Pakistan cement industry achieves capacity utilization of 93.74 percent in 9MFY2017/18

The buoyancy in domestic cement demand has been complemented by surging exports for the second month as cement exports from Pakistan increase by a whopping 85 percent in March. Total cement dispatches in March 2018 was 4.652 million tons the highest ever in history of cement industry. This was 17.33 percent higher than the total dispatches of 3.965 million tons achieved in March 2017. The domestic consumption was 4.260 million tons out of which 3.543 million tons was consumed in the Northern part and 0.717 million tons was consumed in the Southern part of the country, reflecting a growth of 13.52 percent. Cement exports surged to 0.392 million tons that was 85 percent higher than the exports during the corresponding period of last year.

It is worth noting that during the first nine months of this year the industry dispatched 34.758 million tons of cement which was 14.70 percent higher than 30.304 million tons cement dispatched during corresponding period last year. The North based units domestic dispatches were 25.881 million tons while export dispatches were 2.431 million tons; posting an increase of 19.3 percent in domestic consumption but a decline of 3.78 percent in exports. The South based units domestic dispatches 5.426 million tons while exports dispatches were 1.014 million tons; posting an increase of 11.83 percent in domestic consumption and a massive decline of 17.38 percent in exports. Exports have started improving in February 2018 and have continued to improve in March 2018 as well. Exports from North increased mainly due to sudden surge in exports to Afghanistan that increased from 0.037 million tons in March 2017 to 0.106 million tons in March 2018.

The capacity utilization of the industry for the nine months of current fiscal is 93.74 percent, the highest ever in the history of the industry. The monthly cement production capacity of the industry is 4.120 million tons while the in March 2018 industry dispatched 4.652 million tons, a capacity utilization of 112.91 percent for the month of March 2018.

The spokesman of APCMA has expressed hope that going forward the country would continue to post healthy growth in cement sector which is the only industry in Pakistan that has shown faith in Pakistan’s economy and has continued to enhance its capacities.

The spokesman of APCMA said that the local dispatches has increased considerably due to construction activities and could further increase substantially if smuggling of Iranian cement into the country is curbed. Moreover, customs duty on import of both clinker and cement should increase to a uniform rate of 35% and only be allowed if Pakistan Standards and Quality Control Authority may certify the quality.

He said that cement industry is among the highest contributors to the national exchequer over the last few years with a contribution of Rs. 110 billion in 2016-17. Currently Federal excise duty on cement is Rs. 1,250 per ton i.e. Rs. 62.5 per bag. “We appeal the Government to reduce FED to “Zero” to reduce the per bag price of cement and encourage cement consumption which is affected by high taxation,” he added.

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