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Pakistan reports mixed 6M dispatches in December

In the six months of July-December 2019, Pakistani cement plants in the northern region saw a rise in domestic dispatches, but export sales were subdued, according to All Pakistan Cement Manufacturers’ Association (APCMA). In the south the domestic off-take was poor, but exports delivered a positive performance. APCMA attributes this to the two-tier growth in the country’s economy.

In the 6MFY19-20 cement dispatches in the country increased 6.5 per cent to 24.751Mt when compared with 23.239Mt dispatched during the same period last year. Domestic consumption registered a rise of only 3.5 per cent to 20.373Mt from 19.677Mt in the same period last year, while exports surged by over 22 per cent to 4.377Mt from 3.561Mt in the year-ago period.

Out this total, the northern cement grinding units dispatched 17.406Mt cement to the local market in 6MFY19-20, registering a YoY increase of 11.7 per cent. Exports from the north reached only 1.42Mt, down 3.9 per cent YoY.

The southern region dispatched 2.967Mt of cement to the domestic market in the 6MFY19-20, representing a decline of 27.4 per cent when compared with the year-ago period. Exports from the south in the last six months almost matched the local consumption in that region. The exports were 2.957Mt, registering a considerable growth of 41.9 per cent.

December 2019
In December 2019 cement dispatches increased by 10.7 per cent YoY to 4.306Mt from 3.891Mt. Pakistani cement consumption increased by 7.2 per cent to 3.536Mt  in December 2019 from 3.3Mt in December 2018, while exports surged 30.4 per cent from 0.591Mt in December 2018 to 0.769Mt in December 2019.

During the last month of 2019, the cement mills based in northern Pakistan dispatched 3.172Mt, 11.2 per cent higher than 2.852Mt in December 2018. Domestic offtake increased from 2.62Mt in December 2018 to 2.96Mt last month, whereas exports fell from 0.227Mt in December 2018 to 0.207Mt in December 2019.

Southern-based cement mills dispatched 1.135Mt in December 2019, up 9.2 per cent from 1.039Mt in December 2018. Domestic consumption declined from 0.675Mt in December 2018 to 0.572Mt in December 2019. However, exports from the region increased to 0.563Mt in December 2019 from 0.364Mt in December 2018.

Government support needed
With cement dispatches estimated at just over 47Mt in 2019 and a capacity of 59.65Mta, the industry has considerable overcapacity, according to APCMA. This situation is expected not to trigger any investment and expansion in the industry and employment in the sector is set to gradually decrease. To support the sector, APCMA has suggested that the government needs to start work on the Public Sector Development Programme (PSDP) and announced housing projects to boost the contribution of the construction sector and provide job opportunities for skilled and unskilled labour.

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