Uptake of cement in the domestic market accelerated to 10.90 percent in May 2017 while exports continue to mar the performance of the cement sector registering a decline of 44.58 percent in May 2017, the fourth massive decline in exports which declined by 45.69 percent in February, 60.39 percent in March and 50.75 percent in April. This dismal export performance has over shadowed the excellent uptake of cement in the domestic market.
According to the data released by the All Pakistan Cement Manufacturers Association, cement despatches to domestic markets during May 2017 were 3.399 million tons compared to 3.065 million tons during same month last year showing a healthy increase of 10.90 % and indicating continuity of the growth momentum. Exports during May 2017 were 0.309 million tons against 0.558 million tons during May, 2016 showing a reduction of 44.58 percent. Total despatches during May, 2017 were 3.708 million tons compared to 3.623 million tons during same month last year showing an increase of 2.36 percent.
During the period from July 2016 to May 2017 domestic cement consumption has increased by a healthy 10.76 percent to 37.589 million tons against 35.523 million tons of corresponding period last year. Export of cement during the same period declined by 21.27 percent to only to 4.319 million tons against 5.486 million tons of corresponding period last year. Cement exports have been on constant decline since 2008-09 when it peaked at 10.8 million tons.
During the month of May 2017, exports to Afghanistan decreased from 0.206 million tons in May 2016 to 0.097 million tons in May 2017 showing a decline of 53.03 percent. Exports to India also registered a decline from 0.135 million tons in May 2016 to 0.114 million tons during the same month this year, showing a decline of 15.22 percent. Exports to India are mainly through Wahga border and southern coast of India.
Spokesman for APCMA expressed concern over falling exports to Afghanistan that have declined by 31.24 percent during July 2016 to May 2017. They said cement exports to India have registered an increase of 34.61 percent during July 2016 to May 2017 period.
A spokesman of the APCMA regretted that the government slapped undue additional taxes on cement. This increase may hurt the growth of the industry that has been posting healthy growth during last 18 months. He said despatches growth in the industry already remained subdued in past two months being 0.70 percent in April and 2.36 percent in May. This decline in overall growth he added was despite the fact that the domestic consumption of the industry increased by 23.09 percent in March, 9.53 percent in April and 10.58 percent in May. He apprehended some decline in domestic uptake as a result duties slapped on construction sector.
Industry experts have appealed to the government to take steps to boost the housing sector as currently the cement industry is mostly depending on infrastructure projects. They said that sustained growth in housing construction is essential to absorb the additional capacities that would be operational in two years. They urged the government to avoid disruptive policies that impact construction growth in the country.