KARACHI: Local cement sales fell around 18 percent year-on-year to 3.066 million tons in January as the government tightened development spending to contain fiscal deficit, industry officials said on Wednesday.
The officials said it seems that the domestic sector almost collapsed in the last month as the domestic uptake of cement nosedived from 3.737 million tons in January 2018.
All Pakistan Cement Manufacturers Association’s (APCMA) spokesman expressed dismay over the constant decline in cement consumption in the country.
“This is because of reduction in government spending on infrastructure developments,” the spokesman added.
The government slashed public sector development program to keep fiscal deficit at 5.1 percent of GDP for the current fiscal year of 2018/19 compared to 6.6 percent in the last fiscal year.
APCMA’s data revealed that cement sector posted double digit decline of 10.70 percent in growth in January compared with the corresponding month last year, raising alarm bells among producers sitting on huge production capacity.
Cement companies dispatched 3.646 million tons in January as against 4.083 million tons dispatched in the corresponding month a year earlier.
The buoyancy in exports, however, stayed on course as exports increased a healthy 67.27 percent.
The industry exported 0.579 million tons of cement in January as opposed to mere 0.347 million tons exported in January last year.
For the first time during the current fiscal year, the domestic consumption posted nominal decline from the south-based mills, while the downslide in the northern region of the country continued unabated.
Uptake in north was only 2.355 million tons last month as against 3.018 million tons cement consumed in January 2018. The consumption in the south slipped to 0.711 million tons in January from 0.719 million tons in the same month last year.
Cement sales in the first seven months of the current fiscal year stood at 26.765 million tons, up 1.67 percent over the corresponding period a year earlier. Of this, exports were up 50.47 percent to 4.141 million tons in the July-January period of FY2019.
Cement mills located in the north suffered more than the factories situated in the south.
Domestic consumption of north-based mills declined 8.43 percent to 17.831 million tons in the first seven months of the current fiscal year. Cement exports from north fell 16.71 percent to 1.692 million tons during the period under review.
In July-January, local sales in south increased 16.89 percent to 4.793 million tons and exports climbed a whopping 239.89 percent to 2.448 million tons during the period.