Domestic Cement Despatches Increase By 55 Percent

Karachi, August 04: The cement sector celebrated the first month of current fiscal with a bang posting a cumulative growth of 45 percent in the month of July compared with corresponding month of last fiscal; with domestic consumption increasing by a whopping 55 percent and exports by 2.28 percent.

The turnaround after a dismal performance in June 2017 took the industry by surprise and the sharp increase in despatches in July 2017 revived hopes for the sector. The despatches were achieved despite political turmoil in the country and unprecedented rains throughout the country which depicts the maturity of the construction sector of the country.

The capacity utilization was high at 86.46 percent. It is pertinent to mention that the annual cement despatch capacity of the industry has increased to 46.94 million tons.

Local dispatches from units based in Northern region of the country were 2.423 million tons while their export despatches were 0.338 million tons in July 2017 as opposed to 1.516 million tons local and 0.306 million tons export despatches in July 2016.

South based mills also recorded a growth in local despatches which increased from 0.352 million tons in July 2016 to 0.483 million tons in July 2017 whereas, exports took a hit going down to 0.138 million tons from 0.159 million tons in July 2016.

Exports to Afghanistan increased by 40.25% from 0.150 million tons in July last year to 0.210 million tons in July 2017. However, this major increase was offset by decline of 11.61% and 18.95% respectively, in exports to India and other countries by sea which stood at 0.122 and 0.144 million tons respectively in July 2017, going down from 0.138 million tons and 0.178 million tons in July last year.

A spokesman of All Pakistan Cement Manufacturers’ Association said that the despatch figures for July are most encouraging. He said by despatching 3.382 million tons of cement in July 2017 the industry has established a record for this month. Never before he added, the sector had crossed the despatch limit of 3 million tons in the month of July.

However, he said that this does not mean that the economic planners ignore the genuine difficulties faced by this sector. He said the industry is performing in stiff regulatory environment and is only surviving because it has upgraded its technology that has provided it the strength to take any challenge head on.

‘Our quality is the best in the region and our efficiency is second to none. No cement could compete with Pakistani cement if imported at real and fair value after paying all government levies. However, weak border controls and lax customs vigilance allow entry of cement from across our borders at unfair valuations hurting the local cement industry,’ he added.

The spokesman said that the government should lower excise duty on the sector to further boost despatches. In the same way the import duty on coal imported by the sector should be brought at par with other sectors.