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Cement slumps 6.83 percent as construction slowdown takes toll

By Jawwad Rizvi
October 08, 2022

LAHORE: Cement sales declined 6.83 percent to 4.276 million tonnes in September 2022 on the back of contraction in construction activities.

According to data released by All Pakistan Cement Manufacturers Association (APCMA), cement dispatches declined 6.83 percent in September 2022, with the industry dispatching 4.276 million tonnes against 4.589 million tonnes during the same month of FY21. Local cement dispatches by the industry during the month of September 2022 were 3.80 million tonnes compared to 4.01 million tonnes in September 2021, showing a decline of 5.33 percent.

Exports declined by 17.35 percent as volumes reduced from 571,613 tonnes in September 2021 to 472,437 tonnes in September 2022.

In September 2022, cement factories up north posted decline of 8.34 percent as they sold only 3.26 million tonnes against 3.56 million tonnes dispatched in September 2021. South-based mills dispatched 1.01 million tonnes cement during September 2022 that was 1.58 percent less compared to the dispatches of 1.02 million tonnes during September 2021. North-based cement mills dispatched 3.13 million tonnes cement in the domestic markets in September 2022 showing a decline of 9.08 percent against 3.45 million tonnes dispatched in September 2021.

Factories in the south dispatched 666,595 tonnes cement in local markets during September 2022 that was 17.47 percent higher compared to the 567,445 tonnes sold during September 2021.

Exports from the northern units increased by 14.75 percent as quantities increased from 110,245 tonnes in September 2021 to 126,502 tonnes in September 2022. Exports from the south reduced by 25.02 percent to 345,935 tonnes in September 2022 from 461,368 tonnes during the same month last year.

During the first quarter of the current fiscal year, total cement dispatches (domestic and exports) were 9.613 million tonnes; down 25.04 percent from 12.825 million tonnes during the corresponding period of the last fiscal.

Domestic dispatches during this period were 8.599 million tonnes against 11.279 million tonnes during the same period last year; down 23.76 percent. The export dispatches were also 34.44 percent less as the volumes reduced to 1.013 million tonnes during the first three months of the current fiscal compared to 1.545 million tonnes exported during the same period last fiscal.

Factories up north dispatched 7.258 million tonnes cement domestically during the first three months of FY22, down 23.46 percent from 9.483 million tonnes in July-September 2021. Exports from the north declined by 25.53 percent to 288,712 tonnes during July-September 2022 compared with 387,667 tonnes exported during the same period last year.

Total dispatches by cement factories up north reduced 23.54 percent to 7.547 million tonnes during QYFY22 from 9.871 million tonnes in Q1FY21.

Domestic dispatches by south-based mills during July-September 2022 were 1.341 million tonnes showing reduction of 25.31 percent over 1.795 million tonnes dispatched during the same period of the last fiscal year. Exports from the south declined 37.43 percent to 724,682 tonnes during Q1FY22 compared with 1.158 million tonnes in Q1FY21.

Total dispatches by factories in the south declined 30.06 percent to 2.065 million tonnes in Q1 from 2.953 million tonnes during the same period in FY21.

APCMA spokesman expressed serious concerns over the strict limitations on establishing letters of credit by the State Bank for spare parts and other machinery.

“The government must relax conditions for opening letter of credits immediately as without spare parts, cement factories will face difficulties in running their operations,” he added.