Saturday November 27, 2021

Construction initiatives boost cement sales by 49.86pc

June 06, 2021

LAHORE: Initiatives for the construction industry boosted cement sales by 49.86 percent in May 2021 with total dispatches recorded at 3.947 million tonnes compared to 2.634 million tonnes in the same month last year.

According to the data released by All Pakistan Cement Manufacturers Association on Saturday, domestic cement dispatches increased to 3.201 million tonnes in May 2021 from 2.271 million tons in May 2020, registering an increase of 40.95 percent.

More than 100 percent surge was recorded in the cement exports during the period. Exports recorded an increase of 105.56 percent, from 363,174 tonnes in May 2020 to 746,550 tonnes in May 2021.

During May 2021, cement factories in the northern region sold 2.713 million tonnes in local markets showing an increase of 35.55 percent over 2.001 million tonnes dispatched in May 2020. Exports of these factories that were only 7,520 tonnes during May 2020 due to Covid-19 restrictions posted a healthy increase to 203,625 tons in May 2021.

South-based mills dispatched 487,311 tonnes cement in domestic markets during May 2021 registering a robust increase of 81.15 percent compared to the dispatches of 269,003 tonnes in May 2020, with exports posting growth of 52.66 percent to 542,925 tonnes up from 355,654 tonnes in May 2020.

During the first eleven months of this fiscal year, total cement dispatches (domestic and exports) were 52.222 million tonnes, up 20.91 percent from 43.189 million tonnes sold during the corresponding period of last fiscal year.

Local sales increased by 20.26 percent to 43.451 million tonnes during the 11-month period, up from 36.13 million tonnes in the same period last year. Exports increased from 7.059 million tonnes during the first 11 months of the last fiscal to 8.771 million tonnes during July-May FY21, showing a growth of 24.25 percent.

During the first 11 months of the current fiscal year, north based mills dispatched 36.722 million tonnes of cement for domestic consumption that was 18.67 percent higher compared to the dispatches during the same period last fiscal that stood at 30.943 million tonnes. Exports from the north were 2.365 million tonnes showing an increase of 22.89 percent over exports of 1.924 million tonnes during the same period last fiscal.

Local dispatches from factories in the southern region were 6.729 million tonnes during July-May which was 29.73 percent higher than 5.187 million tonnes dispatched during the corresponding period of last fiscal. Similarly, exports from south were recorded at 6.406 million tonnes, registering an increase of 24.76 percent over exports of 5.135 million tonnes during the same period last year. A spokesperson of the APCMA said that cement industry was among the highest contributors to the national exchequer as its contribution increased to Rs143 billion in 2019-20.

The cement industry is subject to FED of Rs1,500/tonne and GST of 17 percent of maximum retail price, and these taxes calculate to around Rs170/bag. Besides FED, industry also pays custom duty and taxes on machinery, spare parts imports and on import of coal and pet coke. Coal prices are showing significant upward trend as the C&F cost has increased from around $60/tonne to around $120/tonne during the current financial year. This has increased the cost of doing business as presently coal and pet coke are being used as fuel/raw material for various manufacturing concerns.

The industry asked the government to abolish FED and reduce other duties and taxes so manufacturers can control their cost of production and further optimise / expand plants, which will in turn help generate more employment and revenues for the government.