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All Pakistan Cement Manufacturers' Association

Pakistan’s cement and clinker exports decline

Pakistan’s cement and clinker exports have decreased in the first seven months of the FY21-22. According to local analysts, historically, when domestic demand is booming, exports take a backseat, and when the domestic market is slowing down, exports contribute a critical share in total sales. It makes more economic sense to sell domestically where prices are more desirable and less competitive. The Indian supply has not been restored to date, and there is no momentum in dispatches to Kabul.

The Pakistan cement industry earned US$160.926m in export revenue by dispatching 4.315Mt of cement and clinker overseas in the 7MFY21-22 (July 2021-January 2022), compared to US$163.67m from 4.93Mt of exports in the year-ago period. As a result, the sector saw a nominal slide of 1.7 per cent in dollar terms but reported a double-digit decline of 12.5 per cent in volume during the export period. However, exports valued in Pakistani rupees saw a growth of 3.1 per cent to PKR27.58bn (US$156.4m) during this period.

Pakistan has been exporting clinker/cement to Bangladesh, Sri Lanka, Afghanistan, Madagascar, South Africa, Tanzania and India.

In Jan 2022 alone, export revenues decreased 44 per cent MoM to US$17.15m on the shipment of 393,347t, compared to US$27.77m from 702,698t of exports in December 2021.

However, when compared with January 2021 earnings of US$20.74m from 607,640t, this represented a drop of 17.3 per cent and 35.3 per cent YoY in value and quantity, respectively.

Cement export increases 0.59pc in six months

The exports of cement witnessed an increase of 0.59 per cent during the first half of financial year 2021-22, against the exports of the corresponding period of last year. The cement exports from the country were recorded at $143.768 million during July-December (2021-22) against the exports of $142.924 million during July- December (2020-21), according to the Pakistan Bureau of Statistics (PBS). In terms of quantity, the exports of cement however dipped by 9.33 percent by going down from 4,325,060 metric tons to 3,921,554 metric tons, according to the data. Meanwhile, on year-to-year basis, the exports of cement increased by 44.28 percent during the month of December 2021 as compared to the same month of last year. The exports of cement from the country during December 2021 were recorded at $27.776 million against the exports of $19.251 million in December 2020. On month-on-month basis, exports of cement declined by 45.04 percent during December 2021 when compared to the exports of $50.542 million in November 2021, the PBS data revealed.

Cement sales rise 7% in November

KARACHI: Cement sales jumped seven per cent year-on-year to 4.82 million tonnes in November, according to the data released by All Pakistan Cement Manufacturers Association on Monday.

Despite an increase in the commodity’s price, domestic sales grew 10.2pc to 4.124m tonnes during the month amid an improvement in construction activity. However, exports fell 9.2pc to 695,779 tonnes from 766,273 tonnes a year ago.

North-based mills despatched 3.469m tonnes in the domestic markets as against 3.129m tonnes in November last year, showing a rise of 11pc. However, cement exports from these mills plummeted 70pc to 55,234 tonnes in November from 182,091 tonnes in the same month last year.

Domestic despatches go up amid increased construction activity, while exports suffer due to higher freight rates

Mills based in the southern region sold 654,983 tonnes in the local market during November, an increase of 7pc compared to 613,113 tonnes a year ago. Exports from the southern mills went up by 9.65pc to 640,545 tonnes in November from 584,182 tonnes during the same month last year.

Five-month sales
In the first five months (July-November) of the current fiscal year, overall cement sales dropped 4pc year-on-year to 22.86m tonnes.

Domestic despatches grew 3pc to 20m tonnes during the five-month period compared to 19.455m tonnes a year ago, whereas exports plunged 35pc to 2.853m tonnes from 4.384m a year ago. Despatches from the north-based mills amounted to 16.785m tonnes domestically during the period, a marginal increase of 0.17pc on a year-on-year basis. Exports from these mills nearly halved to 516,003 tonnes during July-November compared to 1.087m tonnes in the year-ago period.

Domestic despatches by mills based in the southern region stood at 3.22m tonnes, showing a rise of 19.4pc compared to 2.698m tonnes during the five-month period a year ago. In contrast, exports from these mills dropped sharply by 29pc to 2.337m tonnes during the period under review.

