Cement under stress

Cement sector remained under financial pressure during the fiscal year 2011-12 due to increase in its input cost mainly, electricity, diesel, paper sack, gypsum and devaluation in Pak rupee. However, for the year 2011-2012, the industry’s local cement dispatches were the highest ever in the history of the country.
Revealing the performance of the cement sector in the year 2011-12, Spokesman of All Pakistan Cement Manufacturers Association in a statement said that the local cement dispatches increased to record level of 23.947 million tons registering an increase of 8.84 percent. However the exports remained under pressure throughout the year and declined by 9.12 percent to 8.568 million tons. He said 2011-12 was the third straight year when the cement exports declined. He further said that the cement sector added 3 million tons additional production capacity in the year 2011-12 as its total production capacity increased by 7.23 percent to 44.217 million tons from 42.235 million tons in 2010-11. However, for the year 2011-12 its capacity utilization remained under pressure due to sluggish export demand, non revival of construction sector in the country, lack of investment in housing sector and government inability to initiate mega projects.
He said that from the peak level of 10.752 million tons achieved in 2008-09 the export have now decreased to 8.568 million tons in the year 2011-2012 showing a decline of 20.4 percent. He said hype created on trade with India has so far not been materialized and export in that market was only 0.605 million tons in 2011-12 which is well below the expectation of the cement sector. However, the Afghanistan market remained stable and cement sector exported 4.715 million tons in 2011-2012. Exports to other destination through sea excluding India declined to 3.247 million tons showing a reduction of 17%. Besides, the capacity utilization of cement sector reached its lowest at 69.67 percent in past one decade in the first two quarters of 2011-12 that ended on December 31, 2011 while exports continued to decline offsetting the gains in local consumption.