Exports were the saving grace for Pakistan’s cement industry in August as the domestic consumption plummeted by massive 13.73 percent which in fact was the first such decline in consumption in last three years. Domestic cement dispatches in Pakistan was 2.895 million tons out of which 2.326 million tons was dispatched by mills located in the Northern part of the country and 0.569 million tons by the South based mills. During the corresponding month of last year the North zone dispatched 2.730 million ton of cement and South based mills dispatched 0.625 million tons. Cement exports on the other hand increased by 35.82 percent as 0.557 million tons of cement was exported against 0.409 million tons exported in August 2017.
Domestic cement dispatches in the first two months of current fiscal declined by 5.31 percent. In the North zone cement dispatches declined by 8.80 percent while in south zone it declined by 10.91 percent. However, exports dispatches in north zone declined by 29.66 percent while in south zone it grew by 158.40 percent.
The abrupt decline in domestic cement uptake has taken the cement manufacturers by surprise. Spokesman of All Pakistan Cement Manufacturers’ Association (APCMA) said that the industry was expecting a slower growth as witnessed a month earlier but never expected negative growth.
“This might be due to change of governments as pace of ongoing development projects get affected in the process, as private sector construction of houses seemed to be normal,” he added expressing hope that this was a one off decline and the growth would gather pace in coming months.
“The industry is worried because they have made tremendous investment to increase capacity that has now crossed 50 million tons a year. This expansion was made on the assumption that construction activities would continue to grow at a rapid pace in the long term,” the spokesman added. He said the manufacturers were not worried when the domestic cement dispatches grew by a little over 4 percent in July 2018. He said slower growth was attributed to the hectic election activities that were going on in the country. He said things should have normalized in August and it is a matter of great concern for the industry that it did not.
He said that in July 2018 the overall growth in the industry was 5.1 percent while in August 2018 the overall growth was negative 8 percent. He said in the first two months of this fiscal the industry recorded a negative growth of 1.98 percent. He said, “Industry is still hopeful of a rapid turnaround as the new government has promised to construct one million new houses every year. Once this program is energized the growth would accelerate”, he added.