Pakistan: Highest ever cement despatches during 12MFY16

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Cement despatches to domestic markets during the month of June 16 increased by 9.2 percent to 2.96 Million Tons compared to 2.71 Million Tons during same month last year. The comparatively lower growth in June, 16 was mainly due to the holy month of Ramadan as construction activities slowdown in Ramadan. Exports during June 16 were 387,060 Tons against 552,867 Tons during June, 15 showing massive decline of 30%. Total despatches during June, 16 were 3.35 Million Tons compared to 3.26 Million Tons during same month last year showing a marginal increase of 2.57 percent, mainly affected due to substantial downfall in exports. According to the data released by All Pakistan Cement Manufacturers Association, during the fiscal year 15~16, cement industry despatched 33 Million Tons in local markets posting a robust growth of 17.01 percent compared with local despatches during the same period of last fiscal year that were 28.2 Million Tons.


Exports from the country massively declined by 18.38 percent to 5.87 Million Tons compared with exports during last fiscal year that were 7.2 Million Tons. Exports to India has increased by 42.53% to 992,631 Tons during fiscal year 15~16 against 696,417 Tons during last fiscal. However, the decline in exports to Afghanistan by 15.1% and via sea to other countries by 32.68% affected the overall exports of the country. Instable situation in Afghanistan and influx of Iranian Cement limited exports to 2.44 Million Tons during fiscal year 15~16 compared to 2.87 Million Tons during last fiscal. Likewise, increased competition on global level coupled with economic slowdown in countries where Pakistan has been exporting reduced the country’s exports by sea to 2.44 Million Tons during fiscal year 15~16 compared to 3.62 Million Tons during last fiscal.


Total despatches during fiscal year 15~16 showed a growth of 9.82 % compared to last fiscal year as the volume increased to 38.87 Million Tons against 35.34 Million Tons from July 14 to June, 15.  Cement sector closed the financial year 15~16 on a positive note. The only sour point was the additional tax imposed in budget 2016-17 that increased the cement price by Rs. 35 per bag.


Industry circles fear that additional excise duty imposed in federal budget 16~17 might dampen the construction activities. They said that there was no need to increase the tax as cement is already the most heavily taxed commodity in Pakistan. They apprehended that Iranian cement might make further inroads in Pakistani markets in view of lax border checks on smuggling and highly liberal attitude of authorities on under invoicing. Cement industry lost approx. 1 million tons of volume due to smuggled Irani cement coming into Baluchistan and other coastal areas. This trend is going up despite several letters and newspapers coverages on this matter but no positive step to curb the smuggling issue has been taken by the government. A spokesman of APCMA said that sharp decline in cement exports should be an eye opener for the policy makers of the country. APCMA’s spokesperson appealed the government to support local manufacturers in winning back their markets by giving freight/ transportation subsidy enabling them to compete on global level.

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