Domestic cement consumption jumps by 40% in May

Cement sector showed excellent growth of 49.86 percent in May 2021. Total cement despatches during May 2021 were 3.947 million tons against 2.634 Million Tons despatched during the same month of last fiscal year.

According to the data released by All Pakistan Cement Manufacturers Association, domestic cement despatches during the month of May 2021 increased to 3.201 million tonnes from 2.271 million tonnes in May 2020, depicting a healthy increase of 40.95 percent. Exports also massively increased by 105.56 percent, from 363,174 tons in May 2020 to 746,550 tons in May 2021.

During May 2021, the North based cement mills despatched 2.713 million tonnes cement in local markets, showing an increase of 35.55 percent over 2.001 million tons despatches in May 2020. South based mills despatched 487,311 tonnes cement in domestic markets during May 2021 registering a robust increase of 81.15% compared to the despatches of 269,003 tonnes in May 2020. Exports from North based mills that, due to covid-19 issues, was just 7,520 tons in May 2020 showed healthy increase to 203,625 tons in May 2021. Exports from South also increased by 52.66 percent to 542,925 tons in May 2021 from 355,654 tons during the same month last year. During the first eleven months of this fiscal year, total cement despatches (domestic and exports) were 52.222 million tons which is 20.91 percent higher than 43.189 million tons of cement despatched during the corresponding period of last fiscal year. During July 20 to May 21, local despatches increased by 20.26 percent to 43.451 million tons from 36.13 million tons in the same period last year. Exports increased from 7.059 million tons during the first 11 months of the last fiscal to 8.771 million tons during July 20 to May 21, showing a growth of 24.25 percent.

During the first 11 months of the current fiscal year, north based mills despatched 36.722 million tons of cement for domestic consumption that was 18.67 percent higher compared to the despatches during the same period last fiscal that stood at 30.943 million tons. Exports from North were 2.365 million tons showing an increase of 22.89 percent over exports of 1.924 million tons during the same period of last fiscal year. Local despatches from South based mills were 6.729 million tons during the first eleven months of the current fiscal year which was 29.73 percent higher than 5.187 million tons despatched during the corresponding period of last fiscal year. The exports from South recorded 6.406 million tons registering an increase of 24.76 percent over exports of 5.135 million tons during the same period last year.

A spokesman of APCMA said that cement industry is among the highest contributors to the national exchequer as its contribution has increased to 143 billion rupees in 2019-20. He said that cement industry is subject to FED of Rs. 1500 per ton and GST of 17% of maximum retail price and these taxes calculate to around Rs. 170 per bag. Besides FED, industry also pays custom duty and taxes on machinery, spare parts imports and on import of coal and pet coke. Coal prices are showing significant upward trend as the C&F cost has increased from around US $ 60 per ton to around US$ 120 per ton during the current financial year. This has increased the cost of doing business as presently coal and pet coke are being used as fuel/raw material for various manufacturing concerns. He appealed to the government to abolish the FED and reduce other duties and taxes in order to provide opportunity to the manufacturers to control their cost of production and further optimize/ expand their Plant that will in turn help generate more employment and revenues for the government.

Source : Daily times