Karachi, December 04: The cement sector is passing through a lean period which despite mammoth growth in exports still recorded negative overall growth of 1 percent in November 2018 as compared to same month last year.
The growth momentum maintained by the cement industry for five years has now come to halt due to stagnant domestic consumption despite exports picking up from Southern part of the country due to huge devaluation of rupee. The Northern region that catered to Afghanistan and Indian markets has not benefited from rupee depreciation because of political reasons.
In November the cement industry despatched 3.899 million tons of cement that was one percent less than 3.941 million tons of cement despatched during the corresponding month of last year. Total local despatches in the month fell from 3.593 million tons in November 2017 to 3.337 million tons last month, depicting a decrease of 7.13 percent. However, the exports continued to grow and rose by a whopping 61.33 percent from 0.349 million tons in November 2017 to 0.563 million tons in November 2018.
The factories located in the Northern region of the country despatched 2.871 million tons of cement in November 2018 compared with 3.245 million tons despatched in November 2017. Local cement despatches in November 2018 were 2.632 million tons, down from 2.967 million tons in November 2017. The region also failed to register growth in exports which decreased from 0.278 million tons in November 2017 to 0.239 million tons in November 2018.
The units operating in the Southern part of the country despatched 1.029 million tons of cement in November 2018 compared with 0.696 million tons produced in November 2017. Local despatches from the region grew from 0.626 million tons in November 2017 to 0.705 million tons in November 2018 while the exports also shot up to 0.324 million tons from 0.070 million tons in November 2017.
Total cement despatches reached to 19.253 million tons in the first five months of this fiscal. This is 4 percent higher than the despatches of 18.513 million tons achieved during the corresponding period of last fiscal. The domestic dispatches during July to November 2018 stood at 16.283 million tons compared with dispatches of 16.434 million tons recorded in July to November 2017. This shows net decline in domestic consumption for an industry that is expanding its capacities for domestic usage. The exports in first five months of year 2017-18 stood at 2.079 million tons that increased by over 42 percent in the first five months of this fiscal to 2.969 million tons.
Cement industry is one the importer of coal which is being use as fuel for production of cement Rupee devaluation badly hit its cost of production.
A spokesman of the All Pakistan Cement Manufacturer Association hoped that the government would speed up its housing scheme and other development projects to boost construction industry that is one of the largest employers in the country.