Cement sales up 22.7pc to 4.33mln tons in Aug

LAHORE: Driven by a burst in demand, total cement sales in August 2021 increased 22.77 percent to 4.336 million tons from 3.531 million tons in the same month last fiscal year when commercial activities were mostly closed because of Covid curbs, data showed on Friday.

According to the numbers released by All Pakistan Cement Manufacturers Association (APCMA), local cement sales during the month of August 2021 increased to 3.814 million tons from 2.805 million tons in August 2020, showing a healthy increase of 35.98 percent. Export despatches, however, continued to decline as the volumes reduced from 726,687 tons in August 2020 to 521,468 tons in August 2021, decreasing by 28.24 percent.

During August 2021, the North based cement plants sold 3.141 million tons cement in domestic markets, an increase of 25.42 percent over 2.504 million tons in August 2020.

South based factories sent off 673,572 tons cement in local markets in August 2020, registering a robust increase of almost 124 percent compared to 300,750 tons in August 2020.

Exports from North based manufacturers declined 33.14 percent to 141,804 tons in August 2021 from 212,076 tons in August 2020.

Exports from South also decreased 26.22 percent to 379,664 tons in August from 514,611 tons in the same month last year.

During the first two months (July-August) of current fiscal year, total cement despatches (domestic and exports) ticked down 1.61 percent to 8.235 million tons from 8.37 million tons in the corresponding period of last fiscal year.

North-based cement-makers’ domestic despatches edged up 1.57 percent to 6.033 million tons during July-August FY2021-22 compared to 5.939 million tons in July-August FY2000-21.

Exports from North slipped 17.16 percent to 277,422 tons in the first two months of this fiscal year from 334,899 tons exported in the same period last fiscal year.

Domestic despatches by South-based cement plants in the July-August FY22 clocked in at 1.228 million tons, showing a healthy increase of 50.01 percent compared to 818,600 tons in the same period of last fiscal year.

There was, however, a massive decline of around 45 percent in exports from South as the volumes reduced to 696,823 tons in the first two months of this fiscal year from over 1.277 million tons in the corresponding period last fiscal year.

A spokesman for APCMA said the landed price of coal that was around Rs18,000/ton in August 2018 had currently increased to around Rs31,500/ton, resulting in a hike in the cost of production by approximately Rs90/bag.

“Similarly electricity rate that was Rs11.68 per unit in August 2018 has now increased to Rs19.40/unit, which has impacted the cost of production by around Rs35/bag.”

The spokesman said rise in other input costs like packing material, provincial taxes on raw material and fuel prices had also increased the overall cost of production.

He further emphasised the current demand of imported coal for cement sector was around 8.120 million tons but there was only one terminal in the country to handle entire coal shipments.

“Due to this, cement industry is continuously facing delays in unloading of coal shipments, resultantly paying demurrages and incurring extra costs on its operations.”

He said the situation would further aggravate within next two years when cement production capacity of the country would increase from 70 million tons to around 100 million tons per annum.

“Accordingly, the demand of coal will increase and coupled with the requirement of other sectors like textile and power etc, handling by just one terminal will not be possible,” the spokesman added.

On APCMA’s behalf, he said urged the government to ensure availability of multiple berths for coal handling and also accessibility at Karachi Port Trust for coal handling (subject to cabinet's approval).

“Without increasing the capacity of coal handling, the country will have major risk of energy security as well as availability of key industrial materials such as cement, chemicals etc,” the spokesman stressed.

Today, he said the situation was very challenging because of limited coal handling capacity at Pakistan International Bulk Terminal, which was causing huge demurrages and costing exchequer around $100 million per annum.