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May 7, 2020

Cement despatches down 23.65 percent on demand slump

Business

May 7, 2020

LAHORE: Cement despatches declined 23.65 percent to 3.52 million tons in April 2020 from 4.61 million tons in same month last year, primarily because both export and domestic markets crashed after COVID-19 outbreak arrested construction activities world over including Pakistan.

According to data related by the All Pakistan Cement Manufacturers’ Association (APCMA), the decline in domestic consumption was witnessed both in the North and South zones of the country as it fell 18.97 percent to 3.271 million tons in April 2020 from 4.037 million tons in the same month last year.

Domestic despatches from the mills in Southern part of the country fell 49.85 percent from 0.683 million tons in April 2019 to only 0.342 million tons last month whereas the mills based in North despatched only 2.928 million tons domestically in April 2020, down by 12.68 percent from 3.353 million tons in same month last year.

Exports have recorded the first instance of decrease this year as they fell from 574,026 tons in April 2019 to a mere 249,127 tons last month, depicting a decrease of 56.6 percent.

Exports from the Southern Zone decreased 27.97 percent from 343,611 tons in April 2019 to only 247,519 tons in April 2020.

The situation was even more dismal for the mills in the North as the exports in April 2020 were negligible at 1,609 tons, falling 99.3 percent from 230,415 tons in April last year.

The total despatches though inched up 3.45 percent to 40.55 million tons in the first ten months of this fiscal as compared to 39.20 million tons during the same period last year, mainly on the strength of better performance in pre-pandemic months.

Domestic despatches from North increased 8.96 percent to 28.941 million tons during July-April FY20 from 26.561 million tons in July-April FY19, whereas the mills in South have recorded a significant fall in local despatches, down 29.11 percent from 6.936 million tons in first 10 months of the last fiscal to 4.917 million tons this fiscal.

Exports from South rose 37.08 percent from 3.486 million tons in the first ten months of last fiscal to 4.779 million tons this year whereas the mills in North registered 13.63 percent decline in exports, falling to 1.916 million tons from 2.219 million tons last year. An APCMA spokesman said the cement sector that was already struggling to survive on extremely high input costs, was badly hit due to lock down in the first half of the month.

“The decline in construction activities around the world including Pakistan contributed to downfall in demand; however, the cement sector even otherwise was operating under acute distress,” he said.

The cement industry representative further said the construction sector got numerous tax concessions in the stimulus package announced by the federal government, but

it would not succeed until its related industries were accommodated through tax concession.

“The federal government which should consider taking back additional taxes and duties imposed on the sector in the past two years so that the industry could remain sustainable,” he added.