January 2, 2020: The cement sector maintained the despatch pattern of previous six months as the Northern region excelled in domestic dispatches but performed poor in exports. On the other hand, the Southern region over excelled in exports but its performance in the domestic market was pathetic.
The wide difference in local consumption in the North and South depicts a lopsided growth pattern of the economy.
In the month of December 2019 cement despatches increased by 10.69 percent to 4.306 million tons from 3.891 million tons in December 2018. The domestic consumption increased by 7.16 percent to 3.536 million tons in December 2019 from 3.300 million tons in December 2018 while the exports registered another impressive increase of 30.38 percent from 0.591 million tons in December 2018 to 0.769 million tons in December 2019.
In December 2019, the cement mills based in the northern part of the country despatched 3.172 million tons, 11.2 percent higher than 2.852 million tons in December 2018. Domestic despatches increased from 2.62 million tons in December 2018 to 2.96 million last month whereas exports decreased from 0.227 million tons in December 2018 to 0.207 million tons in December 2019.
South based cement mills despatched 1.135 million tons in December 2019, 9.24 percent up from 1.039 in December 2018. The domestic consumption declined from 0.675 million tons in December 2018 to 0.572 million tons in December 2019, however, exports from the region increased to 0.563 million tons in December 2019 from 0.364 million tons in December 2018.
In the first six month of this fiscal the cement despatches in the country increased 6.51 percent to 24.751 million tons against 23.239 million tons dispatched during the same period last year. The domestic consumption registered an increase of only 3.54 percent to 20.373 million tons that was 19.677 million tons in the same period last year while exports increased by over 22 percent to 4.377 million tons from 3.561 million tons in the same period last year.
The Northern mills dispatched 17.406 million tons cement to the local market in the first six month of this fiscal registering an increase of 11.65 percent over the consumption during the same period last year. The exports from North could reach only 1.420 million tons registering a decrease of 3.85 percent over the exports achieved during the same period last year.
The Southern region despatched 2.967 million tons of cement for local market in the first six month of this fiscal that was 27.41 percent lower than the dispatches during July-December 2018. It is interesting to note that the exports from the South in the last six months almost matched the local consumption in that region. The exports were 2.957 million tons registering an impressive growth of 41.87 percent.
“The industry is sitting on a huge unutilized capacity as it will dispatch just over 47 million tons cement this year at this rate against an installed capacity of 59.65 million tons,” said the spokesman of the All Pakistan Cement Manufacturer Association.
“This situation will not trigger any investment and expansion in the industry and employment in the sector will gradually decrease,” he added. To support the sector, he suggested the government to start work on PSDP and announced housing projects that will boost the contribution of the construction sector and job opportunities for skilled and unskilled labour.