Pakistan’s cement sector posted a growth of 12.73 percent in June 2021

The cement sector in Pakistan posted a growth of 12.73 percent in June 2021 compared to June 2020. Total Cement dispatches during June 2021 were 5.211 million tons against 4.623 million tons dispatched during the same month of last fiscal year. This was possible due to the rise in construction activities under Naya Pakistan Housing Scheme, vital government initiatives, and PSDP allocation.

According to the data released by APCMA, local cement despatches in June 2021 increased to 4.668 million tons against 3.834 million tons despatched in June 2020, showing an increase of 21.74 percent. Exports dropped by 31.12 percent to 542,622 tons in June 2021 compared to 787,842 tons exported in June 2020.

Region-wise, domestic cement despatches in the north during June 2021 increased by 14.06 percent to 3.859 million tons from 3.384 million tons in June 2020. Exports from the north massively increased by 337.89 percent to 201,540 tons in June 2021 from 46,025 tons in June 2020.

In the south region, domestic cement despatches increased by 79.35 percent to 808,490 tons during June 2021 from 450,792 tons in June 2020. However, exports from the south decreased by 54.02 percent to 341,082 tons in June 2021 from 741,817 tons in June 2020.

Robust growth is witnessed during financial year 2020~21 as the total cement despatches of the country grew by 20.12 percent to 57.433 million tons from 47.812 million tons during FY 2019-20. Construction activities under the Naya Pakistan Housing Scheme and good PSDP spending helped the cement sector witness a record-breaking growth during the financial year ended on June 30 2021.

During the financial year 2020~21, local cement despatches witnessed an increase of 20.40 percent to 48.119 million tons from 39.965 million tons during the last financial year 2019-20. Exports also increased from 7.847 million tons during the financial year 2019-20 to 9.314 million tons during the financial year 2020~21, showing a growth of 18.69 percent.

In the north region, local cement despatches increased by 18.22 percent to 40.582 million tons during July 20 to June 21 period from 34.328 million tons despatched during July 19 to June 20 period. Exports from the north increased by 30.25 percent to 2.566 million tons from July to June 2021 from 1.970 million tons during the same period last year.

In the south region, domestic cement despatches increased by 33.70 percent to 7.537 million tons from July 20 to June 21 from 5.638 million tons from July 19 to June 20. Exports from the south also increased by 14.82 percent to 6.747 million tons from July 20 to June 21 from 5.877 million tons during the corresponding period last year.

A Spokesman of APCMA said that FY2020-21 had been a good year for cement, as demand has grown considerably. The cement industry is expanding its capacity from 70 million tons to around 100 million tons. The hope that the demand will increase by 15% annually for the next three years is due to an increase in allocation in PSDP increases in CPEC related projects and housing and industrial demand.

The coal prices show a significant upward trend as the C&F cost during the financial year ended on June 30, 21 has increased to USD 140 per ton from USD 60 per ton same period last year. Along with coal prices, the electricity tariff and furnace oil prices have also increased, which has impacted the overall cost of production, which has gone up by around Rs. 110/- per bag compared to the same period last year.

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