During the first half of the current fiscal year, the cement sector continued to remain buoyant in domestic markets while exports remained under severe pressure thereby affecting the total growth in cement despatches.
Despatches during the six months ending on December 31, 2015 increased by 6.38 per cent to 18.21 million tonnes compared with despatches of 17.12 million tonnes during the corresponding period of 2014. “This growth is mainly led by domestic consumption which increased by a healthy 16.34 per cent to 15.2 million tonnes during July to Dec 2015 compared to 13.06 million tonnes during July to Dec 2014,” said a spokesman of All Pakistan Cement Manufacturers Association. He added that during the same period, country’s exports declined by a massive 25.68% to 3.01 million tonnes compared with 4.06 million tonnes during July to Dec, 2014.
Further analysis of despatches revealed that the factories located in north witnessed 15.32 per cent increase in domestic consumption by selling 12.63 million tonnes in domestic markets from July to Dec 2015 against 10.96 million tonnes during the same period of last year. The South based factories witnessed even more growth in domestic dispatches by supplying 2.56 million tonnes of cement to local markets from July to Dec 2015 against 2.10 million tonnes during the same period of last year showing growth of 21.63 per cent. In exports, the North based mills registered decline of 25.09 per cent as exports were restricted to 1.9 million tonnes in first six months of the current fiscal year compared to 2.54 million tonnes during same period of the last year. The South based factories also suffered decline of 26.67% in exports as the quantities dropped to 1.11 million tonnes during July to Dec of the current fiscal year compared to 1.52 million tonnes during the same period of last year.
The industry despatched 3.44 million tonnes of cement in December 2015 compared with 3.11 million tonnes dispatched in December 2014 showing growth of 10.53%. The local despatches were 2.98 million tonnes during December 2015 against 2.5 million tonnes during December 2014 depicting increase of 19.28%. The exports despatches showed decline of 25.39% against 610,000 tonnes of exports during December 2014 – the industry exported 455,000 tonnes during December 2015.
The spokesman of All Pakistan Cement Manufacturers Association said that the government had not been able to work with the industry to arrest the decline in exports. He added that the Association had time and again drawn the government’s attention towards illegal imports of under invoiced cement from Iran. The industry has urged that a proper vigilance and accountability system needs to be put in place to stop cement smuggling into the country. The government should also impose 20% regulatory duty for import of cement in addition to custom duty in order to protect the local industry, the spokesman said.