Cement industry capacity utilization touches 94.65% during the first five months of current fiscal

Karachi, December 06: Cement industry of Pakistan despatched 2.261 million tons more cement in the first five months of this fiscal, which is 13.91 percent higher than the cement despatched during the corresponding period of last fiscal. Capacity utilization of the industry is 94.65 percent during the first five months of this fiscal.

Although, the increase recorded in domestic consumption in November 2017 was 9.89 percent, the overall growth of the sector stood at 5.16 percent; as it was negatively impacted by a steep decline in exports that went down by 27.11 percent.

In November 2017, the mills situated in northern part of the country despatched 2.967 million tons cement locally, which is 10.2 percent higher than 2.692 million tons local despatches in the same month last year. The local despatches in the southern region rose by 8.4 percent from 0.578 million tons in November 2016 to 0.626 million tons in November 2017.

However, exports from South based mills took a major hit as it went down by 45.4 percent from 0.129 million tons in November 2016 to 0.070 million tons in November 2017. Exports from Northern region also decreased by 8 percent to 0.278 million tons last month from 0.350 million tons in same month last year.

However, the drop in exports continued in the first five months of this fiscal as the exports declined by 18.22 percent to 2.079 tons from 2.542 million tons during the corresponding period of this fiscal.

The cement industry is worried on the complacency shown by economic planners towards cement sector. The cement sector has so far withstood the impact of decline in exports due to a robust growth in the domestic market. However, the current political uncertainty may impact domestic growth also, said the spokesman of APCMA adding that the worries are compounded by the fact that more capacities are expected to be commissioned in next three years, starting from January 2018.

While all the previous issues raised by cement manufacturers in the last few months have remain unaddressed, increase in duties on coal has increased the cost of production, said the spokesman. The increased consumption of cement does not mean that government imposes duties on its inputs instead of providing relief to the industry which is badly hit by decline in exports, he said adding that the Government should also honour its commitment made to the cement sector that excise duty will be withdrawn in a phased manner.

“The government can generate revenue from stopping the smuggling of cement from Iran and under-invoicing as inaction against the culprits is not only disturbing the industry but eating up a major chunk of revenue,” he added.