March 3, 2020: Cement sector continued to post growth in the month of February as its total despatches increased to 4.489 million tons, an increase of 33.91 percent from 3.352 million tons during the same month last year.
Domestic consumption increased by 31.35 percent to 3.736 million tons in February 2020 from 2.843 million tons in February 2019 while exports registered an impressive increase of 48.20 percent from 0.508 million tons in February 2019 to 0.753 million tons in February 2020.
North based mills despatched 3.173 million tons locally, which was almost 46 percent higher than the despatches of 2.175 million tons during the corresponding month of last fiscal. As per recent trends, exports from the North based mills also increased in February 2020 by 23 percent to 0.202 million tons, from 0.165 million tons in February 2019.
Southern region of the country reported a decline in domestic consumption by 16 percent, as it fell from 0.669 million tons in February 2019 to 0.562 million tons in February 2020. Exports however surged by a whopping 60 percent to 0.551 million tons last month, as compared to 0.343 million tons in February 2019.
Cement despatches in the first eight months of this fiscal stood at 33.313 million tons depicting a growth of over 10 percent when compared with total despatches of 30.253 million tons during the corresponding period of last fiscal.
Despite robust growth, domestic consumption of the commodity remained lopsided with consumption in the Northern region reaching historic heights with cumulative despatches of 23.263 million tons in the July-Feb period, 15.53 percent higher than 20.136 million tons during the same period last year. In contrast the domestic consumption in the Southern region declined from 5.467 million tons in July18-Feb19 period to 4.111 million tons during same period this year – a decline of 24.81 percent.
Exports depict an opposite pattern where the exports nominally declined for North based mills from 1.857 million tons in the first eight months of last fiscal to 1.808 million tons during the corresponding period of this fiscal. However, the exports from the South zone jumped from 2.792 million tons in July18-Feb19 to 4.131 million tons during July-Feb 2019-20 depicting a huge increase of 47.94 percent. Another point worth noting is that the exports from the South zone exceeded the domestic consumption in the region during the first eight months of this fiscal.
The jump in exports is understandable as it is a result of benefits of huge decline in rupee value. Exports from North remained subdued due to lower demand in Afghanistan and zero exports to India through the Wahga border.
The spokesperson of All Pakistan Cement Manufacturers’ Association (APCMA) said that cement production capacity has increased to 64 million tons for the financial year 2019-20 and the industry has been able to utilize only 78.53 percent of its current installed capacity so far this year with over 9.1 million tons idle capacity.
He appealed to the government to support the industry by minimizing duties and taxes on cement in order to maintain the momentum of increase cement consumption.
“The lopsided performance in domestic consumption in northern and southern parts of the country is worrisome as it depicts that the economic activities in different regions of the country are uneven,” he added.
“The government must focus on public sector development projects and announced housing schemes to boost construction activities so that the employment and investment in the cement and allied industries can be safeguarded,” he added.