Mehroz Khan of Topline Securities said domestic cement sales in November went up amid increased construction activity and post-Covid economic recovery, while exports suffered because of higher freight rates.

He said the retail price of cement in November averaged at Rs734 per 50kg bag in the northern region, an increase of 4pc compared to October. In the southern region, the average retail price jumped by Rs29 per bag to Rs749.

FCCL to become the third-largest player in the country

Fauji Cement Company Ltd (FCCL) informed the Pakistan Stock Exchange (PSX) on 18 November that its Board of Directors has approved the process of amalgamation of Askari Cement Ltd into Fauji Cement Co Ltd and its placement before the shareholders in the Extraordinary General Meeting of the company as Special Business for their approval as per requirements of the Companies Act of 2017.

While commenting on the amalgamation, AHL Research stated that, pertinently, Askari has a cement capacity of 2.8Mta against FCCL’s current capacity of 3.43Mta. This implies an 82 per cent addition to existing capacity, which, together with FCCL’s announced greenfield expansion of 2.05Mta in the north (DG Khan, Punjab) and ACL’s brownfield expansion of 2Mta, will render FCCL to become the third-largest player in the country with a capacity of 10.3Mta.

Post-merger and expansion, ACL will add 47 per cent to the total capacity (4.9Mta out of the total 10.3Mta) in the new entity, whereas its current owners will hold nearly 37 per cent in shareholding (800m shares out of 2180m shares). Albeit, this deal will be beneficial for both ACL and FCCL, as the company’s cumulative market share will aid its augmented presence in North (third largest capacity in the region after Bestway Cement Ltd expands by 2.16Mta to 12Mta and Lucky Cement expands by 3.15Mta to 15Mta).

All Pakistan Cement Manufacturers Association sets out decarbonisation strategy

Pakistan: Members of the All Pakistan Cement Manufacturers Association (APCMA) plan to reduce the CO2 emissions from their cement production. The Business Recorder newspaper has reported that companies will take three routes to emissions reduction while continuing to meet increased demand. These are to increase the efficient use of materials, increase energy efficiency and employ new technologies to capture or eliminate emissions.

President Muhammad Ali Tabba said “In a bid to achieve green growth going forward, the cement industry globally will have to adapt to climate change challenges and rework business models to ensure environmental stewardship and robust growth. The cement industry in Pakistan is committed to playing its role.”

Cement sector pledges to decarbonise Pakistan

KARACHI: Pakistan Business Council (PBC) hosted a virtual session with British High Commission and Embassy of Italy to discuss the pathways for the decarbonisation of the country’s cement sector.

This webinar comes at a time when the world leaders have huddled in Glasgow to discuss sustainability and growth without compromising everyone’s collective future. Speaking at the moot, Mike Nithavrianakis, British Deputy High Commissioner and Director of Trade, said, “Next to water, concrete is the second-most consumed substance on earth; on average, each person uses nearly three tonnes a year”.

According to Nithavrianakis, the concrete industry uses about 1.6 billion tons of Portland cement to produce 12 billion tons of concrete a year and accounts for 7-8 percent of greenhouse emissions. Ehsan Malik, CEO PBC, said, “The investment in infrastructure and the construction packages of the government will entail substantial increase in the use of cement in Pakistan, so we need to think about climate-resilient ways of production”.

Muhammad Ali Tabba, CEO Lucky Cement Limited and President of All Pakistan Cement Manufacturers Association said, “In a bid to achieve green growth going forward, the industry globally will have to adapt to climate change challenges and rework business models to ensure environmental stewardship and robust growth and the cement industry in Pakistan is committed to playing its role”. Faustine Delasalle, Co-Executive Director, Mission Possible Partnership and Director, Energy Transitions Commission explained, “There are essentially three routes, which need to be taken to meet the increasing demand whilst reducing emissions in the cement sector”. “The first being a need to relook at using materials efficiently, the second being improving energy efficiency and the third being employing new technologies to cut emissions,” Delasalle added.

According to the statement, Pakistan’s leading companies are also committing to reduce carbon emissions by disclosing their pledge openly. More than 28 companies from various sectors have signed the pledge letter to the ‘Business Ambition to 1.5 Degrees’ – and are ready to embark on the journey to reduce Carbon emissions to 50 percent by 2030.