Domestic cement despatches declined by 19.05 percent in February

Cement sector posted a double digit decline of 19.05 percent in the month of February compared with corresponding month last year. According to data released by the All Pakistan Cement Manufacturers Association (APCMA), the cement industry despatched 3.325 million tons in February 2019 against despatches of 3.780 million tons in February 2018. It seems that the domestic sector almost collapsed in last month as the domestic consumption declined by 19.05 percent from 3.479 million tons in February 2018 to just 2.817 million tons in February 2019.

Exports from the country overall increased by a healthy 69.07 percent year on year basis in February. The industry exported 0.508 million tons of clinker & cement in February 2019 against exports of mere 0.301 million tons in February 2018.

The domestic consumption in Northern part of the country continued to decline as it was only 2.148 million tons last month against 2.871 million tons same month last year. Exports from the mills based in the Northern region also suffered 8.66 per cent decline to 0.165 million tons in February 2019 that stood at 0.181 million tons last year February 2018.

The Southern part of the country fared comparatively better as local consumption in the region stood at 0.669 million tons in February 2019 as compared to 0.609 million tons in February 2018. Exports from the region also increased by 185 percent from 0.120 million tons in February 2018 to 0.343 million tons in February 2019.

Overall cement despatches in the eight months of this fiscal stood at 30.091 million tons that was only 0.05 percent lower than the despatches of 30.106 million tons achieved during the same period of last year. Out of this, exports during July-February 2019 period were 4.649 million tons which was 52.30 percent higher than 3.053 million tons exported in the corresponding period last year.

Mills located in the North continued to suffer as the domestic consumption of North based mills declined by 10.58 percent to 19.98 million tons in the first eight months of this fiscal from 22.344 million tons same period last year. Exports from North declined by 16 percent to 1.857 million tons during the July-February 2019 from 2.212 million tons in July-February 2018 mainly because India imposed a 200% duty on all items coming from Pakistan. This has caused a big loss to the industry as approximately 300 cement trucks waiting at Wahga border to cross over were returned. The same loss was also incurred by the southern factories as cement loaded in container at Karachi port were returned as Indian customer cancelled all orders.

However, mills in the Southern region of the country performed better during July-February 2019, as the local despatches and exports increased by 15.99 and a whopping 232 percent respectively to 5.462 million tons and 2.792 million tons respectively.

APCMA spokesman expressed dismay on the constant decline in cement uptake in the country, especially in the Northern region, for various reasons. Rains in almost all parts of the country has affected the construction activities. Moreover, the halt in government spending on Public Sector Development Program (PSDP) is also a major concern for the industry. Meanwhile, exports to India have also stopped due to the increasing tension between both the countries.

He appealed the government to support the industry by minimizing duties and taxes, especially on exports to help the industry earn foreign exchange in these testing times. He also urged the government to restart spending on PSDP to boost not only consumption of cement and other construction materials but the work opportunities for skilled and unskilled labour.

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