February 6, 2020: Cement sector continued to post growth in the month of January as its total despatches increased to 4.074 million tons, an increase of 11.26 percent from 3.662 million tons during the same month last year.
As per the data released by All Pakistan Cement Manufacturers’ Association (APCMA) domestic consumption increased by 5.95 percent to 3.265 million tons in January 2020 from 3.082 million tons in January 2019 while the exports registered another impressive increase of 39.49 percent from 0.579 million tons in January 2019 to 0.808 million tons in January 2020.
A very interesting situation has developed in the cement sector as domestic growth is entirely led by the North based plants while the exports are led by mills based in South. North based mills despatched 2.684 million tons locally was almost 11.32 percent higher than the despatches of 2.371 million tons during the corresponding month of last fiscal. In exports the North based mills continued to show decline as exports fell by 13.55 percent with exports of 0.186 million tons in January 2020 compared with exports of 0.215 million tons in January 2019.
It was the other way around in the Southern region of the country where the domestic consumption declined appreciably by 18.23 percent from 0.711 million tons in January 2019 to 0.581 million tons in January 2020. The exports however surged by 70.84 percent to 0.623 million tons from 0.364 million tons in January 2019.
In the first seven month of this fiscal the cement despatches in the country increased by 7.15 percent to 28.824 million tons against 26.900 million tons dispatched during the same period last year. The domestic consumption registered an increase of only 3.86 percent to 23.638 million tons that was 22.759 million tons in the same period last year while exports increased by over 25.23 percent to 5.186 million tons from 4.141 million tons in the same period last year.
The phenomenon of cement exports being more than local despatches has strengthened for South based mills as the local despatches have sharply declined in the region by 26.05 percent from 4.798 million tons in first seven months of last fiscal to 3.548 million tons during same period. The bright spot for the industry is growth in exports from South which surged by 46.18 percent to 3.579 million tons during the period under review from 2.448 million tons same period last year.
North based mills despatched 20.090 million tons locally during the first seven months of current fiscal that was 11.85 percent higher than the despatches of 17.960 million tons during the corresponding months of last fiscal. In exports the North based mills continued to show decline by 5.08 percent with exports of 1.606 million tons in January 2020 compared with exports of 1.692 million tons in January 2019.
“Though the less than expected and nominal increase in the cement despatches and continuous decline in local despatches from South is worrisome for the industry, the increase in exports depicts the competitiveness of our cement industry that has delivered in line with the decline in rupee value,” said the spokesperson of APCMA.
He appealed to the government to start working on the housing schemes and other construction activities as many job opportunities in not only the cement sector but the whole construction industry are on the line in the current economic scenario.
Currently, the cement production capacity reached 69.54 million tons, while domestic despatches would be around 41 million tons, leaving a huge surplus of 28.54 million tons. Therefore, it is imperative that consumption of cement increases to cover the huge surplus and save the industry form total collapse.
“Both North and South based mills were established specifically for domestic consumption and exports are just a bonus. Without surge in exports many mills in the South would have faced trouble affecting the job opportunities in the region,” he added.