Domestic Cement Despatches Increases by 18.90 Percent in September 2018

Domestic cement consumption bounced back in September after two months of lackluster growth registering a double digit increase compared with domestic consumption in the same month of last year. The continued buoyancy in exports helped the sector post a 18.90 percent growth.

The cement industry despatched 3.806 million tons of cement in September 2018 while the cement despatches in September 2017 were 3.201 million tons. This was 18.90 percent higher than last year. In September 2018 the domestic cement despatches in the Northern region were 2.450 million tons increased by 3.45 percent against 2.369 million tons in September 2017 whereas, despatches in the Southern region amounted to 0.641 million tons increased by 48.81 percent in September 2018 against 0.431 million tons in the same month last year. Exports from North were 0.294 million tons last month decreased by 4.69 percent against 0.308 million tons in September 2017. Exports from the South stood at 0.421 million tons in September 2018 increased by 350.92 percent against 0.093 million tons in September last year.

However the industry closed the first quarter of this fiscal on a moderate note. In the July September 2018 period cement mills despatched 10.813 million tons of commodity that was only 4.48 percent higher than 10.349 million tons cement despatched during the corresponding period of last year. This growth pales when compared with the high growth the industry maintained in past five years. The growth in the first quarter does not even match the increase in the production capacity of the industry in 2018. It utilized only 79.75 percent of its capacity in the first quarter compared with average capacity utilization of 87 percent during previous three years.

Majority of cement capacity is located in Northern part of the country. These mills remained under immense pressure in the first quarter. They despatched 7.151 million tons of cement during this period that was 4.94 percent less than the despatches of 7.523 million tons during the same period last year. Exports from North also declined by 21.58 percent to 0.747 million tons compared to 0.953 million tons during first quarter of FY2017-18. Mills in South were in driving seat as the domestic consumption in the first quarter increased by 21.51 percent to 1.870 million tons from 1.539 million tons during the same period last year. Exports also increased from this region by a whopping 212.13 percent to 1.044 million tons from only 0.334 million tons during July-Sep 2017.

The taxation on cement is highest in the region. Spokesman of the association urged the government to take concrete measures to reduce the taxes.

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