The cement industry dispatched 3.325Mt in February 2019 against dispatches of 3.78Mt in February 2018, according to data released by the All Pakistan Cement Manufacturers Association (APCMA). Therefore, domestic consumption contracted by 19.1 per cent YoY.
However, total exports from the country increased by a healthy 69.1 per cent YoY in February. The industry exported 0.508Mt of clinker and cement in February 2019 against exports of 0.301Mt in same month in the previous year.
The domestic consumption in north Pakistan continued to decline to 2.148Mt last month against 2.871Mt same month last year. Exports from the mills based in the north also saw a 8.7 per cent decline to 0.165Mt in February 2019 from 0.181Mt in February 2018.
The south fared comparatively better as local consumption stood at 0.669Mt in February 2019 as compared to 0.609Mt in February 2018. Exports from the south also increased by 185 per cent from 0.12Mt in February 2018 to 0.343Mt in February 2019.
Performance in 8MFY19
Overall cement dispatches in the eight months between July 2018 and Feb 2019 stood at 30.091Mt, 0.1 per cent lower than the dispatches of 30.106Mt achieved during the same period of last year. This total includes exports of 4.649Mt, which was 52.3 per cent higher than 3.053Mt exported in the corresponding period last year.
Mills located in the north continued to be adversely impacted as local consumption declined by 10.6 per cent to 19.98Mt in the first eight months of this financial year from 22.344Mt same period last year.
Indian factor hit exports hard
Exports from north fell 16 per cent to 1.857Mt during the July 2018-February 2019 from 2.212Mt in the year-ago period mainly because India imposed a 200 per cent duty on all items coming from Pakistan. This resulted in a considerable loss to the industry as approximately 300 cement trucks waiting at Wahga border to cross were returned. The same loss was also incurred by the southern factories as cement loaded in container at Karachi port were returned as Indian customers cancelled all orders.
However, mills in the south performed better during July-February 2019, as the local dispatches and exports increased by 16 and 232 per cent to 5.462Mt and 2.792Mt, respectively.
An APCMA spokesman expressed dismay on the constant decline in cement uptake in the country, especially in the northern region, for various reasons. Rains in almost all parts of the country have affected the construction activities. Moreover, the halt in government spending on Public Sector Development Programme (PSDP) is also a major concern for the industry. Meanwhile, exports to India have also stopped due to the increasing tension between both the countries.
He appealed the government to support the industry by minimising duties and taxes, especially on exports to help the industry earn foreign exchange in these testing times. He also urged the government to restart spending on PSDP to boost not only consumption of cement and other construction materials but also the work opportunities for skilled and unskilled labour.
