Capacity utilization for the 11 Months of this fiscal rises to 95%

All Pakistan Cement Manufacturers Association has released data for the month of May, 2018.With fifteen days of fasting falling in May, Cement consumption was slightly affected as domestic despatches posted modest growth of 2.40 percent; lowest this fiscal. Exports however, grew by a healthy 41.88 percent boosting overall growth to 5.69 percent. Traditionally construction activities slowdown in Ramadan and even a modest growth in May indicates that the buoyancy in the sector is still there. Exports continued to post a healthy growth after currency devaluation growing by 84, 80 and 40 percent respectively during March, April and May this year.

In May 2018 the industry despatched 3.919 million tons of cement against 3.708 million tons despatched in May 2017. In May 2018 the domestic cement despatches in the Northern region were 2.812 million tons against 2.811 in May 2017 whereas, despatches in the Southern region amounted to 0.669 million tons in May 2018 against 0.588 million tons in the same month last year. Exports from North were 0.224 million tons last month against 0.219 million tons in May 2017. Exports from the South stood at 0.215 million tons in May 2018 against 0.090 million tons in May last year.

Total cement despatches in the first 11 months of this fiscal have been the highest ever in history as cement industry despatched 42.915 million tons during July-May 2017-18 period against 37.588 million tons during the corresponding period last year. The sector grew by a healthy 14.17 percent in the first 11 months of this fiscal.

Capacity utilization in the first 11 months of this fiscal was 94.69 percent, that is the highest ever in the history of Pakistan’s cement industry. The previous highest capacity utilization was achieved in 1992-93 which totaled 93.62 percent.

Domestic consumption in the Northern parts of the country stood at 31.811 million tons showing a growth of 16.76 percent over the corresponding period of last fiscal. The cement plants in the South despatched 6.755 million tons of cement posting a growth rate of 12.12%. Total exports in 11 months increased to 4.348 million tons posting a modest growth of 0.69% as exports surged after devaluation of the rupee in the last few months.

Spokesman of APCMA expressed hope that local cement consumption will once again rise after Ramadan while continuous increase in exports is a welcome sign for the industry. However, he said that the major factor behind rise in exports is the decline in rupee value against dollar that improved competitiveness of cement sector in the global markets.

APCMA urged the government to withdraw the recent increase in Federal Excise Duty (FED) which will hurt local consumption as this will have an impact of Rs. 15 per bag, thereby raising cost of construction.

“We have been demanding for years to abolish the FED as cement is not a luxury item, use of which should be encouraged,” the spokesman added. “Reducing FED to “Zero” will give rise to construction activities which has a positive effect on multiple industries and thousands of job opportunities will be created with increase in construction,” he concluded.

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