The APCMA spokesman said the manufacturers were not worried when domestic cement dispatches grew by a little over four percent in July 2018.

“Slower growth was attributed to the hectic election activities that were going on in the country,” he said, adding that things should have normalised in August and it was a matter of great concern for the industry that it did not.

In July 2018, the overall growth in the industry was 5.1 percent, while in August 2018 the overall growth was negative 8 percent. He said in the first two months of this fiscal, the industry recorded a negative growth of 1.98 percent.

“Industry is still hopeful of a rapid turnaround as the new government has promised to construct one million new houses every year. Once this programme is energised, the growth will accelerate,” the spokesman said.